Diodes(DIOD) - 2020 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION This section encompasses the company's unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Diodes Incorporated and its subsidiaries, including balance sheets, statements of operations, comprehensive income, equity, and cash flows, along with detailed notes explaining significant accounting policies, earnings per share, inventories, goodwill, intangible assets, income tax, share-based compensation, segment information, commitments, derivative instruments, leases, employee benefit plans, related party transactions, and recent acquisitions Condensed Consolidated Balance Sheets This section presents the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheet Highlights (Amounts in thousands) | Metric | March 31, 2020 (Unaudited) | December 31, 2019 | | :-------------------------- | :------------------------- | :---------------- | | Total Current Assets | $796,446 | $809,959 | | Total Assets | $1,620,266 | $1,639,384 | | Total Current Liabilities | $264,117 | $285,322 | | Total Liabilities | $437,977 | $486,601 | | Total Stockholders' Equity | $1,125,029 | $1,106,424 | | Total Equity | $1,182,289 | $1,152,783 | Condensed Consolidated Statements of Operations This section outlines the company's financial performance over a period, including net sales, costs, expenses, and net income Condensed Consolidated Statements of Operations Highlights (Three Months Ended March 31, Amounts in thousands, except per share data) | Metric | 2020 | 2019 | Change | % Change | | :----------------------------------------- | :---------- | :---------- | :---------- | :---------- | | Net Sales | $280,717 | $302,293 | $(21,576) | (7.1%) | | Cost of Goods Sold | $184,875 | $189,882 | $(5,007) | (2.6%) | | Gross Profit | $95,842 | $112,411 | $(16,569) | (14.7%) | | Total Operating Expense | $69,990 | $70,288 | $(298) | (0.4%) | | Income from Operations | $25,852 | $42,123 | $(16,271) | (38.6%) | | Net Income Attributable to Common Stockholders | $20,168 | $31,716 | $(11,548) | (36.4%) | | Basic EPS | $0.39 | $0.63 | $(0.24) | (38.1%) | | Diluted EPS | $0.38 | $0.62 | $(0.24) | (38.7%) | Condensed Consolidated Statements of Comprehensive Income This section reports net income and other comprehensive income items, reflecting changes in equity from non-owner sources Condensed Consolidated Statements of Comprehensive Income Highlights (Three Months Ended March 31, Amounts in thousands) | Metric | 2020 | 2019 | | :----------------------------------------------------- | :-------- | :-------- | | Net Income | $20,400 | $31,736 | | Unrealized gain (loss) on defined benefit plan, net of tax | $9,719 | $(6,029) | | Unrealized loss on swaps and collars, net of tax | $(1,438) | $(3,909) | | Unrealized foreign currency (loss) gain, net of tax | $(9,614) | $4,936 | | Comprehensive Income | $19,067 | $26,734 | | Total Comprehensive Income Attributable to Common Stockholders | $18,835 | $26,714 | Condensed Consolidated Statements of Equity This section details changes in the company's equity accounts, including common stock, retained earnings, and noncontrolling interests Condensed Consolidated Statements of Equity Highlights (Amounts in thousands) | Metric | March 31, 2020 | December 31, 2019 | | :----------------------------------- | :------------- | :---------------- | | Common Stock | $35,289 | $35,111 | | Additional Paid-in Capital | $427,543 | $427,262 | | Retained Earnings | $810,126 | $789,958 | | Total Incorporated Stockholders' Equity | $1,125,029 | $1,106,424 | | Noncontrolling Interest | $57,260 | $46,359 | | Total Equity | $1,182,289 | $1,152,783 | Condensed Consolidated Statements of Cash Flows This section summarizes the cash inflows and outflows from operating, investing, and financing activities over a period Condensed Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, Amounts in thousands) | Metric | 2020 | 2019 | Change | | :----------------------------------------------------- | :---------- | :---------- | :---------- | | Net Cash Flows Provided by Operating Activities | $53,675 | $69,889 | $(16,214) | | Net Cash and Cash Equivalents Used in Investing Activities | $(17,558) | $(17,152) | $(406) | | Net Cash and Cash Equivalents (Used in) Provided by Financing Activities | $(21,397) | $9,627 | $(31,024) | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | $(3,315) | $(1,890) | $(1,425) | | Net Increase in Cash and Cash Equivalents, Including Restricted Cash | $11,405 | $60,474 | $(49,069) | | Cash and Cash Equivalents, End of Period, Including Restricted Cash | $270,912 | $302,307 | $(31,395) | NOTE 1 – Summary of Operations and Significant Accounting Policies This note describes the company's business and outlines the significant accounting policies used in preparing the financial statements - Diodes Incorporated is a global manufacturer and supplier of high-quality, application-specific standard products in the discrete, logic, analog, and mixed-signal semiconductor markets, serving consumer electronics, computing, communications, industrial, and automotive sectors[24] - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information and Form 10-Q instructions, and should be read in conjunction with the 2019 Form 10-K[25] - The adoption of ASU No. 2016-13 (expected credit losses) effective January 1, 2020, did not have a material impact on the consolidated financial statements, and the company is evaluating the impact of FASB's optional guidance on reference rate reform[28][29] NOTE 2 – Earnings per Share This note provides details on the calculation of basic and diluted earnings per share - EPS is calculated by dividing net income attributable to common stockholders by the weighted-average number of shares outstanding, with diluted EPS including potential dilution from stock options and awards[31] EPS Calculation Reconciliation (Three Months Ended March 31, Amounts in thousands, except per share data) | Metric | 2020 | 2019 | | :----------------------------------------- | :------- | :------- | | Net income attributable to common stockholders | $20,168 | $31,716 | | Weighted average common shares outstanding (basic) | 51,335 | 50,398 | | Dilutive effect of stock options and stock awards outstanding | 1,087 | 1,064 | | Adjusted weighted average common shares outstanding (diluted) | 52,422 | 51,462 | | Basic EPS | $0.39 | $0.63 | | Diluted EPS | $0.38 | $0.62 | NOTE 3 – Inventories This note presents a breakdown of the company's inventory components, including finished goods, work-in-progress, and raw materials Inventories (Amounts in thousands) | Category | March 31, 2020 | December 31, 2019 | | :--------------- | :------------- | :---------------- | | Finished goods | $53,747 | $62,900 | | Work-in-progress | $48,684 | $55,082 | | Raw materials | $129,753 | $118,490 | | Total | $232,184 | $236,472 | NOTE 4 – Goodwill and Intangible Assets This note details changes in goodwill and provides a breakdown of the company's intangible assets, net of amortization Changes in Goodwill (Amounts in thousands) | Metric | Amount | | :------------------------------------ | :-------- | | Balance at December 31, 2019 | $141,318 | | Savitech acquisition | $10,755 | | Foreign currency translation adjustment | $(2,407) | | Balance at March 31, 2020 | $149,666 | Intangible Assets, Net (Amounts in thousands) | Category | March 31, 2020 | December 31, 2019 | | :------------------------------------- | :------------- | :---------------- | | Intangible assets subject to amortization, total | $111,978 | $105,681 | | Intangible assets with indefinite lives, total | $9,240 | $13,842 | | Total intangible assets, net | $121,218 | $119,523 | - Amortization expense for intangible assets subject to amortization was $4.2 million for the three months ended March 31, 2020, a decrease from $4.5 million in the same period of 2019[36] NOTE 5 – Income Tax Provision This note explains the company's income tax expense, effective tax rate, and unrecognized tax benefits Income Tax Information (Three Months Ended March 31, Amounts in thousands, except percentages) | Metric | 2020 | 2019 | | :------------------------- | :-------- | :-------- | | Domestic pre-tax income | $5,268 | $12,486 | | Foreign pre-tax income | $19,688 | $29,548 | | Income tax provision | $4,556 | $10,298 | | Effective tax rate | 18.3% | 24.5% | | Impact of tax holidays on tax expense | $(1,074) | $277 | | Basic EPS impact of tax holidays | $0.02 | $(0.01) | | Diluted EPS impact of tax holidays | $0.02 | $(0.01) | - The effective tax rate decreased to 18.3% in Q1 2020 from 24.5% in Q1 2019, primarily due to a decrease in non-U.S. withholding taxes and a net increase in favorable U.S. permanent differences[37] - As of March 31, 2020, the gross amount of unrecognized tax benefits was approximately $38.4 million, and the company does not expect the CARES Act to have a material impact on its financial statements[39][42] NOTE 6 – Share-Based Compensation This note outlines the share-based compensation expense recognized and the unrecognized compensation expense related to share grants Share-Based Compensation Expense (Three Months Ended March 31, Amounts in thousands) | Line Item | 2020 | 2019 | | :------------------------------- | :------ | :------ | | Cost of goods sold | $273 | $125 | | Selling, general and administrative | $3,711 | $3,637 | | Research and development | $709 | $715 | | Total share-based compensation expense | $4,693 | $4,477 | - As of March 31, 2020, total unrecognized share-based compensation expense related to share grants was approximately $45.4 million, expected to be recognized over a weighted average period of approximately 2.2 years[45] NOTE 7 – Segment Information and Net Sales This note clarifies the company's operating segments and provides a breakdown of net sales by region and type - The company operates in a single segment: standard semiconductor products, with no single customer accounting for 10% or more of revenue or accounts receivable during the periods presented[46] Net Sales by Region (Based on Shipment, Three Months Ended March 31, Amounts in thousands) | Region | 2020 | 2019 | | :------- | :---------- | :---------- | | Asia | $210,805 | $224,289 | | Europe | $46,931 | $38,394 | | Americas | $22,981 | $39,610 | | Total | $280,717 | $302,293 | Net Sales by Type (Three Months Ended March 31, Amounts in thousands) | Type | 2020 | 2019 | | :------------ | :---------- | :---------- | | Direct sales | $99,544 | $86,358 | | Distributor sales | $181,173 | $215,935 | | Total | $280,717 | $302,293 | NOTE 8 – Commitments and Contingencies This note discloses the company's non-cancelable capital expenditure and wafer purchase commitments, as well as legal proceedings - As of March 31, 2020, the company had $38.7 million in non-cancelable capital expenditure commitments and $52.5 million in wafer purchase commitments for 2020[52] - The unfunded liability for the UK defined benefit plan was approximately $14.0 million as of March 31, 2020, with annual contributions of approximately $2.4 million through December 2029[53] - The company is involved in various legal proceedings but believes the ultimate outcome will not have a material adverse effect on its financial position, cash flows, or operating results[54] NOTE 9 – Derivative Financial Instruments This note describes the company's use of derivative instruments to manage foreign currency and interest rate risks - The company uses derivative instruments (foreign currency forward agreements, interest rate swaps, and collars) to manage risks related to foreign currencies and interest rates, with some not qualifying for hedge accounting[55][56] Interest Rate Swaps and Collars Notional Amount (Amounts in thousands) | Metric | 2020 | 2019 | | :----------------------------------- | :-------- | :-------- | | Number of Instruments | 9 | 9 | | Notional Amount | $175,000 | $200,000 | Effect of Derivative Financial Instruments on Income (Three Months Ended March 31, Amounts in thousands) | Derivative Type | 2020 (Loss) / Gain | 2019 (Loss) / Gain | | :----------------------------------- | :----------------- | :----------------- | | Interest rate swaps and collars (OCI) | $(1,390) | $(1,090) | | Interest rate swaps and collars (reclassified to interest expense) | $(71) | $(469) | | Foreign currency forward contracts (recognized in net income) | $(2,147) | $430 | NOTE 10 – Leases This note provides details on the company's operating and finance leases, including lease expenses, liabilities, and right-of-use assets Total Lease Expense (Three Months Ended March 31, Amounts in thousands) | Lease Type | 2020 | 2019 | | :------------------ | :------ | :------ | | Operating lease expense | $3,730 | $3,704 | | Finance lease expense | $216 | $259 | | Short-term lease expense | $94 | $36 | | Variable lease expense | $711 | $618 | | Total lease expense | $4,751 | $4,617 | Lease Liabilities and ROU Assets (Amounts in thousands) | Metric | March 31, 2020 | December 31, 2019 | | :----------------------------------- | :------------- | :---------------- | | Operating lease ROU assets | $53,933 | $57,427 | | Total operating lease liabilities | $36,346 | $40,099 | | Finance lease ROU assets, net | $836 | $1,472 | | Total finance lease liabilities | $818 | $1,041 | - Weighted average remaining lease terms are 4.3 years for operating leases and 1.0 year for finance leases as of March 31, 2020, with weighted average discount rates of 3.8% for operating leases and 3.0% for finance leases[63] NOTE 11 – Employee Benefit Plans This note describes the company's non-qualified deferred compensation plan for executives and board members - The company maintains a Non-Qualified Deferred Compensation Plan for executive officers, key employees, and Board members, allowing deferral of eligible compensation, with investments offsetting these obligations totaling approximately $10.0 million at March 31, 2020[66] NOTE 12 – Related Parties This note details transactions and balances with related parties, including sales, purchases, and an acquisition agreement - The company conducts business with Lite-On Semiconductor Corporation (LSC), its largest stockholder, and Nuvoton Technology Corporation, with an agreement to acquire LSC for approximately $426 million (based on March 31, 2020 exchange rates) anticipated to close in the second half of 2020[67][83] Net Sales to and Purchases from Related Parties (Three Months Ended March 31, Amounts in thousands) | Related Party | Type | 2020 | 2019 | | :------------ | :-------- | :------ | :------ | | LSC | Net sales | $128 | $188 | | LSC | Purchases | $2,748 | $4,412 | | Nuvoton | Purchases | $1,644 | $1,267 | | Keylink | Net sales | $3,985 | $2,815 | | Keylink | Purchases | $405 | $605 | | JCP | Purchases | $156 | $160 | Accounts Receivable from and Payable to Related Parties (Amounts in thousands) | Related Party | Type | March 31, 2020 | December 31, 2019 | | :------------ | :---------------- | :------------- | :---------------- | | LSC | Accounts receivable | $128 | $184 | | LSC | Accounts payable | $2,055 | $2,154 | | Nuvoton | Accounts payable | $875 | $1,055 | | Keylink | Accounts receivable | $25,536 | $31,598 | | Keylink | Accounts payable | $22,100 | $28,244 | | JCP | Accounts payable | $181 | $173 | NOTE 13 – Acquisitions This note provides information on recent acquisitions, including Savitech Corporation and a wafer fabrication facility - On February 5, 2020, the company agreed to acquire at least 51% of Savitech Corporation for up to approximately $14.2 million, with the first tranche of $5.6 million for 33.6% ownership completed on March 4, 2020, and the second tranche contingent on revenue levels[72] - The Savitech acquisition, recorded as a business acquisition, aims to increase the company's integrated circuit business, with total purchase consideration recorded as $12.9 million and goodwill of $10.8 million[74][75] - On April 1, 2019, the company acquired a wafer fabrication facility (GFAB) in Greenock, Scotland, for $33.2 million to increase wafer production capacity, including $24.4 million in property, plant, and equipment, and $0.9 million in goodwill[76][77] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of Diodes Incorporated's business, a detailed analysis of its financial performance for the three months ended March 31, 2020, compared to the prior year, and a discussion of its financial condition, liquidity, capital resources, and recent developments, including the impact of the COVID-19 pandemic and the LSC acquisition Overview This section provides a general description of Diodes Incorporated's business, products, and competitive advantages in the semiconductor market - Diodes Incorporated is a leading global manufacturer and supplier of high-quality, application-specific standard products in the discrete, logic, analog, and mixed-signal semiconductor markets, with products sold primarily across Asia, North America, and Europe[81] - The company emphasizes application-specific standard products, innovative packaging, cost-effective process technologies, and customer-focused product development as key competitive advantages[81] Factors Relevant to Our Results of Operations for the Three Months Ended March 31, 2020 This section highlights key financial metrics and trends impacting the company's performance for the reported quarter Key Financial Highlights (Three Months Ended March 31, Amounts in millions, except per share data) | Metric | Q1 2020 | Q1 2019 | Q4 2019 | | :----------------- | :-------- | :-------- | :-------- | | Net Sales | $280.7 | $302.3 | $301.2 | | Gross Profit | $95.8 | $112.4 | $109.4 | | Gross Profit Margin | 34.1% | 37.2% | 36.3% | | Net Income | $20.2 | $31.7 | $47.2 | | Diluted EPS | $0.38 | $0.62 | $0.90 | | Cash Flow from Operations | $53.7 | - | - | | Net Cash Flow | $11.4 | - | - | - Net sales decreased 7.1% YoY and 6.8% QoQ, while gross profit margin declined to 34.1% from 37.2% YoY, and net income and diluted EPS also saw significant decreases compared to both Q1 2019 and Q4 2019[82] Recent Developments This section discusses significant recent events, including a major acquisition, the impact of the COVID-19 pandemic, and the company's liquidity position - The acquisition of Lite-On Semiconductor Corporation (LSC) for approximately $426 million (as of March 31, 2020) is expected to close in the second half of 2020, pending customary closing conditions and regulatory approvals, with funding anticipated from a new bank financing arrangement[83] - The COVID-19 pandemic's full impact is unknown, but the company delayed manufacturing in China post-Chinese New Year and temporarily closed UK wafer fabrication facilities in Q1 2020, though both operations have since resumed full production[85][87] - As of March 31, 2020, the company had $272.4 million in cash, cash equivalents, and short-term investments, plus $250 million in available borrowing capacity, providing adequate liquidity for at least the next 12 months[88] Results of Operations for the Three Months Ended March 31, 2020 and 2019 This section provides a comparative analysis of the company's financial performance for the current and prior year quarters - Net sales decreased by $21.6 million (7.1%) YoY, primarily due to the global economic slowdown caused by the COVID-19 pandemic and seasonality, though automotive and computing end markets experienced continued growth[94] - Cost of goods sold decreased by $5.0 million (2.6%) YoY, but as a percentage of sales, it increased to 65.9% from 62.8%, with average unit cost increasing by approximately 13.0% due to manufacturing facility shutdowns[95] - Gross profit decreased by 14.7% YoY, with gross profit margin falling to 34.1% from 37.2%, while operating expenses decreased slightly by 0.4% YoY, with SG&A decreasing by $1.5 million and R&D increasing by $1.5 million[95][96] - Interest income decreased by 68.8% due to reduced short-term investments, while interest expense decreased by 42.0% due to lower debt levels and interest rates[98] - Income tax provision decreased by $5.7 million (55.8%) YoY, mainly due to lower pretax income, reduced non-U.S. withholding taxes, and favorable U.S. permanent differences[99] Financial Condition This section discusses the company's liquidity, capital resources, working capital, and debt structure - Primary liquidity sources are cash, cash equivalents, funds from operations, and credit facilities, with working capital increasing from $524.6 million at December 31, 2019, to $532.3 million at March 31, 2020[100][104] - Short-term borrowings under Asia credit facilities totaled $13.4 million at March 31, 2020, and the U.S. Credit Facility provides up to $250 million revolving credit and a $250 million term loan, maturing October 26, 2021[101][102] Borrowings Outstanding as of March 31, 2020 (Amounts in thousands) | Description | Amount Outstanding | | :---------------------------------------- | :----------------- | | Short-term debt: Foreign credit lines | $13,397 | | Long-term debt: Notes payable to Bank of Taiwan | $4,135 | | Long-term debt: Notes payable to CTBC Bank | $19,054 | | Long-term debt: Notes payable to East Sun Bank | $3,308 | | Long-term debt: U.S. Credit facility: Term portion | $55,375 | | Total long-term debt | $81,872 | | Total long-term debt, net of current portion | $46,011 | - Capital expenditures for Q1 2020 were $12.6 million, approximately 4.5% of net sales, slightly below the target range of 5% to 9%, with foreign subsidiaries holding approximately $143.6 million in cash, cash equivalents, and investments, including $9.2 million in China[105][106] Discussion of Cash Flow This section analyzes the company's cash generation and usage across operating, investing, and financing activities - Net cash flows from operating activities decreased to $53.7 million in Q1 2020 from $69.9 million in Q1 2019, primarily due to lower net income[111] - Net cash used in investing activities was $17.6 million in Q1 2020, mainly for property, plant, and equipment purchases ($14.2 million) and an additional investment in Yea-Shin ($6.1 million)[112] - Net cash used in financing activities was $21.4 million in Q1 2020, primarily due to $16.6 million in net repayments of long-term debt and $4.5 million in taxes paid on net share settlement[113] Use of Derivative Instruments and Hedging This section explains the company's strategies for using derivative instruments to manage financial risks - The company uses interest rate swaps and collars to stabilize interest expense and manage interest rate exposure, designating them as cash flow hedges[115] - Foreign currency forward agreements are used to manage foreign currency risk and preserve the economic value of foreign currency denominated assets and liabilities, but these are not designated for hedge accounting[116] Off-Balance Sheet Arrangements This section confirms the absence of material off-balance sheet arrangements that could impact liquidity or capital resources - The company has no transactions, arrangements, or relationships with unconsolidated entities that would materially affect its liquidity or capital resources, nor does it engage in special purpose entities for off-balance sheet financing[117] Contractual Obligations This section notes that there have been no material changes to the company's contractual obligations since the last annual report - There have been no material changes to the company's contractual obligations as disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019[119] Critical Accounting Policies This section refers to the company's key accounting policies and the judgments and estimates involved in their application - Critical accounting policies are detailed in the 2019 Form 10-K, and any new pronouncements or updates are discussed in Note 1 of this report, with management's judgments and estimates based on historical experience and available information[120] Recently Issued Accounting Pronouncements This section directs readers to Note 1 for information on new accounting standards - Detailed information regarding recently issued accounting pronouncements is provided in Note 1 – Summary of Operations and Significant Accounting Policies[121] Available Information This section informs stakeholders about where to access the company's public filings and reports - The company makes its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other SEC filings available free of charge on its website, www.diodes.com[122](index=122&type=chunk) Cautionary Statement for Purposes of the "Safe Harbor" Provision of the Private Securities Litigation Reform Act of 1995 This section provides a disclaimer regarding forward-looking statements and associated risks - This section reiterates that the report contains forward-looking statements subject to risks and uncertainties, as defined by the Private Securities Litigation Reform Act of 1995, and the company undertakes no obligation to update these statements[123][125] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states that there have been no material changes to the company's market risks since those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2019 - No material changes to market risks have occurred since the disclosures in the Annual Report on Form 10-K for the year ended December 31, 2019[170] Item 4. Controls and Procedures This section confirms the effectiveness of the company's disclosure controls and procedures as of March 31, 2020, based on evaluations by the CEO and CFO, and states that there were no material changes in internal control over financial reporting during the quarter - The CEO and CFO evaluated the effectiveness of disclosure controls and procedures as of March 31, 2020, and concluded they are effective at a reasonable assurance level[171] - No changes in internal control over financial reporting occurred during the three months ended March 31, 2020, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[173] PART II – OTHER INFORMATION This section covers legal proceedings, updated risk factors, equity security sales, defaults, mine safety, other information, and a list of exhibits Item 1. Legal Proceedings This section states that Diodes Incorporated is not currently a party to any material pending litigation, and while it may be involved in various legal proceedings in the normal course of business, the ultimate outcome is not expected to have a material adverse effect on its financial position, cash flows, or operating results - The company is not a party to any pending litigation considered material[176] - While involved in various legal proceedings in the normal course of business, the company believes the ultimate outcome will not have any material adverse effect on its consolidated financial position, cash flows, or operating results[177] Item 1A. Risk Factors This section updates the risk factors, primarily focusing on the ultimate impact of the COVID-19 pandemic, which cannot be estimated but may materially adversely affect the business, financial condition, and results of operations. It also references general business, international operations, and common stock-related risks from the previous 10-K - The ultimate impact of the COVID-19 pandemic cannot be estimated at this time, but it may have a material adverse effect on the company's business, financial condition, and results of operations[179] - Risks from COVID-19 include potential long-term limitations or closures of manufacturing facilities, changes in ordering patterns, demand for products, losses in efficiency due to travel restrictions, and potential financial difficulties for customers[181][182][184] - The company's financial statements reflect estimates and assumptions that could be affected by the extent and duration of the COVID-19 pandemic, impacting valuations of goodwill, long-lived assets, inventory, and tax assessments[182] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section states that there were no unregistered sales of equity securities or use of proceeds to report during the period - There were no unregistered sales of equity securities or use of proceeds to report[186] Item 3. Defaults Upon Senior Securities This section indicates that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[188] Item 4. Mine Safety Disclosures This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the company[190] Item 5. Other Information This section indicates that there is no other information to report - There is no other information to report[192] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including amendments to the credit agreement, certifications, and XBRL-related documents. It also includes a cautionary note regarding the accuracy of covenants, representations, or warranties in exhibit agreements - Exhibits include Consent and Amendment No. 4 and No. 5 to the Amended and Restated Credit Agreement, certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, and Inline XBRL documents[194][195][196] - A cautionary note advises investors not to assume the accuracy of covenants, representations, or warranties in exhibit agreements, as they may be subject to contractual materiality standards and risk allocation purposes[197] SIGNATURES This section contains the official signatures of the registrant's President and Chief Executive Officer, Keh-Shew Lu, and Chief Financial Officer, Brett R. Whitmire, certifying the report on behalf of Diodes Incorporated - The report is signed by Keh-Shew Lu, President and Chief Executive Officer, and Brett R. Whitmire, Chief Financial Officer, on May 11, 2020[200]