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
February 7, 2005
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)
Item 2.02 Results of Operations and Financial Condition
- -----------------------------------------------------------------
On February 7, 2005, Diodes Incorporated issued a press
release announcing fourth quarter and full-year 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.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
Exhibit 99.1 - Press Release dated February 7, 2005
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: February 7, 2005 DIODES INCORPORATED
By /s/ Carl C. Wertz
CARL C. WERTZ
Chief Financial Officer
EXHIBIT INDEX
Exhibit Description
Number
99.1 Press Release dated February 7, 2005
Exhibit 99.1
Diodes Incorporated
FOR IMMEDIATE RELEASE
Diodes Incorporated Reports Record Fourth Quarter and
Full Year 2004 Results
o Annual revenues up 35.6% to a record $185.7 million
o Annual net income increases 153.1% to a record $25.6 million
Westlake Village, California, February 7, 2005 - Diodes Incorporated (Nasdaq:
DIOD), a leading manufacturer and supplier of high quality discrete
semiconductors, today reported record financial results for the fourth quarter
and fiscal year 2004 ended December 31, 2004.
Fourth Quarter Highlights:
>> Revenues increased 22% to $47.9 million
>> New product revenue at 16% of total sales, a new record high
>> Gross margin improved 440 basis points to 33.9%
>> Operating income increased 115% to a record $9.9 million
>> Net income increased 113% to a record $7.3 million, or $0.47 per share
Revenues for the fourth quarter of 2004 were $47.9 million, a 22.2% increase
from the fourth quarter of 2003, but a sequential decrease of 3.0% from the
third quarter of 2004. Net income for the quarter increased 113.2% to a record
$7.3 million, compared to $3.4 million for the three months ended December 31,
2003. Diluted earnings per share were $0.47 for the fourth quarter of 2004, as
compared to $0.23 for the same period last year.
Revenues for the twelve months ended December 31, 2004, increased 35.6% to a
record $185.7 million, compared to $136.9 million in the same period last year.
For the full year 2004, the Company earned a record $25.6 million, or $1.65 per
share, as compared to net income of $10.1 million, or $0.70 per share in 2003.
C.H. Chen, President and CEO of Diodes Incorporated, commented: "2004 was a year
of record-breaking financial performance for Diodes and superior execution in
every key aspect of our business. Our research and development initiatives
delivered a stream of breakthrough products that are establishing Diodes as a
technology leader for discrete semiconductors. We continued to extend our sales
reach in Asia and Europe, entering a number of important new customer accounts.
Our world class manufacturing centers achieved substantial increases in unit
output, while continuously improving yields and cost efficiencies.
"Finally, our focus on financial discipline resulted in excellent working
capital management, improving operating margins, an ever stronger balance sheet,
and substantial positive operating cash flows. In 2004, Diodes outperformed the
discrete semiconductor market by nearly two times, and we feel confident we will
again outperform the semiconductor market in 2005."
End Markets
"Diodes' growth in the fourth quarter was driven by continued robust customer
demand and increasing market share in Asia, which contributed 62% of total
revenues for the quarter," said Mark King, Vice President of Sales and
Marketing. "Orders across all of our end-equipment markets remained strong and
were dominated by demand in the consumer electronics and computer industries. We
continued to successfully integrate our next-generation devices and
ultra-miniature arrays into products, including digital audio players, set-top
boxes, cell phones and notebook computers."
Sales in Europe were 2.6% of total revenues during the quarter and the Company
continues to strengthen its footprint in the region. Diodes entered into a new
representative relationship for Northern Europe, covering Sweden, Finland,
Denmark and Norway, extending the Company's reach into these markets.
"During the quarter, we received contract awards with two European customers,
both of which represent significant revenue increases for next year. And we are
very encouraged to have landed our first orders with a second European mobile
handset manufacturer on a design win from last quarter," said Mr. King.
New Products and Design Wins
"Design win momentum continued in the fourth quarter, resulting in multiple wins
at 50 new or existing accounts from a broad range of end-equipment users. Sales
of new products reached a new record high of 16.2% of total revenue, as prior
design wins translated into new orders on the latest generation products,"
commented Mr. Chen.
"During the fourth quarter, Diodes introduced three new Schottky barrier
rectifiers that employ our proprietary new high-current density package type,
PowerDI(TM)5. And at the beginning of February we announced another six Schottky
Rectifiers in the PowerDI(TM)5 family, which deliver unparalleled efficiency and
performance improvements in a smaller space. These performance products combine
lower forward voltage drop with exceptionally low reverse leakage current,
resulting in the highest efficiency rectifiers of their type available. In the
PowerDI(TM)5 package, these devices consume only a fraction of the PC board
space occupied by competing products, and put Diodes in a leadership position to
support the switch mode power supply (SMPS) market. These types of products are
enabling Diodes, Inc. to continue to build our position with existing customers,
enter new accounts and drive sustainable margin expansion as proprietary and
performance devices become a bigger component of our sales mix."
Additional Financial Highlights
Gross profit for the fourth quarter of 2004 was $16.2 million compared to $16.7
million in the third quarter of 2004, and increased 40.2% over the $11.6 million
in the fourth quarter of 2003. Gross margin remained consistent with the third
quarter of 2004 at 33.9% of sales. Compared to the prior-year quarter, gross
margin increased 440 basis points due to an improved product mix, new product
revenue expansion and manufacturing cost efficiencies. For the year, gross
margin increased 600 basis points to 32.7% from 26.7% last year.
For the quarter, SG&A expenses were $5.4 million, or 11.4% of sales, as compared
to $5.5 million, or 14.0% of sales, in the comparable quarter last year.
Sequentially, SG&A expenses were approximately $0.7 million lower due to
one-time reductions in Asia sales commissions and royalty expenses. Research and
development expenses rose 30.5% to $0.9 million, or 1.9% of revenue, from $0.7
million, or 1.8%, in the fourth quarter of 2003, as the Company continues to
invest in enhancing current product features and developing new products.
Operating income for the fourth quarter increased 115.2% to a record $9.9
million, or 20.6% of sales, compared to $4.6 million, or 11.7%, for the fourth
quarter of 2003. Other expense for the fourth quarter was $0.5 million, due
primarily to currency exchange losses related to the weakened U.S. dollar.
The Company recorded a $1.8 million income tax provision for the fourth quarter,
for an effective tax rate of 19.7%. The tax expense includes a $1.3 million tax
provision for planned foreign dividend distributions under the American Jobs
Creation Act of 2004, offset by a $1.2 million foreign reinvestment tax refund
(net of U.S. taxes) and a $0.6 million research and development tax credit.
Capital expenditures for the current quarter were $7.8 million and $26.2 million
for the full year. Depreciation expense for the quarter was $3.6 million and
$13.2 million for the full year.
At December 31, 2004, Diodes had $19.0 million in cash, $50.8 million in working
capital and $11.3 million in term debt. For the fiscal 2004, shareholder equity
increased 50.4% to $107.5 million. Cash flow from operations was $8.2 million
for the quarter and $29.3 million for the year of 2004.
Business Outlook
"After the blistering pace of 2004, the initial outlook for the semiconductor
industry as a whole is somewhat muted for 2005. For the first quarter of 2005,
Diodes continues to experience solid bookings and we expect sales and gross
margins to be comparable to the fourth quarter 2004," said Mr. Chen. "As we
enter 2005, given the strength of demand for our new products and continued
stream of new performance devices, we again expect to significantly outperform
the semiconductor market."
Conference Call
Diodes Incorporated will hold its fourth quarter conference call for all
interested persons at 8 a.m. Pacific Time (11 a.m. Eastern Time) 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, serving the communications,
computer, 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-9000 corporate sales, marketing, engineering
and logistics headquarters is located in Southern California. For further
information, visit the Company's website at http://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: Carl Wertz, Chief Financial Officer, Diodes Incorporated (805) 446-4800
e-mail: carl_wertz@diodes.com
or
Crocker Coulson, President, Coffin Communications Group,
(818) 789-0100, e-mail: crocker.coulson@ccgir.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 Twelve Months Ended
December 31, December 31,
------------------------------------------- ------------------------------------------
2003 2004 2003 2004
-------------------- ------------------- ------------------ -------------------
Net sales $ 39,202,000 $ 47,887,000 $ 136,905,000 $ 185,703,000
Cost of goods sold 27,643,000 31,676,000 100,377,000 124,968,000
-------------------- ------------------- ------------------ -------------------
Gross profit 11,559,000 16,211,000 36,528,000 60,735,000
Selling, general and administrative
expenses 5,490,000 5,439,000 19,587,000 23,503,000
Research and development expenses 691,000 902,000 2,049,000 3,422,000
Loss (gain) on sale of fixed assets 791,000 -- 1,036,000 14,000
-------------------- ------------------- ------------------ -------------------
Total operating expenses 6,972,000 6,341,000 22,672,000 26,939,000
Income from operations 4,587,000 9,870,000 13,856,000 33,796,000
Other expense
Interest expense, net (189,000) (150,000) (860,000) (637,000)
Other (34,000) (385,000) (5,000) (418,000)
-------------------- ------------------- ------------------ -------------------
(223,000) (535,000) (865,000) (1,055,000)
Income before income taxes and minority
interest 4,364,000 9,335,000 12,991,000 32,741,000
Income tax provision (776,000) (1,836,000) (2,460,000) (6,514,000)
-------------------- ------------------- ------------------ -------------------
Income before minority interest 3,588,000 7,499,000 10,531,000 26,227,000
Minority interest in joint venture earnings (151,000) (170,000) (436,000) (676,000)
-------------------- ------------------- ------------------ -------------------
Net income $ 3,437,000 $ 7,329,000 $ 10,095,000 $ 25,551,000
==================== =================== ================== ===================
Earnings per share
Basic $ 0.27 $ 0.53 $ 0.79 $ 1.91
Diluted $ 0.23 $ 0.47 $ 0.70 $ 1.65
==================== =================== ================== ===================
Weighted average shares outstanding
Basic 12,954,320 13,896,695 12,730,808 13,404,276
Diluted 14,932,341 15,707,776 14,406,054 15,471,438
==================== =================== ================== ===================
The accompanying notes are an integral part of these
financial statements.
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
ASSETS
December 31, December 31,
2003 2004
------------------- -------------------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 12,847,000 $ 18,970,000
Accounts receivable
Customers 27,010,000 38,682,000
Related parties 3,938,000 5,526,000
------------------- -------------------
30,948,000 44,208,000
Less: Allowance for doubtful receivables 375,000 432,000
------------------- -------------------
30,573,000 43,776,000
Inventories 16,164,000 22,238,000
Deferred income taxes, current 5,547,000 3,731,000
Prepaid expenses and other current assets 2,256,000 4,243,000
Prepaid income taxes 446,000 406,000
------------------- -------------------
Total current assets 67,833,000 93,364,000
PROPERTY, PLANT AND EQUIPMENT, at cost, net
of accumulated depreciation and amortization 47,893,000 60,857,000
DEFERRED INCOME TAXES, non-current 1,816,000 2,095,000
OTHER ASSETS
Goodwill 5,090,000 5,090,000
Other 1,163,000 1,798,000
------------------- -------------------
TOTAL ASSETS $ 123,795,000 $ 163,204,000
=================== ===================
The accompanying notes are an integral part of these
financial statements.
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, December 31,
2003 2004
------------------ ------------------
(Unaudited)
CURRENT LIABILITIES
Line of credit $ 8,488,000 $ 6,167,000
Accounts payable
Trade 14,029,000 17,274,000
Related parties 3,453,000 3,936,000
Accrued liabilities 8,715,000 11,527,000
Current portion of long-term debt
Related party 2,500,000 2,500,000
Other 3,333,000 1,014,000
Current portion of capital lease obligations 161,000 165,000
------------------ ------------------
Total current liabilities 40,679,000 42,583,000
LONG-TERM DEBT, net of current portion
Related party 3,750,000 1,250,000
Other 3,000,000 6,583,000
CAPITAL LEASE OBLIGATIONS, net of current portion 2,334,000 2,172,000
MINORITY INTEREST IN JOINT VENTURE 2,582,000 3,133,000
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 15,763,266
shares issued at December 31, 2003
and December 31, 2004, respectively 6,502,000 7,260,000
Additional paid-in capital 11,192,000 20,100,000
Retained earnings 55,779,000 81,330,000
------------------ ------------------
73,473,000 108,690,000
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 (575,000)
------------------ ------------------
2,023,000 1,207,000
Total stockholders' equity 71,450,000 107,483,000
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 123,795,000 $ 163,204,000
================== ==================
The accompanying notes are an integral part of these
financial statements.