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United States securities and exchange commission logo
May 20, 2024
Brett R. Whitmire
Chief Financial Officer
Diodes Inc.
4949 Hedgcoxe Road, Suite 200
Plano, Texas 75024
Re: Diodes Inc.
Form 10-K for the
Year Ended December 31, 2023
File No. 002-25577
Dear Brett R. Whitmire:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this letter, we may have additional comments.
Form 10-K for the Year Ended December 31, 2023
Management Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 34
1. Please expand your
discussion of your result of operations to provide a more
comprehensive and
quantified discussion and analysis of the factors that impacted your
results between
comparative periods. Revise your future annual and quarterly filings to
provide the following
items.
Expand your
discussion of net sales to quantify how much of the decrease in net sales
was due to changes
in volume and product mix and the reasons for these changes as
well as changes in
weighted average sales price. Given your decrease in net sales of
$338.8 million or
16.9% for the year ended December 31, 2023, revise your
disclosure to help
us understand how growth in higher-margin end markets have
enabled you to
increase your net sales and margins for the period. We note your gross
profit margin for
the years ended December 31, 2023 and 2022, were 39.6% and
41.3%,
respectively.
You disclosed that
you were in the midst of a current supply-constrained
Brett R. Whitmire
Diodes Inc.
May 20, 2024
Page 2
environment. Discuss whether supply chain disruptions materially
affected your
outlook or business goals. Specify, whether these challenges have
materially
impacted your results of operations or capital resources, and
quantify, to the extent
possible, how your net sales, profits, and/or liquidity have been
impacted. Revise to
discuss known trends or uncertainties resulting from mitigation
efforts undertaken, if
any.
Expand your discussion of gross profit to discuss and quantify the
impact of any
other business factors that affected your gross profit in
addition to the average unit
cost increase of 0.2% for the twelve months ended December 31,
2023. Consider
discussing the impact of product mix, material pricing, and
details of other costs that
impacted your gross profit.
Enhance your disclosure throughout your MD&A to quantify the
business reasons for
the changes between periods in the significant line items of your
consolidated
statements of income. For example, selling, general and
administrative expenses
decreased by $22.9 million primarily due to lower wages and
benefits and freight and
duty costs, partially offset by increases in professional
services and other selling
expenses. However, you have not quantified the impact of each
business reason that
affected this line item.
Revise your discussion of other (expense)/income to provide a more
comprehensive
and robust discussion of the business reasons materially
impacting the line times
within this category, explaining the relative effect of each.
This is not meant to represent an all-inclusive list of where your
MD&A could be
improved. We encourage you to provide quantification of amounts and
further
clarification throughout your discussion. Refer to Item 303 of
Regulation S-K and Section
III.B.4 of Release No. 33-8350 for guidance.
Discussion of Cash Flows
Operating Cash Flows, page 37
2. In your discussions of operating cash flows for the periods presented,
you have merely
listed the components that resulted in the decrease in your cash flows
provided by
operations for the year ended December 31, 2023. In future filings,
please expand this
disclosure to discuss the components that resulted in the decrease in
cash flows provided
by operations as well as the underlying reasons for changes in working
capital
FirstName LastNameBrett R. Whitmire
components, with specific discussions for accounts receivable,
inventories, other
Comapany NameDiodes
operating Inc.
assets, accounts payable and accrued liabilities, as
applicable. See Section IV.B
May 20,of2024
the SEC
PageInterpretive
2 Release No. 33-8350.
FirstName LastName
Brett R. Whitmire
FirstName
Diodes Inc.LastNameBrett R. Whitmire
Comapany
May NameDiodes Inc.
20, 2024
May 20,
Page 3 2024 Page 3
FirstName LastName
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
Please contact Ernest Greene at 202-551-3733 or Hugh West at
202-551-3872 with any
questions.
Sincerely,
Division of
Corporation Finance
Office of
Manufacturing