DIODES INC /DEL/
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
DIOD$77.36+13.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001193125-26-335450
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001193125-26-450082
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 78 previous paragraphs and 93 current paragraphs.
35 unchanged; 32 reworded; 24 added; 8 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
Gross profit margin was 36.1%, compared to 30.7% in the three months ended September 30, 2025 and 33.1% in the three months ended June 30, 2026;
Current report
On August 18, 2026, we issued $375.0 million aggregate principal amount of 0.00% Convertible Senior Notes due 2031 (the "Convertible Senior Notes"), including the exercise in full of the initial purchasers' option to purchase an additional $50.0 million aggregate principal amount. The Convertible Senior Notes were issued pursuant to an Indenture, dated August 18, 2026 (the “Indenture”), between the Company and U.S. Bank Trust Company, National Association, as trustee. The Convertible Senior Notes are senior unsecured obligations of the Company and mature on August 15, 2031, unless earlier converted, redeemed, or repurchased. The Convertible Senior Notes do not bear regular interest, and the principal amount does not accrete. Special interest may accrue under
Current report
-28- certain circumstances as provided in the Indenture. Also in August 2026, in connection with the pricing of the Convertible Senior Notes and the exercise by the initial purchasers of their option in full to purchase additional notes, we entered into the Capped Call Transactions with several financial institutions, including one or more of the initial purchasers and/or their respective affiliates.
Current report
The Company’s third quarter revenue reached record levels coupled with an over 500-basis point year-over-year increase in gross margin to 36.1%, with global point of sales reaching record level in the quarter. The Company’s over 19% sequential revenue growth was primarily driven by continued market share gains in the automotive market, improving demand across broad industrial applications, and continued momentum in the artificial intelligence ecosystem. Underpinning this growth is the benefit of the targeted investments we made in capacity expansion over the past year coming online.
Current report
Net sales increased approximately $140.4 million, or 35.8%, for the three months ended September 30, 2026, compared to the same period last year, primarily driven by continued market share gains in the automotive market, improving demand across broad industrial applications, and continued momentum in the artificial intelligence ecosystem. Underpinning this growth is the benefit of the
Current report
-29- targeted investments we made in capacity expansion over the past year coming online. During the three months ended September 30, 2026, weighted-average sales price increased 13.5% and volume increased 19.7%, when compared to the same period in 2025.
Current report
Our primary sources of liquidity consist of cash and cash equivalents, cash generated from operations, availability under our Revolving Credit Facility, and access to capital markets. Our primary uses of cash include working capital requirements, capital expenditures, strategic acquisitions, debt service obligations, stock repurchases, and other general corporate purposes.
Current report
At September 30, 2026 and December 31, 2025, working capital was $1.1 billion and $878.6 million, respectively. At September 30, 2026 our cash and cash equivalents and restricted cash totaled $566.2 million.
Current report
We believe that cash generated from operations, together with existing cash balances, and amounts available under our Revolving Credit Facility, will be sufficient to fund our operating requirements, capital expenditures, debt service obligations, and other anticipated liquidity needs for at least the next twelve months.
Current report
Financing Transactions
Current report
During the three months ended September 30, 2026, the Company completed the financing transactions described below designed to enhance our financial flexibility, strengthen our long-term capital structure, and support future growth initiatives. Collectively, these transactions enhanced our capital structure by providing long-term financing, extending debt maturities, and increasing available liquidity while maintaining borrowing capacity under our Revolving Credit Facility.
Current report
Convertible Senior Notes
Current report
In August 2026, we issued $375.0 million aggregate principal amount of 0.00% Convertible Senior Notes (“Convertible Senior Notes”) due 2031. Net proceeds from the offering were approximately $364.8 million, after deducting initial purchaser discounts, commissions, and offering expenses and prior to giving effect to the cost of the Capped Call Transactions described below. We used approximately $21.9 million to fund the Capped Call Transactions, and approximately $35.0 million for concurrent repurchases of our common stock. The remaining proceeds are available for general corporate purposes, including potential future acquisitions.
Current report
The issuance of the Convertible Senior Notes significantly increased our available liquidity and provided a long-term source of capital with no scheduled cash interest payments. As a result we are able to preserve our substantial cash balances while maintaining capacity under our Revolving Credit Facility for future operating, investing, and strategic activities.
Current report
Capped Call Transactions
Current report
Concurrently with the issuance of the Convertible Senior Notes, we entered into Capped Call Transactions intended to reduce potential dilution associated with conversions of the Convertible Senior Notes, subject to the terms of the transactions. The aggregate premium paid for the Capped Call Transactions was approximately $21.9 million.
Current report
Credit Agreement Amendment
Current report
Also during August 2026, we amended our Credit Agreement, extending the maturity date of our Revolving Credit Facility to August 12, 2031, modifying pricing provisions, permitting the Convertible Senior Notes financing, and revising certain financial and negative covenants. The amended facility continues to provide an important source of committed liquidity and financial flexibility. There were no borrowings outstanding under the Credit Agreement at September 30, 2026.
Current report
Undistributed Foreign Earnings
Current report
At September 30, 2026, there was no outstanding balance under the Credit Agreement and approximately $225.0 million remained available for borrowing. In August 2026, we amended the Credit Agreement, extending the maturity or the Revolving Credit Facility to
Current report
August 12, 2031 and modifying certain terms to provide additional financial flexibility. The Credit Agreement contains customary affirmative and negative covenants, including a maximum leverage ratio and a minimum interest coverage ratio. As of September 30, 2026, we were in compliance with all financial covenants under the facility.
Current report
In August 2026, we issued $375.0 million aggregate principal amount of 0.00% Convertible Senior Notes due 2031. The issuance provided long-term capital, increased available liquidity, and preserves the borrowing capacity under our Revolving Credit Facility. The Convertible Senior Notes do not bear regular interest and, unless earlier converted, redeemed, or repurchased, mature on August 15, 2031.
Current report
Net cash and cash equivalents from financing activities was $302.1 million for the nine months ended September 30, 2026. The change primarily reflects the issuance of $375.0 million of Convertible Senior Notes, net of $10.2 million in debt issuance costs, partially
Current report
-33- offset by $21.9 million for the Capped Call Transactions and approximately $45.2 million used to repurchase the Company’s common stock.
Removed paragraphs (8)
Previous report
Gross profit margin was 33.1%, compared to 31.5% in the three months ended June 30, 2025 and 31.8% in the three months ended March 31, 2026;
Previous report
The transaction, which is still subject to customary closing conditions, including regulatory approvals, is expected to close during the second half of 2026.
Previous report
In the three months and six months ended June 30, 2026, the Company extended its momentum with revenue again increasing more than 20% when compared to the three and six months ended June 30, 2025, driven by growth across regions. Revenue also increased 10% sequentially coupled. The continued growth this quarter serves as further confirmation of strengthening demand in the overall market combined with the Company’s expanding content across our analog and power solutions in our key focus areas of automotive, industrial and artificial intelligence server-related applications.
Previous report
The cost and operating initiatives previously implemented during the semiconductor market slowdown are producing measurable benefits to gross margin and net income, with margin increasing 160 basis points year-over-year. These actions have also contributed to increased cash flow that has enabled the Company to reinvest in growth and innovation, while also looking for inorganic opportunities to expand our technology portfolio, such as the recent proposed acquisition of ElevATE.
Previous report
Net sales increased approximately $79.3 million, or 21.7%, for the three months ended June 30, 2026, compared to the same period last year, primarily due to strong demand in the computing market, especially for artificial intelligence related server applications as well as data center and edge computing. During the three months ended June 30, 2026, weighted-average sales price decreased 2.5%
Previous report
-24- and volume increased 24.8%, when compared to the same period in 2025. The decrease in weighted-average sales price was primarily due to lower market pricing.
Previous report
Our primary source of liquidity is cash flow from operations. Additional sources of liquidity are cash and cash equivalents, short-term investments, and our credit facilities. Our cash and cash equivalents and restricted cash increased from $372.3 million at December 31, 2025 to $432.1 million at June 30, 2026. This increase in cash, cash equivalents, and restricted cash reflects normal operations of the Company. As of June 30, 2026, we had short-term investments totaling $9.5 million. These investments are highly liquid with maturity dates greater than three months at the date of purchase. We generally can access these investments in a relatively short time frame but in doing so we generally forfeit all earned and future interest income.
Previous report
At June 30, 2026 and December 31, 2025, our working capital was $930.7 million and $878.6 million, respectively. We expect cash generated by our operations together with existing cash, cash equivalents, short-term investments, and available borrowing under credit facilities to be sufficient to cover our cash needs for working capital, capital expenditures, and acquisitions for at least the next 12 months.
Reworded paragraphs (32)
Previous wording
The Company’s diverse product portfolio covers diodes; rectifiers; transistors; MOSFETs; SiC diodes and MOSFETs; protection devices; logic; voltage translators; amplifiers and comparators; sensors; and power management devices such as AC-DC converters, digital isolators and isolated gate drivers, DC-DC switching, photocoupler, linear voltage regulators, voltage references, LED drivers, power switches, and voltage supervisors. We also have timing and connectivity solutions including clock ICs, crystal oscillators, PCIe packet switches, multi-protocol switches, interface products, and signal integrity solutions for high-speed signals.
Current wording
The Company’s diverse product portfolio includes diodes, rectifiers, transistors, MOSFETs, SiC devices, protection devices, logic and interface solutions, amplifiers and comparators, sensors, isolation products, pin electronics PE), device power supply (DPS), and power management devices. Our power management devices include AC-DC converters, DC-DC switching, linear regulators, LED drivers, and voltage references. Our solutions also extend to timing and connectivity products, including clock ICs, crystal oscillators, PCIe and multi-protocol switches, and signal integrity solutions for high-speed applications.
Previous wording
Net sales were $445.5 million, an increase of 21.7% from the $366.2 million in the three months ended June 30, 2025 and an increase of 9.9% from the $405.5 million in three months ended March 31, 2026;
Current wording
Net sales were $532.6 million, an increase of 35.8% from the $392.2 million in the three months ended September 30, 2025 and an increase of 19.5% from the $445.5 million in three months ended June 30, 2026;
Previous wording
Gross profit was $147.6 million, an increase of 28.0% from the $115.3 million in the three months ended June 30, 2025 and an increase of 14.6% from the $128.8 million in the three months ended March 31, 2026;
Current wording
Gross profit was $192.5 million, an increase of 59.7% from the $120.5 million in the three months ended September 30, 2025 and an increase of 30.4% from the $147.6 million in the three months ended June 30, 2026;
Previous wording
Net income attributable to common stockholders was $46.6 million, compared to net income attributable to common stockholders of $46.1 million in the three months ended June 30, 2025 and net income attributable to common stockholders of $15.0 million in the three months ended March 31, 2026;
Current wording
Net income attributable to common stockholders was $43.7 million, compared to net income attributable to common stockholders of $14.3 million in the three months ended September 30, 2025 and net income attributable to common stockholders of $46.6 million in the three months ended June 30, 2026;
Previous wording
Earnings per share attributable to common stockholders was $1.00 per diluted share, compared to $0.99 per diluted share in the three months ended June 30, 2025 and $0.32 per diluted share in the three months ended March 31, 2026; and
Current wording
Earnings per share attributable to common stockholders was $0.95 per diluted share, compared to $0.31 per diluted share in the three months ended September 30, 2025 and $1.00 per diluted share in the three months ended June 30, 2026; and
Previous wording
Cash flow provided by operations was $68.5 million. We had $33.6 million of capital expenditures. Net cash flow was $32.9 million.
Current wording
Cash flow provided by operations was $97.2 million. We had $53.2 million of capital expenditures. Net cash flow was $134.1 million.
Previous wording
As of June 30, 2026, our cash, cash equivalents, and short-term investments were $440.0 million, and we had access to unused borrowing capacity of $225.0 million under the revolving portion of our U.S. Credit Agreement. We believe our liquidity and our borrowing capacity will allow us to cover our cash needs for working capital, capital expenditures, and acquisitions for at least the next 12 months.
Current wording
As of September 30, 2026, our cash, cash equivalents, and short-term investments were $574.9 million, and we had access to unused borrowing capacity of $225.0 million under the revolving portion of our U.S. Credit Agreement. We believe our liquidity and our borrowing capacity will allow us to cover our cash needs for working capital, capital expenditures, and acquisitions for at least the next 12 months.
Previous wording
On July 10, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire 100% of ElevATE Semiconductor, Inc. (“ElevATE”) in an all-cash transaction, which we expect to fund from available cash and our unused borrowing capacity. ElevATE is a fabless semiconductor company based in San Diego, California that specializes in the development of integrated circuits for the automated test equipment industry. Under the terms of the Merger Agreement, the aggregate merger consideration is based on a $250.0 million base purchase price, subject to customary adjustments for cash, indebtedness, transaction costs, taxes, and net working capital. In addition, the Merger Agreement provides for potential earnout payments of up to $50.0 million
Current wording
On August 27, 2026, the Company completed its previously announced all cash acquisition of ElevATE Semiconductor, Inc. ("ElevATE"), a fabless semiconductor company based in San Diego, California that specializes in the development of integrated circuits for the automated test equipment industry. The aggregate merger consideration of $267.1 million was based on a $250.0 million base purchase price, subject to customary adjustments for cash, indebtedness, transaction costs, taxes, and net working capital. In addition, the merger agreement provides for potential earnout payments of up to $50.0 million in the aggregate based on the achievement of specified post-closing revenue and gross margin thresholds for calendar years 2027 through 2030. The ElevATE acquisition advances the Company’s portfolio and content expansion initiatives to capitalize on the growing demand for semiconductor test solutions.
Previous wording
For the three months ended June 30, 2026, gross profit increased approximately 28.0% when compared to the same period last year primarily due to higher net sales. Gross profit margin for the three months ended June 30, 2026 and 2025 was 33.1% and 31.5%, respectively.
Current wording
For the three months ended September 30, 2026, gross profit increased approximately 59.7% when compared to the same period last year primarily due to higher net sales. Gross profit margin for the three months ended September 30, 2026 and 2025 was 36.1% and 30.7%, respectively.
Previous wording
Operating expenses for the three months ended June 30, 2026, increased $8.3 million when compared to the three months ended June 30, 2025. Operating expenses as a percentage of net sales were 25.6% and 28.9% for the three months ended June 30, 2026 and 2025, respectively. SG&A increased approximately $10.3 million as compared to the same period last year reflecting an increase in salaries and wages of $8.6 million and freight and duty expense of $1.7 million. SG&A, as a percentage of net sales, was 15.7% and 16.2% for the three months ended June 30, 2026 and 2025 respectively. For the three months ended June 30, 2026, research and development expenses (“R&D”) was flat when compared to the three months ended June 30, 2025. R&D, as a percentage of net sales, was 9.1% and 11.1% for the three months ended June 30, 2026 and 2025, respectively.
Current wording
Operating expenses for the three months ended September 30, 2026, increased $20.1 million when compared to the three months ended September 30, 2025. Operating expenses as a percentage of net sales were 24.2% and 27.8% for the three months ended September 30, 2026 and 2025, respectively. SG&A increased approximately $19.7 million as compared to the same period last year reflecting an increase in salaries and wages of $7.3 million, increased selling expenses of approximately $6.3 million, increased professional services of approximately $2.5 million, and increased freight and duty expense of $1.6 million. SG&A, as a percentage of net sales, was 15.1% and 15.4% for the three months ended September 30, 2026 and 2025 respectively. For the three months ended September 30, 2026, research and development expenses (“R&D”) was flat when compared to the three months ended September 30, 2025. R&D, as a percentage of net sales, was 8.2% and 10.7% for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
Interest income decreased $1.5 million, or 21.0%, for the three months ended June 30, 2026, compared to the same period last year, reflecting less interest income received in the Company’s derivative hedging instruments. Interest expense was flat for the three months ended June 30, 2026, compared to the same period last year. During the three months ended June 30, 2026, the Company recognized $20.0 million in unrealized gains on investments for mark-to-market adjustments.
Current wording
Interest income decreased $3.7 million, or 43.5%, for the three months ended September 30, 2026, compared to the same period last year, reflecting less interest income received in the Company’s derivative hedging instruments. Interest expense increased due primarily to amortization of debt issuance costs associated with the Convertible Senior Notes, for the three months ended September 30, 2026, compared to the same period last year. During the three months ended September 30, 2026, the Company recognized $6.0 million in unrealized losses on investments for mark-to-market adjustments.
Previous wording
We recognized an income tax expense of approximately $6.8 million and $9.1 million for the three months ended June 30, 2026 and 2025, respectively. The decrease in income taxes for 2026 compared to 2025 is primarily attributable to the geographical mix of pre-tax income and loss across tax jurisdictions.
Current wording
We recognized income tax expense of approximately $14.1 million and $3.6 million for the three months ended September 30, 2026 and 2025, respectively. The increase in income taxes for 2026 compared to 2025 is primarily attributable to the change in pre-tax earnings during the comparable periods, including the geographical mix of pre-tax income and loss across tax jurisdictions.
Previous wording
Results of operations for the six months ended June 30, 2026 and 2025
Current wording
Results of operations for the nine months ended September 30, 2026 and 2025
Previous wording
The following table and discussion explains in greater detail our consolidated operating results and financial condition for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.
Current wording
The following table and discussion explains in greater detail our consolidated operating results and financial condition for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. This discussion should be read in
Previous wording
Net sales increased approximately $152.7 million, or 21.9%, for the six months ended June 30, 2026, compared to the same period last year. During the six months ended June 30, 2026, weighted-average sales price decreased 4.6% and volume increased 27.7%, when compared to the same period in 2025.
Current wording
Net sales increased approximately $293.1 million, or 26.9%, for the nine months ended September 30, 2026, compared to the same period last year. During the nine months ended September 30, 2026, weighted-average sales price increased 1.7% and volume increased 24.7%, when compared to the same period in 2025.
Previous wording
The table below sets forth our product revenue as a percentage of total product revenue by end-user market for the six months ended June 30, 2026 and 2025:
Current wording
The table below sets forth our product revenue as a percentage of total product revenue by end-user market for the nine months ended September 30, 2026 and 2025:
Previous wording
For the six months ended June 30, 2026, gross profit increased approximately 25.6% when compared to the same period last year primarily due to higher net sales. Gross profit margin for the six months ended June 30, 2026 and 2025 was 32.5% and 31.5%, respectively.
Current wording
For the nine months ended September 30, 2026, gross profit increased approximately 37.7% when compared to the same period last year primarily due to higher net sales. Gross profit margin for the nine months ended September 30, 2026 and 2025 was 33.9% and 31.2%, respectively.
Previous wording
Operating expenses for the six months ended June 30, 2026, increased $14.0 million when compared to the six months ended June 30, 2025. Operating expenses as a percentage of net sales were 26.2% and 30.0% for the six months ended June 30, 2026 and 2025, respectively. SG&A increased approximately $15.9 million as compared to the same period last year reflecting an increase in salaries and wages of $11.8 million and an increase in freight and duty of $2.9 million. SG&A, as a percentage of net sales, was 15.8% and 16.9% for the six months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026, R&D increased approximately $2.1 million when compared to the six months ended June 30, 2025 due to increased R&D expenses related to salaries and wages of $4.1 million, and increased depreciation and amortization of $3.8 million. These increases in R&D expenses were partially offset by decreases in R&D marketing expense of $4.2 million and decreases in R&D operating expenses of $2.2 million. R&D, as a percentage of net sales, was 9.6% and 11.3% for the six months ended June 30, 2026 and 2025, respectively.
Current wording
Operating expenses for the nine months ended September 30, 2026, increased $34.1 million when compared to the nine months ended September 30, 2025. Operating expenses as a percentage of net sales were 25.5% and 29.2% for the nine months ended September 30, 2026 and 2025, respectively. SG&A increased approximately $35.6 million as compared to the same period last year reflecting an increase in salaries and wages of $19.1 million, an increase in selling expense of $5.9 million, an increase in freight and duty expense of $4.5 million, an increase in operating expense of $2.8 million, and an increase in consulting and legal expense of $2.5 million, and SG&A, as a percentage of net sales, was 15.5% and 16.4% for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Interest income decreased $1.8 million, or 14.4%, for the six months ended June 30, 2026, compared to the same period last year, reflecting lower amounts of interest income received in the Company’s derivative hedging instruments. Interest expense was flat for the six months ended June 30, 2026, compared to the same period last year. During the six months ended June 30, 2026, the Company recognized an impairment loss on an equity investment of $1.3 million, due to a decline in the value of the investment. During the six months ended June 30, 2026, the Company recognized upward fair value adjustments of $22.5 million related to long-term investments.
Current wording
Interest income decreased $5.5 million, or 25.9%, for the nine months ended September 30, 2026, compared to the same period last year, reflecting lower amounts of interest income received in the Company’s derivative hedging instruments. Interest expense increased due primarily to amortization of debt issuance costs associated with the Convertible Senior Notes, for the nine months ended September 30, 2026, compared to the same period last year. During the nine months ended September 30, 2026, the Company recognized an impairment loss on an equity investment of $1.2 million, due to a decline in the value of the investment. During the nine months ended September 30, 2026, the Company recognized upward fair value adjustments of $16.4 million related to long-term investments.
Previous wording
We recognized an income tax expense of approximately $10.8 million and $9.1 million for the six months ended June 30, 2026 and 2025, respectively. The increase in income taxes for 2026 compared to 2025 was primarily attributable to an increase in pretax earnings.
Current wording
We recognized income tax expense of approximately $24.9 million and $12.6 million for the nine months ended September 30, 2026 and 2025, respectively. The increase in income taxes for 2026 compared to 2025 was primarily attributable to an increase in pre-tax earnings.
Previous wording
Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to earnings of certain European and Asian subsidiaries. As of June 30, 2026, our foreign subsidiaries held approximately $253.2 million of cash, cash equivalents and investments of which approximately $91.2 million would be subject to a potential non-U.S. withholding tax if distributed outside the country in which the cash is currently held. The $92.1 million is held in Asia and Europe.
Current wording
Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to earnings of certain European and Asian subsidiaries. As of September 30, 2026, our foreign subsidiaries held approximately $250.0 million of cash, cash equivalents and investments of which approximately $98.6 million would be subject to a potential non-U.S. withholding tax if distributed outside the country in which the cash is currently held. The $98.6 million is held in Asia and Europe.
Previous wording
Our Asia subsidiaries maintain short-term credit facilities with several financial institutions through our foreign entities worldwide totaling $148.9 million. Other than two Taiwanese credit facilities that are collateralized by assets, our foreign credit lines are unsecured, uncommitted, and contain no restrictive covenants. These credit facilities bear interest at the Taipei Interbank Offering Rate (or similar indices) plus a specified margin. Interest payments are due monthly on outstanding amounts under the credit lines. The unused and available credit under the various facilities as of June 30, 2026, was approximately $129.9 million, net of $18.6 million advanced under our foreign credit lines and $0.4 million of credit used for import and export guarantee.
Current wording
Our Asia subsidiaries maintain short-term credit facilities with various financial institutions totaling $150.0 million. At September 30, 2026, the unused and available credit under the various facilities was approximately $128.5 million, net of $21.0 million advanced under our foreign credit lines and $0.4 million of credit used for import and export guarantee. These facilities provide additional liquidity to support local operating requirements.
Previous wording
The Company maintains a long-term credit facility (“Credit Agreement”). The Credit Agreement consists of a Revolving Credit Facility in the amount of $225.0 million, including a swing line sublimit equal to the lesser of $50.0 million and the Revolving Credit Facility, a letter of credit sublimit equal to the lesser of $100.0 million and the Revolving Credit Facility, and an alternative currency sublimit equal to the lesser of $40.0 million and the Revolving Credit Facility. The Company has the option to increase the Revolving Credit Facility and/or incur Incremental Term Loans in an aggregate principal amount of up to $350.0 million. The Credit Agreement bears interest at Term SOFR or similar other indices plus a specified margin and matures in May 2028. The Company’s obligations under the Credit Agreement are secured by a lien on substantially all assets of the Company and certain of its subsidiaries. There was no outstanding balance under the Credit Agreement at June 30, 2026. In addition to our U.S. Credit Agreement, our 53% owned subsidiary, ERIS, had long-term debt of $20.9 million and $25.0 million, at June 30, 2026 and December 31, 2025, respectively, from local Taiwan banks. The outstanding ERIS debt matures in various periods from 2026 through 2033.
Current wording
Additionally, our 53% owned subsidiary, ERIS, had long-term debt of $17.5 million and $25.0 million, at September 30, 2026 and December 31, 2025, respectively, from local Taiwan banks. These borrowings mature at various dates through 2033.
Previous wording
Net cash flows from operating activities for the six months ended June 30, 2026 was $132.8 million. The following recurring operating items gave rise to the calculation of net cash flows from operating activities for the six months ended June 30, 2026: Net income of $64.9 million, depreciation and amortization of intangible assets of $70.4 million, share-based compensation of $18.9 million, and a net increase of $0.6 million of changes in working capital accounts. These increases in cash were partially offset by the recognition of net investment gains of $17.8 million, including $22.5 million, net, of non-cash mark-to-market increases.
Current wording
Net cash flows from operating activities for the nine months ended September 30, 2026 was $229.9 million. The following recurring operating items gave rise to the calculation of net cash flows from operating activities for the nine months ended September 30, 2026: Net income of $111.4 million, depreciation and amortization of intangible assets of $106.3 million, share-based compensation of $28.3 million, and a net increase of $2.9 million of changes in working capital accounts. These increases in cash were partially offset by the recognition of net investment gains of $9.2 million and interest income from derivative instruments of $8.4 million.
Previous wording
Net cash flows from operating activities for the six months ended June 30, 2025 was $98.3 million. The following recurring operating items gave rise to the calculation of net cash flows from operating activities for the six months ended June 30, 2025: Net income of $41.4 million, depreciation and amortization of intangible assets of $71.8 million, a net increase of $15.3 million of changes in working capital accounts, and share-based compensation of $12.2 million. During the six months ended June 30, 2025 the Company also recognized net investment gains of $39.4 million, including a $33.3 million non-cash mark-to-market increase in the value of the Company’s investment in Atlas, a non-cash mark-to-market decrease of $7.7 million of previously made equity investments, and a gain on the disposal of a subsidiary for $13.7 million.
Current wording
Net cash flows from operating activities for the nine months ended September 30, 2025 was $177.4 million. The following recurring operating items gave rise to the calculation of net cash flows from operating activities for the nine months ended September 30, 2025: Net income of $56.9 million, depreciation and amortization of intangible assets of $108.5 million, a net increase of $43.3 million of changes in working capital accounts, and share-based compensation of $19.0 million. During the nine months ended September 30, 2025, the Company also recognized net investment gains of $27.6 million, including a $33.3 million non-cash mark-to-market increase in the value of the Company’s investment in Atlas, a non-cash mark-to-market decrease of $5.5 million of previously made equity investments, and a gain on the disposal of a subsidiary for $13.7 million.
Previous wording
Net cash and cash equivalents from investing activities was $(75.2) million for the six months ended June 30, 2026. Net cash and cash equivalents from investing activities for the six months ended June 30, 2026 was primarily due to purchases of property, plant, and equipment of $65.5 million, or 7.7% of net sales. We expect capital expenditures for the twelve months ended December 31, 2026 to be within our target model of 5% to 9% of net sales. The Company also paid approximately $6.5 million due to the termination of a hedge instrument and made a $2.4 million payment from an escrow account related to the previously made acquisition.
Current wording
Net cash and cash equivalents from investing activities was $(344.9) million for the nine months ended September 30, 2026. Net cash and cash equivalents from investing activities for the nine months ended September 30, 2026 was primarily due to the purchase of ElevATE that used $262.3 million of cash, and purchases of property, plant, and equipment of $118.7 million, or 8.6% of net sales. We expect capital expenditures for the twelve months ending December 31, 2026 to be within our target model of 5% to 9% of net sales. The Company also received approximately $7.7 million due to the termination of a hedge instrument and made a $2.4 million payment from an escrow account related to the previously made acquisition.
Previous wording
Net cash and cash equivalents from investing activities was ($78.6) million for the six months ended June 30, 2025. Net cash and cash equivalents from investing activities for the six months ended June 30, 2025 was primarily due to purchases of property, plant, and equipment of $36.3 million, or 5.2% of net sales. The Company made purchases of equity securities, including making an investment in ATX of approximately $30.0 million, increasing its investment in Atlas by approximately $17.3 million, and the acquisition of the minority interest in a joint venture in Taiwan for approximately $4.1 million, bringing the Company’s ownership to 100%. The Company also paid approximately $6.9 million due to the expiration of a hedge instrument. These uses of cash for
Current wording
Net cash and cash equivalents from investing activities was $(94.0) million for the nine months ended September 30, 2025. Net cash and cash equivalents from investing activities for the nine months ended September 30, 2025 was primarily due to purchases of property, plant, and equipment of $52.7 million, or 4.8% of net sales. The Company made purchases of equity securities of $49.3 million, including making an investment in ATX of approximately $30.0 million, increasing its investment in Atlas by approximately $17.3 million, and the acquisition of the minority interest in a joint venture in Taiwan for approximately $4.1 million, bringing the Company’s ownership to 100%. The Company also paid approximately $6.6 million due to the expiration of a hedge instrument. These uses of cash for investing were partially offset by the receipt of approximately $16.0 million related to the sale of TFS.
Previous wording
Net cash and cash equivalents from financing activities was ($30.1) million for the six months ended June 30, 2025. Net cash from financing activities in the six months ended June 30, 2025 consisted of net decreases in non-controlling interests of $13.5 million, stock repurchases of $10.0 million, $5.0 million of net decreases in our debt, and taxes paid on net share settlements of $1.6 million.
Current wording
Net cash and cash equivalents from financing activities was $(30.8) million for the nine months ended September 30, 2025. Net cash from financing activities in the nine months ended September 30, 2025 consisted of net decreases in noncontrolling interests of $18.0 million, stock repurchases of $10.0 million, $1.6 million of net decreases in our debt, and taxes paid on net share settlements of $4.3 million.
Previous wording
As part of our overall risk management strategy, we enter into commodity swap agreements to manage our exposure to fluctuations in commodity prices. These derivative instruments are intended to reduce the volatility of future cash flows attributable to changes in market prices and to provide greater certainty regarding the cost of commodities used in our operations.
Current wording
As part of our overall risk management strategy, we enter into commodity swap contracts to manage our exposure to fluctuations in commodity prices. These derivative instruments are intended to reduce the volatility of future cash flows attributable to changes in market prices and to provide greater certainty regarding the cost of commodities used in our operations.
Previous wording
Our objectives in using interest rate derivatives are to add stability to interest expense and to manage exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps, including interest rate collars, as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
Current wording
Our objectives in using interest rate derivatives are to add stability to interest expense and to manage exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps, including interest rate collars, as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the contracts without exchange of the underlying notional amount.
Previous wording
We are exposed to fluctuations in various foreign currencies against our different functional currencies. We use foreign currency forward agreements to manage this exposure and to preserve the economic value of foreign currency denominated monetary assets and liabilities. These instruments are not designated for hedge accounting treatment in accordance with ASC No. 815. The fair value of our foreign exchange hedges approximates zero.
Current wording
We are exposed to fluctuations in various foreign currencies against our different functional currencies. We use foreign currency forward contracts to manage this exposure and to preserve the economic value of foreign currency denominated monetary assets and liabilities. These instruments are not designated for hedge accounting treatment in accordance with ASC No. 815. The fair value of our foreign exchange hedges approximates zero.
Previous wording
We do not have any transactions, arrangements, or other relationships with unconsolidated entities that will affect our liquidity or capital resources. We have no special purpose entities that provide off-balance sheet financing, liquidity, or market or credit risk support, nor do we engage in leasing, swap agreements, or outsourcing of research and development services that could expose us to liability that is not reflected on the face of our financial statements.
Current wording
We do not have any transactions, arrangements, or other relationships with unconsolidated entities that will affect our liquidity or capital resources. We have no special purpose entities that provide off-balance sheet financing, liquidity, or market or credit risk support, nor do we engage in leasing, swap contracts, or outsourcing of research and development services that could expose us to liability that is not reflected on the face of our financial statements.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
-30- conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.
Current report — wording carried from elsewhere
R&D increased approximately $4.1 million when compared to the nine months ended September 30, 2025 due to increased R&D expenses related to salaries and wages of $7.8 million, an increase in depreciation and amortization of $4.4 million, and an increase in selling expenses of $1.0 million. These increases in R&D expenses were partially offset by decreases in R&D marketing expense of $6.9 million and decreases in R&D operating expenses of $2.0 million. R&D, as a percentage of net sales, was 9.0% and 11.1% for the nine months ended September 30, 2026 and 2025, respectively.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
-23- in the aggregate based on the achievement of specified post-closing revenue and gross margin thresholds for calendar years 2027 through 2030.
Previous report — wording carried elsewhere
investing were partially offset by the receipt of approximately $16.0 million related to the sale of TFS.
Previous report — wording carried elsewhere
Net cash and cash equivalents from financing activities was $(2.0) million for the six months ended June 30, 2026. Net cash from financing activities in the six months ended June 30, 2026 consisted of stock repurchases of $10.2 million, $14.8 million of net decreases in our debt, and taxes paid on net share settlements of $1.9 million. These uses of cash were partially offset by net changes in non-controlling interests of $25.1 million.