Fire to Reduce Revenues and Margins for Diodes Inc.

December 08, 2016 by Jeff Shepard

Diodes Incorporated today announced that on Friday, November 18, 2016, Diodes' wafer fab in Lee's Summit, MO (KFAB) experienced a fire in its wet etch wafer fabrication area. Due to the fire, all production in KFAB has been temporarily suspended. Repair plans have been submitted to the landlord and to the city for approval. Once approval is received, Diodes expects the repairs to take one to three days. At this time, the Company is unable to predict when approval might be given or when repairs will be completed and subsequently approved by city inspectors.

As a result of the delayed production at KFAB, the Company is revising its financial guidance for the fourth quarter of 2016. Assuming the repairs cannot be completed or approval to resume production is not received from the city in time to impact fourth quarter, the Company expects revenue to be impacted by as much as $10 million, with a revised revenue range for such quarter now being between $222 million and $238 million.

Gross margin is also expected to be reduced by approximately 3 percent to 29.2 percent of revenue, plus or minus 1 percent. Non-GAAP operating expenses of 23.5 percent of revenue plus or minus 1 percent, other expense of approximately $3.9 million, a tax rate of 29 percent plus or minus 3 percent, and shares used to calculate diluted EPS of approximately 49.5 million shares remain unchanged.