What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-09 compared with 2020-08-06 · 117 added, 94 removed, 517 unchanged (29% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

September 30,

Current assets:

2 unchanged sentences

Accounts receivable, net of allowances of $ 3,056 and $ 4,866 at

June 30, 2020 and December 31, 2019, respectively

September 30, 2020 and December 31, 2019, respectively

Prepaid expenses and other

23 unchanged sentences

51,945,299 and 51,206,969 , issued and outstanding

at June 30, 2020 and December 31, 2019, respectively

at September 30, 2020 and December 31, 2019, respectively

Additional paid-in capital

Retained earnings

Treasury stock at cost, 1,482,915 and 1,457,206 , at June 30, 2020 and

December 31, 2019, respectively

Treasury stock at cost, 1,494,080 and 1,457,206 , at

September 30, 2020 and December 31, 2019, respectively

Accumulated other comprehensive loss

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cost of goods sold

3 unchanged sentences

Amortization of acquisition related intangible assets

Other operating (income)

Other operating expense (income)

Total operating expense

16 unchanged sentences

Three Months Ended

Six Months Ended

Unrealized (loss) gain on defined benefit plan, net of tax

Nine Months Ended

September 30,

Unrealized gain (loss) on defined benefit plan, net of tax

Unrealized gain (loss) on swaps and collars, net of tax

11 unchanged sentences

Noncontrolling

Balance, March 31, 2020

Balance, June 30, 2020

Total comprehensive income

Acquisition of non-controlling interest

Contributions from noncontrolling interests

Dividends to noncontrolling interest

Common stock issued for share-based plans

2 unchanged sentences

Tax related to net share settlement

Balance, June 30, 2020

Balance, September 30, 2020

Balance, December 31, 2019

7 unchanged sentences

Tax related to net share settlement

Balance, September 30, 2020

Balance, June 30, 2019

Balance, March 31, 2019

Total comprehensive income

2 unchanged sentences

Tax related to net share settlement

Balance, June 30, 2019

Balance, September 30, 2019

Balance, December 31, 2018

5 unchanged sentences

Tax related to net share settlement

Balance, June 30, 2019

Balance, September 30, 2019

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

2 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

4 unchanged sentences

Changes in operating assets:

Change in accounts receivable

Change in inventory

Change in other operating assets

Accounts receivable

Other operating assets

Changes in operating liabilities:

Change in accounts payable

Change in accrued liabilities

Change in income tax payable

Change in other operating liabilities

Accounts payable

Accrued liabilities

Income tax payable

Other operating liabilities

Net cash flows provided by operating activities

15 unchanged sentences

Dividend distribution to noncontrolling interests

Net cash and cash equivalents (used in) provided by financing activities

Net cash and cash equivalents provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

8 unchanged sentences

property, plant and equipment

Dividend payable to noncontrolling interest

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

The company’s restricted cash primarily consisted of the cash required to be on deposit under contractual agreements with banks to support the outstanding loan and import/export guarantees.

Six Months Ended

The Company’s restricted cash primarily consisted of the cash required to be on deposit under contractual agreements with banks to support outstanding loan and import/export guarantees.

Nine Months Ended

September 30,

Current assets:

31 unchanged sentences

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 six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for other interim periods or the year ending December 31, 2020.

Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for other interim periods or the year ending December 31, 2020.

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.

23 unchanged sentences

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.

During the three and six month ended June 30, 2020 and 2019 we paid no dividends on our Common Stock.

During the three and nine months ended September 30, 2020 and 2019 we paid no dividends on our Common Stock.

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

Six Months Ended

Nine Months Ended

September 30,

Earnings (numerator)

9 unchanged sentences

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

June 30, 2020

September 30, 2020

December 31, 2019

7 unchanged sentences

Foreign currency translation adjustment

Balance at June 30, 2020

Balance at September 30, 2020

The table below sets forth the value of intangible assets, other than goodwill:

September 30,

Intangible assets subject to amortization:

8 unchanged sentences

Amortization expense

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

NOTE 5 – Income Tax Provision

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Domestic pre-tax income

4 unchanged sentences

Earnings per share impact of tax holidays:

The decrease in the effective tax rate for the three and six months ended June 30, 2020 when compared to the three and six months ended June 30, 2019, is primarily attributable to a decrease in non-U.S.

The decrease in the effective tax rate for the three and nine months ended September 30, 2020 when compared to the three and nine months ended September 30, 2019, is primarily attributable to a decrease in non-U.S.

withholding taxes and a net increase in favorable U.S.

13 unchanged sentences

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in interest expense.

As of June 30, 2020, the gross amount of unrecognized tax benefits was approximately $ 39.6 million.

As of September 30, 2020, the gross amount of unrecognized tax benefits was approximately $ 37.5 million.

It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company’s unrecognized tax positions will significantly increase or decrease within the next 12 months.

6 unchanged sentences

All outstanding stock options are fully vested, and all expense related to stock options has been recognized in previous periods.

Approximately $ 1.1 million of cash proceeds were received from stock option exercises during the six months ended June 30, 2020.

Approximately $ 2.0 million of cash proceeds were received from stock option exercises during the nine months ended September 30, 2020.

The table below sets forth the line items where share-based compensation expense was recorded:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cost of goods sold

10 unchanged sentences

PSUs will vest upon the Company achieving a cumulative 3 -year non-GAAP operating income target for the applicable periods.

As of June 30, 2020, total unrecognized share-based compensation expense related to share grants was approximately $ 43.5 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 2.1 years.

As of September 30, 2020, total unrecognized share-based compensation expense related to share grants was approximately $ 50.8 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 2.2 years.

NOTE 7 – Segment Information and Net Sales

3 unchanged sentences

Our primary operations include operations in Asia, North America and Europe.

During the three months ended June 30, 2019, one customer, a broad-based global distributor that sells to thousands of different end users, accounted for 10 % or $ 31.5 million of our net sales.

No customer accounted for 10% or greater of our net sales during any other period presented.

No customer accounted for 10% or more of our outstanding accounts receivable at any point in the periods presented in this report.

No customer accounted for 10% or more of our net sales or outstanding accounts receivable at any point in the periods presented in this report.

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

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

North America

Intercompany elimination

Three Months Ended June 30, 2019

Three Months Ended September 30, 2019

North America

1 unchanged sentence

As of and for the

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

North America

2 unchanged sentences

As of and for the

Six Months Ended June 30, 2019

Nine Months Ended September 30, 2019

North America

6 unchanged sentences

Further, most of our contracts are fixed-price arrangements, and are short term in nature, ranging from days to several months.

The tables below set forth net sales for the Company disaggregated into geographic locations based on shipment and by type (direct sales or Distributor ) for the three months and six months ended June 30, 2020 and 2019:

The tables below set forth net sales for the Company disaggregated into geographic locations based on shipment and by type (direct sales or Distributor ) for the three months and nine months ended September 30, 2020 and 2019:

Three Months Ended

September 30,

Net Sales by Region

3 unchanged sentences

Total net sales

Six Months Ended

Nine Months Ended

September 30,

Net Sales by Region

3 unchanged sentences

Total net sales

Net sales from products shipped to China was $ 152.4 million and $ 160.3 million for the three months ended June 30, 2020 and 2019, respectively and $ 291.3 million and $ 311.8 million for the six months ended June 30, 2020 and 2019, respectively.

Net sales from products shipped to China was $ 161.6 million and $ 163.3 million for the three months ended September 30, 2020 and 2019, respectively, and $ 452.9 million and $ 475.1 million for the nine months ended September 30, 2020 and 2019, respectively.

NOTE 8 – Debt

2 unchanged sentences

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, 2020, was approximately $ 101.4 million, net of a $ 63.7 million advanced under our foreign credit lines and $ 0.4 million credit used for import and export guarantee.

The unused and available credit under the various facilities as of September 30, 2020, was approximately $ 86.2 million, net of a $ 70.7 million advanced under our foreign credit lines and $ 0.4 million credit used for import and export guarantee.

In connection with our Asia credit facilities $ 52.2 million of cash deposits have been restricted in support of a corresponding loan amount.

On May 29, 2020 , the Company, Diodes Holding B.V.

(the “Foreign Borrower” and, collectively with the Company, the “Borrowers”), and certain subsidiaries of the Company as guarantors, entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) that amends and restates that certain Amended and Restated Credit Agreement dated as of October 26, 2016 (as amended, modified and/or supplemented from time to time prior May 29, 2020, the “Existing Credit Agreement”).

(the “Foreign Borrower” and, collectively with the Company, the “Borrowers”), and certain subsidiaries of the Company as guarantors, entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) that amends and restates that certain Amended and Restated Credit Agreement dated as of October 26, 2016 (as amended, modified and/or supplemented from time to time prior to May 29, 2020, the “Existing Credit Agreement”).

Certain capitalized terms used in this description of the Credit Agreement have the meanings given to them in the Credit Agreement.

The Company analyzed this amendment pursuant to the guidance in ASC No.

The Company analyzed the amendment to the Existing Credit Agreement pursuant to the guidance in ASC No.

470-50, Debt—Modifications and Extinguishments.

The Company determined that certain lenders had changes in cash flows which were substantially different as a result of the amendment, which resulted in a debt extinguishment of $ 52.2 million and a loss on extinguishment and third-party fees of $ 0.7 million being expensed in the three-month period ended June 30, 2020.

The Company determined that certain lenders had changes in cash flows which were substantially different as a result of the amendment to the Existing Credit Agreement, which resulted in a debt extinguishment of $ 52.2 million and a loss on extinguishment and third-party fees of $ 0.7 million being expensed in the nine-month period ended September 30, 2020.

The Credit Agreement rebalances the Company’s existing senior credit facilities under the Existing Credit Agreement from (x) aggregate credit facilities of $ 500,000,000 , consisting of (A) a $ 250,000,000 revolving senior credit facility, which included a $ 10,000,000 swing line sublimit, a $ 10,000,000 letter of credit sublimit, and a $ 20,000,000 alternative currency sublimit, and (B) a $ 250,000,000 term loan to (y) aggregate credit facilities of $ 670,000,000 consisting of (A) an acquisition draw term commitment of $ 340,000,000 (the “Acquisition Draw Term Commitment”), (B) an initial term commitment of $ 180,000,000 (the “Initial Term Commitment” and, together with the Acquisition Draw Term Commitment, the “Term Loan”) and (C) a $ 150,000,000 revolving

s enior credit facility (the “Revolver”), which includes a $ 20,000,000 uncommitted swing line submit, a $ 10,000,000 letter of credit sublimit, and a $ 40,000,000 alternative currency sublimit.

senior credit facility (the “Revolver”), which includes a $ 20,000,000 uncommitted swing line sublimit, a $ 10,000,000 letter of credit sublimi t, and a $ 40,000,000 alternative currency sublimit.

The Revolver and the Term Loan mature on May 29, 2023 (the “Maturity Date”).

6 unchanged sentences

The ERIS debt matures in periods from 2020 through 2033 .

Borrowings outstanding as of June 30, 2020 and December 31, 2019, are set forth in the table below:

Borrowings outstanding as of September 30, 2020 and December 31, 2019, are set forth in the table below:

September 30,

Current Amount

12 unchanged sentences

1-M deposit rate plus 0.08%

Notes payable to E Sun Bank

1-M deposit rate plus 0.08%

Notes payable to E Sun Bank

1-M deposit rate plus 0.08%

Term loan and revolver

5 unchanged sentences

NOTE 9 – Commitments and Contingencies

Purchase commitments – As of June 30, 2020, we had approximately $ 26.8 million in non-cancelable purchase contracts related to capital expenditures, primarily related to our manufacturing facilities in Asia.

As of June 30, 2020, we also had a commitment to purchase approximately $ 29.8 million of wafers to be used in our manufacturing process.

Purchase commitments – As of September 30, 2020, we had approximately $ 19.8 million in non-cancelable purchase contracts related to capital expenditures, primarily related to our manufacturing facilities in Asia.

As of September 30, 2020, we also had a commitment to purchase approximately $ 20.3 million of wafers to be used in our manufacturing process.

These wafer purchases will occur during 2020.

Defined Benefit Plan - We have a contributory defined benefit plan that covers certain employees in the United Kingdom.

As of June 30, 2020, the unfunded liability for this defined benefit plan was approximately $ 28.7 million.

As of September 30, 2020, the unfunded liability for this defined benefit plan was approximately $ 30.7 million.

An actuarial valuation was performed as of March 31, 2019, resulting in a deficit of approximately GBP 26.7 million (approximately $ 34.7 million based on a GBP:

1 unchanged sentence

As a result of this valuation we have agreed to a revised schedule of contributions of GBP 2.0 million (approximately $ 2.6 million based on a GBP:

USD exchange rate of 1.2 :1) to be paid in annual installments with

effect from April 1, 2020 to address the deficit revealed by the valuation (with the first payment made by March 31, 2021, and payments to be made by December 31 each year thereafter).

USD exchange rate of 1.3 :1) to be paid in annual installments with effect from April 1, 2020 to address the deficit revealed by the valuation (with the first payment made by March 31, 2021, and payments to be made by December 31 each year thereafter).

These contributions, together with the assumed asset outperformance, are expected to eliminate the deficit by December 31, 2028.

14 unchanged sentences

We use foreign currency forward agreements to manage this exposure.

At June 30, 2020, and December 31, 2019, we had $ 93.0 million and $ 105.9 million, respectively, outstanding foreign currency forward contracts that are intended to preserve the economic value of foreign currency denominated monetary assets and liabilities;

At September 30, 2020, and December 31, 2019, we had $ 124.7 million and $ 105.9 million, respectively, outstanding foreign currency forward contracts that are intended 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.

3 unchanged sentences

Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The table below sets forth the fair value of the Company’s interest rate related derivative financial instruments as well as their classification on our condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019:

Other Current Assets

2 unchanged sentences

Interest rate swaps and collars

The tables below set forth the effect of the Company’s derivative financial instruments on our condensed consolidated statements of income for the three and six months ended June 30, 2020 and 2019:

The tables below set forth the effect of the Company’s derivative financial instruments on our condensed consolidated statements of income for the three and nine months ended September 30, 2020 and 2019:

Amount of Gain or (Loss) Recognized in OCI on Derivative

4 unchanged sentences

Derivative Instruments Designated as Hedging Instruments

September 30,

Three Months Ended

3 unchanged sentences

Interest income

Six Months Ended

Nine Months Ended

Interest rate swaps and collars

2 unchanged sentences

Interest income

We estimate that $ 0.6 million of net derivative gains included in accumulated other comprehensive income (“AOCI”) as of June 30, 2020 will be reclassified into expense within the following 12 months.

No gains or losses were reclassified from AOCI into earnings as a result of forecasted transactions that failed to occur during three and six months ended June 30, 2020 or 2019.

We estimate that $ 0.6 million of net derivative gains included in accumulated other comprehensive income (“AOCI”) as of September 30, 2020 will be reclassified into expense within the following 12 months.

No gains or losses were reclassified from AOCI into earnings as a result of forecasted transactions that failed to occur during three and nine months ended September 30, 2020 or 2019.

Amount of Gain or (Loss) Recognized in Net Income

1 unchanged sentence

Derivative Instruments Not Designated as Hedging Instruments

September 30,

Three Months Ended

1 unchanged sentence

Foreign currency loss, net

Six Months Ended

Nine Months Ended

Foreign currency forward contracts

Foreign currency loss, net

As of June 30, 2020 and December 31, 2019, the Company had no t posted any collateral related to these agreements.

As of September 30, 2020 and December 31, 2019, the Company had no t posted any collateral related to these agreements.

NOTE 11 – Leases

2 unchanged sentences

The components of lease expense are set forth in the table below:

Three Months Ended

Six Months Ended

September 30,

Operating lease expense

6 unchanged sentences

The table below sets forth supplemental balance sheet information related to leases.

In our condensed consolidated balance sheets, ROU assets are included in other long-term assets while lease liabilities are located in accrued liabilities and other for the current portion and other long-term liabilities for the non-current portion:

June 30, 2020

In our condensed consolidated balance sheets, right of use (“ROU”) assets are included in other long-term assets while lease liabilities are located in accrued liabilities and other for the current portion and other long-term liabilities for the non-current portion:

September 30, 2020

December 31, 2019

18 unchanged sentences

The table below sets forth supplemental cash flow and other information related to leases:

Six Months Ended

June 30, 2020

June 30, 2019

Nine Months Ended

September 30, 2020

September 30, 2019

Cash paid for the amounts included in the measurements of lease liabilities:

5 unchanged sentences

The table below sets forth information about lease liability maturities:

June 30, 2020

September 30, 2020

Operating Leases

11 unchanged sentences

We offset our obligations under the Deferred Compensation Plan primarily by investing in the actual underlying investments.

At June 30, 2020 and December 31, 2019, these investments totaled approximately $ 11.2 million and $ 12.9 million, respectively.

At September 30, 2020 and December 31, 2019, these investments totaled approximately $ 11.7 million and $ 12.9 million, respectively.

NOTE 13 – Related Parties

We conduct business with a related party company, Lite-On Semiconductor Corporation and its subsidiaries and affiliates (collectively, “LSC”), and Nuvoton Technology Corporation and its subsidiaries and affiliates (collectively, “Nuvoton”).

LSC is our largest stockholder, owning approximately 15 % of o ur ou t s t a nd i n g C o m m on S toc k as of June 30, 2020, a n d i s a m e m ber of t he L ite- On G r o u p o f c o m p a n ies .

LSC is our largest stockholder, owning approximately 15 % of o ur ou t s t a nd i n g C o m m on S toc k as of September 30, 2020, a n d i s a m e m ber of t he L ite- On G r o u p o f c o m p a n ies .

On August 8, 2019, we announced that we entered into an agreement with LSC pursuant to which the Company shall acquire LSC.

The aggregate consideration payable by the Company, based on the December 31, 2019 exchange rate, is approximately $ 437 million.

The aggregate consideration payable by the Company, based on the September 30, 2020 exchange rate, is approximately $ 451.4 million.

This amount is subject to change, based on the Taiwan dollar to United States dollar exchange rate at closing.

The acquisition received LSC stockholder approval on October 25, 2019, and we anticipate completing the acquisition in the second half of 2020, subject to customary closing conditions and pending regulatory approval in China.

The acquisition received LSC stockholder approval on October 25, 2019.

On September 22, 2020, we received approval from the China’s State Administration for Market Regulation (“SAMR”) to proceed with the acquisition.

LSC has initiated the process to terminate its listing on the Taiwan Stock Exchange and revoke its public offering with the Taiwan Financial Supervisory Commission.

With the exception of the remaining customary closing conditions, all other conditions to the acquisition’s closing have been satisfied, including the approvals from the Taiwan Fair Trade Commission, the Investment Commission of the Ministry of Economic Affairs and China’s National Development and Reform Commission and SAMR, and we anticipate completing the acquisition by the end of November 2020, subject to customary closing conditions.

We expect to fund the purchase price of the transaction primarily with proceeds from the Credit Agreement.

1 unchanged sentence

Chen, our former President and Chief Executive Officer and currently the Vice Chairman of our Board of Directors, is also Vice Chairman of LSC and a board member of LTC.

Keh-Shew Lu, Chairman of our Board of Directors, President and Chief Executive Officer, is a board member of LTC, and a board member of Nuvoton.

Keh-Shew Lu, Chairman of our Board of Directors, President and Chief Executive Officer, is a board member of LTC, and a

board member of Nuvoton.

We consider our relationships with LSC and Nuvoton to be mutually beneficial, and we plan to continue our strategic alliance with LSC and Nuvoton.

4 unchanged sentences

We sell products to, and purchase inventory from Keylink.

In addition, our subsidiaries in China lease their manufacturing facilities in Shanghai from, and subcontract a portion of our

manufacturing process (metal plating and environmental services) to, Keylink.

In addition, our subsidiaries in China lease their manufacturing facilities in Shanghai from, and subcontract a portion of our manufacturing process (metal plating and environmental services) to, Keylink.

We also pay fees for plating and rental services and consulting to Keylink.

The aggregate amounts paid to Keylink for the th ree months ended June 30, 2020 and 2019 were approximately $ 3.8 million and $ 3.9 million, respectively.

The aggregate amounts paid to Keylink for the six months ended June 30, 2020 and 2019 were approximately $ 6.9 million and $ 7.8 million, respecti vely.

The aggregate amounts paid to Keylink for the three months ended September 30, 2020 and 2019 were approximately $ 3.9 million and $ 3.7 million, respectively.

The aggregate amounts paid to Keylink for the nine months ended September 30, 2020 and 2019 were approximately $ 10.7 million and $ 11.5 million, respectively.

I n a dd itio n, Chengdu Ya Guang Electronic Company Limited (“ Y a G u a ng”) is our 2 % joint venture partner in one of our Chengdu assembly and test facilities and i s o ur 5 % j o i nt v e n t ure p a r t n e r i n ou r other C h eng du asse m bly a nd tes t facility ;

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

The table below sets forth accounts receivable from, and accounts payable to, related parties:

September 30,

Accounts receivable

8 unchanged sentences

The Company will make the investment in two tranches.

The first tranche of $ 5.6 million, which provided the Company with a 33.6 % ownership of Savitech, was made on March 4, 2020.

The first tranche of $ 5.6 million, which provided the Company with a 33.6 % ownership of

Savitech, was made on March 4, 2020.

The initial tranche was funded with cash on hand.

The second tranche, currently recorded in other long-term liabilities, as shown in the table below, and currently valued at $ 8.4 million will increase the Company’s ownership to at least 51 % of Savitech.

The second tranche, currently recorded in other current liabilities, as shown in the table below, and currently valued at $ 8.5 million will increase the Company’ s ownership to at least 51 % of Savitech.

The second tranche will be paid on June 30, 2021, provided Savitech achieves previously agreed-to revenue levels.

If revenue levels are not achieved the Company will pay less than the maximum $ 8.6 million, but regardless of the amount paid for the second tranche, the Company will still acquire at least 51 % of Savitech.

The Company recorded the purchase of Savitech as a business acquisition and will consolidate Savitech into its operations, based on the vot ing model, with a non-controlling interest related to the interest the Company does not own in Savitech.

The Company recorded the purchase of Savitech as a business acquisition and will consolidate Savitech into its operations, based on the voting model, with a non-controlling interest related to the interest the Company does not own in Savitech.

The Company made its investment in Savitech in order to increase the Company’s integrated circuit business.

2 unchanged sentences

The Company also incurred acquisition costs of approximately $ 0.1 million that were recognized in selling, general and administrative expense.

The table below sets forth the fair value of the ass ets and liabilities recorded in the acquisition and the corresponding line item in which the item is recorded in our condensed consolidated balance sheet at the date of acquisition.

The acquisition accounting is not final as deferred taxes, the contingen t consideration payment and goodwill are being finalized.

We expect the acquisition accounting to be finalized in the third quarter of 2020.

The table below sets forth the fair value of the assets and liabilities recorded in the acquisition and the corresponding line item in which the item is recorded in our condensed consolidated balance sheet at the date of acquisition.

Cash and cash equivalents

18 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements