diod-10q_20180930.htm

Large accelerated filer

Accelerated filer

Non-accelerated filer

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 every Interactive Data File required to be submitted 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 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 2, 2018 was 50,220,853.

	September 30,			December 31,
	2018			2017
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	150,274		$	203,820
Short-term investments		7,280			4,558
Accounts receivable, net of allowances of $3,480 and $4,480 at September 30, 2018 and December 31, 2017, respectively		228,065			200,112
Inventories		219,146			216,506
Prepaid expenses and other		42,804			37,328
Total current assets		647,569			662,324
Property, plant and equipment, net		454,086			459,169
Deferred income tax		44,000			40,580
Goodwill		132,910			134,187
Intangible assets, net		142,487			156,445
Other		46,732			35,968
Total assets	$	1,467,784		$	1,488,673

Liabilities
Current liabilities:
Line of credit	$	12,283		$	1,008
Accounts payable		117,118			108,001
Accrued liabilities and other		92,039			99,301
Income tax payable		14,145			18,216
Current portion of long-term debt		26,285			20,636
Total current liabilities		261,870			247,162
Long-term debt, net of current portion		139,987			247,492
Deferred tax liabilities		26,308			25,176
Other long-term liabilities		87,168			94,925
Total liabilities		515,333			614,755

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; 50,190,959 and 49,130,090, issued and outstanding at September 30, 2018 and December 31, 2017, respectively		34,433			33,727
Additional paid-in capital		395,412			386,338
Retained earnings		607,189			532,687
Treasury stock, at cost, 1,457,206 shares held at September 30, 2018 and December 31, 2017		(37,768	)		(37,768	)
Accumulated other comprehensive loss		(91,598	)		(83,480	)
Total stockholders' equity		907,668			831,504
Noncontrolling interest		44,783			42,414
Total equity		952,451			873,918
Total liabilities and stockholders' equity	$	1,467,784		$	1,488,673


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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Net sales	$	320,946		$	285,247		$	899,543		$	785,774
Cost of goods sold		205,732			188,900			578,466			525,377
Gross profit		115,214			96,347			321,077			260,397

Operating expenses
Selling, general and administrative		42,475			43,525			131,778			122,912
Research and development		22,549			20,379			64,799			58,215
Amortization of acquisition related intangible assets		4,418			4,694			13,863			14,098
Impairment of fixed assets		-			1,993			-			1,993
Restructuring		-			2,039			206			6,108
Other operating (income) expense		(66	)		-			(191	)		169
Total operating expense		69,376			72,630			210,455			203,495

Income from operations		45,838			23,717			110,622			56,902

Other income (expense)
Interest income		474			389			1,431			992
Interest expense		(2,318	)		(3,561	)		(7,619	)		(10,493	)
Foreign currency loss, net		(655	)		(1,312	)		(3,384	)		(6,734	)
Other income		1,061			597			6,073			1,128
Total other expense		(1,438	)		(3,887	)		(3,499	)		(15,107	)

Income before income taxes and noncontrolling interest		44,400			19,830			107,123			41,795
Income tax provision		13,190			5,052			31,726			11,651
Net income		31,210			14,778			75,397			30,144
Less net income attributable to noncontrolling interest		(302	)		(328	)		(895	)		(1,298	)
Net income attributable to common stockholders	$	30,908		$	14,450		$	74,502		$	28,846

Earnings per share attributable to common stockholders:
Basic	$	0.62		$	0.29		$	1.50		$	0.59
Diluted	$	0.61		$	0.29		$	1.46		$	0.58
Number of shares used in earnings per share computation:
Basic		50,115			49,057			49,713			48,633
Diluted		51,077			50,416			50,883			50,061

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Net income	$	31,210		$	14,778		$	75,397		$	30,144
Unrealized (loss) gain on defined benefit plan, net of tax		(493	)		(1,135	)		7,208			(2,517	)
Unrealized gain on interest rate swap, net of tax		378			180			3,653			60
Unrealized foreign currency (loss) gain, net of tax		(9,848	)		8,249			(18,978	)		25,416
Comprehensive income		21,247			22,072			67,280			53,103
Less: Comprehensive income attributable to noncontrolling interest		(302	)		(328	)		(895	)		(1,298	)
Total comprehensive income attributable to common stockholders	$	20,945		$	21,744		$	66,385		$	51,805

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

	Nine Months Ended
	September 30,
	2018			2017
Cash flows from operating activities	$	123,928		$	106,340

Cash flows from investing activities
Acquisition net of cash acquired		(41	)		-
Purchases of property, plant and equipment		(72,159	)		(81,877	)
Purchases of short-term investments		(13,959	)		(9,744	)
Proceeds from maturity of short-term investments		10,831			27,891
Other		1,235			(1,238	)
Net cash and cash equivalents used in investing activities		(74,093	)		(64,968	)

Cash flows from financing activities
Advances on lines of credit and short-term debt		9,151			2,383
Taxes paid related to net share settlement		(11,056	)		(277	)
Proceeds from long-term debt		304,656			7,500
Repayments of long-term debt		(408,863	)		(109,607	)
Net proceeds from issuance of common stock		4,861			6,880
Proceeds from and repayment of capital lease obligation		1,489			(533	)
Dividend distribution to noncontrolling interest		(2,694	)		(5,754	)
Capital contribution from noncontrolling interest		5,263			-
Other		(764	)		1,562
Net cash and cash equivalents used in financing activities		(97,957	)		(97,846	)

Effect of exchange rate changes on cash and cash equivalents		(6,039	)		9,415
Change in cash and cash equivalents, including restricted cash		(54,161	)		(47,059	)
Cash and cash equivalents, beginning of period, including restricted cash		205,262			249,712
Cash and cash equivalents, end of period, including restricted cash	$	151,101		$	202,653

Supplemental Cash Flow Information
Interest	$	7,661		$	10,063
Taxes	$	29,435		$	28,808

Non-cash investing and financing activities:
Decrease/(increase) in accounts payable related to the purchase of property, plant and equipment	$	8,093		$	(10,919	)
Increase in dividend accrued for noncontrolling interest	$	-		$	1,000

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown above:

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 and in Shanghai, China. We have assembly and test facilities located in Shanghai, Jinan and Chengdu, China, as well as in Hong Kong, Neuhaus and Taipei. Additional engineering, research and development, sales, warehouse, and logistics offices are located in Taipei; Hong Kong; Manchester; Shanghai; Shenzhen, Yangzhou, China; Seongnam-si, South Korea; and Munich, Germany; and Tokyo, Japan, with support offices throughout the world.

The condensed consolidated financial data at December 31, 2017 is derived from audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission (“SEC”) on February 20, 2018 (“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, 2018 are not necessarily indicative of the results that may be expected for other interim periods or the year ending December 31, 2018.

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) - On January 1, 2018, we adopted the comprehensive new revenue recognition standard issued by the FASB. 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 previous revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance. The adoption of this standard did not have a material impact on our condensed consolidated financial

position, reported revenue, results of operations or cash flows as of and for the three or nine months ended September 30, 2018. See Note 7 for our expanded revenue disclosures required by the new standard.

ASU No. 2016-18, Statement of Cash Flows – Restricted Cash (Topic 230) – In November 2016, the FASB issued guidance on the presentation of restricted cash which requires that on the statement of cash flows, amounts generally described as restricted cash or restricted cash equivalents should be included within the beginning and ending balances of cash and cash equivalents. We adopted this guidance in the first quarter of 2018 on a retrospective basis. As a result, restricted cash amounts that have historically been included in prepaid expenses on our consolidated balance sheets are now included with cash and cash equivalents on the consolidated statements of cash flows. As of September 30, 2018 and December 31, 2017 we had restricted cash of approximately $0.8 million and $1.4 million, respectively. Restricted cash is pledged as collateral when we enter into agreements with banks for certain banking facilities.

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 and requires, among other things, lessees to recognize a right-of-use asset and lease liability for most lease arrangements . 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 ASU will become effective for the Company for interim and annual reporting periods in fiscal years beginning after December 15, 2018. The standard offers a number of practical expedients for transition and certain expedients specific to lessees or lessors. Both lessees and lessors are permitted to make an election to apply a package of practical expedients available for implementation under the standard. For transition, the Company will recognize all effects of transition in the beginning of the adoption reporting period on January 1, 2019. We do not expect to elect the use-of-hindsight or land easement practical expedients, the latter not being applicable to us.

The Company will continue its implementation work of ASU 2016-02 in 2018, including enhancements to the Company’s internal control framework, accounting systems and related documentation surrounding its lease accounting processes and the preparation of any additional disclosures that will be required.

ASU 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2016-02”) - In July 2018 the FASB issued ASU 2018-10, to add clarity to certain areas within ASU 2016-02. The effective date and transition requirements will be the same as ASU 2016-02. The Company will evaluate and adopt this ASU in conjunction with ASU 2016-02.

ASU 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”) - In July 2018, the FASB issued ASU 2018-11, which now allows entities the option of recognizing the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings in the year of adoption (January 1, 2019) while continuing to present all prior periods under previous lease accounting guidance. The Company will adopt this standard on January 1, 2019.

ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ("ASU 2018-07") - In June 2018, the FASB issued ASU 2018-07, which simplifies several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation—Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. We are currently assessing the effect this guidance may have on our consolidated financial statements and disclosures.

ASU 2018-13, Changes to Disclosure Requirements for Fair Value Measurements (“ASU 2018-13”) - In August 2018, the FASB issued ASU 2018-13 which is part of the disclosure framework project and eliminates certain disclosure requirements for fair value measurements, requires entities to disclose new information, and modifies existing disclosure requirements. The new guidance is effective after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact this change will have on its consolidated financial statements and disclosures.

ASU 2018-14, Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU No. 2018-14"). In August 2018, the FASB issued ASU No. 2018-14, which is part of the FASB's broader disclosure framework project, and modifies and supplements the current U.S. GAAP annual disclosure requirements for employers that sponsor defined benefit pension plans. ASU No. 2018-14 is effective for the year ending December 31, 2020, with early adoption permitted. ASU No. 2018-14 must be adopted on a retroactive basis and applied to each comparative period presented in an entity's financial statements. We are evaluating the potential impact of adopting ASU No. 2018-14; however, we do not currently expect it to have a material impact on our consolidated financial statements and disclosures.

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.

The table below sets forth the reconciliation between net income and the weighted average shares outstanding used for calculating basic and diluted EPS:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Earnings (numerator)
Net income attributable to common stockholders	$	30,908	$	14,450	$	74,502	$	28,846

Shares (denominator)
Weighted average common shares outstanding (basic)		50,115		49,057		49,713		48,633
Dilutive effect of stock options and stock awards outstanding		962		1,359		1,170		1,428
Adjusted weighted average common shares outstanding (diluted)		51,077		50,416		50,883		50,061

Earnings per share attributable to common stockholders
Basic	$	0.62	$	0.29	$	1.50	$	0.59
Diluted	$	0.61	$	0.29	$	1.46	$	0.58

Stock options and stock awards excluded from EPS calculation because the effect would be anti-dilutive		-		651		94		704

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

The table below sets forth amortization expense related to intangible assets subject to amortization:

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduced the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, provided an exemption from U.S. federal tax for dividends received from foreign subsidiaries, and created new taxes on certain foreign sourced earnings. As of the completion of these financial statements and related disclosures, we have not completed our accounting for the tax effects of the Tax Act on our 2017 tax year. We have not made any adjustments to the provisional tax expense of $45.9 million we recorded in the fourth quarter of 2017 to account for the tax effects of the Tax Act. The Company expects to finalize the accounting for the effects of the Tax Act on the 2017 tax year no later than the fourth quarter of 2018, in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 118. Future adjustments made to the provisional effects will be reported as a component of income tax expense from continuing operations in the reporting period in which any such adjustments are determined.

We incorporated the effects of the Tax Act into our 30.4% estimated annual effective tax rate for 2018. As shown below, the actual 29.7% effective tax rate for the quarter ended September 30, 2018, varies from the estimated annual tax rate due to discrete items related to stock-based compensation activity during the quarter (accounted for under ASU 2016-09).

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Domestic pre-tax loss	$	(7,267	)	$	(27,783	)	$	(11,289	)	$	(63,026	)
Foreign pre-tax income	$	51,667		$	47,613		$	118,412		$	104,821
Income tax provision	$	13,190		$	5,052		$	31,726		$	11,651
Effective tax rate		29.7	%		25.5	%		29.6	%		27.9	%
Impact of tax holidays on tax expense	$	638		$	(733	)	$	(104	)	$	(2,553	)
Earnings per share impact of tax holidays:
Basic	$	(0.01	)	$	0.01		$	-		$	0.05
Diluted	$	(0.01	)	$	0.01		$	-		$	0.05

The increase in the effective tax rate for the three and nine months ended September 30, 2018 when compared to the three and nine months ended September 30, 2017, is primarily attributable to the “GILTI” tax, which is a new tax on global intangible low-taxed income of non-U.S. subsidiaries that was created by the Tax Act and to which the Company is subject effective January 1, 2018.

Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to earnings of European subsidiaries. Any future distributions of foreign earnings will not be subject to additional U.S. income tax, but may be subject to non-U.S. withholding taxes.

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations by tax authorities for tax years before 2008, or for the 2010 and 2011 tax years. We are no longer subject to China income tax examinations by tax authorities for tax years before 2007. 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 2012. 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 currently pending tax audits. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in interest expense. As of September 30, 2018, the gross amount of unrecognized tax benefits was approximately $33.1 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:

Stock Options. Approximately $4.9 million in cash proceeds was received from stock option exercises during the nine months ended September 30, 2018.

As of September 30, 2018, there was no unrecognized share-based compensation expense related to unvested stock options.

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. Our Chief Executive Officer had a grant of 600,000 performance-based stock units that vested upon the Company reaching $1.0 billion in revenue. Based on the Company reaching approximately $1.1 billion in revenue in 2017, our Chief Executive Officer’s grant of 600,000 performance-based stock units were released to the Chief Executive Officer, upon filing of the Company’s Annual Report on Form 10-K, in February 2018. The expense related to the 600,000 performance-based units was all recognized in previous periods. During the nine months ended September 30, 2018, we issued 639,755 stock awards. This was primarily made up of the annual grant for officers, employees and directors.

As of September 30, 2018, total unrecognized share-based compensation expense related to share grants was approximately $39.9 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 2.4 years.

Stock Modification. During the nine months ended September 30, 2018 we modified previously granted stock option and stock awards for two corporate officers who retired. The result of the modification was the acceleration of the vesting of 7,500 stock options and 79,720 stock awards for the corporate officers. The incremental expense recorded for this modification was approximately $1.8 million, which was expensed in SG&A in the nine months ended September 30, 2018.

Segment Reporting. 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 and nine months ended September 30, 2018, one customer, a broad-based global distributor that sells to thousands of different end users, accounted for 10.2% and 10.5% or $32.7 million and $94.4 million, respectively, of our revenue. The same customer accounted for 10.3%, or $29.3 million, of our revenue for the three months ended September 30, 2017. No customer accounted for 10% or greater of our outstanding accounts receivable at September 30, 2018 or 2017. No customer accounted for 10% or greater of our revenue for the nine months ended 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, 2018	Asia			North America			Europe			Consolidated
Total sales	$	283,635		$	51,640		$	49,209		$	384,484
Intercompany elimination		(40,690	)		(8,773	)		(14,075	)		(63,538	)
Net sales	$	242,945		$	42,867		$	35,134		$	320,946

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

		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		22
Item 3. Quantitative and Qualitative Disclosures About Market Risk		32
Item 4. Controls and Procedures		32
Part II – Other Information		33
Item 1. Legal Proceedings		33
Item 1A. Risk Factors		33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		33
Item 3. Defaults Upon Senior Securities		33
Item 4. Mine Safety Disclosures		33
Item 5. Other Information		33
Item 6. Exhibits		34
Signatures		36

	Nine Months Ended
	September 30,
	2018	2017
Current assets:
Cash and cash equivalents	$150,274	$201,226
Restricted cash (included in other current assets)	827	1,427
Total cash, cash equivalents and restricted cash	$151,101	$202,653

	September 30, 2018		December 31, 2017
Finished goods	$	62,004	$	81,194
Work-in-progress		57,504		52,578
Raw materials		99,638		82,734
Total	$	219,146	$	216,506

Balance at December 31, 2017	$	134,187
ERIS acquisition of Yea Shin Technology Corporation		559
Foreign currency translation adjustment		(1,836	)
Balance at September 30, 2018	$	132,910

	September 30,			December 31,
	2018			2017
Intangible assets subject to amortization:
Gross carrying amount	$	238,867		$	234,533
Accumulated amortization		(101,923	)		(88,059	)
Foreign currency translation adjustment		(8,265	)		(8,249	)
Total		128,679			138,225
Intangible assets with indefinite lives:
Gross carrying amount		14,883			19,217
Foreign currency translation adjustment		(1,075	)		(997	)
Total		13,808			18,220
Total intangible assets, net	$	142,487		$	156,445

Amortization expense	2018		2017
Three months ended September 30	$	4,418	$	4,694
Nine months ended September 30	$	13,863	$	14,098