View:
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, 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 July 28, 2005, Diodes Incorporated issued a press release
announcing second quarter 2005 earnings. A copy of the press release is attached
as Exhibit 99.1.
During the investor conference call on July 28, 2005, Carl
Wertz, the Company's Chief Financial Officer made the following additional
comment:
a. In regards to the Company's third quarter revenue guidance
of "modest sequential revenue growth", the assumed
definition of "modest" is in the 1%-5% range.
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 July 28, 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: July 28, 2005 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, 2005
Exhibit 99.1
Diodes Incorporated
FOR IMMEDIATE RELEASE
Diodes Incorporated Reports Second Quarter 2005 Earnings
o Record quarterly revenues of $50.6 million, up 7.6%
o Record quarterly earnings of $7.7 million, up 25%
Westlake Village, California, July 28, 2005 - 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, 2005.
Second Quarter Highlights:
>> Revenue increased 7.6% year-over-year and 4.1% sequentially to a record
$50.6 million
>> Gross margin improved 260 basis points to 34.6% year-over-year
>> Operating income increased 21.1% to 9.5 million
>> Net income increased 25.2% to a record $7.7 million, or $0.47 per
diluted share, up from $6.1 million, or $0.40 per diluted share,
in 2Q04 Launched new DFN packaging platform
>> Expanded product offerings using PowerDI(TM)123 and SOD-523 compact
performance packages
Revenues for the second quarter of 2005 were a record $50.6 million, an increase
of 7.6% from the second quarter of 2004, and a sequential increase of 4.1%. Net
income for the quarter increased 25.2% to a record $7.7 million, compared to
$6.1 million for the three months ended June 30, 2004. Diluted earnings per
share were $0.47 for the second quarter of 2005, compared with $0.40 for the
second quarter of 2004.
Revenues for the first six months of 2005 increased 12.2% to $99.2 million,
compared to $88.4 million in the same period last year. Net income for the first
half of 2005 increased 35.7% to $14.9 million, compared to $11.0 million in the
same period last year. Diluted earnings per share were $0.93 for the first six
months of 2005, compared to $0.72 for the same period last year.
Gross profit for the second quarter of 2005 increased to $17.5 million, or 34.6%
of sales, compared to $15.0 million, or 32.0%, in the second quarter of 2004,
and $16.6 million, or 34.1% of sales in the first quarter of 2005. The
improvements in gross margin were due to the positive contribution of
higher-margin new products, a favorable product mix, and efficient utilization
of manufacturing capacity.
Commenting on the quarter, Dr. Keh-Shew Lu, President and CEO of Diodes
Incorporated, said: "During the second quarter Diodes continued to outpace the
discrete semiconductor market, as our revenues and net income reached new record
highs. Margins continue to be driven by robust demand for our next-generation
products. Diodes' market share is at an all time high in most of our end-user
markets. In addition to the profit improvement, we generated $24.1 million in
operating cash flow during the first half of 2005, providing us with a very
strong balance sheet to support future corporate growth initiatives."
"Over the past several years, Diodes has established a reputation as an
innovation leader in the discrete semiconductor segment, while delivering
profitable growth to our shareholders," Dr. Lu continued. "I am very excited to
help lead Diodes, Inc. to the next stage of its growth as we progress into
adjacent technologies, such as analog and mixed-signal products, which offer the
potential to expand our addressable market and profitability over time. This
represents a natural evolution in Diodes' long-term growth strategy and builds
upon our core strength in multi-chip packaging integration to deliver a growing
range of value-added solutions for our customers."
End-Markets
"Demand for our innovative space and power-saving subminiature devices in areas
including notebooks computers and audio players drove Diodes' revenue growth in
the quarter, with computer and consumer electronics contributing 36% and 34% of
total sales respectively," commented Mark King, Vice President of Sales and
Marketing.
"Asia continued to be the fastest growing region of global electronics
manufacturing, contributing 66% of our second quarter revenues. Demand in North
America remained in line with the previous quarter and sales represented 31% of
total revenues. And despite soft market demand in Europe, we continued to
establish Diodes' position in this market by penetrating new accounts to grow
this region's contribution to almost 3% of sales," said Mr. King.
Design Wins and New Products
During the second quarter, Diodes launched a new breakthrough DFN packaging
platform using Quad Flat No-Lead technology, which will be employed in a new
line of ultra-miniature devices broadly used in mobile phones, PDAs, portable
media and entertainment devices, digital cameras and camcorders, notebook
computers, and wireless equipment. And the Company continued to expand its
compact power PowerDI(TM)123 and ultra-small SOD-523 packages, with new products
offering reduced size and power consumption suited to a wide range of portable
electronic devices, consumer electronics and automotive applications, as well as
switch-mode power supply designs.
Sales of new products were 15.7% of total sales, compared to 12.6% a year ago.
"New product revenues were primarily driven by SOD523 product line, array
products in various packages and early revenues generated by PowerDI(TM)123,"
Mr. King commented. "Design wins for our PowerDI(TM)123, PowerDI(TM)5, and array
products continued to be very strong during the quarter, which has us well
positioned as the next-generation of end-equipment goes into production."
Additional Financial Highlights
For the quarter, SG&A expenses were $7.2 million, or 14.2% of sales, as compared
to $6.4 million, or 13.6% of sales, in the comparable quarter last year. The
increase was primarily attributable to non-cash expenses of $358,000 related to
the granting of a total of 220,000 shares of Diodes' stock to Dr. Lu and C.H.
Chen as part of Diodes' recent strengthening of its senior management team. In
addition to the expense, the 220,000 shares are included in the diluted shares
outstanding calculation. The combined impact of the share grant reduced Diodes'
diluted earnings per share during the second quarter by two cents, from 49 cents
to 47 cents. The share grant will continue to be expensed quarterly based on
Diodes' stock price over the required 4-year vesting period.
Research and development expenses were $850,000, or 1.7% of revenue, compared to
$815,000, or 1.7% of sales, in the second quarter of 2004.
Operating income for the second quarter increased 21.1% to $9.5 million, or
18.7% of sales, compared to $7.8 million, or 16.6% of sales, for the second
quarter of 2004.
Capital expenditures for the current quarter were $4.0 million and $6.8 million
year to date. Depreciation expense for the quarter was $3.9 million and $7.8
million year to date.
At June 30, 2005, Diodes had $33.0 million in cash, $66.5 million in working
capital, $10.8 million in long-term debt and unused and available credit
facilities of $49.8 million. For the first six months of 2005, shareholder
equity increased 18.6% to $133.0 million.
Business Outlook
"With flat demand in the worldwide discrete semiconductor market, and coming off
our record revenue performance during the second quarter, we expect to see
modest sequential revenue growth and comparable gross margins for the third
quarter of 2005," stated Dr. Lu. "We are very encouraged by the strong interest
in our new value-added products and excited about the opportunities to continue
to expand our growth horizons through customer-driven innovation. In addition,
with our China facility operating at capacity, and solid demand, we are now
increasing our previous full-year capital expenditure forecast from $12-14
million to $15-18 million."
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, primarily to the communications,
computing, industrial, consumer electronics and automotive markets. The Company
operates four Far East subsidiaries, Diodes-China (QS-9000 and ISO-14001
certified) in Shanghai, our newest manufacturing facility in China,
Diodes-Shanghai, Diodes-Taiwan (ISO-9000 certified) in Taipei, and Diodes-Hong
Kong. Diodes-China and Diodes-Shanghai manufacturing focus are 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
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, including, but not limited to, any forecast of revenues or gross
margin. 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, CCG Investor Relations,
(310) 231-8600, Ext. 103, 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 Six Months Ended
June 30, June 30,
------------------------------------------- -----------------------------------------
2004 2005 2004 2005
-------------------- ------------------- ------------------ -------------------
Net sales $ 47,017,000 $ 50,598,000 $ 88,442,000 $ 99,198,000
Cost of goods sold 31,989,000 33,101,000 60,664,000 65,105,000
-------------------- ------------------- ------------------ -------------------
Gross profit 15,028,000 17,497,000 27,778,000 34,093,000
Selling, general and administrative
expenses 6,417,000 7,196,000 11,908,000 13,888,000
Research and development expenses 815,000 850,000 1,562,000 1,750,000
Loss (gain) on sale of fixed assets (8,000) -- 15,000 (105,000)
-------------------- ------------------- ------------------ -------------------
Total operating expenses 7,224,000 8,046,000 13,485,000 15,533,000
Income from operations 7,804,000 9,451,000 14,293,000 18,560,000
Other income (expense)
Interest income 8,000 39,000 10,000 43,000
Interest expense (153,000) (118,000) (337,000) (277,000)
Other 24,000 12,000 (124,000) (21,000)
-------------------- ------------------- ------------------ -------------------
(121,000) (67,000) (451,000) (255,000)
Income before income taxes and minority
interest 7,683,000 9,384,000 13,842,000 18,305,000
Income tax provision (1,383,000) (1,461,000) (2,543,000) (2,903,000)
-------------------- ------------------- ------------------ -------------------
Income before minority interest 6,300,000 7,923,000 11,299,000 15,402,000
Minority interest in joint venture earnings (177,000) (258,000) (319,000) (497,000)
-------------------- ------------------- ------------------ -------------------
Net income $ 6,123,000 $ 7,665,000 $ 10,980,000 $ 14,905,000
==================== =================== ================== ===================
Earnings per share
Basic $ 0.46 $ 0.53 $ 0.83 $ 1.04
Diluted $ 0.40 $ 0.47 $ 0.72 $ 0.93
==================== =================== ================== ===================
Number of shares used in computation
Basic 13,265,146 14,418,819 13,180,992 14,318,916
Diluted 15,329,760 16,209,651 15,306,089 16,071,423
==================== =================== ================== ===================
The accompanying notes are an integral part of these
financial statements.
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
ASSETS
December 31, June 30,
2004 2005
------------------- -------------------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 18,970,000 $ 33,014,000
Accounts receivable
Customers 38,682,000 43,782,000
Related parties 5,526,000 4,599,000
------------------- -------------------
44,208,000 48,381,000
Less: Allowance for doubtful receivables 432,000 464,000
------------------- -------------------
43,776,000 47,917,000
Inventories 22,238,000 22,304,000
Deferred income taxes, current 2,453,000 2,375,000
Prepaid expenses and other current assets 4,243,000 4,160,000
Prepaid income taxes 406,000 883,000
------------------- -------------------
Total current assets 92,086,000 110,653,000
PROPERTY, PLANT AND EQUIPMENT, at cost, net
of accumulated depreciation and amortization 60,857,000 63,005,000
DEFERRED INCOME TAXES, non-current 7,970,000 7,309,000
OTHER ASSETS
Goodwill 5,090,000 5,090,000
Other 1,798,000 323,000
------------------- -------------------
TOTAL ASSETS $167,801,000 $ 186,380,000
=================== ===================
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, June 30,
2004 2005
------------------ ------------------
(Unaudited)
CURRENT LIABILITIES
Line of credit $ 6,167,000 $ --
Accounts payable
Trade 17,274,000 18,374,000
Related parties 3,936,000 6,071,000
Accrued liabilities 11,459,000 12,730,000
Current portion of long-term debt
Related party 2,500,000 2,500,000
Other 1,014,000 4,391,000
Current portion of capital lease obligations 165,000 136,000
------------------ ------------------
Total current liabilities 42,515,000 44,202,000
LONG-TERM DEBT, net of current portion
Related party 1,250,000 --
Other 6,583,000 3,877,000
CAPITAL LEASE OBLIGATIONS, net of current portion 2,172,000 1,678,000
MINORITY INTEREST IN JOINT VENTURE 3,133,000 3,630,000
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; 15,763,266 and 16,185,552
shares issued at December 31, 2004
and June 30, 2005, respectively 7,260,000 7,538,000
Additional paid-in capital 24,765,000 30,199,000
Retained earnings 81,330,000 96,235,000
------------------ ------------------
113,355,000 133,972,000
Less:
Treasury stock - 1,613,508 shares of common stock, at cost 1,782,000 1,782,000
Accumulated other comprehensive gain (575,000) (803,000)
------------------ ------------------
1,207,000 979,000
Total stockholders' equity 112,148,000 132,993,000
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $167,801,000 $ 186,380,000
================== ==================
The accompanying notes are an integral part of these
financial statements.