UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
APRIL 29, 2004
Date of Report (Date of earliest event reported)
DIODES INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 1-5740 95-2039518
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation)
3050 EAST HILLCREST DRIVE
WESTLAKE VILLAGE, CALIFORNIA 91362
(Address of principal executive offices) (Zip Code)
(805) 446-4800
(Registrant's telephone number, including area code)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS
Exhibit 99.1 - Press Release dated April 29, 2004
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On March 29, 2004, Diodes Incorporated issued a press release
announcing first quarter 2004 earnings. A copy of the press release is attached
as Exhibit 99.1.
The information in this Form 8-K and the Exhibits attached
hereto shall not be deemed "filed" for purposes of Section 18 of the Securities
Act of 1934, nor shall it be deemed incorporated by reference in any filing
under the Securities Act of 1933 or the Securities Exchange Act of 1984, except
as shall be expressly set forth by specific reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: April 30, 2004
DIODES INCORPORATED
By /s/ Carl C. Wertz
CARL C. WERTZ
Chief Financial Officer
EXHIBIT INDEX
EXHIBIT DESCRIPTION
NUMBER
99.1 Press Release dated April 29, 2004
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EXHIBIT 99.1
[GRAPHIC OMITTED][GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE
Diodes Incorporated Reports 41% Increase in Revenues
Resulting in Record First Quarter 2004 Earnings
o New product sales, strong markets drive 153% year-over-year net income growth
WESTLAKE VILLAGE, CALIFORNIA, APRIL 29, 2004 - Diodes Incorporated (NASDAQ:
DIOD), a leading manufacturer and supplier of high quality discrete
semiconductors, today reported record financial results for the first quarter of
2004 ended March 31, 2004.
FIRST QUARTER HIGHLIGHTS:
>> Revenue increased 40.7% year-over-year and 5.7% sequentially to a record
$41.4 million.
>> PowerDITM123 and SOT-563 product lines were launched.
>> Gross margin improved 130 basis points sequentially to 30.8%.
>> Net income increased 153% to a record $4.9 million, or $0.32 per share,
up from $1.9 million, or $0.14 per share, in 1Q03.
Revenues for the first quarter of 2004 were a record $41.4 million, a sequential
increase of 5.7% from the fourth quarter of 2003, and an increase of 40.7% from
the first quarter of 2003. Net income for the quarter increased 152.5% to $4.9
million, compared to $1.9 million for the three months ended March 31, 2003, and
rose 41.3% sequentially. Diluted earnings per share were $0.32 for the first
quarter of 2004, as compared to $0.14 for the same period last year.
Commenting on the quarter, C.H. Chen, President and CEO of Diodes Incorporated,
said, "2004 is off to a very strong start, as reflected by our record first
quarter results. We recently introduced two major new product lines that extend
our drive to be an innovation leader for discrete devices. Sales of our existing
value-added products continued to push Diodes' share of the addressable market
to new highs and boost our gross margins. Given the robust pattern of bookings
and brisk pace of design wins, we expect to build on this momentum over the
course of 2004."
Diodes' revenue growth in the first quarter was driven by strong product demand,
as well as sales of the Company's new industry-leading space and power saving
subminiature devices. Powermite(R)3 sales continue to accelerate, driven by the
notebook computer, automotive audio, DC/DC converter and MP3 player end-user
categories. Geographically, demand remained strong in Asia and North America,
which accounted for 58% and 39% of total revenues, respectively. And the Company
continued to make inroads in Europe, which accounted for 3% of total revenues.
Gross profit for the first quarter of 2004 increased to $12.8 million, or 30.8%
of sales, compared to $11.6 million, or 29.5% of sales, in the fourth quarter of
2003 and $7.5 million, or 25.3%, in the first quarter of 2003. The 130 basis
point sequential improvement in gross margin was due to manufacturing cost
efficiencies and a more favorable product mix. With utilization running above
90% at Diodes-China, and near 90% at Diodes-FabTech, the Company continued to
shift its manufacturing resources towards newer, higher-margin devices, and to
invest in capacity expansion to meet market demand.
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"During the quarter, we introduced a new line of subminiature SOT-563
semiconductor components targeted to space-economizing devices including PDAs,
MP3 players and portable handheld electronics. We added additional senior
engineering talent to our R&D team. And we have an exciting product road map in
place, with plans to introduce several new packaging platforms over the balance
of 2004 that are smaller and more power-efficient and deliver higher performance
than the legacy products they replace.
"In addition, we recently launched a line of discrete devices based on
proprietary technology from our recently intensified research and development
efforts. Our new PowerDITM123 high- density package is one of the most thermally
efficient compact rectifier packages available on the market. Initial interest
in the PowerDITM123 has been very strong and we expect to launch additional
series of surge protectors and rectifiers based on this package in the coming
months," added Chen.
For the quarter, SG&A expenses were $5.5 million, or 13.3% of sales, as compared
to $4.2 million, or 14.4% of sales, in the comparable quarter last year.
Research and development expenses climbed to $748,000, or 1.8% of revenue, from
$346,000, or 1.2%, in the first quarter of 2003, as the Company continues to
focus on bringing new products to market.
Operating income for the first quarter increased 118.5% to $6.5 million, or
15.7% of sales, compared to $3.0 million, or 10.1%, for the first quarter of
2003.
Interest expense declined to $182,000 in the first quarter, from $244,000 in the
year-ago quarter, aided by a $5.8 million reduction in total debt over the
period as well as lower interest rates.
Capital expenditures for the current quarter were $3.3 million
and depreciation expense was $3.2 million. Given strong market demand, capital
expenditures are expected to run between $13-16 million for the full year as new
products are brought into production.
At March 31, 2004, Diodes had $10.5 million in cash, $34.2 million in working
capital, $11.1 million in term debt, $5.2 million outstanding on its revolving
credit line, $34.2 million in available credit facilities, and $78.6 million in
shareholders' equity. Cash flow from operations was $4.4 million in the first
quarter.
BUSINESS OUTLOOK
"Entering the second quarter, shipments and orders for
delivery are strong in both Asia and North America, and our book-to-bill ratio
is solidly above one. Order cycles are lengthening and distributor inventory
remains at relatively low levels. Given these factors, we expect another quarter
of record revenues with a 4-6% sequential increase, and a slight sequential
expansion in gross margin with continued earnings per share improvement," Chen
concluded.
CONFERENCE CALL
Diodes Incorporated will hold its fourth quarter conference
call for all interested persons at 8 a.m. PST (11 a.m. EST) today to discuss its
results. This conference call will be broadcast live over the Internet and can
be accessed by all interested parties on the investor section of Diodes' website
at WWW.DIODES.COM. To listen to the live call, please go to the Investor section
of Diodes website and click on the Conference Call link at least fifteen minutes
prior to the start of the call to register, download, and install any necessary
audio software. For those unable to participate during the live broadcast, a
replay will be available shortly after the call on Diodes website for 90 days.
ABOUT DIODES INCORPORATED
Diodes Incorporated (Nasdaq: DIOD) is a leading manufacturer and supplier of
high-quality discrete semiconductor products, primarily to the communications,
computing, industrial, consumer electronics and automotive markets. The Company
operates three Far East subsidiaries, Diodes-China (QS-9000 and ISO-14001
certified) in Shanghai, Diodes-Taiwan (ISO-9000 certified) in Taipei, and
Diodes-Hong Kong. Diodes-China's manufacturing focus is on subminiature
surface-mount devices destined for wireless devices, notebook, flat panel
display, digital camera, mobile handset, set-top box, DC to DC conversion, and
automotive applications, among others. Diodes-Taiwan is
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our Asia-Pacific sales, logistics and distribution center. Diodes-Hong Kong
covers sales, warehouse and logistics functions. The Company's 5" wafer foundry,
Diodes-FabTech (QS-9000 certified), specializes in Schottky products and is
located just outside Kansas City, Missouri. The Company's ISO-9001:2000
corporate sales, marketing, engineering and logistics headquarters is located in
Southern California. For further information, including SEC filings, visit the
Company's website at www.diodes.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: ANY STATEMENTS SET FORTH ABOVE THAT ARE NOT HISTORICAL FACTS ARE
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING
STATEMENTS. POTENTIAL RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO,
SUCH FACTORS AS FLUCTUATIONS IN PRODUCT DEMAND, THE INTRODUCTION OF NEW
PRODUCTS, THE COMPANY'S ABILITY TO MAINTAIN CUSTOMER AND VENDOR RELATIONSHIPS,
TECHNOLOGICAL ADVANCEMENTS, IMPACT OF COMPETITIVE PRODUCTS AND PRICING, GROWTH
IN TARGETED MARKETS, RISKS OF FOREIGN OPERATIONS, AND OTHER INFORMATION DETAILED
FROM TIME TO TIME IN THE COMPANY'S FILINGS WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION.
Source: Diodes Incorporated
CONTACT: Crocker Coulson, Partner, CCG; (818) 789-0100
e-mail: crocker.coulson@ccgir.com or Carl Wertz, Chief Financial Officer,
Diodes, Incorporated; (805) 446-4800 carl_wertz@diodes.com
Recent news releases, annual reports, and SEC filings are available at the
Company's website: http://www.diodes.com. Written requests may be sent
directly to the Company, or they may be e-mailed to: diodes-fin@diodes.com.
CONSOLIDATED CONDENSED INCOME STATEMENT AND BALANCE SHEET FOLLOWS
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DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
---------------------------------------
2003 2004
---------------- -------------------
NET SALES $ 29,446,000 $ 41,430,000
COST OF GOODS SOLD 21,985,000 28,680,000
---------------- -------------------
Gross profit 7,461,000 12,750,000
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 4,233,000 5,491,000
RESEARCH AND DEVELOPMENT EXPENSES 346,000 748,000
LOSS (GAIN) ON SALE OF FIXED ASSETS (88,000) 23,000
---------------- -------------------
Total operating expenses 4,491,000 6,262,000
Operating income 2,970,000 6,488,000
OTHER INCOME (EXPENSE)
Interest expense, net (244,000) (182,000)
Other (89,000) (147,000)
---------------- -------------------
(333,000) (329,000)
Income from operations before income taxes and
minority interest 2,637,000 6,159,000
INCOME TAX PROVISION (617,000) (1,160,000)
---------------- -------------------
Income from operations before minority interest 2,020,000 4,999,000
MINORITY INTEREST IN JOINT VENTURE EARNINGS (97,000) (143,000)
---------------- -------------------
NET INCOME $ 1,923,000 $ 4,856,000
================ ===================
EARNINGS PER SHARE
Basic $ 0.15 $ 0.37
Diluted $ 0.14 $ 0.32
================ ===================
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 12,471,993 13,096,836
Diluted 13,727,244 15,286,416
================ ===================
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DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
ASSETS
DECEMBER 31, MARCH 31,
2003 2004
------------------- -------------------
(UNAUDITED)
CURRENT ASSETS
Cash and cash equivalents $ 12,847,000 $ 10,474,000
Accounts receivable
Customers 27,010,000 27,804,000
Related parties 3,938,000 3,598,000
------------------- -------------------
30,948,000 31,402,000
Less: Allowance for doubtful receivables 375,000 379,000
------------------- -------------------
30,573,000 31,023,000
Inventories 16,164,000 17,992,000
Deferred income taxes, current 5,547,000 6,856,000
Prepaid expenses and other current assets 2,256,000 2,617,000
Prepaid income taxes 446,000 531,000
------------------- -------------------
Total current assets 67,833,000 69,493,000
PROPERTY, PLANT AND EQUIPMENT, at cost, net
of accumulated depreciation and amortization 47,893,000 47,711,000
DEFERRED INCOME TAXES, non-current 1,816,000 1,524,000
OTHER ASSETS
Goodwill 5,090,000 5,090,000
Other 1,163,000 1,099,000
------------------- -------------------
TOTAL ASSETS $ 123,795,000 $ 124,917,000
=================== ===================
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DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
DECEMBER 31, MARCH 31,
2003 2004
------------------ ------------------
(UNAUDITED)
CURRENT LIABILITIES
Line of credit $ 8,488,000 $ 5,156,000
Accounts payable
Trade 14,029,000 13,630,000
Related parties 3,453,000 4,063,000
Accrued liabilities 8,715,000 7,148,000
Current portion of long-term debt
Related party 2,500,000 2,500,000
Other 3,333,000 2,500,000
Current portion of capital lease obligations 161,000 162,000
------------------ ------------------
Total current liabilities 40,679,000 35,159,000
LONG-TERM DEBT, net of current portion
Related party 3,750,000 3,125,000
Other 3,000,000 3,000,000
CAPITAL LEASE OBLIGATIONS, net of current portion 2,334,000 2,279,000
MINORITY INTEREST IN JOINT VENTURE 2,582,000 2,724,000
STOCKHOLDERS' EQUITY
Class A convertible preferred stock - par value $1.00 per share; 1,000,000
shares authorized;
no shares issued and outstanding -- --
Common stock - par value $0.66 2/3 per share;
30,000,000 shares authorized; 14,627,284 and 14,798,709
shares issued at December 31, 2003
and March 31, 2004, respectively 6,502,000 6,614,000
Additional paid-in capital 11,192,000 13,118,000
Retained earnings 55,779,000 60,635,000
------------------ ------------------
73,473,000 80,367,000
Less:
Treasury stock - 1,613,508 shares of common stock, at cost 1,782,000 1,782,000
Accumulated other comprehensive loss (gain) 241,000 (45,000)
------------------ ------------------
2,023,000 1,737,000
Total stockholders' equity 71,450,000 78,630,000
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 123,795,000 $ 124,917,000
================== ==================
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