UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
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Registrant’s Telephone Number, Including Area Code: |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On February 6, 2024, Diodes Incorporated (the “Company”) issued a press release announcing its fourth quarter and fiscal year ended December 31, 2023 financial results. A copy of the press release is furnished as Exhibit 99.1.
In the press release, the Company utilizes financial measures and terms not calculated in accordance with generally accepted accounting principles in the United States (“GAAP”) in order to provide investors with an alternative method for assessing the Company’s operating results in a manner that enables investors to more thoroughly evaluate its current performance as compared to past performance. The Company also believes these non-GAAP measures provide investors with a more informed baseline for modeling the Company’s future financial performance. Management uses these non-GAAP measures for the same purpose. The Company believes that investors should have access to the same set of tools that management uses in analyzing results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results and may differ from similar measures used by other companies. See Exhibit 99.1 for a description and reconciliation with GAAP of the non-GAAP measures used.
The information furnished in this Item 2.02, including the exhibit incorporated by reference, will not be treated as “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. This information will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or into another filing under the Exchange Act, unless that filing expressly refers to specific information in this Report.
Item 7.01 Regulation FD Disclosure.
The press release furnished as Exhibit 99.1 also provides an update on the Company’s business outlook, that is intended to be within the safe harbor provided by the Private Securities Litigation Reform Act of 1995 (the “Act”) as comprising forward looking statements within the meaning of the Act.
The information furnished in this Item 7.01, including the exhibit incorporated by reference, will not be treated as “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. This information will not be deemed incorporated by reference into any filing under the Securities Act, or into another filing under the Exchange Act, unless that filing expressly refers to specific information in this Report.
Item 8.01 Other Events.
From time to time, Diodes Incorporated (the “Company”) may give corporate presentations to its customers, suppliers and other related interested parties. Copies of the Company’s corporate presentation slides, updated on February 6, 2024, are attached herewith as Exhibit 99.2 and Exhibit 99.3. Exhibit 99.2 provides an update focused on the Company's fourth quarter and fiscal 2023 financial results and Exhibit 99.3 is used in the Company's investor relations presentations.
Forward-Looking Statements
Statements in this Current Report on Form 8-K (including in the documents attached as Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3 contain forward-looking statements that involve future risks and uncertainties as contemplated by the safe harbor provided by the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this Current Report on Form 8-K (including the documents attached as Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3 should be regarded as “forward-looking statements” and Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3 contain a more detailed listing of the risks and uncertainties associated with those forward-looking statements. Diodes undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit Number |
Description |
99.1 |
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99.2 |
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99.3 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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 thereunto duly authorized.
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DIODES INCORPORATED |
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Date: |
February 6, 2024 |
By: |
/s/Brett R. Whitmire |
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Brett R. Whitmire |
Exhibit 99.1
Diodes Incorporated Reports Fourth Quarter and Fiscal 2023 Financial Results
Full Year Automotive and Industrial Product Revenue Remained
Above Target Model at 46%
Plano, Texas – February 6, 2024 -- Diodes Incorporated (Diodes) (Nasdaq: DIOD) today reported its financial results for the fourth quarter and year ended December 31, 2023.
Year 2023 Overview
Commenting on the results, Gary Yu, President of Diodes, stated, “This past year proved to be challenging as the consumer, computing and communications markets experienced an extended slowdown, coupled with inventory rebalancing in the industrial market late in the year as well as softness in certain areas of the automotive market. Despite this global weakness, we made notable progress on improving the quality and mix of our product portfolio as we continued to focus on the automotive and industrial markets through expanding design wins and increased investment in new product development, which resulted in over 350 new automotive-compliant products. The combined revenue from these two markets expanded to 46% of product revenue in 2023 compared to 42% last year.
“Our product mix improvements were especially evident in our ability to maintain full year gross margin near 40%, meeting our target model despite the lower annual revenue. Throughout the year, we continued to drive manufacturing cost reductions and operating efficiencies, while also further developing our process technology for expansion of our internal facility utilization. Overall, we maintained strong cash generation in 2023 that enabled us to reduce total debt by $124 million to $62 million, maintain a solid cash position over $315 million and increase total cash less debt by 67% to approximately $253 million. Additionally, we renewed and expanded our lines of credit to approximately $315 million to provide added financial flexibility.”
Mr. Yu concluded by stating, “As we look to 2024, we remain focused on driving further improvements in the quality and mix of our portfolio with our analog and power discrete products, including our newly introduced SiC product family, especially targeted at the automotive and industrial markets. We believe our total solutions sales approach that has been successful in the past, along with further emphasis placed on key account development, will continue to deliver increasing content opportunities, design wins and profitable growth in the future.”
Fourth Quarter 2023
Revenue for fourth quarter 2023 was $322.7 million, compared to $404.6 million in the third quarter 2023 and $496.2 million in the fourth quarter 2022.
GAAP gross profit for the fourth quarter 2023 was $112.5 million, or 34.9 percent of revenue, compared to $155.9 million, or 38.5 percent of revenue, in the third quarter 2023 and $206.2 million, or 41.6 percent of revenue, in the fourth quarter of 2022.
GAAP operating expenses for fourth quarter 2023 were $91.8 million, or 28.4 percent of revenue, and on a non-GAAP basis were $89.0 million, or 27.6 percent of revenue, which excludes $3.8 million amortization of acquisition-related intangible asset expenses and $1.0 million in restructuring cost gains. GAAP operating expenses in the third quarter 2023 were $102.0 million, or 25.2 percent of revenue and in the fourth quarter 2022 were $109.7 million, or 22.1 percent of revenue.
Fourth quarter 2023 GAAP net income was $25.3 million, or $0.55 per diluted share, compared to GAAP net income in the third quarter 2023 of $48.7 million, or $1.05 per diluted share, and $92.1 million, or $2.00 per diluted share, of GAAP net income in the fourth quarter 2022.
Fourth quarter 2023 non-GAAP adjusted net income was $23.4 million, or $0.51 per diluted share, which excluded, net of tax, $3.1 million of acquisition-related intangible asset costs, $2.8 million gain on investments, $1.4 million non-cash mark-to-market investment value adjustment and a $0.7 million gain on restructuring costs. This compares to non-GAAP adjusted net income of $52.5 million, or $1.13 per diluted share, in the third quarter 2023 and $79.6 million, or $1.73 per diluted share, in the fourth quarter 2022.
The following is an unaudited summary reconciliation of GAAP net income to non-GAAP adjusted net income and per share data, net of tax (in thousands, except per share data):
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Three Months Ended |
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December 31, 2023 |
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GAAP net income |
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$ |
25,292 |
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GAAP diluted earnings per share |
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$ |
0.55 |
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Adjustments to reconcile net income to non-GAAP net income: |
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Amortization of acquisition-related intangible assets |
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3,108 |
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Non-cash mark-to-market investment value adjustments |
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(1,444 |
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Investment gain |
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(2,794 |
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Restructuring Cost |
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(738 |
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Non-GAAP net income |
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$ |
23,424 |
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Non-GAAP diluted earnings per share |
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$ |
0.51 |
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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 fourth quarter 2023 GAAP net income and non-GAAP adjusted net income was approximately $5.9 million, net of tax, of non-cash share-based compensation expense. Excluding share-based compensation expense, both GAAP earnings per share (“EPS”) and non-GAAP adjusted EPS would have increased by $0.13 per diluted share for the fourth quarter 2023, $0.10 for the third quarter 2023 and $0.16 for fourth quarter 2022.
EBITDA (a non-GAAP measure), which represents earnings before net interest expense, income tax, depreciation and amortization, in fourth quarter 2023 was $58.4 million, or 18.1 percent of revenue, compared to $90.6 million, or 22.4 percent of revenue, in third quarter 2023 and $129.6 million, or 26.1 percent of revenue, in fourth quarter 2022. For a reconciliation of GAAP net income to EBITDA, see the table near the end of this release for further details.
For fourth quarter 2023, net cash provided by operating activities was $38.4 million. Net cash flow was a positive $20.9 million. Free cash flow (a non-GAAP measure) was $11.1 million, which includes $27.3 million of capital expenditures.
Balance Sheet
As of December 31, 2023, the Company had approximately $329 million in cash and cash equivalents, restricted cash, and short-term investments. Total debt (including long-term and short-term) amounted to approximately $62 million and working capital was approximately $794 million.
The results announced today are preliminary and unaudited, as they are subject to the Company finalizing its closing procedures and completion of the quarterly review by its independent registered public accounting firm. As such, these results are subject to revision until the Company files its Form 10-K for the year ending December 31, 2023.
Business Outlook
Gary Yu further commented, “For the first quarter of 2024, we expect revenue to be approximately $305 million, plus or minus 3 percent. GAAP gross margin is expected to be 34.0 percent, plus or minus 1 percent. Non-GAAP operating expenses, which are GAAP operating expenses adjusted for amortization of acquisition-related intangible assets, are expected to be approximately 28.7 percent of revenue, plus or minus 1 percent. We expect net interest income to be approximately $2.0 million. Our income tax rate is expected to be 18.0 percent, plus or minus 3 percent, and shares used to calculate diluted EPS for the first quarter are anticipated to be approximately 46.5 million.”
Amortization of acquisition-related intangible assets of $3.1 million, after tax, for previous acquisitions is not included in these non-GAAP estimates.
Conference Call
Diodes will host a conference call on Tuesday, February 6, 2024 at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its fourth quarter and full year financial results. Investors and analysts may join the conference call by dialing 1-833-634-2590, and international callers may join the teleconference by dialing +1-412-317-6038. A telephone replay of the call will be made available approximately two hours after the call and will remain available until February 13, 2024 at midnight Central Time. The replay number is 1-877-344-7529 with a pass code of 5233965. International callers should dial +1-412-317-0088 and enter the same pass code at the prompt.
Additionally, this conference call will be broadcast live over the Internet and can be accessed by all interested parties on the Investor Relations section of the Company’s website. To listen to the live call, please go to the investors’ section of Diodes’ website and click on the conference call link at least 15 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 approximately 90 days.
About Diodes Incorporated
Diodes Incorporated (Nasdaq: DIOD), a Standard and Poor’s SmallCap 600 and Russell 3000 Index company, delivers high-quality semiconductor products to the world’s leading companies in the consumer electronics, computing, communications, industrial, and automotive markets. We leverage our expanded product portfolio of discrete, analog, and mixed-signal products and leading-edge packaging technology to meet customers’ needs. Our broad range of application-specific solutions and solutions-focused sales, coupled with worldwide operations of 32 sites, including engineering, testing, manufacturing, and customer service, enables us to be a premier provider for high-volume, high-growth markets. For more information visit 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. 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 first quarter of 2024, we expect revenue to be approximately $305 million plus or minus 3 percent; we expect GAAP gross margin to be 34.0 percent, plus or minus 1 percent; non-GAAP operating expenses, which are GAAP operating expenses adjusted for amortization of acquisition-related intangible assets, are expected to be approximately 28.7 percent of revenue, plus or minus 1 percent; we expect non-GAAP net interest income to be approximately $2.0 million; we expect our income tax rate to be 18.0 percent, plus or minus 3 percent; shares used to calculate diluted EPS for the first quarter are anticipated to be approximately 46.5 million. Potential risks and uncertainties include, but are not limited to, such factors as: the risk that such expectations may not be met; the risk that the expected benefits of acquisitions may not be realized or that integration of acquired businesses may not continue as rapidly as we anticipate; the risk that we may not be able to maintain our current growth strategy or continue to maintain our current performance, costs, and loadings in our manufacturing facilities; the risk that we may not be able to increase our automotive, industrial, or other revenue and market share; risks of domestic and foreign operations, including excessive operating costs, labor shortages, higher tax rates, and our joint venture prospects; the risks of cyclical downturns in the semiconductor industry and of changes in end-market demand or product mix that may affect gross margin or render inventory obsolete; the risk of unfavorable currency exchange rates; the risk that our future outlook or guidance may be incorrect; the risks of global economic weakness or instability in global financial markets; the risks of trade restrictions, tariffs, or embargoes; the risk that the coronavirus outbreak or other similar epidemics may harm our domestic or international business operations to a greater extent than we currently anticipate; the risk of breaches of our information technology systems; and other information, including the “Risk Factors” detailed from time to time in Diodes’ filings with the United States Securities and Exchange Commission.
The Diodes logo is a registered trademark of Diodes Incorporated in the United States and other countries.
Automotive-compliant – AEC qualified, manufactured in IATF certified facilities supporting PPAP documentation
© 2024 Diodes Incorporated. All Rights Reserved.
Company Contact: |
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Investor Relations Contact: |
Diodes Incorporated |
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Shelton Group |
Gurmeet Dhaliwal |
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Leanne Sievers |
Director, IR & Corporate Marketing |
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President, Investor Relations |
P: 408-232-9003 |
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P: 949-224-3874 |
E: Gurmeet_Dhaliwal@diodes.com |
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E: lsievers@sheltongroup.com |
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
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Three Months Ended |
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Twelve Months Ended |
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December 31, |
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December 31, |
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2023 |
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2022 |
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2023 |
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2022 |
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Net sales |
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$ |
322,699 |
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$ |
496,212 |
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$ |
1,661,739 |
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$ |
2,000,580 |
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Cost of goods sold |
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210,223 |
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290,016 |
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1,003,557 |
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1,173,343 |
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Gross profit |
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112,476 |
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206,196 |
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658,182 |
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827,237 |
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Operating expenses |
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Selling, general and administrative |
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56,484 |
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71,822 |
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257,939 |
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280,877 |
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Research and development |
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32,957 |
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34,090 |
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134,868 |
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126,316 |
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Amortization of acquisition-related intangible assets |
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3,806 |
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3,830 |
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15,282 |
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15,610 |
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Restructuring cost |
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(983 |
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- |
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1,583 |
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- |
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(Gain)loss on disposal of fixed assets |
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(489 |
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4 |
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(2,045 |
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(3,651 |
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Other operating (income) expense |
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(2 |
) |
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(1 |
) |
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(16 |
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(108 |
) |
Total operating expense |
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91,773 |
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109,745 |
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407,611 |
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419,044 |
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Income from operations |
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20,703 |
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96,451 |
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250,571 |
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408,193 |
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Other (expense) income |
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Interest income |
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4,835 |
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1,123 |
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13,338 |
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3,672 |
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Interest expense |
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(481 |
) |
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(2,892 |
) |
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(5,700 |
) |
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(8,320 |
) |
Foreign currency gain(loss), net |
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(2,468 |
) |
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(410 |
) |
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(5,264 |
) |
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2,122 |
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Unrealized gain(loss) on investments |
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1,805 |
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(554 |
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18,267 |
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(16,514 |
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Other income |
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3,484 |
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1,046 |
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6,721 |
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6,787 |
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Total other income (expense) |
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7,175 |
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(1,687 |
) |
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27,362 |
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(12,253 |
) |
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Income before income taxes and noncontrolling interest |
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27,878 |
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94,764 |
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277,933 |
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395,940 |
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Income tax provision |
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2,771 |
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1,406 |
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47,285 |
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56,685 |
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Net income |
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25,107 |
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93,358 |
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230,648 |
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339,255 |
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Less net (income) attributable to noncontrolling interest |
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185 |
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(1,307 |
) |
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(3,466 |
) |
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(7,972 |
) |
Net income attributable to common stockholders |
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$ |
25,292 |
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$ |
92,051 |
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$ |
227,182 |
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$ |
331,283 |
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Earnings per share attributable to common stockholders: |
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Basic |
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$ |
0.55 |
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$ |
2.02 |
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$ |
4.96 |
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$ |
7.31 |
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Diluted |
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$ |
0.55 |
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$ |
2.00 |
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$ |
4.91 |
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$ |
7.20 |
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Number of shares used in earnings per share computation: |
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Basic |
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45,938 |
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45,470 |
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45,803 |
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45,330 |
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Diluted |
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46,245 |
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46,111 |
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46,311 |
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|
46,036 |
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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 December 31, 2023:
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Operating Expenses |
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Other (Income) Expense |
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Income Tax Provision |
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Net Income |
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Per-GAAP |
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$ |
25,292 |
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Diluted earnings per share (per-GAAP) |
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$ |
0.55 |
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Adjustments to reconcile net income to non-GAAP net income: |
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Amortization of acquisition-related intangible assets |
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3,806 |
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(698 |
) |
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3,108 |
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Non-cash mark-to-market investment value adjustments |
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(1,805 |
) |
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361 |
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(1,444 |
) |
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Investment gain |
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(2,794 |
) |
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(2,794 |
) |
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Restructuring Cost |
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(984 |
) |
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|
246 |
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|
|
(738 |
) |
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Non-GAAP |
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|
|
|
|
|
|
$ |
23,424 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted shares used in computing earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
46,245 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-GAAP diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.51 |
|
|||
Note: Included in GAAP and non-GAAP net income was approximately $5.9 million, net of tax, non-cash share-based compensation expense. Excluding share-based compensation expense, both GAAP and non-GAAP diluted earnings per share would have improved by $0.13 per share.
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 December 31, 2022:
|
|
|
|
Operating Expenses |
|
|
Other Income (Expense) |
|
|
Income Tax Provision |
|
|
Net Income |
|
||||
Per-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
92,051 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted earnings per share (Per-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2.00 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments to reconcile net income to non-GAAP net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of acquisition-related intangible assets |
|
|
|
|
3,830 |
|
|
|
|
|
|
(700 |
) |
|
|
3,130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on sale of manufacturing facilities |
|
|
|
|
|
|
|
264 |
|
|
|
(40 |
) |
|
|
224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
LSC investment related |
|
|
|
|
|
|
|
554 |
|
|
|
(16,386 |
) |
|
|
(15,832 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
79,573 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted shares used in computing earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
46,111 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-GAAP diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1.73 |
|
|||
Note: Included in GAAP and non-GAAP adjusted net income was approximately $7.6 million, net of tax, non-cash share-based compensation expense. Excluding share-based compensation expense, both GAAP and non-GAAP adjusted diluted earnings per share would have improved by $0.16 per share.
DIODES INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME
(in thousands, except per share data)
(unaudited)
For the twelve months ended December 31, 2023:
|
|
|
|
Operating Expenses |
|
|
Other (Income) Expense |
|
|
Income Tax Provision |
|
|
Net Income |
|
||||
Per-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
227,182 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted earnings per share (per-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4.91 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments to reconcile net income to non-GAAP net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of acquisition-related intangible assets |
|
|
|
|
15,282 |
|
|
|
|
|
|
(2,803 |
) |
|
|
12,479 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Officer retirement |
|
|
|
|
2,788 |
|
|
|
|
|
|
(571 |
) |
|
|
2,217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-cash mark-to-market investment value adjustments |
|
|
|
|
|
|
|
(18,267 |
) |
|
|
1,690 |
|
|
|
(16,577 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment gain |
|
|
|
|
|
|
|
(3,931 |
) |
|
|
227 |
|
|
|
(3,704 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restructuring Cost |
|
|
|
|
1,583 |
|
|
|
|
|
|
(396 |
) |
|
|
1,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
222,784 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted shares used in computing earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
46,311 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-GAAP diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4.81 |
|
|||
Note: Included in GAAP and non-GAAP adjusted net income was approximately $24.4 million, net of tax, non-cash share-based compensation expense. Excluding share-based compensation expense, both GAAP and non-GAAP adjusted diluted earnings per share would have improved by $0.53 per share.
DIODES INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME
(in thousands, except per share data)
(unaudited)
For the twelve months ended December 31, 2022:
|
|
|
|
Operating Expenses |
|
|
Other Income (Expense) |
|
|
Income Tax Provision |
|
|
Net Income |
|
||||
Per-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
331,283 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted earnings per share (Per-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7.20 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments to reconcile net income to non-GAAP net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of acquisition-related intangible assets |
|
|
|
|
15,610 |
|
|
|
|
|
|
(2,857 |
) |
|
|
12,753 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisition-related costs |
|
|
|
|
607 |
|
|
|
|
|
|
(127 |
) |
|
|
480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Insurance recovery for manufacturing facility |
|
|
|
|
(3,594 |
) |
|
|
|
|
|
719 |
|
|
|
(2,875 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on sale of manufacturing facilities |
|
|
|
|
|
|
|
677 |
|
|
|
(102 |
) |
|
|
575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
LSC investment related |
|
|
|
|
|
|
|
16,514 |
|
|
|
(19,771 |
) |
|
|
(3,257 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
338,959 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted shares used in computing earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
46,036 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-GAAP diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7.36 |
|
|||
Note: Included in GAAP and non-GAAP adjusted net income was approximately $28.7 million, net of tax, non-cash share-based compensation expense. Excluding share-based compensation expense, both GAAP and non-GAAP adjusted diluted earnings per share would have improved by $0.62 per share.
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 the United States (“GAAP”). The Company’s management makes adjustments to the GAAP measures that it feels are necessary to allow investors and other readers of the Company’s financial releases to view the Company’s operating results as viewed by the Company’s management, board of directors and research analysts in the semiconductor industry. These non-GAAP measures are not prepared in accordance with, and should not be considered alternatives or necessarily superior to, GAAP financial data and may be different from non-GAAP measures used by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names. The explanation of the adjustments made in the table above, are set forth below:
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.
Officer retirement – The Company excluded costs related to the retirement of two executives. These costs represent cash payments and the accelerated vesting of previously issued stock awards. The Company feels it is appropriate to exclude these costs since they don’t represent ongoing operating expenses and will present investors with a more accurate indication of our continuing operations.
Acquisition related costs – The Company excluded expenses associated with previous acquisitions of that typically consist of advisory, legal and other professional and consulting fees. These costs were expensed as they were incurred and as services were received, and in which the corresponding tax adjustments were made for the non-deductible portions of these expenses. The Company believes the exclusion of the acquisition related costs provides investors with a more accurate reflection of costs likely to be incurred in the absence of an unusual event such as an acquisition and facilitates comparisons with the results of other periods that may not reflect such costs.
Insurance recovery for manufacturing facility – The Company recorded gains related to insurance recovery for a manufacturing facility in Asia. The Company believes the exclusion of the insurance recovery provides investors with a more accurate reflection of the continuing operations of the Company and facilitates comparisons with the results of other periods which may not reflect such gains.
Gain/Loss on sale of manufacturing facilities - The Company sold a manufacturing subsidiary and as part of the transaction, there are working capital adjustments that are recorded as gains or losses in the statement of operations. The Company believes this is not reflective of the ongoing operations and exclusion of this provides investors an enhanced view of the Company’s operating results.
Non-cash mark-to-market investment adjustments – The Company excluded mark-to-market adjustments on various equity related investments. The Company believes this is not reflective of the ongoing operations and exclusion of this provides investors an enhanced view of the Company’s operating results.
Restructuring costs – The Company recorded restructuring charges related to various international locations. These restructuring charges are excluded from management’s assessment of the Company’s operating performance. The Company believes the exclusion of the restructuring charges provides investors an enhanced view of the cost structure of the Company’s operations and facilitates comparisons with the results of other periods that may not reflect such charges or may reflect different levels of such charges.
LSC investments related – The Company excluded mark to market adjustments and the associated tax on certain LSC equity investments. The Company has also excluded certain taxes related to integration and restructuring activities within certain Taiwan subsidiaries including LSC. The Company believes this is not reflective of the ongoing operations and exclusion of this provides investors an enhanced view of the Company’s operating results.
CASH FLOW ITEMS
Free cash flow (FCF) (Non-GAAP)
FCF for the fourth quarter of 2023 is a non-GAAP financial measure, which is calculated by subtracting capital expenditures from cash flow from operations. For the fourth quarter of 2023, FCF was $11.1 million, which represents the cash and cash equivalents that we are able to generate after taking into account cash outlays required to maintain or expand property, plant and equipment. FCF is important because it allows us to pursue opportunities to develop new products, make acquisitions and reduce debt.
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 |
|
|
Twelve Months Ended |
|
||||||||||
|
|
December 31, |
|
|
December 31, |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net income (per-GAAP) |
|
$ |
25,292 |
|
|
$ |
92,051 |
|
|
$ |
227,182 |
|
|
$ |
331,283 |
|
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense (income), net |
|
|
(4,354 |
) |
|
|
1,769 |
|
|
|
(7,638 |
) |
|
|
4,648 |
|
Income tax provision |
|
|
2,771 |
|
|
|
1,406 |
|
|
|
47,285 |
|
|
|
56,685 |
|
Depreciation and amortization |
|
|
34,644 |
|
|
|
34,363 |
|
|
|
137,367 |
|
|
|
127,776 |
|
EBITDA (non-GAAP) |
|
$ |
58,353 |
|
|
$ |
129,589 |
|
|
$ |
404,196 |
|
|
$ |
520,392 |
|
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
|
|
December 31, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
|
|
(unaudited) |
|
|
(audited) |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
315,457 |
|
|
$ |
336,732 |
|
Restricted Cash |
|
|
3,026 |
|
|
|
4,367 |
|
Short-term investments |
|
|
10,174 |
|
|
|
7,059 |
|
Accounts receivable, net of allowances of $5,641 and $5,852 at |
|
|
371,930 |
|
|
|
369,233 |
|
Inventories |
|
|
389,774 |
|
|
|
360,281 |
|
Prepaid expenses and other |
|
|
97,024 |
|
|
|
83,999 |
|
Total current assets |
|
|
1,187,385 |
|
|
|
1,161,671 |
|
Property, plant and equipment, net |
|
|
746,169 |
|
|
|
736,730 |
|
Deferred income tax |
|
|
51,620 |
|
|
|
35,308 |
|
Goodwill |
|
|
146,558 |
|
|
|
144,757 |
|
Intangible assets, net |
|
|
63,937 |
|
|
|
79,137 |
|
Other long-term assets |
|
|
171,990 |
|
|
|
130,709 |
|
Total assets |
|
$ |
2,367,659 |
|
|
$ |
2,288,312 |
|
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Line of credit |
|
$ |
40,685 |
|
|
$ |
36,280 |
|
Accounts payable |
|
|
158,261 |
|
|
|
160,442 |
|
Accrued liabilities |
|
|
179,674 |
|
|
|
214,433 |
|
Income tax payable |
|
|
10,459 |
|
|
|
19,682 |
|
Current portion of long-term debt |
|
|
4,419 |
|
|
|
1,693 |
|
Total current liabilities |
|
|
393,498 |
|
|
|
432,530 |
|
Long-term debt, net of current portion |
|
|
16,979 |
|
|
|
147,470 |
|
Deferred tax liabilities |
|
|
13,662 |
|
|
|
12,903 |
|
Unrecognized tax benefits |
|
|
34,035 |
|
|
|
31,594 |
|
Other long-term liabilities |
|
|
99,808 |
|
|
|
80,896 |
|
Total liabilities |
|
|
557,982 |
|
|
|
705,393 |
|
|
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Stockholders' equity |
|
|
|
|
|
|
||
Preferred stock - par value $1.00 per share; 1,000,000 shares authorized; no shares issued or outstanding |
|
|
- |
|
|
|
- |
|
Common stock - par value $0.66 2/3 per share; 70,000,000 shares authorized; 45,938,382 and 45,469,722, issued and outstanding at December 31, 2023 and December 31, 2022, respectively |
|
|
36,819 |
|
|
|
36,503 |
|
Additional paid-in capital |
|
|
509,861 |
|
|
|
494,773 |
|
Retained earnings |
|
|
1,675,274 |
|
|
|
1,448,092 |
|
Treasury stock, at cost, 9,286,862 shares held at December 31, 2023 and 9,281,581 shares held at December 31, 2022 |
|
|
(337,986 |
) |
|
|
(337,490 |
) |
Accumulated other comprehensive loss |
|
|
(143,227 |
) |
|
|
(128,233 |
) |
Total stockholders' equity |
|
|
1,740,741 |
|
|
|
1,513,645 |
|
Noncontrolling interest |
|
|
68,936 |
|
|
|
69,274 |
|
Total equity |
|
|
1,809,677 |
|
|
|
1,582,919 |
|
Total liabilities and stockholders' equity |
|
$ |
2,367,659 |
|
|
$ |
2,288,312 |
|
Fourth Quarter and Fiscal 2023 Financial Results Diodes Incorporated (DIOD) Plano, TX, USA February 6, 2024 Exhibit 99.2
Safe Harbor Statement 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 first quarter of 2024, we expect revenue to be approximately $305 million plus or minus 3 percent; we expect GAAP gross margin to be 34.0 percent, plus or minus 1 percent; non-GAAP operating expenses, which are GAAP operating expenses adjusted for amortization of acquisition-related intangible assets, are expected to be approximately 28.7 percent of revenue, plus or minus 1 percent; we expect non-GAAP net interest income to be approximately $2.0 million; we expect our income tax rate to be 18.0 percent, plus or minus 3 percent; shares used to calculate diluted EPS for the first quarter are anticipated to be approximately 46.5 million. Potential risks and uncertainties include, but are not limited to, such factors as: the risk that such expectations may not be met; the risk that the expected benefits of acquisitions may not be realized or that integration of acquired businesses may not continue as rapidly as we anticipate; the risk that the cost, expense,; the risk that we may not be able to maintain our current growth strategy or continue to maintain our current performance, costs, and loadings in our manufacturing facilities; the risk that we may not be able to increase our automotive, industrial, or other revenue and market share; risks of domestic and foreign operations, including excessive operating costs, labor shortages, higher tax rates, and our joint venture prospects; the risks of cyclical downturns in the semiconductor industry and of changes in end-market demand or product mix that may affect gross margin or render inventory obsolete; the risk of unfavorable currency exchange rates; the risk that our future outlook or guidance may be incorrect; the risks of global economic weakness or instability in global financial markets; the risks of trade restrictions, tariffs, or embargoes; the risk that the coronavirus outbreak or other similar epidemics may harm our domestic or international business operations to a greater extent than we currently anticipate; the risk of breaches of our information technology systems; and other information, including the “Risk Factors” detailed from time to time in Diodes’ filings with the United States Securities and Exchange Commission. This presentation also contains non-GAAP measures. See the Company’s press release on February 6, 2024 titled, “Diodes Incorporated Reports Fourth Quarter and Fiscal 2023 Financial Results” for detailed information related to the Company’s non-GAAP measures and a reconciliation of GAAP net income to non-GAAP net income.
About Diodes Incorporated Vision: Profitability Growth to Maximize Shareholder Value Our Core Values: Integrity, Commitment, Innovation Diodes delivers high-quality (analog, discrete, logic and mixed signal) semiconductor products to the world’s leading companies in the automotive, industrial, computing, consumer electronics, and communications markets DIOD Stock Symbol 65 Years in business 32 Consecutive years of profitability 32 Number of locations worldwide ~8600 Number of employees 1.7Bn Annual Revenue 2023 >42Bn Number of units shipped in 2023 >28K Number of products (SKU) shipped in 2023 >50 Number of distributors >50K Number of customers 46% of 2023 product revenue from Automotive/Industrial
Longer Term $B Corporate Objectives Goal 1: $1B Market Cap Goal 2: $1B Annual Revenue Goal 3: $1B Gross Profit Goal 4: $1B Profit Before Tax $1B Market Cap $1B Revenue $1B Gross Profit $1B PBT - 2010 - 2017 2025 Target: $1B Gross profit Gross Margin: 40% Revenue: $2.5B by 2025
Targeted Market Segment Goal Automotive Connected driving, comfort/style/safety, electrification/powertrain Industrial Embedded systems and precision controls, and AIoT Consumer IoT: wearables, home automation, smart infrastructure Communications Smart phones, 5G networks, advanced protocols, and charging solutions Computing Cloud computing: server, AI server, storage, data centers ~60% of revenue ~40% of revenue (54% for FY2023) (46% for FY2023)
Profitability Growth Track record of Continued Outperformance Annual Revenue Gross Profit ($ in millions) ($ in millions) CAGR: 12% (2005 – 2023) CAGR: 13% (2005 - 2023)
Gross Margins and EPS Gross Margins (%) Non-GAAP EPS ($) CAGR: 22% (2012 - 2023)
Fiscal Year 2023 Financials Revenue - $1.7 billion; compared to $2.0 billion in 2022 GAAP gross profit - $658.2 million; compared to $827.2 million in the prior year GAAP gross profit margin - 39.6%; percent from 41.3 percent in 2022 GAAP net income – $227.2 million, compared to the $331.3 million last year GAAP EPS – $4.91 per diluted share, compared to $7.20 per diluted share in 2022 Non-GAAP adjusted net income - $222.8 million, compared to $339.0 million in 2022 Non-GAAP EPS – $4.81 per diluted share, compared to $7.36 per diluted share in 2022 EBITDA – $404.2 million, or 24.3 percent of revenue Cash flow - $280.9 million from operations Free cash flow - $130.1 million, including $150.8 million of capital expenditures Net cash flow - negative $22.6 million, which includes net pay-down of $124.3 million of total debt
FY2023 Highlights Total debt ~$62 million Automotive and Industrial totaled 46% of product revenue, exceeding 2025 target of 40% Automotive revenue 19% of product revenue $329 million in cash and cash equivalents* Seven consecutive quarters of automotive and industrial product revenue above our target model of 40 percent * Cash and cash equivalents, restricted cash and short-term investments
Revenue Profile for 2023 By End Market Computing Consumer Industrial Communications Automotive By Channel Distribution Direct By Region Asia Pacific Europe Americas
4QFY23 Performance $322.7M -20% Q-Q Revenue $112.5M GAAP Gross Profit -28% Q-Q 34.9% - 360 bps Q-Q GAAP Gross Margin $0.51 -55% Q-Q Non-GAAP EPS $23.4M -55% Q-Q Non-GAAP Net Income $58.4M EBITDA 18.1% of Revenue $38.4M Cash Flow from Ops $329M/$62M Strong Balance Sheet Cash*/Debt 11.9% of Revenue * Cash and cash equivalents, restricted cash and short-term investments
Revenue Profile for Fourth Quarter 2023 By End Market Computing Consumer Industrial Communications Automotive By Channel Distribution Direct By Region 65% 35% By Region Asia Pacific Europe Americas 78% 14% 8% 19% 15% 25% 23% 18%
Quarterly Performance Quarterly Gross Profit ($ Millions) Quarterly Revenue ($ Millions)
Income Statement – Fourth Quarter 2023 ($ in millions, except EPS) 4Q22 3Q23 4Q23 Net sales 496.2 404.6 322.7 Gross profit (GAAP) 206.2 155.9 112.5 Gross profit margin % (GAAP) 41.6% 38.5% 34.9% Net income (GAAP) 92.1 48.7 25.3 Net income (non-GAAP) 79.6 52.5 23.4 Diluted EPS (non-GAAP) 1.73 1.13 0.51 Cash flow from operations 102.9 50.1 38.4 EBITDA (non-GAAP) 129.6 90.6 58.4
Balance Sheet ($ in millions) Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Cash* 373 348 329 Inventory 349 360 390 Current Assets 1,188 1,162 1,187 Total Assets 2,194 2,288 2,368 Total Debt 301 185 62 Total Liabilities 892 705 558 Total Equity 1,303 1,583 1,810 * Cash and cash equivalents, restricted cash and short-term investments
Revenue to be ~$305 million, +/- 3.0% GAAP gross margin of 34.0%, +/- 1% Non-GAAP operating expenses 28.7% of revenue, +/- 1%, which are GAAP operating expenses adjusted for amortization of acquisition-related intangible assets Net Interest income of ~$2.0 million Income tax rate to be 18%, +/- 3% Shares used to calculate diluted EPS approximately 46.5 million Amortization of $3.1 million, after tax, for previous acquisitions is not included in these non-GAAP estimates *Guidance as provided on February 6, 2024 First Quarter 2024 Business Outlook
Investment Summary Vision: Expand shareholder value Mission: Profitability growth to drive 20%+ operating profit Next Strategic Goal: $1B gross profit Tactics: Total system solutions sales approach and content expansion driving growth Focus on key accounts Increased focus on high-margin automotive, industrial, analog, and power discrete products Investment for technology leadership in target products, fab processes, and advanced packaging Accelerate fab process and product qualifications
Reconciliation of Net Income to Adjusted Net Income For the three months ended December 31, 2023 (in thousands, except per share data) (unaudited) Note: Included in GAAP and non-GAAP net income was approximately $5.9 million, net of tax, non-cash share-based compensation expense. Excluding share-based compensation expense, both GAAP and non-GAAP diluted earnings per share would have improved by $0.13 per share.
GAAP to Non-GAAP Reconciliation For the three months ended December 31, 2022 (in thousands, except per share data) (unaudited) Note: Included in GAAP and non-GAAP adjusted net income was approximately $7.6 million, net of tax, non-cash share-based compensation expense. Excluding share-based compensation expense, both GAAP and non-GAAP adjusted diluted earnings per share would have improved by $0.16 per share.
Reconciliation of Net Income to Adjusted Net Income For the twelve months ended December 31, 2023 (in thousands, except per share data) (unaudited) Note: Included in GAAP and non-GAAP adjusted net income was approximately $24.4 million, net of tax, non-cash share-based compensation expense. Excluding share-based compensation expense, both GAAP and non-GAAP adjusted diluted earnings per share would have improved by $0.53 per share.
GAAP to Non-GAAP Reconciliation For the twelve months ended December 31, 2022 (in thousands, except per share data) (unaudited) Note: Included in GAAP and non-GAAP adjusted net income was approximately $28.7 million, net of tax, non-cash share-based compensation expense. Excluding share-based compensation expense, both GAAP and non-GAAP adjusted diluted earnings per share would have improved by $0.62 per share. .
Investor Relations Diodes Incorporated (DIOD) Plano, TX, USA February 6, 2024 Exhibit 99.3
Safe Harbor Statement 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 first quarter of 2024, we expect revenue to be approximately $305 million plus or minus 3 percent; we expect GAAP gross margin to be 34.0 percent, plus or minus 1 percent; non-GAAP operating expenses, which are GAAP operating expenses adjusted for amortization of acquisition-related intangible assets, are expected to be approximately 28.7 percent of revenue, plus or minus 1 percent; we expect non-GAAP net interest income to be approximately $2.0 million; we expect our income tax rate to be 18.0 percent, plus or minus 3 percent; shares used to calculate diluted EPS for the first quarter are anticipated to be approximately 46.5 million. Potential risks and uncertainties include, but are not limited to, such factors as: the risk that such expectations may not be met; the risk that the expected benefits of acquisitions may not be realized or that integration of acquired businesses may not continue as rapidly as we anticipate; the risk that the cost, expense,; the risk that we may not be able to maintain our current growth strategy or continue to maintain our current performance, costs, and loadings in our manufacturing facilities; the risk that we may not be able to increase our automotive, industrial, or other revenue and market share; risks of domestic and foreign operations, including excessive operating costs, labor shortages, higher tax rates, and our joint venture prospects; the risks of cyclical downturns in the semiconductor industry and of changes in end-market demand or product mix that may affect gross margin or render inventory obsolete; the risk of unfavorable currency exchange rates; the risk that our future outlook or guidance may be incorrect; the risks of global economic weakness or instability in global financial markets; the risks of trade restrictions, tariffs, or embargoes; the risk that the coronavirus outbreak or other similar epidemics may harm our domestic or international business operations to a greater extent than we currently anticipate; the risk of breaches of our information technology systems; and other information, including the “Risk Factors” detailed from time to time in Diodes’ filings with the United States Securities and Exchange Commission. This presentation also contains non-GAAP measures. See the Company’s press release on February 6, 2024 titled, “Diodes Incorporated Reports Fourth Quarter and Fiscal 2023 Financial Results” for detailed information related to the Company’s non-GAAP measures and a reconciliation of GAAP net income to non-GAAP net income.
Management Representative Dr. Keh-Shew Lu Chairman and CEO Experience: President & CEO, Diodes Incorporated Since 2005 Texas Instruments 27 years Senior Vice President of TI Worldwide Analog and Logic President of Texas Instruments – Asia Education: Honorary Doctorate in Engineering National Cheng Kung University Doctorate and Master's Degree in Electrical Engineering Texas Tech University Bachelor's Degree in Engineering National Cheng Kung University – Taiwan
Management Representative Gary Yu President Experience: Diodes Incorporated, since 2008 Chief Operating Officer Senior Vice President, Business Groups President, Asia Pacific Region General Manager, Shanghai Wafer Fabrication and BCD Business Unit Vice President of Asia Pacific Sales Manager, Sensor and Satellite Business Unit Lite-On Semiconductor Corporation Vice President, Worldwide Sales Texas Instruments IT, Finance and Capacity Planning Education: MBA - University of Dallas Master’s Degree in Telecommunication Engineering Southern Methodist University Bachelor's Degree in MIS Fu-Jen University, Taiwan
Company Representative Experience: Head of Corporate Marketing, Diodes Incorporated Head of Corporate Marketing, Pericom Semiconductor Vice President, Marketing, CA Technologies (Broadcom) Director, Global Marketing Strategy, EMC Director, Marketing, Zarlink Semiconductor (Microchip) Marketing Management positions at Cisco and National Semiconductor (TI) Education: MBA, Marketing/Entrepreneurship, Saint Mary's College of California BS in Electrical and Computer Engineering, UC Santa Barbara Gurmeet Dhaliwal Company spokesperson Head of Corporate Marketing & Investor Relations
About Diodes Incorporated Vision: Profitability Growth to Maximize Shareholder Value Our Core Values: Integrity, Commitment, Innovation Diodes delivers high-quality (analog, discrete, logic and mixed signal) semiconductor products to the world’s leading companies in the automotive, industrial, computing, consumer electronics, and communications markets DIOD Stock Symbol 65 Years in business 32 Consecutive years of profitability 32 Number of locations worldwide ~8600 Number of employees 1.7Bn Annual Revenue 2023 >42Bn Number of units shipped in 2023 >28K Number of products (SKU) shipped in 2023 >50 Number of distributors >50K Number of customers 46% of 2023 product revenue from Automotive/Industrial
Investing for the Future 2006 2006 2012 2015 2008 2013 2019 2020 2022 Anachip Corporation Taiwan Advanced Power Devices Zetex Semiconductors Power Analog Microelectronics BCD Semiconductor Pericom Semiconductor TI’s Greenock fab (GFAB) Lite-On Semiconductor Onsemi‘s fab (SPFAB) Global Operations and World-class Manufacturing Headquartered in Plano, TX Manufacturing in US, UK, Germany, China, and Taiwan ISO 9001:2015 Certified / IATF 16949:2016 Certified ISO 14001:2015 Certified Key Acquisitions
Global Organization Wuxi, China Shanghai, China Jhongli, Taiwan Hsinchu, Taiwan Taipei, Taiwan Munich, Germany Neuhaus, Germany Plano, Texas Milpitas, California Greenock, UK Chengdu, China Logistics Hub and Warehouses Oldham, UK Key: Headquarters Wafer Fab Assembly/Test Design/Sales/Marketing South, Portland, Maine Keelung, Taiwan
Our Sustainability Commitment Our commitment to a sustainable and profitable business is built around ESG Please refer to Governance and Oversight for additional details Social (S) Governance (G) Environment (E) Climate Change Natural Resources Pollution & Waste Biodiversity Strategy & Oversight Risks Management Business Continuity Accountability & Transparency Supply Chain Product Integrity Human Capital Community
Longer Term $B Corporate Objectives Goal 1: $1B Market Cap Goal 2: $1B Annual Revenue Goal 3: $1B Gross Profit Goal 4: $1B Profit Before Tax $1B Market Cap $1B Revenue $1B Gross Profit $1B PBT - 2010 - 2017 2025 Target: $1B Gross profit Gross Margin: 40% Revenue: $2.5B by 2025
Profitability Growth Track record of Continued Outperformance Annual Revenue Gross Profit ($ in millions) ($ in millions) CAGR: 12% (2005 – 2023) CAGR: 13% (2005 - 2023)
Gross Margins and EPS Gross Margins (%) Non-GAAP EPS ($) CAGR: 22% (2012 - 2023)
Targeted Market Segment Goal Automotive Connected driving, comfort/style/safety, electrification/powertrain Industrial Embedded systems and precision controls, and AIoT Consumer IoT: wearables, home automation, smart infrastructure Communications Smart phones, 5G networks, advanced protocols, and charging solutions Computing Cloud computing: server, AI server, storage, data centers ~60% of revenue ~40% of revenue (54% for FY2023) (46% for FY2023)
Key Growth Areas Automotive and Industrial are Driving Growth Automotive – 28% CAGR (2013 – 2023) Focused on connected driving, comfort, style, safety, and electrification Released 362 new automotive-compliant products in 2023 Increased dollar content per car to $161 Industrial – 11% CAGR (2013 – 2023) Focused on embedded systems, networked systems, automation, motor controls, sensors, power management, and IIoT Building momentum for SiC Schottky diodes and MOSFETs Expanding content in security, medical, green energy generation and energy storage systems
Total Solutions Provider Example: Embedded System Applications
Automotive Applications Driving Growth Connected Driving ADAS (Advanced Driver Assistance Systems) Telematics Infotainment Systems Comfort, Style, and Safety Lighting Migration to LED and intelligent illumination BLDC motor / fan control Migration from Brushed to Brushless DC Motors Electrification/Powertrain Conventional Powertrain Hybrid Electrification Battery management Move to 48V battery Focus Applications: Automotive Revenue Growth Year 2013 – 2023 CAGR: 28% Year
Automotive Opportunity Automotive Potential Revenue $ / Car Automotive Motor Control $50.70 Connected Driving (Infotainment, Telematics & ADAS) $71.30 Powertrain, Electrification & Body Control Electronics $22.60 Lighting – Moving to LED $16.50 Total $161.20 Normalized to 2013 $ Content/Car Year
Automotive Surround-View SuperCAM Platform Advanced Clock Gen, Clock Buffer, Crystal Oscillator, USB Power Switch, and Protection solutions for mission-critical need Automotive Compliant* Products Diodes’ Key Products $ / Box Analog >$1.20 Power Management >$0.70 MOS/BJT >$3.50 Diodes and Rectifiers >$5.00 Timing and Connectivity $14.00 Total $24.40 * AEC qualified, manufactured in IATF 16949 certified sites supporting PPAP documentation (if applicable)
Automotive Compliant USB Charging USB charging is a high growth application with approximately 2 to 8 ports per vehicle USB PD is an important expansion capability up to 100W/port USB-C supports DP over USB and opens up the opportunity to share portable equipment’s screen on interior display Diodes provides a system solution for USB charging including Port Controller, USB Muxes, Signal Switches, ReDrivers, Xtals, Power Management, and Protection. Automotive Compliant* product portfolio expansion is expanding the SAM further * AEC qualified, manufactured in IATF 16949 certified sites supporting PPAP documentation (if applicable) Diodes’ Key Products $ / per car Power Management $6.20 MOS/BJT $1.30 Diodes and Rectifiers $0.60 Timing and Connectivity $3.20 Total $11.30
Industrial Content Expansion Increasing IC content in embedded systems Switching and signal path for networked systems and automation Signal conditioning and timing for precision controls Industrial / motor controls, sensors, and power management for smart meters Green power, Energy storage 2013 - 2023 CAGR: 11% Industrial Revenue Growth Net Sales Year
IoT – Machine to Machine (M2M) Growth Opportunities: Power, Sensor, DC-DC Gate Driver, BJT, MOSFET XTAL and clock Packet switch, ReDriver, IO Expander, MIPI, and USB charging M2M – Dominated by short range technology 73% are short range, mostly Wi-Fi 2030: connections @ 29,400 million M2M – By Application IoT and M2M Modems POS, Routers, Edge Server On-Premise Edge Gateway AGV (Automated Guided Vehicle) AMR (Autonomous Mobile Robots) UAV (Unmanned Aerial Vehicle) POS Display Port Switch I2C Level Shifter w/Buffer USB Switch USB Power Switch USB 3.0 ReDriver USB 3.0 Switch PCI Switch/ ReDriver SATA Switch/ ReDriver Voltage Detector Xtal USB Port USB 3.0 Controller High Bandwidth Mux ReDriver AC-DC Adapter GPIO Expander Temperature Sensor DVI Scaler Mobile DDR/NOR Flash NAND Flash USB 3.0 PCIe/ SATA DP I2C Bus UART USB 2.0 CPU STDLIN DC-DC / LDO AC-DC Diodes’ Key Products $ / AGV Discrete $3.50 Analog & Power Mgmt. $2.20 Timing and Connectivity $18.00 Total $23.70 PMU DDR WiFi Module Gate Driver and MOS LiDAR / Gyro Sensor PCIe Packet Switch Camera Sensor CAN Transceiver Embedded Processor SSD M Isolated DCDC 48V Battery LDO, DCDC, Hall sensor, Audio Amp IO Expander AGV
Cloud Computing Accelerating Enterprise Market ReDriver support for PCIe or USB connectivity Wide range of signal protocols: PCIe, CXL, SAS, SATA, USB MUX switch products for high capacity solid state storage Packet switches for accelerating AI computing Crystal oscillators for increasing clocking speeds LDOs, DCDC, SBR, and TVS for power management and protection
Server Platform Solution Almost all of Server vendors are Diodes’ existing customers Diodes’ products are well positioned in this segment PCIe, USB, & SATA ReDrivers, Clock Buffer, Oscillator, I3C MUX, Level shifter, IO Expander, Bus Switch, QSPI MUX, Logic IC, MOSFET, LDO, TVS, DC-DC Diodes’ Key Products $ / Box Analog $6.90 Power Management $2.20 MOS/BJT $0.70 Timing and Connectivity $43.20 Total $53.00 Data Center – Blade Server
Consumer: IoT Driving Power & Connectivity Requirements Diodes’ Key Products $ / Box Analog >$0.20 Power Management >$1.30 MOS/BJT >$10.00 Diodes and Rectifiers >$5.00 Timing and Connectivity $3.50 Total $20.00 Enterprise Smart Infrastructure Wearables Consumer & Home Asset Tracking Security & Surveillance Retail
Sensor IoT Segment: Smart Home Smart Home Safety and Security Climate Control Consumer Electronics Lighting control Host Controller X1 PCIe2 100MHz HCSL Clk SSD X1 PCIe2 (or SATA controller) 25MHz Xtal PCIe CG PI6C557-05 PCIe Packet SW PI7C9X2G304SL Wireless Controller Wireless Controller Smart Home Gateway Smart Lighting MHz Xtal kHz Xtal AC Power LED Driver AC-DC Light User Interface Smart Speaker MHz Xtal SoC Growth Opportunities Power LED driver Xtal and clock Packet switch SoC MHz Xtal MOSFET TVS NAND SDRAM Wi-Fi LED Drive Audio Amp Digital Assistant Diodes’ Key Products $ / Box Analog $0.55 ~ $0.80 Power Management $1.80 MOS/BJT $1.10 Diodes and Rectifiers $0.50 Timing and Connectivity $3.50 Total $7.70 AC-DC Audio Amp Wi-Fi Memory Ethernet port AC Power SoC DC-DC / LDO DC-DC / LDO Op Amp
Communications - 5G Applications Focus Applications: Cloud Computing AI / Data Center Server Gateway Internet Gateway Fiber network Core Network, Cell Stations Small Cells Base Station Edge Computing Server Smart antenna Fiber network End Products Portables: Smartphone, Tablet Smart Car Consumer: VR/AR, Drone, IoT Telecom: 5G CPEs Embedded/Industrial
Communication – 5G Distributed Unit Advanced Solution in Signal Integrity, Signal/Bus/Power Switches and IO Expanders for diversified networking applications Global Logistics provide cost-competitive solution with industry standard pin-outs and flexible package options Diodes' Key Products $ / Box Analog $12.00 Power Management & Discrete $3.00 Timing and Connectivity $23.00 Total $38.00
Complete Platform Solution DCDC Converter CPU PCH MOSFET LED Driver USB 2.0 Switch A/V Codec DDR Regulator LDO Analog Switch TVS USB 3.0 ReDriver Crossbar Switch Vcore DCDC Controller Sleep / Charge Detect Video Switch MCU USB3 / DP Switch LSP Con LCD Panel TVS DP-to-VGA Converter Video Switch TVS HDMI ReDriver SATA / PCIe ReDriver HDD / SSD USB2 / 3 Switch USB Power Switch TVS Docking Sub-system DDR4 DIMM 3D Camera LDO USB3 ReDriver UART D+, D- Memory Bus DP0..3 Tx, Rx I2C D+, D- D+, D- AUXHPD+ AUXHPD- SATA / PCIe DDI USB3.0 eDP1.3 DP1.2b HDMI 1.4 TVS LAN Switch MOSFET Audio Amplifier Sensor DCDC LDO Logic Sensor TVS USB Switch LED Driver Timing Signal Integrity Switching Connectivity Audio SBR ACDC Std Linear High-Speed Serial Connectivity SBR Diode Diode DP/LAN Mux Clock Buffer ACDC External Adapter / Charger MOSFET / SBR TVS, LDO,Thyristor Bridge Rectifier TVS Thyristor Bridge Rectifier Example: Notebook
Technology Focus Products eUSB/USB repeater and Ultra Low Cj TVS for signal integrity Automotive Packet Switch for Telematics / ADAS, high voltage LDO and DCDC products Complete USB-C / Power Delivery Solutions Low jitter timing solution for cloud computing High precision high bandwidth standard analog Ultra low power and low noise LDOs for IoT Lowest RDS(ON) LDMOS for battery efficiency IntelliFET - self-protected power switches Comprehensive MOSFETs (8V to 800V) SiC Schottky Diodes and SiC MOSFET for industrial and automotive applications Cu Pillar with flip chip on lead frame High pin count BGA, LGA, and AQFN packages Chip scale packaging with highest current density Compact QFN and DFN Power density PowerDI High performance 8” MOSFET trench technology Advanced Epi bipolar transistor processes Proprietary rectifier technology Rugged automotive grade NMOS and PMOS Low power low noise SiGe BiCMOS process High voltage high power BCD process Assembly/Test Wafer Fab
Assembly and Test Efficient Manufacturing + Superior Processes China: Shanghai, Chengdu, and Wuxi Taiwan: Jhongli Germany: Neuhaus US: South Portland, Maine China: Shanghai and Wuxi Taiwan: Hsinchu and Keelung UK: Greenock and Oldham Bipolar, BiCMOS, CMOS and BCD process Global footprint with strong engineering capabilities Wafer Fabs
Revenue Profile for FY2023 By End Market Computing Consumer Industrial Communications Automotive By Channel Distribution Direct By Region Asia Pacific Europe Americas
Income Statement – Fourth Quarter 2023 ($ in millions, except EPS) 4Q22 3Q23 4Q23 Net sales 496.2 404.6 322.7 Gross profit (GAAP) 206.2 155.9 112.5 Gross profit margin % (GAAP) 41.6% 38.5% 34.9% Net income (GAAP) 92.1 48.7 25.3 Net income (non-GAAP) 79.6 52.5 23.4 Diluted EPS (non-GAAP) 1.73 1.13 0.51 Cash flow from operations 102.9 50.1 38.4 EBITDA (non-GAAP) 129.6 90.6 58.4
Balance Sheet ($ in millions) Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Cash* 373 348 329 Inventory 349 360 390 Current Assets 1,188 1,162 1,187 Total Assets 2,194 2,288 2,368 Total Debt 301 185 62 Total Liabilities 892 705 558 Total Equity 1,303 1,583 1,810 * Cash and cash equivalents, restricted cash and short-term investments
Revenue to be ~$305 million, +/- 3.0% GAAP gross margin of 34.0%, +/- 1% Non-GAAP operating expenses 28.7% of revenue, +/- 1%, which are GAAP operating expenses adjusted for amortization of acquisition-related intangible assets Net Interest income of ~$2.0 million Income tax rate to be 18%, +/- 3% Shares used to calculate diluted EPS approximately 46.5 million Amortization of $3.1 million, after tax, for previous acquisitions is not included in these non-GAAP estimates *Guidance as provided on February 6, 2024 First Quarter 2024 Business Outlook
Investment Summary Vision: Expand shareholder value Mission: Profitability growth to drive 20%+ operating profit Next Strategic Goal: $1B gross profit Tactics: Total system solutions sales approach and content expansion driving growth Focus on key accounts Increased focus on high-margin automotive, industrial, analog, and power discrete products Investment for technology leadership in target products, fab processes, and advanced packaging Accelerate fab process and product qualifications
