diod-10q_20170930.htm

Large accelerated filer

Accelerated filer

Non-accelerated filer

☐ (Do not check if a smaller reporting company)

Smaller reporting company

Emerging growth company

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s Common Stock outstanding as of November 3, 2017 was 49,390,130.

	September 30,			December 31,
	2017			2016
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	201,226		$	247,802
Short-term investments		12,737			29,842
Accounts receivable, net of allowances of $3,218 and $2,141 at September 30, 2017 and December 31, 2016, respectively		230,460			217,217
Inventories		211,412			193,483
Prepaid expenses and other		45,644			44,438
Total current assets		701,479			732,782
Property, plant and equipment, net		446,052			401,988
Deferred income tax		64,129			56,047
Goodwill		133,538			129,412
Intangible assets, net		161,122			174,876
Other		34,269			33,447
Total assets	$	1,540,589		$	1,528,552

Liabilities
Current liabilities:
Accounts payable	$	111,689		$	87,600
Accrued liabilities and other		94,436			71,562
Income tax payable		-			11,855
Current portion of long-term debt		19,067			14,356
Total current liabilities		225,192			185,373
Long-term debt, net of current portion		306,687			413,126
Deferred tax liabilities		28,617			28,213
Other long-term liabilities		85,209			81,373
Total liabilities		645,705			708,085

Commitments and contingencies (See Note 8)

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; 49091693 and 48,219,376, issued and outstanding at September 30, 2017 and December 31, 2016, respectively		33,501			32,919
Additional paid-in capital		375,134			354,574
Retained earnings		563,338			530,215
Treasury stock, at cost, 1,157,206 shares held at September 30, 2017 and December 31, 2016		(29,023	)		(29,023	)
Accumulated other comprehensive loss		(89,707	)		(112,666	)
Total stockholders' equity		853,243			776,019
Noncontrolling interest		41,641			44,448
Total equity		894,884			820,467
Total liabilities and stockholders' equity	$	1,540,589		$	1,528,552


The accompanying notes are an integral part of these condensed consolidated financial statements.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net sales	$	285,247		$	250,694		$	785,774		$	710,077
Cost of goods sold		188,900			170,071			525,377			490,417
Gross profit		96,347			80,623			260,397			219,660

Operating expenses
Selling, general and administrative		43,525			38,321			122,912			119,165
Research and development		20,379			17,088			58,215			52,247
Amortization of acquisition related intangible assets		4,694			5,117			14,098			15,379
Impairment of fixed assets		1,993			-			1,993			-
Restructuring expense		2,039			-			6,108			-
Other operating expenses		-			144			169			184
Total operating expenses		72,630			60,670			203,495			186,975

Income from operations		23,717			19,953			56,902			32,685

Other income (expense)
Interest income		389			321			992			1,075
Interest expense		(3,561	)		(3,684	)		(10,493	)		(9,880	)
Foreign currency loss, net		(1,312	)		(1,439	)		(6,734	)		(2,045	)
Other income		597			480			1,128			551
Total other income (expense)		(3,887	)		(4,322	)		(15,107	)		(10,299	)

Income before income taxes and noncontrolling interest		19,830			15,631			41,795			22,386
Income tax provision		5,052			4,097			11,651			5,941
Net income		14,778			11,534			30,144			16,445
Less net income attributable to noncontrolling interest		(328	)		(886	)		(1,298	)		(1,778	)
Net income attributable to common stockholders	$	14,450		$	10,648		$	28,846		$	14,667

Earnings per share attributable to common stockholders:
Basic	$	0.29		$	0.22		$	0.59		$	0.30
Diluted	$	0.29		$	0.21		$	0.58		$	0.30
Number of shares used in earnings per share computation:
Basic		49,057			48,814			48,633			48,496
Diluted		50,416			49,922			50,061			49,565

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net income	$	14,778		$	11,534		$	30,144		$	16,445
Unrealized (loss) on defined benefit plan, net of tax		(1,135	)		(9,571	)		(2,517	)		(14,732	)
Unrealized gain on interest rate swap, net of tax		180			-			60			-
Unrealized foreign currency gain (loss), net of tax		8,249			1,187			25,416			(6,588	)
Comprehensive income (loss)		22,072			3,150			53,103			(4,875	)
Less: Comprehensive income attributable to noncontrolling interest		(328	)		(886	)		(1,298	)		(1,778	)
Total comprehensive income attributable to common stockholders	$	21,744		$	2,264		$	51,805		$	(6,653	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Nine Months Ended
	September 30,
	2017			2016
Cash flows from operating activities	$	106,340		$	74,935

Cash flows from investing activities
Decrease (increase) in restricted cash		555			(311	)
Purchases of property, plant and equipment		(81,877	)		(47,054	)
Purchases of short-term investments		(9,744	)		(17,482	)
Proceeds from maturity of short-term investments		27,891			46,352
Other		(1,238	)		(1,316	)
Net cash and cash equivalents used in investing activities		(64,413	)		(19,811	)

Cash flows from financing activities
Advances on lines of credit and short-term debt		2,383			9,000
Taxes paid related to net share settlement		(277	)		(2,528	)
Repayments on lines of credit and short-term debt		(395	)		(9,000	)
Debt issuance costs		(99	)		(435	)
Proceeds from long-term debt		7,500			23,500
Repayments of long-term debt		(109,607	)		(70,714	)
Net proceeds from issuance of common stock		6,880			5
Repayment of capital lease obligation		(533	)		(19	)
Dividend distribution to noncontrolling interest		(5,754	)		(4,615	)
Other		2,056			518
Net cash and cash equivalents used in financing activities		(97,846	)		(54,288	)

Effect of exchange rate changes on cash and cash equivalents		9,343			1,255
Change in cash and cash equivalents		(46,576	)		2,091
Cash and cash equivalents, beginning of period		247,802			218,435
Cash and cash equivalents, end of period	$	201,226		$	220,526

Supplemental disclosure
Non-cash financing activities:
Decrease (increase) in accounts payable related to the purchase of property, plant and equipment	$	(10,919	)	$	7,459

The accompanying notes are an integral part of these condensed consolidated financial statements.

NOTE 1 – Nature of Operations, Basis of Presentation and Recently Issued Accounting Pronouncements

Diodes Incorporated, together with its subsidiaries (collectively, the “Company,” “we” or “our”) (Nasdaq: DIOD), is a leading global manufacturer and supplier of high-quality, application-specific standard products within the broad discrete, logic, analog and mixed-signal semiconductor markets. We serve the consumer electronics, computing, communications, industrial, and automotive markets. Our products include diodes, rectifiers, transistors, MOSFETs, protection devices, function-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. Our corporate headquarters and Americas’ sales office are located in Plano, Texas and Milpitas, California. Design, marketing, and engineering centers are located in Plano; Milpitas; Taipei, Taoyuan City and Zhubei City, Taiwan; Manchester, England; and Neuhaus, Germany. Our wafer fabrication facilities are located in Manchester, with an additional facility located in Shanghai, China. We are in the process of shutting down our Lee’s Summit, Missouri wafer fabrication facility (“KFAB”) and transferring its wafer fabrication operation to other Company-owned wafer fabrication plants and external foundries (See Note 11). We have assembly and test facilities located in Shanghai, Jinan, Chengdu, and Yangzhou, China, as well as in Hong Kong, Neuhaus and Taipei. Additional engineering, sales, warehouse, and logistics offices are located in Taipei; Hong Kong; Manchester; Shanghai; Shenzhen, China; Seongnam-si, South Korea; and Munich, Germany, with support offices throughout the world.

The condensed consolidated financial data at December 31, 2016 is derived from audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission (“SEC”) on February 27, 2017 (“Form 10-K”). The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. They do not include all information and footnotes necessary for a fair presentation of financial position, operating results and cash flows in conformity with GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in our Form 10-K. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the operating results for the period presented have been included in the interim period. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for other interim periods or the year ending December 31, 2017.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. As permitted under GAAP, interim accounting for certain expenses, including income taxes, are based on full year forecasts. For interim financial reporting purposes, income taxes are recorded based upon estimated annual effective income tax rates taking into consideration discrete items occurring in a quarter. Dollar amounts and share amounts are presented in thousands, except per share amounts, unless otherwise noted. Certain prior year’s balances have been reclassified to conform to the current financial statement presentation.

The Financial Accounting Standards Board (“FASB”) issued the following Accounting Standards Updates (“ASU”) which could have potential impact on the Company’s financial statements:

ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard sets forth a five-step revenue recognition model which replaces the current revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance. To further assist with adoption and implementation of ASU 2014-09, the FASB issued the following ASUs:

•ASU 2016-08 (Issued March 2016) — Principal versus Agent Consideration (Reporting Revenue Gross versus Net)

•ASU 2016-10 (Issued April 2016) — Identifying Performance Obligations and Licensing

•ASU 2016-12 (Issued May 2016) — Narrow-Scope Improvements and Practical Expedients

•ASU 2016-20 (Issued December 2016) — Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers

This standard is effective in the first quarter of 2018. We will adopt this standard using the modified retrospective method. We have established a cross-functional coordinated implementation team to implement ASU 2014-09. We have completed our initial diagnostic assessment and are in the process of identifying and implementing changes to our systems and processes to meet the reporting and disclosure requirements. We continue to engage outside consultants to assist us in determining the effect this standard will have on our financial statements, to assist us in making necessary changes in our accounting practices and to assist us in making certain we are capturing the necessary detail to fulfill the disclosure requirements promulgated in this standard.

Based upon our initial assessment we believe the key revenue streams will be distribution and OEM sales, which combined comprise the majority of our business. The Company has not identified any contracts with customers containing multiple performance obligations. The Company has identified a number of variable consideration components within our contracts with customers and is in process of quantifying the overall impact related to the consideration to which the entity is entitled. The Company expects adoption of this new standard will not have a material impact on its income statement and balance sheet.

ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) - In February 2016, the FASB issued ASU 2016-02, which amends the accounting treatment for leases. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016-02 may have on its consolidated financial statements and has not elected early adoption as of the period ended September 30, 2017. During the second quarter of 2017 we engaged outside accounting consultants to assist us in the implementation of this new standard. The Company is in the process of assessing its outstanding leases.

ASU No. 2016-09, Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting - In March 2016, the FASB issued guidance to simplify the accounting for share-based payment transactions by requiring all excess tax benefits and deficiencies to be recognized in income tax expense or benefit in earnings, thus eliminating the requirement to classify the excess tax benefit and deficiencies as additional paid-in capital. Under the new guidance, an entity makes an accounting policy election to either estimate the expected forfeiture awards or account for forfeitures as they occur. We adopted ASU No. 2016-09 during the first quarter of 2017 and as a result will account for forfeitures as they occur. The effect of the adoption related to the income tax portion was an increase of $4.8 million to retained earnings and to deferred income tax assets. The effect of the adoption related to forfeitures was an increase to additional paid in capital of $0.8 million, an increase to deferred tax assets of $0.3 million and a decrease to retained earnings of $0.5 million.

ASU No. 2017-09, Compensation – Stock Compensation (Topic 718) Scope of Modification Accounting - In May 2017, the FASB issued guidance to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The guidance is effective prospectively for all companies for annual periods beginning on or after December 15, 2017. Early adoption is permitted. We early adopted this standard in the third quarter of 2017. Adoption of this standard had no impact on the Company’s financial statements.

ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities – In August 2017, the FASB issued guidance that eliminates the requirement to separately measure and report hedge ineffectiveness. The guidance is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted in any interim period or fiscal period before the effective date. The Company adopted ASU No. 2017-12 during the third quarter of 2017. In accordance with ASU 2017-12, the Company recognizes all reclassifications out of other comprehensive income (other than those related to a hedged transaction becoming probable of not occurring) in the same income statement line item in which the earnings effect of the hedged item is being presented, which is consistent with the Company’s current policy. Adoption of this standard had no impact on the Company’s financial statements.

Earnings per share (“EPS”) is calculated by dividing net income attributable to common stockholders by the weighted-average number of shares of Common Stock outstanding during the period. Diluted EPS is calculated similarly but includes potential dilution from the exercise of stock options and stock awards, except when the effect would be anti-dilutive. A total of 0.7 million and 1.7 million stock options and stock awards outstanding during the three months ended September 30, 2017 and 2016, respectively, and 0.7 million and 1.9 million stock options and stock awards outstanding during the nine months ended September 30, 2017 and 2016, respectively, were excluded from the calculation because the effect was anti-dilutive.

The table below sets forth the reconciliation between net income (loss) and the weighted average shares outstanding used for calculating basic and diluted EPS for the three and nine months ended September 30, 2017 and 2016:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Earnings (numerator)
Net income attributable to common stockholders	$	14,450	$	10,648	$	28,846	$	14,667

Shares (denominator)
Weighted average common shares outstanding (basic)		49,057		48,814		48,633		48,496
Dilutive effect of stock options and stock awards outstanding		1,359		1,108		1,428		1,069
Adjusted weighted average common shares outstanding (diluted)		50,416		49,922		50,061		49,565

Earnings per share attributable to common stockholders
Basic	$	0.29	$	0.22	$	0.59	$	0.30
Diluted	$	0.29	$	0.21	$	0.58	$	0.30

The table below sets forth inventories which are stated at the lower of cost or market value:

The table below sets forth amortization expense related to intangible assets subject to amortization for the three and nine months ended September 30, 2017 and 2016:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Domestic pre-tax income (loss)	$	(27,783	)	$	(7,274	)	$	(63,026	)	$	(25,520	)
Foreign pre-tax income	$	47,613		$	22,905		$	104,821		$	47,906
Income tax provision	$	5,052		$	4,097		$	11,651		$	5,941
Effective tax rate		25.5	%		26.2	%		27.9	%		26.5	%
Impact of tax holidays on tax expense	$	(733	)	$	(2,992	)	$	(2,553	)	$	(5,099	)
Earnings per share impact of tax holidays
Basic	$	0.01		$	0.06		$	0.05		$	0.10
Diluted	$	0.01		$	0.06		$	0.05		$	0.10

The decrease in the effective tax rate for the three months ended September 30, 2017 when compared to the three months ended September 30, 2016, is primarily attributable to an immaterial expense for various discrete items. The increase in the effective tax rate over the nine months ended September 30, 2017 when compared to the nine months ended September 30, 2016 is primarily attributable to changes in the proportion of income generated in North America, Europe and Asia, and the impact of ASU 2016-09 related to the treatment of equity based compensation. In both periods the effective tax rates were lower than the U.S. statutory rate of 35%, principally from the impact of income from lower-taxed jurisdictions.

Funds repatriated from foreign subsidiaries to the U.S. may be subject to federal and state income taxes. The Company intends to permanently reinvest overseas all of its earnings from its foreign subsidiaries, except to the extent such undistributed earnings have previously been subject to US tax; accordingly, deferred U.S. taxes are not recorded on undistributed foreign earnings.

The Company files income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for tax years before 2007, or for the 2010 tax year. The Company is no longer subject to China income tax examinations by tax authorities for tax years before 2005. With respect to state and local jurisdictions and countries outside of the U.S. (other than China), with limited exceptions, the Company is no longer subject to income tax audits for years before 2006. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties, if any, have been provided for in the Company’s reserve for any adjustments that may

result from tax audits. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in interest expense. As of September 30, 2017, the gross amount of unrecognized tax benefits was approximately $31.5 million.

It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company’s unrecognized tax positions will significantly increase or decrease within the next 12 months. At this time, an estimate of the range of the reasonably possible outcomes cannot be made.

The table below sets forth the line items where share-based compensation expense was recorded for the three and nine months ended September 30, 2017 and 2016:

The table below sets forth share-based compensation expense by type for the three and nine months ended September 30, 2017 and 2016:

Stock Options. Approximately $6.9 million in cash proceeds was received from stock option exercises during the nine months ended September 30, 2017.

As of September 30, 2017, total unrecognized share-based compensation expense related to unvested stock options was approximately $0.4 million, before income taxes, and is expected to be recognized over a weighted average period of less than 1 year.

Share Grants. Restricted stock awards and restricted stock units generally vest in equal annual installments over a four-year period. We also have share grants that are performance based that vest upon achievement of certain performance criteria. During the nine months ended September 30, 2017, the Company modified a performance-based award previously granted to our Chief Executive Officer. The effect was to replace a performance-based grant covering 700,000 shares of the Company’s common stock with a performance-based grant covering 62,905 shares of the Company’s common stock and a restricted stock grant covering 62,905 of the Company’s common stock. If certain performance criteria are met for the performance-based grant, Dr. Lu will receive 200% of that award or 125,810 shares. The incremental expense if Dr. Lu received 200% of the performance-based grant award is approximately $3.3 million. The incremental expense of the restricted stock grant is approximately $1.7 million.

As of September 30, 2017, total unrecognized share-based compensation expense related to share grants was approximately $36.9 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 2.6 years.

For financial reporting purposes, we operate in a single segment, standard semiconductor products, through our various manufacturing and distribution facilities. We aggregate our products because the products are similar and have similar economic characteristics, use similar production processes and share the same customer type. Our primary operations include operations in Asia, North America and Europe. During the three months ended September 30, 2017, one customer accounted for 10.3% or $29.3 million of our revenue. This customer did not account for 10% or greater of our revenue for the nine months ended September 30, 2017 or 10% or greater of our outstanding accounts receivable at September 30, 2017.

The tables below set forth net sales based on the location of the subsidiary producing the net sale.

Three Months Ended
September 30, 2017	Asia			North America			Europe			Consolidated
Total sales	$	263,088		$	31,320		$	47,307		$	341,715
Intercompany elimination		(37,475	)		(4,061	)		(14,932	)		(56,468	)
Net sales	$	225,613		$	27,259		$	32,375		$	285,247

Three Months Ended
September 30, 2016	Asia			North America			Europe			Consolidated
Total sales	$	239,447		$	30,067		$	38,451		$	307,965
Intercompany elimination		(37,228	)		(5,726	)		(14,317	)		(57,271	)
Net sales	$	202,219		$	24,341		$	24,134		$	250,694


As of and for the Nine Months Ended
September 30, 2017	Asia			North America			Europe			Consolidated
Total sales	$	731,982		$	122,072		$	134,132		$	988,186
Intercompany elimination		(111,963	)		(44,547	)		(45,902	)		(202,412	)
Net sales	$	620,019		$	77,525		$	88,230		$	785,774

		Page
Part I – Financial Information		3
Item 1. Financial Statements		3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3. Quantitative and Qualitative Disclosures About Market Risk		27
Item 4. Controls and Procedures		27
Part II – Other Information		28
Item 1. Legal Proceedings		28
Item 1A. Risk Factors		28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		28
Item 3. Defaults Upon Senior Securities		28
Item 4. Mine Safety Disclosures		28
Item 5. Other Information		28
Item 6. Exhibits		29
Signatures		30

	September 30, 2017		December 31, 2016
Finished goods	$	59,403	$	66,930
Work-in-progress		50,881		45,408
Raw materials		101,128		81,145
Total	$	211,412	$	193,483

Balance at December 31, 2016	$	129,412
Foreign currency translation adjustment		4,126
Balance at September 30, 2017	$	133,538

	September 30,			December 31,
	2017			2016
Intangible assets subject to amortization:
Gross carrying amount	$	234,533		$	232,747
Accumulated amortization		(83,354	)		(69,247	)
Foreign currency translation adjustment		(8,259	)		(8,442	)
Total		142,920			155,058
Intangible assets with indefinite lives:
Gross carrying amount		19,217			21,003
Foreign currency translation adjustment		(1,015	)		(1,185	)
Total		18,202			19,818
Total intangible assets, net	$	161,122		$	174,876

Amortization expense	2017		2016
Three months ended September 30,	$	4,694	$	5,117
Nine months ended September 30, 2017	$	14,098	$	15,379