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Diodes Incorporated Reports Second Quarter 2021 Financial Results
Achieves Record Revenue for
Second Quarter Highlights
-
Revenue was a record
$440.4 million , increasing 7 percent from$413.1 million in the first quarter 2021 and 53 percent from$288.7 million in the second quarter 2020; -
GAAP gross profit was a record
$159.8 million , increasing 15 percent from$138.6 million in the first quarter 2021 and 57 percent from$101.5 million in the second quarter 2020; - GAAP gross profit margin was 36.3 percent, compared to 33.6 percent in the first quarter 2021 and 35.2 percent in the second quarter 2020;
-
GAAP net income was a record
$55.4 million , or$1.22 per diluted share, compared to$39.5 million , or$0.87 per diluted share, in the first quarter 2021 and$21.0 million , or$0.40 per diluted share, in the second quarter 2020; -
Non-GAAP adjusted net income was a record
$54.6 million , or$1.20 per diluted share, compared to$42.0 million , or$0.93 per diluted share, in the first quarter 2021 and$28.6 million , or$0.54 per diluted share, in the second quarter 2020; -
Excluding
$6.8 million , net of tax, of non-cash share-based compensation expense, both GAAP and non-GAAP earnings per share would have increased by$0.15 per diluted share; -
EBITDA was a record
$99.4 million , or 22.6 percent of revenue, compared to$81.7 million , or 19.8 percent of revenue, in the first quarter 2021 and$55.3 million , or 19.2 percent of revenue, in the second quarter 2020; and -
Achieved cash flow from operations of
$93.9 million and$66.0 million of free cash flow, including$27.9 of capital expenditures. Net cash flow was a negative$36.2 million , including the pay down of$114.2 million of total debt.
Commenting on the results, Dr.
“Further highlighting our results was the achievement of record GAAP and non-GAAP net income as well as EBITDA, which increased 22 percent sequentially to almost 23 percent of revenue. The highly accretive LSC acquisition together with our significant operating leverage drove adjusted earnings per share for the first six months of 2021 to more than double the adjusted EPS reported in the same period of 2020. And with our expectation for another quarter of record results in the third quarter, we are well positioned to deliver continued growth, increasing profitability and shareholder value. Further, our achievement of year-over-year revenue growth of 53 percent and gross profit increasing 57 percent this quarter represents a major step toward our long-term goal of
Second Quarter 2021
Revenue for second quarter 2021 was a record
GAAP gross profit for the second quarter 2021 was a record
GAAP operating expenses for second quarter 2021 were
Second quarter 2021 GAAP net income was a record
Second quarter 2021 non-GAAP adjusted net income was a record
The following is an unaudited summary reconciliation of GAAP net income to non-GAAP adjusted net income and per share data, net of tax (in thousands, except per share data):
Three Months Ended | ||||||
GAAP net income |
$ |
55,374 |
|
|||
GAAP diluted earnings per share |
|
1.22 |
|
|||
Adjustments to reconcile net income to non-GAAP net income: | ||||||
Amortization of acquisition-related intangible assets |
|
3,351 |
|
|||
Acquisition-related costs |
|
118 |
|
|||
Gain on LSC investments |
|
(4,210 |
) |
|||
Non-GAAP net income |
$ |
54,633 |
|
|||
Non-GAAP diluted earnings per share |
$ |
1.20 |
|
Note: Throughout this release, we refer to “net income attributable to common stockholders” as “net income.”
(See the reconciliation tables of GAAP net income to non-GAAP adjusted net income near the end of this release for further details.)
Included in second quarter 2021 GAAP net income and non-GAAP adjusted net income was approximately
EBITDA (a non-GAAP measure), which represents earnings before net interest expense, income tax, depreciation and amortization, in second quarter 2021 was a record
For second quarter 2021, net cash provided by operating activities was
Balance Sheet
As of
The results announced today are preliminary and unaudited, as they are subject to the Company finalizing its closing procedures and completion of the Company’s 2021 quarterly review by its independent registered public accounting firm. As such, these results are subject to revision until the Company files its Form 10-Q for the quarter ending
Business Outlook
Purchase accounting adjustments related to amortization of acquisition-related intangible assets of
Conference Call
Diodes will host a conference call on
About
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. Such statements include statements containing forward-looking words such as “expect,” “anticipate,” “aim,” “estimate,” and variations thereof, including without limitation statements, whether direct or implied, regarding expectations of that for the third quarter of 2021, we expect revenue to increase to approximately
DIODES INCORPORATED AND SUBSIDIARIES |
||||||||||||||||||
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS |
||||||||||||||||||
(unaudited) |
||||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||||
Three Months Ended |
|
|
|
Six Months Ended |
||||||||||||||
|
|
|
|
|
||||||||||||||
2021 |
|
2020 |
|
|
|
2021 |
|
2020 |
||||||||||
Net sales |
$ |
440,448 |
|
$ |
288,669 |
|
$ |
853,569 |
|
$ |
569,386 |
|
||||||
Cost of goods sold |
|
280,646 |
|
|
187,177 |
|
|
555,131 |
|
|
372,052 |
|
||||||
Gross profit |
|
159,802 |
|
|
101,492 |
|
|
298,438 |
|
|
197,334 |
|
||||||
Operating expenses | ||||||||||||||||||
Selling, general and administrative |
|
60,280 |
|
|
45,372 |
|
|
118,956 |
|
|
87,587 |
|
||||||
Research and development |
|
29,987 |
|
|
21,322 |
|
|
57,646 |
|
|
45,000 |
|
||||||
Amortization of acquisition-related intangible assets |
|
4,060 |
|
|
4,021 |
|
|
8,083 |
|
|
8,242 |
|
||||||
Other operating expense |
|
118 |
|
|
(92 |
) |
|
1,006 |
|
|
(216 |
) |
||||||
Total operating expense |
|
94,445 |
|
|
70,623 |
|
|
185,691 |
|
|
140,613 |
|
||||||
Income from operations |
|
65,357 |
|
|
30,869 |
|
|
112,747 |
|
|
56,721 |
|
||||||
Other income (expense) | ||||||||||||||||||
Interest income |
|
818 |
|
|
168 |
|
|
1,586 |
|
|
441 |
|
||||||
Interest expense |
|
(2,017 |
) |
|
(2,653 |
) |
|
(4,881 |
) |
|
(3,898 |
) |
||||||
Foreign currency loss, net |
|
(510 |
) |
|
(3,600 |
) |
|
(1,789 |
) |
|
(3,525 |
) |
||||||
Unrealized Gain (Loss) on Investments |
|
5,261 |
|
|
- |
|
|
8,916 |
|
|
- |
|
||||||
Other income |
|
1,837 |
|
|
1,274 |
|
|
4,154 |
|
|
1,275 |
|
||||||
Total other income (expense) |
|
5,389 |
|
|
(4,811 |
) |
|
7,986 |
|
|
(5,707 |
) |
||||||
Income before income taxes and noncontrolling interest |
|
70,746 |
|
|
26,058 |
|
|
120,733 |
|
|
51,014 |
|
||||||
Income tax provision |
|
12,120 |
|
|
4,670 |
|
|
21,554 |
|
|
9,226 |
|
||||||
Net income |
|
58,626 |
|
|
21,388 |
|
|
99,179 |
|
|
41,788 |
|
||||||
Less net (income) loss attributable to noncontrolling interest |
|
(3,252 |
) |
|
(355 |
) |
|
(4,353 |
) |
|
(587 |
) |
||||||
Net income attributable to common stockholders |
$ |
55,374 |
|
$ |
21,033 |
|
$ |
94,826 |
|
$ |
41,201 |
|
||||||
Earnings per share attributable to common stockholders: | ||||||||||||||||||
Basic |
$ |
1.24 |
|
$ |
0.41 |
|
$ |
2.13 |
|
$ |
0.80 |
|
||||||
Diluted |
$ |
1.22 |
|
$ |
0.40 |
|
$ |
2.09 |
|
$ |
0.78 |
|
||||||
Number of shares used in earnings per share computation: | ||||||||||||||||||
Basic |
|
44,667 |
|
|
51,527 |
|
|
44,538 |
|
|
51,431 |
|
||||||
Diluted |
|
45,380 |
|
|
52,569 |
|
|
45,327 |
|
|
52,517 |
|
Note: Throughout this release, we refer to “net income attributable to common stockholders” as “net income.”
DIODES INCORPORATED AND SUBSIDIARIES |
||||||||||||||
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME |
||||||||||||||
(in thousands, except per share data) |
||||||||||||||
(unaudited) |
||||||||||||||
For the three months ended |
||||||||||||||
COGS | Operating Expenses |
Other Income (Expense) |
Income Tax Provision |
Net Income | ||||||||||
Per-GAAP |
$ |
55,374 |
|
|||||||||||
Diluted earnings per share (Per-GAAP) |
|
1.22 |
|
|||||||||||
Adjustments to reconcile net income to non-GAAP net income: | ||||||||||||||
Amortization of acquisition-related intangible assets |
4,060 |
(709 |
) |
|
3,351 |
|
||||||||
Acquisition-related costs |
149 |
(31 |
) |
|
118 |
|
||||||||
Gain on LSC investments |
(5,262 |
) |
1,052 |
|
|
(4,210 |
) |
|||||||
Non-GAAP |
$ |
54,633 |
|
|||||||||||
Diluted shares used in computing earnings per share |
|
45,380 |
|
|||||||||||
Non-GAAP diluted earnings per share |
$ |
1.20 |
|
Note: Included in GAAP and non-GAAP net income was approximately
DIODES INCORPORATED AND SUBSIDIARIES |
||||||||||||
CONSOLIDATED RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME – Cont. |
||||||||||||
(in thousands, except per share data) |
||||||||||||
(unaudited) |
||||||||||||
For the three months ended |
||||||||||||
COGS | Operating Expenses |
Other Income (Expense) |
Income Tax Provision |
Net Income | ||||||||
Per-GAAP |
$ |
21,033 |
||||||||||
Diluted earnings per share (Per-GAAP) |
$ |
0.40 |
||||||||||
Adjustments to reconcile net income to non-GAAP net income: | ||||||||||||
Amortization of acquisition-related intangible assets |
4,021 |
(744 |
) |
|
3,277 |
|||||||
Acquisition-related financing costs |
3,420 |
(774 |
) |
|
2,646 |
|||||||
Acquisition-related costs |
416 |
(85 |
) |
|
331 |
|||||||
Board-member retirement costs |
1,705 |
(358 |
) |
|
1,347 |
|||||||
Non-GAAP |
$ |
28,634 |
||||||||||
Diluted shares used in computing earnings per share |
|
52,569 |
||||||||||
Non-GAAP diluted earnings per share |
$ |
0.54 |
Note: Included in GAAP and non-GAAP adjusted net income was approximately
DIODES INCORPORATED AND SUBSIDIARIES |
||||||||||||||
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME |
||||||||||||||
(in thousands, except per share data) |
||||||||||||||
(unaudited) |
||||||||||||||
For the six months ended |
||||||||||||||
COGS | Operating Expenses |
Other Income (Expense) |
Income Tax Provision |
Net Income | ||||||||||
Per-GAAP |
$ |
94,826 |
|
|||||||||||
Diluted earnings per share (Per-GAAP) |
$ |
2.09 |
|
|||||||||||
Adjustments to reconcile net income to non-GAAP net income: | ||||||||||||||
Amortization of acquisition-related intangible assets |
8,083 |
(1,413 |
) |
|
6,670 |
|
||||||||
Acquisition-related costs |
2,056 |
(431 |
) |
|
1,625 |
|
||||||||
Gain on LSC investments |
(8,916 |
) |
1,783 |
|
|
(7,133 |
) |
|||||||
Restructuring costs |
820 |
(123 |
) |
|
697 |
|
||||||||
Non-GAAP |
$ |
96,685 |
|
|||||||||||
Diluted shares used in computing earnings per share |
|
45,327 |
|
|||||||||||
Non-GAAP diluted earnings per share |
$ |
2.13 |
|
Note: Included in GAAP and non-GAAP net income was approximately
DIODES INCORPORATED AND SUBSIDIARIES |
||||||||||
CONSOLIDATED RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME – Cont. |
||||||||||
(in thousands, except per share data) |
||||||||||
(unaudited) |
||||||||||
For the six months ended |
||||||||||
Operating Expenses |
Other Income (Expense) |
Income Tax Provision |
Net Income | |||||||
Per-GAAP |
$ |
41,201 |
||||||||
Diluted earnings per share (Per-GAAP) |
$ |
0.78 |
||||||||
Adjustments to reconcile net income to non-GAAP net income: | ||||||||||
Amortization of acquisition-related intangible assets |
8,242 |
(1,509 |
) |
|
6,733 |
|||||
Acquisition-related financing costs |
3,420 |
(774 |
) |
|
2,646 |
|||||
Acquisition-related costs |
824 |
(168 |
) |
|
656 |
|||||
Board-member retirement costs |
1,705 |
(358 |
) |
|
1,347 |
|||||
Non-GAAP |
$ |
52,583 |
||||||||
Diluted shares used in computing earnings per share |
|
52,517 |
||||||||
Non-GAAP diluted earnings per share |
$ |
1.00 |
Note: Included in GAAP and non-GAAP adjusted net income was approximately
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE
The Company’s financial statements present net income and earnings per share that are calculated using accounting principles generally accepted in
Detail of non-GAAP adjustments
Amortization of acquisition-related intangible assets – The Company excluded this item, including amortization of developed technologies and customer relationships. The fair value of the acquisition-related intangible assets is amortized using straight-line methods which approximate the proportion of future cash flows estimated to be generated each period over the estimated useful life of the applicable assets. The Company believes that exclusion of this item is appropriate because a significant portion of the purchase price for its acquisitions was allocated to the intangible assets that have short lives and exclusion of the amortization expense allows comparisons of operating results that are consistent over time for both the Company’s newly acquired and long-held businesses. In addition, the Company excluded this item because there is significant variability and unpredictability among companies with respect to this expense.
Acquisition related costs – The Company excluded expenses associated with the acquisition of
Gain on LSC investments – During
Restructuring costs – The Company has recorded restructuring charges related to the shutdown and relocation of one of our assembly and test facilities located in
Board member retirement costs – The Company excluded expenses in connection with the retirement of a member of the Company’s board of directors. The Company modified that director’s unvested RSU grants to vest upon his retirement. The shares subject to the modified grants will be released that board member as if they were vesting under the original vesting timeline. In connection with this modification the Company recorded additional expense of approximately
CASH FLOW ITEMS
Free cash flow (FCF) (Non-GAAP)
FCF for the second quarter of 2021 is a non-GAAP financial measure, which is calculated by subtracting capital expenditures from cash flow from operations. For the second quarter of 2021, FCF was
CONSOLIDATED RECONCILIATION OF NET INCOME TO EBITDA
EBITDA represents earnings before net interest expense, income tax provision, depreciation and amortization. Management believes EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties, such as financial institutions in extending credit, in evaluating companies in our industry and provides further clarity on our profitability. In addition, management uses EBITDA, along with other GAAP and non-GAAP measures, in evaluating our operating performance compared to that of other companies in our industry. The calculation of EBITDA generally eliminates the effects of financing, operating in different income tax jurisdictions, and accounting effects of capital spending, including the impact of our asset base, which can differ depending on the book value of assets and the accounting methods used to compute depreciation and amortization expense. EBITDA is not a recognized measurement under GAAP, and when analyzing our operating performance, investors should use EBITDA in addition to, and not as an alternative for, income from operations and net income, each as determined in accordance with GAAP. Because not all companies use identical calculations, our presentation of EBITDA may not be comparable to similarly titled measures used by other companies. For example, our EBITDA takes into account all net interest expense, income tax provision, depreciation and amortization without taking into account any amounts attributable to noncontrolling interest. Furthermore, EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as tax and debt service payments.
The following table provides a reconciliation of net income to EBITDA (in thousands, unaudited):
Three Months Ended |
|
Six Months Ended |
||||||||||
|
|
|
||||||||||
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||
Net income (per-GAAP) |
$ |
55,374 |
$ |
21,033 |
$ |
94,826 |
$ |
41,201 |
||||
Plus: | ||||||||||||
Interest expense, net |
|
1,199 |
|
2,485 |
|
3,295 |
|
3,457 |
||||
Income tax provision |
|
12,120 |
|
4,670 |
|
21,554 |
|
9,226 |
||||
Depreciation and amortization |
|
30,727 |
|
27,107 |
|
61,402 |
|
54,344 |
||||
EBITDA (non-GAAP) |
$ |
99,420 |
$ |
55,295 |
$ |
181,077 |
$ |
108,228 |
DIODES INCORPORATED AND SUBSIDIARIES |
||||||||
CONSOLIDATED CONDENSED BALANCE SHEETS |
||||||||
(in thousands) |
||||||||
2021 |
2020 |
|||||||
(unaudited) | (unaudited) | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents |
$ |
292,650 |
|
$ |
268,065 |
|
||
Restricted Cash |
|
2,268 |
|
|
52,464 |
|
||
Short-term investments |
|
7,386 |
|
|
6,142 |
|
||
Accounts receivable, net of allowances of |
|
339,142 |
|
|
320,061 |
|
||
Inventories |
|
304,128 |
|
|
307,062 |
|
||
Prepaid expenses and other |
|
96,904 |
|
|
70,193 |
|
||
Total current assets |
|
1,042,478 |
|
|
1,023,987 |
|
||
Property, plant and equipment, net |
|
522,182 |
|
|
530,815 |
|
||
Deferred income tax |
|
52,249 |
|
|
57,841 |
|
||
|
159,584 |
|
|
158,331 |
|
|||
Intangible assets, net |
|
102,677 |
|
|
110,591 |
|
||
Other long-term assets |
|
113,799 |
|
|
97,892 |
|
||
Total assets |
$ |
1,992,969 |
|
$ |
1,979,457 |
|
||
Liabilities | ||||||||
Current liabilities: | ||||||||
Line of credit |
$ |
60,239 |
|
$ |
140,563 |
|
||
Accounts payable |
|
181,919 |
|
|
168,045 |
|
||
Accrued liabilities |
|
182,385 |
|
|
160,117 |
|
||
Income tax payable |
|
17,316 |
|
|
19,177 |
|
||
Current portion of long-term debt |
|
18,346 |
|
|
21,860 |
|
||
Total current liabilities |
|
460,205 |
|
|
509,762 |
|
||
Long-term debt, net of current portion |
|
222,712 |
|
|
288,179 |
|
||
Deferred tax liabilities |
|
34,761 |
|
|
34,598 |
|
||
Other long-term liabilities |
|
132,294 |
|
|
130,795 |
|
||
Total liabilities |
|
849,972 |
|
|
963,334 |
|
||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
Preferred stock - par value |
|
- |
|
|
- |
|
||
Common stock - par value |
|
35,998 |
|
|
35,692 |
|
||
Additional paid-in capital |
|
455,683 |
|
|
449,598 |
|
||
Retained earnings |
|
982,872 |
|
|
888,046 |
|
||
|
(336,128 |
) |
|
(335,910 |
) |
|||
Accumulated other comprehensive loss |
|
(55,841 |
) |
|
(73,606 |
) |
||
Total stockholders' equity |
|
1,082,584 |
|
|
963,820 |
|
||
Noncontrolling interest |
|
60,413 |
|
|
52,303 |
|
||
Total equity |
|
1,142,997 |
|
|
1,016,123 |
|
||
Total liabilities and stockholders' equity |
$ |
1,992,969 |
|
$ |
1,979,457 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210805006078/en/
Company Contact:
Director of Investor Relations
P: 972-987-3959
E: laura_mehrl@diodes.com
Investor Relations Contact:
President, Investor Relations
P: 949-224-3874
E: lsievers@sheltongroup.com
Source: