Diodes Inc. reported financial results for the first quarter ended March 31, 2009. Revenue for the first quarter of 2009 was $78.1 million, compared to $87.1 million reported in the fourth quarter of 2008 and $95.6 million reported in the first quarter of 2008. Revenue for the first quarter exceeded the company’s guidance primarily due to stronger than expected demand in the China market for the company’s products utilized in mobile phone handsets, LCD televisions and netbooks, and the ramping of new design wins, as well as an increase in market share at current customers for existing designs.
Gross profit for the first quarter of 2009 was $14.5 million, or 18.6% of revenue, compared to $22.9 million, or 26.3% in the fourth quarter of 2008. The decrease was primarily due to lower manufacturing capacity utilization as a result of weaker global demand and our planned finished goods inventory reduction.
First quarter GAAP net loss was $10.8 million, or ($0.26) per share, which included $2.2 million of non-cash interest expense related to the amortization of the debt discount on its Convertible Senior Notes in accordance with FSP APB 14-1, $1.1 million of non-cash acquisition related intangible asset amortization costs, and $0.7 million of SFAS 123R stock option expense, as well as a $1.5 million gain related to the repurchase of its Convertible Senior Notes.
GAAP net loss adjusted for the change in accounting principle effected by FSP APB 14-1, which we adopted during the first quarter of 2009 was $9.5 million, or ($0.23) per share. FSP APB 14-1 requires that issuers of debt instruments, such as convertible notes, must separately account for the liability and equity components in a manner that reflects the entity’s nonconvertible debt borrowing rate. All adjustments were made retrospectively as of the date of issuance of the Convertible Senior Notes and, therefore, all prior quarters and years have been adjusted accordingly.
As of March 31, 2009, Diodes had approximately $93.2 million in cash, $320.6 million of par-value auction rate securities, which will be converted to cash on June 30, 2010 under the UBS settlement ($284 million market value in long-term investments) and $366 million in long-term debt (including the Convertible Senior Notes).
Commenting on the quarter, Dr. Keh-Shew Lu, President and Chief Executive Officer of Diodes Incorporated, said, "I am pleased with our improved performance throughout the first quarter, resulting in revenues that exceeded our updated guidance due to strength in China and market share gains related to both new and existing products. Notable during the quarter, we completed the implementation of our previously announced cost savings initiatives, which contributed to lower operating expenses in the current quarter and resulted in an improved cost structure going forward. Also, we further reduced debt, capital expenditures and inventory, which collectively resulted in positive cash flow from operations and positive free cash flow in the first quarter."
