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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
JULY 28, 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)
1
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS
Exhibit 99.1 - Press Release dated July 28, 2004
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On July 28, 2004, Diodes Incorporated issued a press release
announcing second 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: July 29, 2004 DIODES INCORPORATED
By /s/ Carl C. Wertz
CARL C. WERTZ
Chief Financial Officer
EXHIBIT INDEX
EXHIBIT DESCRIPTION
NUMBER
99.1 Press Release dated July 28, 2004
2
EXHIBIT 99.1
Diodes Incorporated
FOR IMMEDIATE RELEASE
Diodes Incorporated Reports Record Second Quarter 2004 Earnings
41% year-over-year revenue increase is 5th consecutive record quarter
WESTLAKE VILLAGE, CALIFORNIA, JULY 28, 2004 - Diodes Incorporated (NASDAQ:
DIOD), a leading manufacturer and supplier of high quality discrete
semiconductors, today reported record financial results for the second quarter
ended June 30, 2004.
SECOND QUARTER HIGHLIGHTS:
Net income increases 182% to a record $6.1 million, or $0.40 per share, up from
$2.2 million, or $0.15 per share, in 2Q03.
Revenue increases 41.4% year-over-year and 13.5% sequentially to a record $47.0
million.
Gross margin improves 120 basis points sequentially to 32.0%.
PowerDITM123 and SOT-563 product lines are rolled-out.
Revenues for the second quarter of 2004 were a record $47.0 million, a
sequential increase of 13.5% from the first quarter of 2004, and an increase of
41.4% from the second quarter of 2003. Net income for the quarter increased 182%
to a record $6.1 million, compared to $2.2 million for the three months ended
June 30, 2003, and rose 26.1% sequentially. Diluted earnings per share were
$0.40 for the second quarter of 2004, compared with $0.15 for the second quarter
of 2003 and $0.32 for the first quarter of 2004.
Revenues for the first six months of 2004 increased 40.9% to $88.4 million,
compared to $62.8 million in the same period last year. Net income for the first
half of 2004 increased 168% to $10.9 million or 12.4% of sales, compared to $4.1
million or 6.5% of sales in the same period last year. Diluted earnings per
share were $0.72 for the first six months of 2004, compared to $0.29 for the
same period last year.
Commenting on the quarter, C.H. Chen, President and CEO of Diodes Incorporated,
said, "Our second quarter results exceeded our highest expectations as revenues
were at a record level for the fifth consecutive quarter. Revenue and market
share reached new highs and increased sales of our innovative value-added
products expanded our gross margins. Our book-to-bill remains above one and
design wins continue at a brisk pace. Given this strong order flow and
accelerating demand from emerging consumer electronics markets, we expect top-
and bottom-line growth to continue in the second half of the year."
END-MARKETS
"Diodes' revenue growth in the second quarter was driven by strong product
demand for the Company's innovative space and power-saving subminiature devices
across a wide range of consumer electronics and computing categories as well as
the automotive end-user market. Diodes products used in TFT display, inverter
and notebook applications were particularly strong as we continue to gain share.
In addition, Powermite(R)3 revenue more than doubled in the quarter, as our
previous design wins entered production, and our new SOT563 series, introduced
last quarter, continues to roll out to a strong reception. 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," said Mark King, Vice
President of Sales and Marketing of Diodes Incorporated.
DESIGN WINS AND NEW PRODUCTS
During the quarter, design wins continued to come from a wide range of consumer
electronics-related end-user markets as well as the automotive and industrial
sectors. In addition to the seasonally strong mobile handset, digital camera and
digital audio player end-markets, growth consumer technologies, such as digital
cable, high-definition television and WiFi networking are driving demand for
Diodes' devices from the makers of set-top boxes, LCD and TFT displays, and
wireless LANs.
"In Europe we had significant design wins with four key accounts, including our
first win with our second major branded handset manufacturer, a custom array win
at a major industrial account, and our first approvals at a well known consumer
electronics manufacturer. Our ability to work closely with individual customers
and to develop products tailored to their needs is driving demand for our
arrays," added Mr. King.
FACTORY UTILIZATION AND LEAD TIME
"Our factories are running near capacity and lead times are lengthening
slightly. We are adding capacity in a disciplined manner and reshaping our
existing capacity toward higher-margin devices to meet demand," commented Mr.
Chen.
Gross profit for the second quarter of 2004 increased to $15.0 million, or 32.0%
of sales, compared to $12.8 million, or 30.8% of sales, in the first quarter of
2004 and $8.3 million, or 25.1%, in the second quarter of 2003. The improvements
in gross margin were due to a more favorable product mix, increased factory
utilization manufacturing cost efficiencies.
For the quarter, SG&A expenses were $6.4 million, or 13.6% of sales, as compared
to $4.8 million, or 14.3% of sales, in the comparable quarter last year.
Research and development expenses climbed to $815,000, or 1.7% of revenue, from
$400,000, or 1.2%, in the second quarter of 2003, as the Company continues to
focus on bringing new products to market.
Operating income for the second quarter increased 149% to $7.8 million, or 16.6%
of sales, compared to $3.1 million, or 9.4%, for the second quarter of 2003.
Capital expenditures for the current quarter were $11.4
million and $14.1 million year to date. Depreciation expense for the quarter was
$3.0 million. As the strong market demand continues, we are increasing planned
capital expenditures to $20-24 million for the full year.
At June 30, 2004, Diodes had $14.6 million in cash, $33.1 million in working
capital and $9.7 million in term debt. For the first six months of 2004,
shareholder equity increased 20.8% to $86.3 million. Cash flow from operations
was $13.8 million in the first half of 2004.
BUSINESS OUTLOOK
"Entering the third quarter, shipments and orders for delivery
remain relatively strong in both Asia and North America, and our book-to-bill
ratio is above one. Order cycles are lengthening and distributor inventory
remains at relatively low levels for discretes. Given these factors, and coming
off five consecutive record revenue quarters including this quarters' 13.5%
sequential growth, we are projecting another record revenue quarter with a 2-5%
sequential increase. In addition, we are forecasting a slight sequential
expansion in gross margins due to better product mix, new product revenue
expansion, and manufacturing cost efficiencies 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 60 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 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
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------------------- -----------------------------------------
2003 2004 2003 2004
-------------------- ------------------- ------------------ -------------------
NET SALES $ 33,316,000 $ 47,012,000 $ 62,762,000 $ 88,442,000
COST OF GOODS SOLD 24,970,000 31,984,000 46,955,000 60,664,000
-------------------- ------------------- ------------------ -------------------
Gross profit 8,346,000 15,028,000 15,807,000 27,778,000
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 4,777,000 6,417,000 9,009,000 11,908,000
RESEARCH AND DEVELOPMENT EXPENSES 400,000 815,000 746,000 1,562,000
LOSS (GAIN) ON SALE OF FIXED ASSETS 32,000 (8,000) (56,000) 15,000
-------------------- ------------------- ------------------ -------------------
Total operating expenses 5,209,000 7,224,000 9,699,000 13,485,000
Income from operations 3,137,000 7,804,000 6,108,000 14,293,000
OTHER INCOME (EXPENSE)
Interest income 5,000 8,000 9,000 10,000
Interest expense (223,000) (153,000) (472,000) (337,000)
Other (7,000) 24,000 (96,000) (124,000)
-------------------- ------------------- ------------------ -------------------
(225,000) (121,000) (559,000) (451,000)
Income before income taxes and minority
interest 2,912,000 7,683,000 5,549,000 13,842,000
INCOME TAX BENEFIT (PROVISION) (651,000) (1,383,000) (1,268,000) (2,543,000)
-------------------- ------------------- ------------------ -------------------
Income before minority interest 2,261,000 6,300,000 4,281,000 11,299,000
MINORITY INTEREST IN JOINT VENTURE EARNINGS (89,000) (177,000) (187,000) (319,000)
-------------------- ------------------- ------------------ -------------------
NET INCOME $ 2,172,000 $ 6,123,000 $ 4,094,000 $ 10,980,000
==================== =================== ================== ===================
EARNINGS PER SHARE
Basic $ 0.17 $ 0.46 $ 0.33 $ 0.83
Diluted $ 0.15 $ 0.40 $ 0.29 $ 0.72
==================== =================== ================== ===================
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 12,678,194 13,265,146 12,575,166 13,180,992
Diluted 14,268,400 15,329,760 14,058,761 15,306,089
==================== =================== ================== ===================
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
ASSETS
DECEMBER 31, JUNE 30,
2003 2004
------------------- -------------------
(UNAUDITED)
CURRENT ASSETS
Cash and cash equivalents $ 12,847,000 $ 14,586,000
Accounts receivable
Customers 27,010,000 32,428,000
Related parties 3,938,000 4,892,000
------------------- -------------------
30,948,000 37,320,000
Less: Allowance for doubtful receivables 375,000 374,000
------------------- -------------------
30,573,000 36,946,000
Inventories 16,164,000 19,650,000
Deferred income taxes, current 5,547,000 5,734,000
Prepaid expenses and other current assets 2,256,000 2,294,000
Prepaid income taxes 446,000 238,000
------------------- -------------------
Total current assets 67,833,000 79,448,000
PROPERTY, PLANT AND EQUIPMENT, at cost, net
of accumulated depreciation and amortization 47,893,000 55,436,000
DEFERRED INCOME TAXES, non-current 1,816,000 1,296,000
OTHER ASSETS
Goodwill 5,090,000 5,090,000
Other 1,163,000 1,763,000
------------------- -------------------
TOTAL ASSETS $ 123,795,000 $ 143,033,000
=================== ===================
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
DECEMBER 31, JUNE 30,
2003 2004
------------------ ------------------
(UNAUDITED)
CURRENT LIABILITIES
Line of credit $ 8,488,000 $ 7,661,000
Accounts payable
Trade 14,029,000 16,567,000
Related parties 3,453,000 4,804,000
Accrued liabilities 8,715,000 13,003,000
Current portion of long-term debt
Related party 2,500,000 2,500,000
Other 3,333,000 1,667,000
Current portion of capital lease obligations 161,000 163,000
------------------ ------------------
Total current liabilities 40,679,000 46,365,000
LONG-TERM DEBT, net of current portion
Related party 3,750,000 2,500,000
Other 3,000,000 3,000,000
CAPITAL LEASE OBLIGATIONS, net of current portion 2,334,000 2,242,000
MINORITY INTEREST IN JOINT VENTURE 2,582,000 2,600,000
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 14,930,159
shares issued at December 31, 2003
and June 30, 2004, respectively 6,502,000 6,704,000
Additional paid-in capital 11,192,000 14,793,000
Retained earnings 55,779,000 66,759,000
------------------ ------------------
73,473,000 88,256,000
Less:
Treasury stock - 1,613,508 shares of common stock, at cost 1,782,000 1,782,000
Accumulated other comprehensive loss 241,000 148,000
------------------ ------------------
2,023,000 1,930,000
Total stockholders' equity 71,450,000 86,326,000
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 123,795,000 $ 143,033,000
================== ==================