Delaware
95-2039518
incorporation or organization)
Identification No.)
Peter M. Menard, Esq.
Su Lian Lu, Esq. Sheppard, Mullin, Richter & Hampton LLP 333 South Hope Street, 48th Floor Los Angeles, California 90071 (213) 620-1780 |
William B. Brentani, Esq.
Rebecca B. Boyden, Esq. Simpson Thacher & Bartlett LLP 3330 Hillview Avenue Palo Alto, California 94304 (650) 251-5000 |
Proposed maximum | Proposed maximum | Amount of | ||||||||||
Title of each class of | Amount to be | offering price | aggregate offering | registration | ||||||||
securities to be registered | registered(1) | per share(2) | price(2) | fee | ||||||||
Common Stock, par value
$0.66
2
/
3
per share
|
2,875,000 shares | $35.18 | $101,142,500 | $11,904.47 | ||||||||
(1) | Includes 375,000 shares of common stock that the underwriters have the option to purchase solely to cover over-allotments, if any. |
(2) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, based on the average of the high and low prices of the Registrants common stock as reported on the Nasdaq National Market on August 19, 2005. |
The information
in this preliminary prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This preliminary prospectus is not an offer to sell
these securities and we are not soliciting offers to buy these
securities in any jurisdiction where the offer or sale is not
permitted.
|
PRELIMINARY PROSPECTUS | SUBJECT TO COMPLETION | August 25, 2005 |
Per Share | Total | |||||||
Public offering price
|
$ | $ | ||||||
Underwriting discounts and commissions
|
$ | $ | ||||||
Proceeds, before expenses, to us
|
$ | $ | ||||||
Proceeds, before expenses, to the selling stockholder
|
$ | $ | ||||||
A.G. Edwards | C.E. Unterberg, Towbin | Raymond James |
1 | ||||||||
7 | ||||||||
21 | ||||||||
21 | ||||||||
22 | ||||||||
22 | ||||||||
22 | ||||||||
23 | ||||||||
24 | ||||||||
26 | ||||||||
46 | ||||||||
57 | ||||||||
62 | ||||||||
64 | ||||||||
66 | ||||||||
68 | ||||||||
71 | ||||||||
74 | ||||||||
77 | ||||||||
77 | ||||||||
77 | ||||||||
77 | ||||||||
F-1 | ||||||||
EX-4.1 | ||||||||
EX-23.2 |
| Flexible, scalable and cost-effective manufacturing. Our manufacturing operations are a core element of our success and we have designed our manufacturing base to allow us to respond quickly to changes in demand trends in the end-markets we serve. For example, we have structured our Shanghai assembly, test and packaging facilities to enable us to rapidly and efficiently add capacity and adjust product mix to meet shifts in customer demand and overall market trends. As a result, for the past three years we have operated our Shanghai facilities at near full capacity, while at the same time significantly expanding that capacity. Additionally, the Shanghai location of our manufacturing operations provides us with access to a highly-skilled workforce at a low overall cost base while enabling us to better serve our leading customers, many of which are located in Asia. |
| Integrated packaging expertise. We believe that we have particular expertise in designing and manufacturing innovative and proprietary packaging solutions that integrate multiple separate discrete elements into a single semiconductor product called an array. Our ability to design and manufacture highly integrated discrete semiconductor solutions provides our customers with products of equivalent functionality with fewer individual parts, and at lower overall cost, than alternative products. For example, one of our leading diode array products integrates eight discrete elements into a single highly-miniaturized package that provides four times the functionality with less than 20% of the space requirements of the previous solution. This combination of integration, functionality and miniaturization makes our products well suited for high-volume consumer applications such as digital audio players, notebook computers and digital cameras. |
| Broad customer base and diverse end markets. Our customers include leading OEMs such as Bose Corporation, Honeywell International, Inc., LG Electronics, Inc., Logitech, Inc., Motorola, Inc., Quanta Computer, Inc., Sagem Communication, Samsung Electronics Co., Ltd. and Thompson, Inc., as well as leading EMS providers such as Celestica, Inc., Flextronics International, Ltd., Hon Hai Precision Industry Co., Ltd., Inventec Corporation, Jabil Circuit, Inc., Sanmina-SCI Corporation and Solectron Corporation. Overall, we serve over 150 direct customers and over 10,000 additional customers through our distributors, including leading distributors such as Arrow Electronics, Inc., Avnet, Inc., Future Electronics and Yosun Industrial Corp. Our products are ultimately used in end products in a large number of markets served by our broad base of customers, which we believe makes us less dependent on either specific customers or specific end-use applications. |
| Customer-focused product development. Close collaboration with our customers and a high degree of customer service are essential elements of our business. We believe focusing on dependable delivery of discrete semiconductor solutions tailored to specific end-user applications, has fostered deep customer relationships and created a key competitive advantage for us in the highly-fragmented discrete semiconductor marketplace. We believe our close relationships with our OEM and EMS customers have provided us with deep insight into our customers product needs. This results in differentiation in our product designs and often provides us with insight into additional opportunities for new design wins in our customers products. |
| Management continuity and experience. We believe that the continuity of our management team is a critical competitive strength. The five members of our senior management team have an average of over 12 years of service at Diodes and the length of their service with us has created significant institutional insight into our markets, our customers and our operations. In June 2005, we appointed Dr. Keh-Shew Lu as President and Chief Executive Officer. Dr. Lu has served as a director of Diodes since 2001 and has 30 years of relevant industry experience. Dr. Lu began his career at Texas Instruments in 1974 and retired in 2001 as Senior Vice President and General Manager of Worldwide Analog, Mixed-Signal and Logic Products. Our Chief Financial Officer, Carl Wertz, has been employed by us since 1993 and has over 20 years of financial experience in manufacturing and distribution industries. Joseph Liu, our Senior Vice President, Operations, joined us in 1990 and has over 30 years |
of relevant industry experience having started his career in 1971 at Texas Instruments. Similarly, Mark King, our Senior Vice President of Sales and Marketing has been employed by us since 1991, as has Steven Ho, our Vice President of Asia Sales. |
| continue rapidly introducing innovative discrete semiconductor products; |
| expand our available market opportunities; |
| maintain intense customer focus; |
| enhance cost competitiveness; and |
| pursue selective strategic acquisitions. |
Common stock offered by us | 1,750,000 shares | |
Common stock offered by the selling stockholder | 750,000 shares | |
Common stock to be outstanding after this offering(1) | 16,322,044 shares | |
Use of proceeds after expenses | We estimate that the net proceeds to us from this offering will be approximately $ million, or approximately $ million if the underwriters exercise their overallotment option in full. We intend to use the net proceeds of this offering for working capital and other general corporate purposes, including acquisitions. We will not receive any of the proceeds from the sale of shares of common stock offered by the selling stockholder. See Use of Proceeds. | |
Nasdaq National Market symbol | DIOD |
| 2,409,922 shares of common stock issuable after the completion of this offering upon the exercise of outstanding stock options under our stock incentive plans at a weighted average exercise price of $11.78 per share; |
| 571,462 shares of common stock available for future grants under our stock incentive plans; and |
| 1,613,508 shares of common stock held by us as treasury stock. |
(1) | As of June 30, 2005, we had 16,185,122 shares issued of which (a) 14,572,044 shares were outstanding and (b) 1,613,508 were held as treasury stock, which were issued but not outstanding. |
Six months | ||||||||||||||||||||||||||||||
Year ended December 31, | ended June 30 | |||||||||||||||||||||||||||||
2000 | 2001 | 2002 | 2003 | 2004 | 2004 | 2005 | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||||||
Consolidated statement of income data:
|
||||||||||||||||||||||||||||||
Net sales
|
$ | 118,462 | $ | 93,210 | $ | 115,821 | $ | 136,905 | $ | 185,703 | $ | 88,442 | $ | 99,198 | ||||||||||||||||
Cost of goods sold
|
81,035 | 79,031 | 89,111 | 100,377 | 124,968 | 60,664 | 65,105 | |||||||||||||||||||||||
Gross profit
|
37,427 | 14,179 | 26,710 | 36,528 | 60,735 | 27,778 | 34,093 | |||||||||||||||||||||||
Operating expenses
|
||||||||||||||||||||||||||||||
Selling, general and administrative
|
18,814 | 13,711 | 16,228 | 19,586 | 23,503 | 11,908 | 13,888 | |||||||||||||||||||||||
Research and development
|
141 | 592 | 1,472 | 2,049 | 3,422 | 1,562 | 1,750 | |||||||||||||||||||||||
Loss (gain) on sale of fixed assets
|
| 8 | 43 | 1,037 | 14 | 15 | (105 | ) | ||||||||||||||||||||||
Total operating expenses
|
18,955 | 14,311 | 17,743 | 22,672 | 26,939 | 13,485 | 15,533 | |||||||||||||||||||||||
Income (loss) from operations
|
18,472 | (132 | ) | 8,967 | 13,856 | 33,796 | 14,293 | 18,560 | ||||||||||||||||||||||
Interest expense, net
|
940 | 2,074 | 1,183 | 860 | 637 | 327 | 234 | |||||||||||||||||||||||
Other income (expense)
|
501 | 785 | 67 | (5 | ) | (418 | ) | (124 | ) | (21 | ) | |||||||||||||||||||
Income (loss) before taxes and minority interest
|
18,033 | (1,421 | ) | 7,851 | 12,991 | 32,741 | 13,842 | 18,305 | ||||||||||||||||||||||
Income tax benefit (provision)
|
(2,496 | ) | 1,769 | (1,729 | ) | (2,460 | ) | (6,514 | ) | (2,543 | ) | (2,903 | ) | |||||||||||||||||
Minority interest in earnings of joint venture
|
(642 | ) | (224 | ) | (320 | ) | (436 | ) | (676 | ) | (319 | ) | (497 | ) | ||||||||||||||||
Net income
|
$ | 14,895 | $ | 124 | $ | 5,802 | $ | 10,095 | $ | 25,551 | $ | 10,980 | $ | 14,905 | ||||||||||||||||
Earnings per share(1):
|
||||||||||||||||||||||||||||||
Basic
|
$ | 1.23 | $ | 0.01 | $ | 0.47 | $ | 0.79 | $ | 1.91 | $ | 0.83 | $ | 1.04 | ||||||||||||||||
Diluted
|
$ | 1.08 | $ | 0.01 | $ | 0.44 | $ | 0.70 | $ | 1.65 | $ | 0.72 | $ | 0.93 | ||||||||||||||||
Number of shares used in computation(1):
|
||||||||||||||||||||||||||||||
Basic
|
12,107 | 12,216 | 12,277 | 12,731 | 13,404 | 13,181 | 14,319 | |||||||||||||||||||||||
Diluted
|
13,833 | 13,322 | 13,297 | 14,406 | 15,471 | 15,306 | 16,071 | |||||||||||||||||||||||
Consolidated statement of cash flows data:
|
||||||||||||||||||||||||||||||
Cash flow from operating activities
|
10,208 | 14,938 | 19,990 | 18,821 | 29,300 | 13,781 | 24,138 | |||||||||||||||||||||||
Cash (used in) investing activities
|
(21,389 | ) | (8,477 | ) | (6,774 | ) | (15,289 | ) | (26,133 | ) | (10,245 | ) | (6,845 | ) | ||||||||||||||||
Cash flow from (used in) financing activities
|
12,100 | (2,485 | ) | (13,995 | ) | 1,862 | 2,163 | (1,890 | ) | (3,477 | ) | |||||||||||||||||||
Other data:
|
||||||||||||||||||||||||||||||
EBITDA(2)
|
$ | 22,334 | $ | 9,099 | $ | 18,461 | $ | 24,488 | $ | 45,875 | $ | 19,995 | $ | 25,855 |
(1) | Adjusted for the effect of 3-for-2 stock splits in July 2000 and November 2003. |
(2) | EBITDA represents earnings before net interest expense, income tax provision, depreciation and amortization. Our management believes EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in evaluating companies in our industry. In addition, our management believes that EBITDA is useful 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 and income taxes and the accounting effects of capital spending, which items may vary for different companies for reasons unrelated to overall operating performance. As a result, our management uses EBITDA as a measure to evaluate the performance of our business. However, EBITDA is not a recognized measurement under generally accepted accounting principles, or 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 of other companies. Furthermore, EBITDA is not intended to be a measure of free cash flow for our managements discretionary use, as it does not consider certain cash requirements such as a tax and debt service payments. |
Six months ended | |||||||||||||||||||||||||||||
Year ended December 31, | June 30, | ||||||||||||||||||||||||||||
Reconciliation of net income to EBITDA: | 2000 | 2001 | 2002 | 2003 | 2004 | 2004 | 2005 | ||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
Net income
|
$ | 14,895 | $ | 124 | $ | 5,802 | $ | 10,095 | $ | 25,551 | $ | 10,980 | $ | 14,905 | |||||||||||||||
plus:
|
|||||||||||||||||||||||||||||
Interest expense, net
|
940 | 2,074 | 1,183 | 860 | 637 | 327 | 234 | ||||||||||||||||||||||
Income tax provision (benefit)
|
2,496 | (1,769) | 1,729 | 2,460 | 6,514 | 2,543 | 2,903 | ||||||||||||||||||||||
Depreciation and amortization
|
5,003 | 8,670 | 9,747 | 11,073 | 13,173 | 6,145 | 7,813 | ||||||||||||||||||||||
EBITDA
|
$ | 23,334 | $ | 9,099 | $ | 18,461 | $ | 24,488 | $ | 45,875 | $ | 19,995 | $ | 25,855 | |||||||||||||||
| on an actual basis; and |
| on an as adjusted basis to give effect to the issuance of 1,750,000 shares of common stock in this offering. |
As of June 30, 2005 | ||||||||
Consolidated balance sheet data: | Actual | As adjusted | ||||||
(unaudited, in thousands) | ||||||||
Cash
|
$ | 33,014 | ||||||
Working capital
|
66,451 | |||||||
Total assets
|
186,380 | |||||||
Long-term debt, including current portion
|
10,768 | 10,768 | ||||||
Total liabilities
|
53,387 | 53,387 | ||||||
Total stockholders equity
|
132,993 |
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pay substantial damages for past,
present and future use of the infringing technology;
cease the manufacture, use or sale
of infringing products;
discontinue the use of infringing
technology;
expend significant resources to
develop non-infringing technology;
pay substantial damages to our
customers or end users to discontinue use or replace infringing
technology with non-infringing technology;
license technology from the third
party claiming infringement, which license may not be available
on commercially reasonable terms, or at all; or
relinquish intellectual property
rights associated with one or more of our patent claims, if such
claims are held invalid or otherwise unenforceable.
Table of Contents
difficulties associated with
owning a manufacturing business, including, but not limited to,
the maintenance and management of manufacturing facilities,
equipment, employees and inventories and limitations on the
flexibility of controlling overhead;
difficulties in continuing
expansion of our operations in Asia and Europe, because of the
distance from our U.S. headquarters and differing
regulatory and cultural environments;
the need for skills and techniques
that are outside our traditional core expertise;
less flexibility in shifting
manufacturing or supply sources from one region to another;
even when independent suppliers
offer lower prices, we would continue to acquire wafers from our
captive manufacturing facility, which may result in us having
higher costs than our competitors;
difficulties developing and
implementing a successful research and development team; and
difficulties developing, and
gaining market acceptance of, our proprietary technology.
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unexpected losses of key employees
or customers of the acquired company;
bringing the acquired
companys standards, processes, procedures and controls
into conformance with our operations;
coordinating our new product and
process development;
hiring additional management and
other critical personnel;
increasing the scope, geographic
diversity and complexity of our operations;
difficulties in consolidating
facilities and transferring processes and know-how;
difficulties in reducing costs of
the acquired entitys business;
diversion of managements
attention from the management of our business; and
adverse effects on existing
business relationships with customers.
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changes in, or impositions of,
legislative or regulatory requirements, including tax laws in
the United States and in the countries in which we manufacture
or sell our products;
compliance with trade or other
laws in a variety of jurisdictions;
trade restrictions, transportation
delays, work stoppages, and economic and political instability;
changes in import/export
regulations, tariffs and freight rates;
Table of Contents
difficulties in collecting
receivables and enforcing contracts;
currency exchange rate
fluctuations;
restrictions on the transfer of
funds from foreign subsidiaries to the United States;
the possibility of international
conflict, particularly between or among China and Taiwan and the
United States;
legal regulatory, political and
cultural differences among the countries in which we do
business; and
longer customer payment terms.
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general economic conditions in the
countries where we sell our products;
seasonality and variability in the
computer and communications market and our other end markets;
the timing of our and our
competitors new product introductions;
product obsolescence;
the scheduling, rescheduling and
cancellation of large orders by our customers;
the cyclical nature of demand for
our customers products;
our ability to develop new process
technologies and achieve volume production at our fabrication
facilities;
changes in manufacturing yields;
adverse movements in exchange
rates, interest rates or tax rates; and
the availability of adequate
supply commitments from our outside suppliers or subcontractors.
Table of Contents
use a significant portion of our
available cash;
issue equity securities, which
would dilute current stockholders percentage ownership;
incur substantial debt;
incur or assume contingent
liabilities, known or unknown;
incur amortization expenses
related to intangibles; and
incur large, immediate accounting
write-offs.
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Common stock price
High
Low
$
8.40
$
6.25
14.63
7.01
16.60
11.79
21.75
13.41
$
26.96
$
18.93
25.25
20.15
26.20
16.15
29.66
21.50
$
27.86
$
19.07
33.85
24.70
38.80
30.80
Table of Contents
| on an actual basis; and |
| on an as adjusted basis to give effect to the issuance of 1,750,000 shares of common stock by us in this offering, resulting in estimated proceeds of $ , after deducting underwriting discounts and commissions and the estimated offering expenses payable by us. |
As of | ||||||||||
June 30, 2005 | ||||||||||
Actual | As adjusted | |||||||||
(in thousands, except share | ||||||||||
and per share data, | ||||||||||
unaudited) | ||||||||||
Cash
|
$ | 33,014 | $ | |||||||
Long-term debt, including current portion
|
$ | 10,768 | $ | 10,768 | ||||||
Stockholders equity:
|
||||||||||
Class A convertible preferred stock, par value
$1.00 per share, 1,000,000 shares authorized, no
shares issued and outstanding, actual and as adjusted
|
| |||||||||
Common stock, par value
$0.66
2
/
3
per
share, 30,000,000 shares authorized, 16,185,552 shares
issued, actual; 30,000,000 shares authorized,
17,935,552 shares issued, as adjusted
|
10,791 | |||||||||
Additional paid-in capital
|
26,946 | |||||||||
Retained earnings
|
96,235 | 96,235 | ||||||||
Less: Treasury stock 1,613,508 shares of common
stock, at cost
|
1,782 | 1,782 | ||||||||
Less: Accumulated other comprehensive income
|
(803 | ) | (803 | ) | ||||||
Total stockholders equity
|
132,993 | |||||||||
Total capitalization
|
$ | 176,775 | $ | |||||||
| 2,409,922 shares of common stock issuable after the completion of this offering upon the exercise of outstanding stock options under our stock incentive plans at a weighted average exercise price of $11.78 per share; and |
| 571,462 shares of common stock available for future grants under our stock incentive plans. |
Six months | ||||||||||||||||||||||||||||||
Year ended December 31, | ended June 30, | |||||||||||||||||||||||||||||
2000 | 2001 | 2002 | 2003 | 2004 | 2004 | 2005 | ||||||||||||||||||||||||
(in thousands, except per share data) | (unaudited) | |||||||||||||||||||||||||||||
Consolidated statement of income data:
|
||||||||||||||||||||||||||||||
Net sales
|
$ | 118,462 | $ | 93,210 | $ | 115,821 | $ | 136,905 | $ | 185,703 | $ | 88,442 | $ | 99,198 | ||||||||||||||||
Cost of goods sold
|
81,035 | 79,031 | 89,111 | 100,377 | 124,968 | 60,664 | 65,105 | |||||||||||||||||||||||
Gross profit
|
37,427 | 14,179 | 26,710 | 36,528 | 60,735 | 27,778 | 34,093 | |||||||||||||||||||||||
Operating Expenses
|
||||||||||||||||||||||||||||||
Selling, general and administrative
|
18,814 | 13,711 | 16,228 | 19,586 | 23,503 | 11,908 | 13,888 | |||||||||||||||||||||||
Research and development
|
141 | 592 | 1,472 | 2,049 | 3,422 | 1,562 | 1,750 | |||||||||||||||||||||||
Loss (gain) on sale of fixed assets
|
| 8 | 43 | 1,037 | 14 | 15 | (105 | ) | ||||||||||||||||||||||
Total operating expenses
|
18,955 | 14,311 | 17,743 | 22,672 | 26,939 | 13,485 | 15,533 | |||||||||||||||||||||||
Income (loss) from operations
|
18,472 | (132 | ) | 8,967 | 13,856 | 33,796 | 14,293 | 18,560 | ||||||||||||||||||||||
Interest expense, net
|
940 | 2,074 | 1,183 | 860 | 637 | 327 | 234 | |||||||||||||||||||||||
Other income (expense)
|
501 | 785 | 67 | (5 | ) | (418 | ) | (124 | ) | (21 | ) | |||||||||||||||||||
Income (loss) before taxes and minority interest
|
18,033 | (1,421 | ) | 7,851 | 12,991 | 32,741 | 13,842 | 18,305 | ||||||||||||||||||||||
Income tax benefit (provision)
|
(2,496 | ) | 1,769 | (1,729 | ) | (2,460 | ) | (6,514 | ) | (2,543 | ) | (2,903 | ) | |||||||||||||||||
Minority interest in earnings of joint venture
|
(642 | ) | (224 | ) | (320 | ) | (436 | ) | (676 | ) | (319 | ) | (497 | ) | ||||||||||||||||
Net income
|
$ | 14,895 | $ | 124 | $ | 5,802 | $ | 10,095 | $ | 25,551 | $ | 10,980 | $ | 14,905 | ||||||||||||||||
Earnings per share(1):
|
||||||||||||||||||||||||||||||
Basic
|
$ | 1.23 | $ | 0.01 | $ | 0.47 | $ | 0.79 | $ | 1.91 | $ | 0.83 | $ | 1.04 | ||||||||||||||||
Diluted
|
$ | 1.08 | $ | 0.01 | $ | 0.44 | $ | 0.70 | $ | 1.65 | $ | 0.72 | $ | 0.93 | ||||||||||||||||
Number of shares used in computation(1):
|
||||||||||||||||||||||||||||||
Basic
|
12,107 | 12,216 | 12,277 | 12,731 | 13,404 | 13,181 | 14,319 | |||||||||||||||||||||||
Diluted
|
13,833 | 13,322 | 13,297 | 14,406 | 15,471 | 15,306 | 16,071 | |||||||||||||||||||||||
Consolidated statement of cash flows data:
|
||||||||||||||||||||||||||||||
Cash flow from operating activities
|
10,208 | 14,938 | 19,990 | 18,821 | 29,300 | 13,781 | 24,138 | |||||||||||||||||||||||
Cash (used in) investing activities
|
(21,389 | ) | (8,477 | ) | (6,774 | ) | (15,289 | ) | (26,133 | ) | (10,245 | ) | (6,845 | ) | ||||||||||||||||
Cash flow from (used in) financing activities
|
12,100 | (2,485 | ) | (13,995 | ) | 1,862 | 2,163 | (1,890 | ) | (3,477 | ) | |||||||||||||||||||
Other data:
|
||||||||||||||||||||||||||||||
EBITDA(2)
|
$ | 22,334 | $ | 9,099 | $ | 18,461 | $ | 24,488 | $ | 45,875 | $ | 19,995 | $ | 25,855 |
(1) | Adjusted for the effect of 3-for-2 stock splits in July 2000 and November 2003. |
(2) | EBITDA represents earnings before net interest expense, income tax provision, depreciation and amortization. Our management believes EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in evaluating companies in our industry. In addition, our management believes that EBITDA is useful 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 and income taxes and the accounting effects of capital spending, which items may vary for different companies for reasons unrelated to overall operating performance. As a result, our management uses EBITDA as a measure to evaluate the performance of our business. However, EBITDA is not a recognized measurement under generally accepted accounting principles, or 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 of other companies. Furthermore, EBITDA is not intended to be a measure of free cash flow for our managements discretionary use, as it does not consider certain cash requirements such as a tax and debt service payments. |
Six months ended | |||||||||||||||||||||||||||||
Year ended December 31, | June 30, | ||||||||||||||||||||||||||||
Reconciliation of net income to EBITDA: | 2000 | 2001 | 2002 | 2003 | 2004 | 2004 | 2005 | ||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
Net income
|
$ | 14,895 | $ | 124 | $ | 5,802 | $ | 10,095 | $ | 25,551 | $ | 10,980 | $ | 14,905 | |||||||||||||||
plus:
|
|||||||||||||||||||||||||||||
Interest expense, net
|
940 | 2,074 | 1,183 | 860 | 637 | 327 | 234 | ||||||||||||||||||||||
Income tax provision (benefit)
|
2,496 | (1,769) | 1,729 | 2,460 | 6,514 | 2,543 | 2,903 | ||||||||||||||||||||||
Depreciation and amortization
|
5,003 | 8,670 | 9,747 | 11,073 | 13,173 | 6,145 | 7,813 | ||||||||||||||||||||||
EBITDA
|
$ | 23,334 | $ | 9,099 | $ | 18,461 | $ | 24,488 | $ | 45,875 | $ | 19,995 | $ | 25,855 | |||||||||||||||
As of December 31, | As of June 30, | |||||||||||||||||||||||||||
Consolidated balance sheet data: | 2000 | 2001 | 2002 | 2003 | 2004 | 2004 | 2005 | |||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Total assets
|
$ | 112,950 | $ | 103,258 | $ | 105,010 | $ | 123,795 | $ | 167,801 | $ | 143,033 | $ | 186,380 | ||||||||||||||
Working capital
|
17,291 | 19,798 | 20,830 | 27,154 | 49,571 | 33,083 | 66,451 | |||||||||||||||||||||
Long-term debt, net of current portion
|
15,997 | 21,164 | 12,583 | 6,750 | 7,833 | 5,500 | 3,877 | |||||||||||||||||||||
Stockholders equity
|
51,253 | 51,124 | 57,679 | 71,450 | 112,148 | 86,326 | 132,993 |
| expanding our manufacturing capacity, including establishing integrated state-of-the-art packaging and testing facilities in Asia, in 1998 and 2004, and acquiring a wafer foundry in the United States in 2000; |
| expanding our sales and marketing organization in Asia in order to address the shift of manufacturing of electronics products from the United States to Asia; |
| establishing our sales and marketing organization in Europe commencing in 2002; and |
| expanding the number of our field application engineers to design our products into specific end-user applications. |
| Since 1998, we have experienced increases in the demand for our products, and substantial pressure from our customers and competitors to reduce the selling price of our products. We expect future increases in net income to result primarily from increases in sales volume and improvements in product mix in order to offset reduced average selling prices of our products. |
| In 2004 and the six months ended June 30, 2005, 14.3% and 15.8%, respectively, of our net sales derived from products introduced within the last three years, which we term new products, compared to 12.1% in 2003. New products generally have gross profit margins that are higher |
than the margins of our standard products. We expect net sales derived from new products to increase in absolute terms, although our net sales of new products as a percentage of our net sales will depend on the demand for our standard products, as well as our product mix. | |
| Our gross profit margin was 34.4% in the six months ended June 30, 2005, compared to 32.7% in 2004 and 26.7% in 2003. This improvement in our gross margin was due to improvements in product mix, as well as increases in wafer and packaging yields, reductions in manufacturing costs and increases in capacity utilization. We expect only modest improvements in yields and capacity utilization in the future and, as a result, future gross profit margins will depend primarily on our product mix, as well as on the demand for our product. |
| As of June 30, 2005, we had invested approximately $83.0 million in our Asian manufacturing facilities. For the six months ended June 30, 2005, we invested approximately $6.0 million in our Asian manufacturing facilities and expect to invest an additional $9.0 to $11.0 million in these facilities for the remainder of 2005. We expect to continue to invest in our manufacturing facilities, although the amount to be invested will depend on product demand and new product developments. |
| In the six months ended June 30, 2005, the percentage of our net sales derived from our Asian subsidiaries was 64.7%, compared to 59.1% in 2004 and 55.5% in 2003. We expect our net sales to the Asian market to continue to increase as a percentage of our total net sales for the remainder of 2005 and 2006 as a result of the continuing shift of the manufacture of electronic products from the United States to Asia. |
| We have increased research and development expenses from $2.0 million, or 1.5% of net sales, in 2003 to $3.4 million, or 1.8% of net sales in 2004. We continue to seek to hire qualified engineers who fit our focus on proprietary discrete processes and packaging technologies. Our goal is to expand research and development expenses to approximately 3.0% of net sales as we bring additional proprietary devices to the market. |
| the condition of the economy in general and of the semiconductor industry in particular; |
| our customers adjustments in their order levels; |
| changes in our pricing policies or the pricing policies of our competitors or suppliers; |
| the termination of key supplier relationships; |
| the rate of introduction to, and acceptance of new products by, our customers; |
| our ability to compete effectively with our current and future competitors; |
| our ability to enter into and renew key corporate and strategic relationships with our customers, vendors and strategic alliances; |
| changes in foreign currency exchange rates; |
| a major disruption of our information technology infrastructure; and |
| unforeseen catastrophic events, such as armed conflict, terrorism, fires, typhoons and earthquakes. |
Six months | |||||||||||||||||||||
ended | |||||||||||||||||||||
Year ended December 31, | June 30, | ||||||||||||||||||||
Consolidated statements of income data: | 2002 | 2003 | 2004 | 2004 | 2005 | ||||||||||||||||
(unaudited) | |||||||||||||||||||||
Net sales
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
Cost of goods sold
|
76.9 | 73.3 | 67.3 | 68.6 | 65.6 | ||||||||||||||||
Gross profit
|
23.1 | 26.7 | 32.7 | 31.4 | 34.4 | ||||||||||||||||
Selling, general and administrative expenses
|
14.0 | 14.3 | 12.7 | 13.5 | 14.0 | ||||||||||||||||
Research and development expenses
|
1.3 | 1.5 | 1.8 | 1.8 | 1.8 | ||||||||||||||||
Impairment of fixed assets
|
| 0.8 | | | | ||||||||||||||||
Gain (loss) on disposal of fixed assets
|
| | | | (0.1 | ) | |||||||||||||||
Income from operations
|
7.7 | 10.1 | 18.2 | 16.2 | 18.7 | ||||||||||||||||
Interest expense, net
|
(1.0 | ) | (0.6 | ) | (0.3 | ) | (0.4 | ) | (0.2 | ) | |||||||||||
Other income (expense)
|
0.1 | | (0.2 | ) | (0.1 | ) | | ||||||||||||||
Income before taxes and minority interest
|
6.8 | 9.5 | 17.7 | 15.7 | 18.5 | ||||||||||||||||
Income tax provision
|
(1.5 | ) | (1.8 | ) | (3.5 | ) | (2.9 | ) | (2.9 | ) | |||||||||||
Minority interest in earnings of joint venture
|
(0.3 | ) | (0.3 | ) | (0.4 | ) | (0.4 | ) | (0.5 | ) | |||||||||||
Net income
|
5.0 | % | 7.4 | % | 13.8 | % | 12.4 | % | 15.0 | % | |||||||||||
Net sales | ||||||||||||||||
six months | Percentage of | |||||||||||||||
ended June 30, | net sales | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Taiwan
|
$ | 33,606 | $ | 23,464 | 33.9 | % | 26.5 | % | ||||||||
China
|
25,535 | 19,161 | 25.7 | 21.7 | ||||||||||||
United States
|
25,157 | 25,550 | 25.4 | 28.9 | ||||||||||||
Korea
|
5,225 | 8,577 | 5.3 | 9.7 | ||||||||||||
Singapore
|
4,494 | 5,319 | 4.5 | 6.0 | ||||||||||||
All others
|
5,181 | 6,371 | 5.2 | 7.2 | ||||||||||||
Total
|
$ | 99,198 | $ | 88,442 | 100.0 | % | 100.0 | % | ||||||||
Net sales year ended | Percentage of | |||||||||||||||
December 31, | net sales | |||||||||||||||
Country | 2004 | 2003 | 2004 | 2003 | ||||||||||||
(dollars in thousands) | ||||||||||||||||
United States
|
$ | 53,204 | $ | 41,593 | 28.7 | % | 30.4 | % | ||||||||
Taiwan
|
50,716 | 38,087 | 27.3 | 27.8 | ||||||||||||
China
|
44,311 | 25,908 | 23.9 | 18.9 | ||||||||||||
Korea
|
16,447 | 14,455 | 8.9 | 10.6 | ||||||||||||
Singapore
|
9,407 | 9,032 | 5.1 | 6.6 | ||||||||||||
All others
|
11,618 | 7,830 | 6.1 | 5.7 | ||||||||||||
Total
|
$ | 185,703 | $ | 136,905 | 100.0 | % | 100.0 | % | ||||||||
Net sales year ended | Percentage of | |||||||||||||||
December 31, | net sales | |||||||||||||||
Country | 2003 | 2002 | 2003 | 2002 | ||||||||||||
(dollars in thousands) | ||||||||||||||||
United States
|
$ | 41,593 | $ | 40,125 | 30.4 | % | 34.6 | % | ||||||||
Taiwan
|
38,087 | 25,507 | 27.8 | 22.0 | ||||||||||||
China
|
25,908 | 23,467 | 18.9 | 20.3 | ||||||||||||
Korea
|
14,455 | 5,255 | 10.6 | 4.5 | ||||||||||||
Singapore
|
9,032 | 9,496 | 6.6 | 8.2 | ||||||||||||
All others
|
7,830 | 11,971 | 5.7 | 10.4 | ||||||||||||
Total
|
$ | 136,905 | $ | 115,821 | 100.0 | % | 100.0 | % | ||||||||
Three months ended | ||||||||||||||||||||||||||||||||||||||||||
Mar 31, | Jun 30, | Sep 30, | Dec 31, | Mar 31, | Jun 30, | Sep 30, | Dec 31, | Mar 31, | Jun 30, | |||||||||||||||||||||||||||||||||
2003 | 2003 | 2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | |||||||||||||||||||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||||||||||||||||||||||||||||
Net sales
|
$ | 29,446 | $ | 33,316 | $ | 34,941 | $ | 39,202 | $ | 41,435 | $ | 47,017 | $ | 49,353 | $ | 47,898 | $ | 48,600 | $ | 50,598 | ||||||||||||||||||||||
Cost of goods sold
|
21,985 | 24,970 | 25,779 | 27,643 | 28,685 | 31,989 | 32,607 | 31,687 | 32,004 | 33,101 | ||||||||||||||||||||||||||||||||
Gross profit
|
7,461 | 8,346 | 9,162 | 11,559 | 12,750 | 15,028 | 16,746 | 16,211 | 16,596 | 17,497 | ||||||||||||||||||||||||||||||||
Operating expenses
|
||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses
|
4,233 | 4,777 | 5,089 | 5,487 | 5,476 | 6,417 | 6,171 | 5,439 | 6,692 | 7,196 | ||||||||||||||||||||||||||||||||
Research and development expenses
|
346 | 400 | 612 | 691 | 763 | 815 | 942 | 902 | 900 | 850 | ||||||||||||||||||||||||||||||||
Loss (gain) on sale of fixed assets
|
(88 | ) | 32 | 300 | 793 | 23 | (8 | ) | (1 | ) | | (105 | ) | | ||||||||||||||||||||||||||||
Total operating expenses
|
4,491 | 5,209 | 6,001 | 6,971 | 6,262 | 7,224 | 7,112 | 6,341 | 7,487 | 8,046 | ||||||||||||||||||||||||||||||||
Income from operations
|
2,970 | 3,137 | 3,161 | 4,588 | 6,488 | 7,804 | 9,634 | 9,870 | 9,109 | 9,451 | ||||||||||||||||||||||||||||||||
Interest expense, net
|
244 | 218 | 209 | 189 | 182 | 145 | 160 | 150 | 154 | 79 | ||||||||||||||||||||||||||||||||
Other income (expense)
|
(89 | ) | (7 | ) | 126 | (35 | ) | (147 | ) | 24 | 91 | (386 | ) | (34 | ) | 12 | ||||||||||||||||||||||||||
Income before taxes and minority interest
|
2,637 | 2,912 | 3,078 | 4,364 | 6,159 | 7,683 | 9,565 | 9,334 | 8,921 | 9,384 | ||||||||||||||||||||||||||||||||
Income tax benefit (provision)
|
(617 | ) | (651 | ) | (416 | ) | (776 | ) | (1,160 | ) | (1,383 | ) | (2,134 | ) | (1,837 | ) | (1,442 | ) | (1,461 | ) | ||||||||||||||||||||||
Minority interest in joint venture earnings
|
(97 | ) | (89 | ) | (99 | ) | (151 | ) | (143 | ) | (177 | ) | (189 | ) | (167 | ) | (239 | ) | (258 | ) | ||||||||||||||||||||||
Net income
|
$ | 1,923 | $ | 2,172 | $ | 2,563 | $ | 3,437 | $ | 4,856 | $ | 6,123 | $ | 7,242 | $ | 7,330 | $ | 7,240 | $ | 7,665 | ||||||||||||||||||||||
Earnings per share(1):
|
||||||||||||||||||||||||||||||||||||||||||
Basic
|
$ | 0.15 | $ | 0.17 | $ | 0.20 | $ | 0.27 | $ | 0.37 | $ | 0.46 | $ | 0.54 | $ | 0.53 | $ | 0.51 | $ | 0.53 | ||||||||||||||||||||||
Diluted
|
$ | 0.14 | $ | 0.15 | $ | 0.18 | $ | 0.23 | $ | 0.32 | $ | 0.40 | $ | 0.47 | $ | 0.47 | $ | 0.46 | $ | 0.47 | ||||||||||||||||||||||
Number of shares used in computation(1):
|
||||||||||||||||||||||||||||||||||||||||||
Basic
|
12,472 | 12,678 | 12,813 | 12,954 | 13,097 | 13,265 | 13,356 | 13,897 | 14,218 | 14,419 | ||||||||||||||||||||||||||||||||
Diluted
|
13,727 | 14,268 | 14,546 | 14,932 | 15,286 | 15,330 | 15,367 | 15,708 | 15,683 | 16,210 |
(1) | Adjusted for the effect of a 3-for-2 stock split in November 2003. |
Payments due by period | |||||||||||||||||||||
Less than | More than | ||||||||||||||||||||
Total | 1 Year | 1-3 Years | 3-5 Years | 5 Years | |||||||||||||||||
(in thousands) | |||||||||||||||||||||
Long-term debt
|
$ | 11,347 | $ | 3,514 | $ | 7,250 | $ | 583 | $ | | |||||||||||
Capital leases
|
2,777 | 230 | 460 | 460 | 1,627 | ||||||||||||||||
Operating leases
|
13,498 | 3,461 | 6,420 | 3,617 | | ||||||||||||||||
Purchase obligations
|
2,927 | 2,927 | | | | ||||||||||||||||
Total obligations
|
$ | 30,549 | $ | 10,132 | $ | 14,130 | $ | 4,660 | $ | 1,627 | |||||||||||
| Logic devices which process data and range from complex semiconductors such as microprocessors to digital signal processors to application-specific and standard logic products. According to Gartner the combined microcomponent, logic and application specific segments represent approximately 57.7% of total industry sales in 2004. |
| Memory devices, which store data. According to Gartner, the memory devices segment represents 21.9% of total industry sales in 2004; and |
| Analog and discrete devices which interface with real world signals such as light and heat, or process electronic signals and control electronic power. According to Gartner, the combined analog integrated circuits, discrete, optical and non-optical sensors segments represent approximately 20.4% of total industry sales in 2004. |
Historical | Projected | CAGR(3) | |||||||||||||||||||||||
2003 | 2004 | 2005E | 2006E | 2007E | 03-07E | ||||||||||||||||||||
(in billions) | |||||||||||||||||||||||||
Logic(1)
|
$ | 108.4 | $ | 126.9 | $ | 137.1 | $ | 149.6 | $ | 162.5 | 10.7 | % | |||||||||||||
Analog(2)
|
22.8 | 29.0 | 32.5 | 35.1 | 38.1 | 13.7 | |||||||||||||||||||
Discrete
|
13.5 | 15.8 | 16.5 | 17.4 | 19.1 | 9.1 | |||||||||||||||||||
Memory
|
33.5 | 48.0 | 49.2 | 52.4 | 45.5 | 8.0 | |||||||||||||||||||
Total
|
$ | 178.2 | $ | 219.9 | $ | 235.4 | $ | 254.4 | $ | 265.2 | 10.5 | % | |||||||||||||
(1) | Logic includes the following Gartner segments: microcomponent, logic and application specific |
(2) | Analog includes the following Gartner segments: analog integrated circuits, optical and non-optical sensors |
(3) | Represents compound annual growth rate |
| Flexible, scalable and cost-effective manufacturing. Our manufacturing operations are a core element of our success, and we have designed our manufacturing base to allow us to respond quickly to changes in demand trends in the end-markets we serve. For example, we have structured our Shanghai assembly, test and packaging facilities to enable us to rapidly and efficiently add capacity and adjust product mix to meet shifts in customer demand and overall market trends. As a result, for the past three years we have operated our Shanghai facilities at near full capacity, while at the same time significantly expanding that capacity. Additionally, the Shanghai location of our manufacturing operations provides us with access to a highly-skilled workforce at a low overall cost base while enabling us to better serve our leading customers, many of which are located in Asia. |
| Integrated packaging expertise. We believe that we have particular expertise in designing and manufacturing innovative and proprietary packaging solutions that integrate multiple separate discrete elements into a single semiconductor product called an array. Our ability to design and manufacture highly integrated discrete semiconductor solutions provides our customers with |
products of equivalent functionality with fewer individual parts, and at lower overall cost, than alternative products. For example, one of our leading diode array products integrates eight discrete elements into a single highly-miniaturized package that provides four times the functionality, with less than 20% of the space requirements of the previous solution. This combination of integration, functionality and miniaturization makes our products well suited for high-volume consumer applications such as the digital audio players, notebook computers and digital cameras. |
| Broad customer base and diverse end markets. Our customers include leading OEMs such as Bose Corporation, Honeywell International, Inc., LG Electronics, Inc., Logitech, Inc., Motorola, Inc., Quanta Computer, Inc., Sagem Communication, Samsung Electronics Co., Ltd. and Thompson, Inc., as well as leading EMS providers such as Celestica, Inc., Flextronics International, Ltd., Hon Hai Precision Industry Co., Ltd., Inventec Corporation, Jabil Circuit, Inc., Sanmina-SCI Corporation and Solectron Corporation. Overall, we serve over 150 direct customers and over 10,000 additional customers through our distributors, including leading distributors, such as Arrow Electronics, Inc., Avnet, Inc., Future Electronics and Yosun Industrial Corp. Our products are ultimately used in end products in a large number of markets served by our broad base of customers, which we believe makes us less dependent on either specific customers or specific end-use applications. |
| Customer focused product development. Close collaboration with our customers and a high degree of customer service are essential elements of our business. We believe focusing on dependable delivery of discrete semiconductor solutions tailored to specific end-user applications, has fostered deep customer relationships and created a key competitive advantage for us in the highly-fragmented discrete semiconductor marketplace. We believe our close relationships with our OEM and EMS customers have provided us with deeper insight into our customers product needs. This results in differentiation in our product designs and often provides us with insight into additional opportunities for new design wins in our customers products. |
| Management continuity and experience. We believe that the continuity of our management team is a critical competitive strength. The five members of our senior management team have an average of over 12 years of service at Diodes and the length of their service with us has created significant institutional insight into our markets, our customers and our operations. In June 2005, we appointed Dr. Keh-Shew Lu as President and Chief Executive Officer. Dr. Lu has served as a director of Diodes since 2001 and has 30 years of relevant industry experience. Dr. Lu began his career at Texas Instruments in 1974 and retired in 2001 as Senior Vice President and General Manager of Worldwide Analog, Mixed-Signal and Logic Products. Our Chief Financial Officer, Carl Wertz, has been employed by us since 1993 and has over 20 years of financial experience in manufacturing and distribution industries. Joseph Liu, our Senior Vice President, Operations, joined us in 1990 and has over 30 years of relevant industry experience having started his career in 1971 at Texas Instruments. Similarly, Mark King, our Senior Vice President of Sales and Marketing has been employed by us since 1991, as has Steven Ho, our Vice President of Asia Sales. |
| Continue rapidly introducing innovative discrete semiconductor products. We intend to maintain our rapid pace of new discrete product introductions, especially for high-volume, growth applications with short design cycles, such as digital audio players, notebook computers, flat panel displays, mobile handsets, digital cameras, set-top boxes and other consumer electronics and |
computing devices. During the six months ended June 30, 2005, we introduced 122 new devices in 13 different product families and achieved new design wins with over 100 OEMs. We believe that continued introduction of new and differentiated product solutions is critically important in maintaining and extending our market share in the highly competitive discrete semiconductor marketplace. | |
| Expand our available market opportunities. We intend to aggressively maximize our opportunities in the discrete semiconductor market as well as in related markets, where we can apply our semiconductor design and manufacturing expertise. A key element of this is leveraging our highly integrated packaging expertise through our Application Specific Multi-Chip Circuit, or ASMCC, product platform, which consists of standard arrays, function specific arrays and end-equipment specific arrays. We intend to achieve this by: |
- | Continuing to focus on increasing packaging integration, particularly with our existing standard array and customer-specific array products, in order to achieve products with increased circuit density, reduced component count and lower overall product cost; | |
- | Expanding existing products and developing new products in our function specific array lines, which combine multiple discrete semiconductor components to achieve specific common electronic device functionality at a low cost; and | |
- | Developing new product lines, that we refer to as end-equipment specific arrays, which combine discrete components with logic and/or standard analog circuits to provide system-level solutions for high-volume, high-growth applications. |
| Maintain intense customer focus. We intend to strengthen and deepen our customer relationships. We believe that continued focus on customer service will increase our net sales, operating performance and overall market share. To accomplish this, we intend to continue to closely collaborate with our customers to design products that meet their specific needs. A critical element of this strategy is to continue to further reduce our design cycle time in order to quickly provide our customers with innovative products. Additionally, to support our customer-focused strategy, we are continuing to expand our sales force and field application engineers personnel, particularly in Asia and Europe. |
| Enhance cost competitiveness. A key element of our success is our overall low-cost base. While we believe that our Shanghai manufacturing facilities are among the most efficient in the industry, we will continue to refine our proprietary manufacturing processes and technology to achieve additional cost efficiencies. Additionally, we intend to continue to operate our facilities at high utilization rates and to increase product yields in order to achieve meaningful economies of scale. |
| Pursue selective strategic acquisitions. As part of our strategy to expand our discrete semiconductor product offerings and to maximize our market opportunities, we may acquire discrete analog or mixed-signal technologies, product lines or companies in order to support our ASMCC product platform and enhance our standard and new product offerings. |
| Discrete semiconductor products, including performance Schottky rectifiers; performance Schottky diodes; Zener diodes and performance Zener diodes, including tight tolerance and low operating current types; standard, fast, super-fast and ultra-fast recovery rectifiers; bridge rectifiers; switching diodes; small signal bipolar transistors; prebiased transistors; MOSFETs; and transient voltage suppressors; |
| Complex high-density diode, transistor and mixed technology arrays, in multi-pin ultra-miniature surface-mount packages, including customer specific and function specific arrays; and |
| Silicon wafers used in manufacturing these products. |
Approximate | ||||||
percentage of our | ||||||
net sales for the | ||||||
End markets | six months ended | |||||
served | June 30, 2005 | End product applications | ||||
Computing and Peripherals | 36% | Notebooks, flat panel monitors, motherboards, PDAs, multi-function printers, servers, network interface cards, hard disk drives | ||||
Consumer Electronics | 34% | Set-top boxes, game consoles, digital audio players, digital cameras, mobile handset, flat panel display, personal medical devices | ||||
Industrial | 18% | Ballast lighting, power supplies, DC-DC conversion, security/access systems, motor controls, HVAC | ||||
Communications | 8% | Gateways, routers, switches, hubs, fiber optics, DSL, cable and standard modems, networking (wireless, ethernet, power/phone line) | ||||
Automotive | 4% | Comfort controls, audio/video players, GPS navigation, safety, security, satellite radios, engine control, HID lighting | ||||
Approximate
Location
Use
Size (sq. ft.)
Global headquarters and product distribution
30,900
Wafer fabrication (5), research and development,
engineering, sales and marketing
70,000
Shanghai, China (Shanghai Kaihong Electronics, Co., Ltd.)
Manufacturing (packaging, assembly and test), research and
development, engineering
145,300
Shanghai, China (Shanghai Kaihong Technology Electronic Co.,
Ltd.)
Manufacturing (packaging, assembly and test) research and
development, engineering
74,300
Warehouse
9,000
Sales and administrative offices
7,000
Regional offices
*
Regional offices
*
Sales, warehousing and logistics office
*
Regional sales office
*
Regional sales office
*
Regional sales office
*
Regional sales office
*
Regional sales office
*
* | Less than 1,000 square feet. |
Name | Age | Position(s) | ||||
Dr. Keh-Shew Lu(1)
|
58 | President, Chief Executive Officer and Director | ||||
Joseph Liu
|
63 | Senior Vice President, Operations | ||||
Mark A. King
|
47 | Senior Vice President, Sales & Marketing | ||||
Carl C. Wertz
|
51 | Chief Financial Officer, Secretary and Treasurer | ||||
Steven Ho
|
50 | Vice President, Asia Sales | ||||
Raymond Soong
|
63 | Chairman of the Board | ||||
C.H. Chen(1)(2)(3)
|
62 | Vice Chairman of the Board | ||||
Michael R. Giordano(1)(2)(4)
|
58 | Director | ||||
M.K. Lu
|
57 | Director | ||||
Dr. Shing Mao(3)(4)
|
70 | Director | ||||
John M. Stich(1)(2)(3)(4)
|
63 | Director |
(1) | Member of our Strategic Planning Committee. |
(2) | Member of our Compensation and Stock Options Committee. |
(3) | Member of our Nominating Committee. |
(4) | Member of our Audit Committee. |
| any breach of their duty of loyalty to our company or our stockholders; |
| acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
| unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; and |
| any transaction from which the director derived an improper personal benefit. |
Percent of | ||||||||||||||||||||
outstanding | ||||||||||||||||||||
Number of | Number of | shares | ||||||||||||||||||
shares | Number of | shares | beneficially | |||||||||||||||||
beneficially | shares to | beneficially | owned(3) | |||||||||||||||||
owned | be sold in | owned | ||||||||||||||||||
prior to | this | after the | Before | After | ||||||||||||||||
Name and address of beneficial owner(1) | offering(2) | offering | offering(2) | offering | offering | |||||||||||||||
Lite-On Semiconductor Corporation(4)
|
4,601,458 | 750,000 | 3,851,458 | 31.5 | % | 23.5 | % | |||||||||||||
Munder Capital Management
|
803,288 | | 803,288 | 5.5 | 4.9 | |||||||||||||||
Raymond Soong(5)
|
269,100 | | 269,100 | 1.8 | 1.6 | |||||||||||||||
C.H. Chen(5)
|
232,500 | | 232,500 | 1.6 | 1.4 | |||||||||||||||
Michael R. Giordano(5)(6)
|
118,187 | | 118,187 | * | * | |||||||||||||||
M.K. Lu(5)
|
23,000 | | 23,000 | * | * | |||||||||||||||
Dr. Shing Mao(5)
|
54,000 | | 54,000 | * | * | |||||||||||||||
John M. Stich(5)(7)
|
36,500 | | 36,500 | * | * | |||||||||||||||
Dr. Keh-Shew Lu(5)
|
229,000 | | 229,000 | 1.6 | 1.4 | |||||||||||||||
Joseph Liu(5)
|
300,000 | | 300,000 | 2.0 | 1.8 | |||||||||||||||
Mark A. King(5)
|
81,000 | | 81,000 | * | * | |||||||||||||||
Carl C. Wertz(5)
|
144,281 | | 144,281 | 1.0 | * | |||||||||||||||
Steven Ho(5)
|
50,375 | | 50,375 | * | * | |||||||||||||||
All directors and executive officers as a group (11 persons)(8)
|
1,537,943 | | 1,537,943 | 9.7 | 8.7 |
* | Less than 1%. |
(1) | The address of Lite-On Semiconductor is 9F. No. 233-2, Pao-Chiao Road, Hsin-Tien, Taipei-hsien 23115, Taiwan, R.O.C. The address of Munder Capital Management is 480 Pierce Street Birmingham, MI 48009-6063. The address of each our directors and executive officers is 3050 East Hillcrest Drive, Westlake Village, California 91362. |
(2) | The named stockholder has sole voting power and investment power with respect to the shares listed, except as indicated and subject to community property laws where applicable. |
(3) | Under Rule 13d-3 of the Securities and Exchange Act of 1934, or the Exchange Act, certain shares may be deemed to be beneficially owned by more than one person (if, for example, a person shares the power to vote or the power to dispose of the shares). In addition, under Rule 13d-3(d)(1) of the Exchange Act, shares which the person (or group) has the right to acquire within 60 days after August 15, 2005 are deemed to be outstanding in calculating the beneficial ownership and the percentage ownership of the person (or group) but are not deemed to be outstanding as to any other person or group. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the persons actual ownership of voting power with respect to the number of shares of common stock actually outstanding at August 15, 2005. |
(4) | Lite-On Semiconductor is a public company listed on the Taiwan Stock Exchange Corporation and a member of The Lite-On Group. |
(5) | Includes the following shares of common stock that the named individual has the right to acquire within 60 days after August 15, 2005 by the exercise of vested stock options: |
Shares | ||||
subject to | ||||
Named individual | options | |||
Raymond Soong
|
236,250 | |||
C.H. Chen
|
232,500 | |||
Michael R. Giordano
|
100,500 | |||
M.K. Lu
|
23,000 | |||
Shing Mao
|
45,000 | |||
John M. Stich
|
35,000 | |||
Keh-Shew Lu
|
49,000 | |||
Joseph Liu
|
267,500 | |||
Mark A. King
|
81,000 | |||
Carl C. Wertz
|
139,500 | |||
Steven Ho
|
39,500 |
(6) | Includes 2,250 shares of common stock held in the name of UBS Fiduciary Trust for the investment retirement account of Mr. Giordano. |
(7) | Includes 1,500 shares of common stock held in the name of Stich Family Holdings LP. |
(8) | Includes 1,208,750 shares that the directors and executive officers have the right to acquire within 60 days after August 15, 2005, by the exercise of vested stock options but excludes an additional 608,500 shares that the directors and executive officers will have the right to acquire upon the exercise of stock options which will become exercisable in installments more than 60 days after August 15, 2005. |
| 30,000,000 shares are designated as common stock, each with a par value of $0.66 2 / 3 ; and |
| 1,000,000 shares are designated as preferred stock, each with a par value of $1.00. |
| either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder is approved by the corporations board of directors prior to the date the interested stockholder becomes an interested stockholder; |
| the interested stockholder acquired at least 85.0% of the voting stock of the corporation (other than stock held by directors who are also officers or by certain employee stock plans) in the transaction in which the stockholder became an interested stockholder; or |
| the business combination is approved by a majority of the board of directors and by the affirmative vote of 66.66% of the outstanding voting stock that is not owned by the interested stockholder. |
| banks, insurance companies or other financial institutions; |
| persons subject to the alternative minimum tax; |
| tax-exempt organizations or government entities; |
| brokers or dealers in securities or currencies; |
| traders in securities that elect to use a mark-to-market method of accounting for their securities holdings; |
| certain former citizens or long-term residents of the United States; |
| certain foreign entities that are owned by U.S. persons, including controlled foreign corporations and passive foreign investment companies; |
| persons who hold our common stock as a position in a hedging transaction, straddle, conversion transaction or other risk reduction transaction; |
| persons deemed to sell our common stock under the constructive sale provisions of the Code; or |
| partnerships or entities taxable as partnerships. |
| an individual citizen or resident of the United States; |
| a corporation or other entity taxable as a corporation created or organized in the United States or under the laws of the United States, any state or the District of Columbia; |
| an estate whose income is subject to U.S. federal income tax regardless at its source; or |
| a trust (i) whose administration is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (ii) which has made an election to be treated as a U.S. person. |
| the gain is effectively connected with your conduct of a U.S. trade or business (and if a tax treaty applies, such gain is attributable to your permanent establishment in the Unites States) (in either case, see the discussion below under Income or Gain Effectively Connected with a United States Trade or Business); |
| you are an individual who holds our common stock as a capital asset (generally, an asset held for investment purposes) and who is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which the sale or disposition occurs and certain other conditions are met; or |
| our common stock constitutes a U.S. real property interest by reason of our status as a U.S. real property holding corporation for U.S. federal income tax purposes at any time within the shorter of the five-year period preceding the disposition or your holding period for our common stock. |
Underwriters | Number of shares | ||||
UBS Securities LLC
|
|||||
A.G. Edwards & Sons, Inc.
|
|||||
C.E. Unterberg, Towbin, LLC
|
|||||
Raymond James & Associates, Inc.
|
|||||
WR Hambrecht + Co, LLC
|
|||||
Total
|
2,500,000 |
| receipt and acceptance of the common stock by the underwriters; and |
| the underwriters right to reject orders in whole or in part. |
Underwriters | No exercise | Full exercise | |||||||
Per share
|
$ | $ | |||||||
Total
|
$ | $ | |||||||
| stabilizing transactions; |
| short sales; |
| purchases to cover positions created by short sales; |
| imposition of penalty bids; and |
| syndicate covering transactions. |
(1) | to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; | |
(2) | to any legal entity which has two or more of (a) an average of at least 250 employees during the last financial year; (b) a total balance sheet of more than 43,000,000 and (c) an annual net turnover of more than 50,000,000, as shown in its last annual or consolidated accounts; or | |
(3) | in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive. |
(1) | this prospectus has not been submitted to the clearance procedures of the AMF; | |
(2) | in compliance with the Decree, if you subscribe for shares of our common stock, you will be acting for your own account; | |
(3) | the direct and indirect distribution by you to the public of your shares shall only be made in compliance with Articles L.411-1, L.411-2, L.412-1, and L.621-8 of the Monetary and Financial Code; and |
(4) | where the exemption for placements within a restricted circle of investors is relied on and the number of such investors exceeds 100, you must declare that you have personal links, either of a professional or family nature, with any of the underwriters. |
(1) | made by investment firms, banks, or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with Legislative Decree No. 385 of 1st September 1993 (Decree No. 385), Decree No. 58, Regulation No. 11522, and any other applicable laws and regulations; and | |
(2) | in compliance with any other applicable notification requirement or limitation which may be imposed by CONSOB or the Bank of Italy. |
| Our annual report on Form 10-K for the fiscal year ended December 31, 2004 (as amended by the Form 10-K/A (Amendment No. 1)), including the information incorporated therein from the proxy statement for our 2005 annual meeting of stockholders); |
| Our quarterly reports on Form 10-Q for the fiscal quarters ended March 31, 2005 and June 30, 2005; and |
| Our current reports on Form 8-K, filed on May 31, 2005 (except Item 7.01 which is furnished to, but not filed with, the SEC) and July 28, 2005. |
Consolidated Financial Statements of Diodes Incorporated
|
||||
F-2 | ||||
F-3 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F-8 | ||||
Unaudited Consolidated Financial Statements of Diodes
Incorporated
|
||||
F-27 | ||||
F-29 | ||||
F-30 | ||||
F-32 |
December 31,
2003
2004
ASSETS
$
12,847,000
$
18,970,000
27,010,000
38,682,000
3,938,000
5,526,000
30,948,000
44,208,000
(375,000
)
(432,000
)
30,573,000
43,776,000
16,164,000
22,238,000
5,547,000
2,453,000
2,256,000
4,243,000
446,000
406,000
67,833,000
92,086,000
47,893,000
60,857,000
1,816,000
7,970,000
5,090,000
5,090,000
1,163,000
1,798,000
$
123,795,000
$
167,801,000
2002
2003
2004
$
115,821,000
$
136,905,000
$
185,703,000
89,111,000
100,377,000
124,968,000
26,710,000
36,528,000
60,735,000
16,228,000
19,586,000
23,503,000
1,472,000
2,049,000
3,422,000
1,000,000
43,000
37,000
14,000
17,743,000
22,672,000
26,939,000
8,967,000
13,856,000
33,796,000
(1,183,000
)
(860,000
)
(637,000
)
67,000
(5,000
)
(418,000
)
(1,116,000
)
(865,000
)
(1,055,000
)
7,851,000
12,991,000
32,741,000
(1,729,000
)
(2,460,000
)
(6,514,000
)
6,122,000
10,531,000
26,227,000
(320,000
)
(436,000
)
(676,000
)
$
5,802,000
$
10,095,000
$
25,551,000
$
0.47
$
0.79
$
1.91
$
0.44
$
0.70
$
1.65
12,276,899
12,730,808
13,404,276
13,297,490
14,406,054
15,471,438
Common stock
Accumulated
other
Shares in
Common stock
Additional Paid-In
Retained
comprehensive
Shares
Treasury
Amount
in treasury
Capital
earnings
gain (loss)
Total
13,841,496
1,613,508
$
9,228,000
$
(1,782,000
)
$
4,233,000
$
39,882,000
$
(437,000
)
$
51,124,000
5,802,000
5,802,000
(40,000
)
(40,000
)
(1,000
)
(1,000
)
5,761,000
375,000
375,000
97,650
65,000
354,000
419,000
13,939,146
1,613,508
$
9,293,000
$
(1,782,000
)
$
4,962,000
$
45,684,000
$
(478,000
)
$
57,679,000
10,095,000
10,095,000
169,000
169,000
68,000
68,000
10,332,000
286,000
286,000
688,138
459,000
2,694,000
3,153,000
14,627,284
1,613,508
$
9,752,000
$
(1,782,000
)
$
7,942,000
$
55,779,000
$
(241,000
)
$
71,450,000
25,551,000
25,551,000
793,000
793,000
23,000
23,000
26,367,000
180,000
180,000
1,135,982
757,000
13,394,000
14,151,000
15,763,266
1,613,508
$
10,509,000
$
(1,782,000
)
$
21,516,000
$
81,330,000
$
575,000
$
112,148,000
2002
2003
2004
$
5,802,000
$
10,095,000
$
25,551,000
9,747,000
11,073,000
13,173,000
320,000
436,000
676,000
43,000
1,037,000
14,000
(4,779,000
)
(8,490,000
)
(13,203,000
)
2,139,000
(1,248,000
)
(6,074,000
)
(711,000
)
(388,000
)
(2,474,000
)
646,000
270,000
5,463,000
3,153,000
5,082,000
3,728,000
3,481,000
1,468,000
149,000
954,000
978,000
19,990,000
18,821,000
29,300,000
(6,777,000
)
(15,646,000
)
(26,201,000
)
3,000
357,000
68,000
(6,774,000
)
(15,289,000
)
(26,133,000
)
(3,478,000
)
5,463,000
(2,321,000
)
321,000
2,014,000
5,628,000
375,000
375,000
375,000
3,583,000
(11,080,000
)
(5,833,000
)
(4,819,000
)
175,000
(133,000
)
(157,000
)
(158,000
)
(300,000
)
(13,995,000
)
1,862,000
2,163,000
(40,000
)
169,000
793,000
(819,000
)
5,563,000
6,123,000
8,103,000
7,284,000
12,847,000
$
7,284,000
$
12,847,000
$
18,970,000
$
1,229,000
$
876,000
$
683,000
$
965,000
$
999,000
$
2,504,000
$
98,000
$
1,139,000
$
8,514,000
$
2,785,000
$
$
Year ended December 31
2002
2003
2004
$
5,802,000
$
10,095,000
$
25,551,000
12,276,899
12,730,808
13,404,276
$
0.47
$
0.79
$
1.91
12,276,899
12,730,808
13,404,276
1,020,591
1,675,246
2,067,162
13,297,490
14,406,054
15,471,438
$
0.44
$
0.70
$
1.65
For the years ended December 31,
Amounts per
Amounts per
Amounts per
share
share
share
2002
Basic
Diluted
2003
Basic
Diluted
2004
Basic
Diluted
$
5,802,000
$
0.47
$
0.44
$
10,095,000
$
0.79
$
0.70
$
25,551,000
$
1.91
$
1.65
(1,918,000
)
(0.15
)
(0.15
)
(1,397,000
)
(0.11
)
(0.10
)
(1,642,000
)
(0.13
)
(0.10
)
$
3,884,000
$
0.32
$
0.29
$
8,698,000
$
0.68
$
0.60
$
23,909,000
$
1.78
$
1.55
Risk-free | Expected | Expected | Expected | |||||||||||||||||
December 31, | interest rate | Expected life | volatility | forfeitures | dividends | |||||||||||||||
2004
|
3.64% | 5.0 years | 68.36% | 2.64% | 0% | |||||||||||||||
2003
|
3.31% | 5.0 years | 66.18% | 2.77% | 0% | |||||||||||||||
2002
|
4.03% | 5.0 years | 75.61% | 2.77% | 0% |
2003
2004
$
9,920,000
$
13,118,000
1,818,000
2,025,000
6,519,000
9,240,000
18,257,000
24,383,000
(2,093,000
)
(2,145,000
)
$
16,164,000
$
22,238,000
2003
2004
$
5,894,000
$
7,126,000
2,810,000
2,989,000
74,171,000
90,151,000
82,875,000
100,266,000
(35,244,000
)
(39,671,000
)
47,631,000
60,595,000
262,000
262,000
$
47,893,000
$
60,857,000
Outstanding at December 31,
2004
Credit Facility
Terms
2003
2004
$
7,500,000
Revolving, collateralized by all assets, variable
$
5,782,000
$
3,167,000
interest (prime rate, approximately 5.25% at December 31,
2004) due monthly
$
5,000,000
Term loan, collateralized by all assets, variable interest
3,333,000
4,597,000
(LIBOR + variable margin, approximately 3.80% at
December 31, 2004) due monthly
$
25,000,000
Unsecured, interest at LIBOR plus margin (approximately 2.30% at
December 31, 2004) due quarterly
3,000,000
6,000,000
$
8,960,000
Unsecured, variable interest plus margin (approximately 1.70% to
2.30% at December 31, 2003) due monthly
2,706,000
$
46,460,000
14,821,000
13,764,000
(6,333,000
)
(7,597,000
)
$
8,488,000
$
6,167,000
Table of Contents
$
3,514,000
5,250,000
1,000,000
1,000,000
583,000
$
11,347,000
For years ending December 31,
$
230,000
230,000
230,000
230,000
230,000
1,627,000
2,777,000
(440,000
)
2,337,000
(165,000
)
$
2,172,000
Table of Contents
2003
2004
$
4,501,000
$
5,779,000
1,875,000
2,012,000
978,000
686,000
437,000
334,000
219,000
1,319,000
2,034,000
$
8,715,000
$
11,459,000
2002
2003
2004
$
$
1,167,000
$
4,922,000
1,231,000
1,183,000
4,745,000
1,000
40,000
461,000
1,232,000
2,390,000
10,128,000
497,000
70,000
(3,614,000
)
$
1,729,000
$
2,460,000
$
6,514,000
Table of Contents
2002
2003
2004
Percent
Percent
Percent
of pretax
of pretax
of pretax
Amount
earnings
Amount
earnings
Amount
earnings
$
2,669,000
34.0
$
4,417,000
34.0
$
11,131,000
34.0
455,000
5.8
753,000
5.8
1,588,000
4.8
(1,409,000
)
(18.0
)
(2,808,000
)
(21.6
)
(6,629,000
)
(20.2
)
14,000
0.2
98,000
0.8
424,000
1.3
$
1,729,000
22.0
$
2,460,000
19.0
$
6,514,000
19.9
Table of Contents
2003
2004
$
272,000
$
364,000
566,000
702,000
4,709,000
1,387,000
$
5,547,000
$
2,453,000
$
(2,380,000
)
$
(2,632,000
)
4,196,000
10,602,000
$
1,816,000
$
7,970,000
Table of Contents
Table of Contents
Outstanding options
Exercise price per share
Weighted
Number
Range
average
3,172,641
$
0.83-15.94
$
5.85
515,550
5.69-6.38
5.72
(97,650
)
0.83-5.55
3.28
(5,400
)
5.55-5.69
5.62
3,585,141
0.83-15.94
5.90
502,950
10.63-13.04
13.03
(688,141
)
0.83-15.94
2.93
(15,325
)
5.55-15.94
7.84
3,384,625
2.22-15.94
7.56
526,900
18.32-21.85
18.35
(1,136,725
)
2.22-15.94
4.96
(35,600
)
5.55-18.32
13.64
2,739,200
$
2.22-21.85
$
10.63
Weighted average
Range of exercise
Number
remaining contractual
Weighted average
prices
outstanding
life (yrs)
exercise price
$
2.67-15.94
631,950
4.6
$
9.42
2.22-15.94
705,400
4.9
7.45
4.77-21.85
1,401,850
8.6
12.77
$
2.22-21.85
2,739,200
6.7
$
10.63
Range of exercise
Number
Weighted average
prices
exercisable
exercise price
$
2.67-15.94
630,300
$
9.43
2.22-15.94
668,550
$
7.53
5.55-13.04
438,350
$
8.09
$
2.22-15.94
1,737,200
$
8.36
Table of Contents
2002
2003
2004
$
16,147,000
$
14,628,000
$
20,675,000
14,292,000
18,667,000
22,368,000
Table of Contents
2002
2003
2004
$
1,885,000
$
1,484,000
$
1,677,000
4,394,000
2,961,000
4,789,000
2003
2004
$
3,111,000
$
4,180,000
827,000
1,346,000
$
3,938,000
$
5,526,000
$
2,914,000
$
3,308,000
539,000
628,000
$
3,453,000
$
3,936,000
Table of Contents
Asia
U.S.A.
Consolidated
$
185,308,000
$
92,634,000
$
277,942,000
(75,527,000
)
(16,712,000
)
(92,239,000
)
$
109,781,000
$
75,922,000
$
185,703,000
$
116,729,000
$
51,072,000
$
167,801,000
48,589,000
12,268,000
60,857,000
$
124,412,000
$
72,188,000
$
196,600,000
(48,378,000
)
(11,317,000
)
(59,695,000
)
$
76,034,000
$
60,871,000
$
136,905,000
$
82,142,000
$
41,653,000
$
123,795,000
35,941,000
11,952,000
47,893,000
$
95,081,000
$
66,338,000
$
161,419,000
(39,592,000
)
(6,006,000
)
(45,598,000
)
$
55,489,000
$
60,332,000
$
115,821,000
$
63,721,000
$
41,289,000
$
105,010,000
32,313,000
12,380,000
44,693,000
$
3,461,000
3,481,000
2,939,000
2,520,000
1,097,000
$
13,498,000
Table of Contents
Quarter Ended
March 31
June 30
Sept. 30
Dec. 31
$
41,435,000
$
47,017,000
$
49,364,000
$
47,887,000
12,750,000
15,028,000
16,746,000
16,211,000
4,856,000
6,123,000
7,242,000
7,330,000
$
0.37
$
0.46
$
0.54
$
0.53
0.32
0.40
0.47
0.47
Quarter Ended
March 31
June 30
Sept. 30
Dec. 31
$
29,446,000
$
33,316,000
$
34,941,000
$
39,202,000
7,461,000
8,346,000
9,162,000
11,559,000
1,923,000
2,172,000
2,563,000
3,437,000
$
0.15
$
0.17
$
0.20
$
0.27
0.14
0.15
0.18
0.23
Quarter Ended
March 31
June 30
Sept. 30
Dec. 31
$
26,924,000
$
29,946,000
$
30,287,000
$
28,664,000
4,345,000
7,098,000
7,862,000
7,405,000
208,000
1,564,000
1,767,000
2,263,000
$
0.02
$
0.13
$
0.14
$
0.18
0.02
0.12
0.13
0.17
Table of Contents
December 31,
June 30,
2004
2005
(unaudited)
$
18,970,000
$
33,014,000
38,682,000
43,782,000
5,526,000
4,599,000
44,208,000
48,381,000
432,000
464,000
43,776,000
47,917,000
22,238,000
22,304,000
2,453,000
2,375,000
4,243,000
4,160,000
406,000
883,000
92,086,000
110,653,000
60,857,000
63,005,000
7,970,000
7,309,000
5,090,000
5,090,000
1,798,000
323,000
$
167,801,000
$
186,380,000
Table of Contents
December 31,
June 30,
2004
2005
(unaudited)
$
6,167,000
$
17,274,000
18,374,000
3,936,000
6,071,000
11,459,000
12,730,000
2,500,000
2,500,000
1,014,000
4,391,000
165,000
136,000
42,515,000
44,202,000
1,250,000
6,583,000
3,877,000
2,172,000
1,678,000
3,133,000
3,630,000
10,509,000
10,791,000
21,516,000
26,946,000
81,330,000
96,235,000
113,355,000
133,972,000
1,782,000
1,782,000
(575,000
)
(803,000
)
1,207,000
979,000
112,148,000
132,993,000
$
167,801,000
$
186,380,000
Table of Contents
Three months ended
Six months ended
June 30,
June 30,
2004
2005
2004
2005
$
47,017,000
$
50,598,000
$
88,442,000
$
99,198,000
31,989,000
33,101,000
60,664,000
65,105,000
15,028,000
17,497,000
27,778,000
34,093,000
6,417,000
7,196,000
11,908,000
13,888,000
815,000
850,000
1,562,000
1,750,000
(8,000
)
15,000
(105,000
)
7,224,000
8,046,000
13,485,000
15,533,000
7,804,000
9,451,000
14,293,000
18,560,000
8,000
39,000
10,000
43,000
(153,000
)
(118,000
)
(337,000
)
(277,000
)
24,000
12,000
(124,000
)
(21,000
)
(121,000
)
(67,000
)
(451,000
)
(255,000
)
7,683,000
9,384,000
13,842,000
18,305,000
(1,383,000
)
(1,461,000
)
(2,543,000
)
(2,903,000
)
6,300,000
7,923,000
11,299,000
15,402,000
(177,000
)
(258,000
)
(319,000
)
(497,000
)
$
6,123,000
$
7,665,000
$
10,980,000
$
14,905,000
$
0.46
$
0.53
$
0.83
$
1.04
$
0.40
$
0.47
$
0.72
$
0.93
13,265,146
14,418,819
13,180,992
14,318,916
15,329,760
16,209,651
15,306,089
16,071,423
Table of Contents
Six months ended June 30,
2004
2005
$
10,980,000
$
14,905,000
6,145,000
7,813,000
319,000
497,000
358,000
15,000
(105,000
)
(6,568,000
)
(4,336,000
)
(3,486,000
)
(66,000
)
(66,000
)
1,558,000
334,000
263,000
3,889,000
3,235,000
2,219,000
(1,207,000
)
1,223,000
13,781,000
24,138,000
(10,300,000
)
(6,845,000
)
55,000
(10,245,000
)
(6,845,000
)
(827,000
)
(6,167,000
)
1,868,000
2,973,000
(2,916,000
)
(579,000
)
(90,000
)
(79,000
)
375,000
375,000
(300,000
)
(1,890,000
)
(3,477,000
)
93,000
228,000
1,739,000
14,044,000
12,847,000
18,970,000
$
14,586,000
$
33,014,000
Table of Contents
Six months ended June 30,
2004
2005
$
343,000
$
289,000
$
1,592,000
$
1,627,000
$
1,755,000
$
2,201,000
Table of Contents
Table of Contents
December 31,
June 30,
2004
2005
$
13,118,000
$
13,389,000
2,025,000
2,511,000
9,240,000
8,558,000
24,383,000
24,458,000
(2,145,000
)
(2,154,000
)
$
22,238,000
$
22,304,000
Table of Contents
Table of Contents
For the three months ended June 30
(in 000s except per share data),
Amounts per share
Amounts per share
2004
Basic
Diluted
2005
Basic
Diluted
$
6,123
$
0.46
$
0.40
$
7,665
$
0.53
$
0.47
(316
)
(0.02
)
(0.02
)
(567
)
(0.04
)
(0.03
)
$
5,807
$
0.44
$
0.38
$
7,098
$
0.49
$
0.44
For the six months ended June 30
(in 000s except per share data),
Amounts Per Share
Amounts Per Share
2004
Basic
Diluted
2005
Basic
Diluted
$
10,980
$
0.83
$
0.72
$
14,905
$
1.04
$
0.93
(630
)
(0.04
)
(0.04
)
(1,083
)
(0.07
)
(0.07
)
$
10,350
$
0.79
$
0.68
$
13,822
$
0.97
$
0.86
Table of Contents
Three Months Ended June 30, 2004
Revenue
% of Total Revenue
$
13,823,000
29.4
$
12,434,000
26.4
$
10,837,000
23.0
$
9,923,000
21.2
$
47,017,000
100.0
Three Months Ended June 30, 2005
Revenue
% of Total Revenue
$
17,042,000
33.7
$
13,085,000
25.9
$
12,852,000
25.4
$
7,619,000
15.0
$
50,598,000
100.0
Six Months Ended June 30, 2004
Revenue
% of Total Revenue
$
25,550,000
28.9
$
23,464,000
26.5
$
19,161,000
21.7
$
20,267,000
22.9
$
88,442,000
100.0
Table of Contents
Six Months Ended June 30, 2005
Revenue
% of Total Revenue
$
33,606,000
33.9
$
25,535,000
25.7
$
25,157,000
25.4
$
14,900,000
15.0
$
99,198,000
100.0
Consolidated
Three Months Ended June 30, 2004
Far East
North America
Segments
$
46,185,000
$
24,051,000
$
70,236,000
(18,733,000
)
(4,486,000
)
(23,219,000
)
$
27,452,000
$
19,565,000
$
47,017,000
$
43,617,000
$
11,819,000
$
55,436,000
$
99,438,000
$
43,595,000
$
143,033,000
Consolidated
Three Months Ended June 30, 2005
Far East
North America
Segments
$
56,088,000
$
21,554,000
$
77,642,000
(22,815,000
)
(4,229,000
)
(27,044,000
)
$
33,273,000
$
17,325,000
$
50,598,000
$
51,582,000
$
11,423,000
$
63,005,000
$
135,414,000
$
50,966,000
$
186,380,000
Consolidated
Six Months Ended June 30, 2004
Far East
North America
Segments
$
87,086,000
$
45,428,000
$
132,514,000
(35,695,000
)
(8,367,000
)
(44,072,000
)
$
51,391,000
$
37,061,000
$
88,442,000
$
43,617,000
$
11,819,000
$
55,436,000
$
99,438,000
$
43,595,000
$
143,033,000
Table of Contents
Consolidated
Six Months Ended June 30, 2005
Far East
North America
Segments
$
108,803,000
$
42,924,000
$
151,727,000
(44,649,000
)
(7,880,000
)
(52,529,000
)
$
64,154,000
$
35,044,000
$
99,198,000
$
51,582,000
$
11,423,000
$
63,005,000
$
135,414,000
$
50,966,000
$
186,380,000
Table of Contents
Table of Contents
Table of Contents
ITEM 14.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
$
11,904
10,500
21,250
110,000
500,000
60,000
6,000
100,346
$
820,000
Table of Contents
any breach of their duty of
loyalty to the corporation or its stockholders;
acts or omissions not in good
faith or which involve intentional misconduct or a knowing
violation of law;
unlawful payments of dividends or
unlawful stock repurchases or redemptions as provided in
Section 174 of the DGCL; or
any transaction from which the
director derived an improper personal benefit.
Table of Contents
ITEM 16.
Exhibits.
Exhibit
number
Description of exhibit
1
.1*
Form of Underwriting Agreement
4
.1
Form of Certificate for Common Stock, par value
$0.66
2
/
3
per share
5
.1*
Opinion of Sheppard, Mullin, Richter & Hampton, LLP
23
.1*
Consent of Sheppard, Mullin, Richter & Hampton, LLP
(included in its opinion filed as Exhibit 5.1)
23
.2
Consent of Moss Adams, LLP
24
.1
Power of Attorney (See p. II-5)
*
To be filed by amendment.
ITEM 17.
UNDERTAKINGS.
a.
The undersigned registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities
Act of 1933 (the Securities Act), the information
omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2)
For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial
bona fide
offering thereof.
b.
The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each
filing of the registrants annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of
1934 (the Exchange Act) (and, where applicable, each
filing of an employee benefit plans annual report pursuant
to Section 15(d) of the Exchange Act) that is incorporated
by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial
bona fide
offering
thereof.
c.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, executive officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission
Table of Contents
such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
Table of Contents
By:
/s/ Keh-Shew Lu
Signature
Title
Date
/s/ Keh-Shew Lu
President and Chief Executive Officer, and Director (Principal
Executive Officer)
August 25, 2005
/s/ Carl C. Wertz
Chief Financial Officer (Principal Financial and Accounting
Officer)
August 25, 2005
/s/ Raymond Soong
Director
August 25, 2005
/s/ C.H. Chen
Director
August 25, 2005
Table of Contents
Signature
Title
Date
/s/ Michael R. Giordano
Director
August 25, 2005
/s/ M.K. Lu
Director
August 25, 2005
Director
August 25, 2005
/s/ John M. Stich
Director
August 25, 2005
Table of Contents
Exhibit
Number
Description of Exhibit
1
.1*
Form of Underwriting Agreement
4
.1
Form of Certificate for Common Stock, par value
$0.66
2
/
3
per share
5
.1*
Opinion of Sheppard, Mullin, Richter & Hampton, LLP
23
.1*
Consent of Sheppard, Mullin, Richter & Hampton, LLP
(included in its opinion filed as Exhibit 5.1)
23
.2
Consent of Moss Adams, LLP
24
.1
Power of Attorney (See p. II-5)
*
To be filed by amendment
EXHIBIT 4.1
as tenants in common
as tenants by entireties
as joint tenants with right of
survivorship and not as tenants in common
UNIF GIFT MIN ACT
(Cust)
(Minor)
under Uniform Gifts to Minors
Act
UNIF TRF MIN ACT
Custodian (until age
)
(Cust)
(Minor)
to Minors Act
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE |
||
|
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X | |||
|
||||
|
X | |||
|
|
NOTICE: | THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. |
By
|
|||
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|||
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKHOLDERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17AD-15. |