Press Release
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Diodes Incorporated Reports Third Quarter Fiscal 2024 Financial Results
Exceeded 3Q Revenue Expectations, Growing Over 9% Sequentially
Third Quarter Highlights
-
Revenue was
$350.1 million , compared to$319.8 million in the second quarter 2024 and$404.6 million in the third quarter 2023; -
Global Point of Sales (POS) increased over 10 percent sequentially inAsia ; -
GAAP gross profit was
$118.0 million , compared to$107.4 million in the second quarter 2024 and$155.9 million in the third quarter 2023; - GAAP gross profit margin was 33.7 percent, compared to 33.6 percent in the second quarter 2024 and 38.5 percent in the third quarter 2023;
-
GAAP net income was
$13.7 million , compared to$8.0 million in the second quarter 2024 and$48.7 million in the third quarter 2023; -
Non-GAAP adjusted net income was
$20.1 million , compared to$15.4 million in the second quarter 2024 and$52.5 million in the third quarter 2023; -
GAAP EPS was
$0.30 per diluted share, compared to$0.17 per diluted share in the second quarter 2024 and$1.05 per diluted share in the third quarter 2023; -
Non-GAAP EPS was
$0.43 per diluted share, compared to$0.33 per diluted share last quarter and$1.13 per diluted share in the prior year quarter; -
Excluding
$5.9 million , net of tax, respectively, of non-cash share-based compensation expense, GAAP and non-GAAP earnings per share would have increased by$0.13 per share, respectively; -
EBITDA was
$46.9 million , or 13.4 percent of revenue, compared to$41.1 million , or 12.8 percent of revenue, in the second quarter 2024 and$90.6 million , or 22.4 percent of revenue, in the third quarter 2023; and -
Cash flow provided by operations was
$54.4 million and$39.4 million of free cash flow, including$15.0 million of capital expenditures. Net cash flow was$49.4 million , including borrowing of$9.7 million of total debt.
Commenting on the results,
“For the fourth quarter, we are guiding revenue to be better than typical seasonality. Our gross margin expectation continues to reflect factory underloading related to our wafer service agreements and internal demand. With sufficient capacity available to support future demand improvements, we took the initiative in the third quarter to moderate our CapEx investments to below our target model. This action combined with our past cost reduction actions will help preserve near-term earnings and cash flow until the recovery accelerates, especially in the higher margin automotive and industrial end markets.”
Third Quarter 2024
Revenue for third quarter 2024 was
GAAP gross profit for the third quarter 2024 was
GAAP operating expenses for third quarter 2024 were
Third quarter 2024 GAAP net income was
Third quarter 2024 non-GAAP adjusted net income was
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 |
$ |
13,745 |
|
|
GAAP diluted earnings per share |
$ |
0.30 |
|
|
Adjustments to reconcile net income to non-GAAP net income: | ||||
Amortization of acquisition-related intangible assets |
|
3,130 |
|
|
Acquisition related cost |
|
604 |
|
|
Restructuring charge |
|
(157 |
) |
|
Non-cash mark-to-market investment value adjustments |
|
2,729 |
|
|
Non-GAAP net income |
$ |
20,051 |
|
|
Non-GAAP diluted earnings per share |
$ |
0.43 |
|
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 third quarter 2024 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 third quarter 2024 was
For the third quarter 2024, 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 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
Amortization of acquisition-related intangible assets of
Conference Call
Diodes will host a conference call on
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
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 fourth quarter of 2024, we expect revenue to be approximately
The Diodes logo is a registered trademark of
© 2024
DIODES INCORPORATED AND SUBSIDIARIES |
|||||||||||||||
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS |
|||||||||||||||
(in thousands, except per share data) |
|||||||||||||||
(unaudited) |
|||||||||||||||
|
|||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net sales |
$ |
350,079 |
|
$ |
404,647 |
|
$ |
971,822 |
|
$ |
1,339,040 |
|
|||
Cost of goods sold |
|
232,071 |
|
|
248,771 |
|
|
646,844 |
|
|
793,334 |
|
|||
Gross profit |
|
118,008 |
|
|
155,876 |
|
|
324,978 |
|
|
545,706 |
|
|||
Operating expenses | |||||||||||||||
Selling, general and administrative |
|
59,388 |
|
|
62,964 |
|
|
171,590 |
|
|
201,455 |
|
|||
Research and development |
|
33,691 |
|
|
34,068 |
|
|
100,844 |
|
|
101,911 |
|
|||
Amortization of acquisition-related intangible assets |
|
3,833 |
|
|
3,808 |
|
|
11,497 |
|
|
11,476 |
|
|||
(Gain)loss on disposal of fixed assets |
|
(571 |
) |
|
- |
|
|
(5,525 |
) |
|
- |
|
|||
Restructuring charge |
|
(211 |
) |
|
2,566 |
|
|
8,039 |
|
|
2,566 |
|
|||
Other operating (income)expense |
|
1 |
|
|
(1,404 |
) |
|
- |
|
|
(1,570 |
) |
|||
Total operating expense |
|
96,131 |
|
|
102,002 |
|
|
286,445 |
|
|
315,838 |
|
|||
Income from operations |
|
21,877 |
|
|
53,874 |
|
|
38,533 |
|
|
229,868 |
|
|||
Other (expense) income | |||||||||||||||
Interest income |
|
4,532 |
|
|
4,507 |
|
|
13,383 |
|
|
8,503 |
|
|||
Interest expense |
|
(456 |
) |
|
(898 |
) |
|
(1,840 |
) |
|
(5,219 |
) |
|||
Foreign currency gain(loss), net |
|
(4,423 |
) |
|
1,314 |
|
|
(2,652 |
) |
|
(2,796 |
) |
|||
Unrealized gain(loss) on investments |
|
(3,410 |
) |
|
401 |
|
|
1,310 |
|
|
16,462 |
|
|||
Other income |
|
682 |
|
|
1,309 |
|
|
1,678 |
|
|
3,237 |
|
|||
Total other income (expense) |
|
(3,075 |
) |
|
6,633 |
|
|
11,879 |
|
|
20,187 |
|
|||
Income before income taxes and noncontrolling interest |
|
18,802 |
|
|
60,507 |
|
|
50,412 |
|
|
250,055 |
|
|||
Income tax provision |
|
3,619 |
|
|
10,674 |
|
|
9,799 |
|
|
44,514 |
|
|||
Net income |
|
15,183 |
|
|
49,833 |
|
|
40,613 |
|
|
205,541 |
|
|||
Less net (income) attributable to noncontrolling interest |
|
(1,438 |
) |
|
(1,113 |
) |
|
(4,830 |
) |
|
(3,651 |
) |
|||
Net income attributable to common stockholders |
$ |
13,745 |
|
$ |
48,720 |
|
$ |
35,783 |
|
$ |
201,890 |
|
|||
Earnings per share attributable to common stockholders: | |||||||||||||||
Basic |
$ |
0.30 |
|
$ |
1.06 |
|
$ |
0.78 |
|
$ |
4.41 |
|
|||
Diluted |
$ |
0.30 |
|
$ |
1.05 |
|
|
0.77 |
|
$ |
4.36 |
|
|||
Number of shares used in earnings per share computation: | |||||||||||||||
Basic |
|
46,331 |
|
|
45,936 |
|
|
46,166 |
|
|
45,758 |
|
|||
Diluted |
|
46,442 |
|
|
46,320 |
|
|
46,378 |
|
|
46,296 |
|
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 |
||||||||||||
Operating
|
Other
|
Income Tax
|
Net Income |
|||||||||
Per-GAAP |
$ |
13,745 |
|
|||||||||
Diluted earnings per share (per-GAAP) |
$ |
0.30 |
|
|||||||||
Adjustments to reconcile net income to non-GAAP net income: | ||||||||||||
Amortization of acquisition-related intangible assets |
3,833 |
|
(703 |
) |
|
3,130 |
|
|||||
Acquisition related cost |
765 |
|
(161 |
) |
|
604 |
|
|||||
Restructuring charge |
(211 |
) |
54 |
|
|
(157 |
) |
|||||
Non-cash mark-to-market investment value adjustments |
3,411 |
|
(682 |
) |
|
|
2,729 |
|
||||
Non-GAAP |
$ |
20,051 |
|
|||||||||
Diluted shares used in computing earnings per share |
|
46,442 |
|
|||||||||
Non-GAAP diluted earnings per share |
$ |
0.43 |
|
Note: Included in GAAP and non-GAAP adjusted 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 |
||||||||||||
Operating Expenses |
Other (Income) Expense |
Income Tax Provision |
Net Income | |||||||||
Per-GAAP |
$ |
48,720 |
|
|||||||||
Diluted earnings per share (per-GAAP) |
$ |
1.05 |
|
|||||||||
Adjustments to reconcile net income to non-GAAP net income: | ||||||||||||
Amortization of acquisition-related intangible assets |
3,807 |
(698 |
) |
|
3,109 |
|
||||||
Non-cash market-to-market investment value adjustments |
(401 |
) |
|
80 |
|
|
|
(321 |
) |
|||
Investment gain |
(1,136 |
) |
227 |
|
|
(909 |
) |
|||||
Restructuring Cost |
2,566 |
(642 |
) |
|
1,924 |
|
||||||
Non-GAAP |
$ |
52,523 |
|
|||||||||
Diluted shares used in computing earnings per share |
|
46,320 |
|
|||||||||
Non-GAAP diluted earnings per share |
$ |
1.13 |
|
Note: Included in GAAP and non-GAAP adjusted 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 nine months ended |
|||||||||||||
Operating Expenses |
Other (Income) Expense |
Income Tax Provision |
Net Income | ||||||||||
Per-GAAP |
$ |
35,783 |
|
||||||||||
Diluted earnings per share (per-GAAP) |
$ |
0.77 |
|
||||||||||
Adjustments to reconcile net income to non-GAAP net income: | |||||||||||||
Amortization of acquisition-related intangible assets |
11,497 |
|
(2,109 |
) |
|
9,388 |
|
||||||
Officer retirement |
644 |
|
(135 |
) |
|
509 |
|
||||||
Acquisition related cost |
765 |
|
(161 |
) |
|
604 |
|
||||||
Restructuring charge |
8,039 |
|
789 |
|
(1,741 |
) |
|
7,087 |
|
||||
Non-cash mark-to-market investment value adjustments |
(1,310 |
) |
|
262 |
|
|
|
(1,048 |
) |
||||
Insurance recovery for manufacturing facility |
(4,804 |
) |
961 |
|
|
(3,843 |
) |
||||||
Non-GAAP |
$ |
48,480 |
|
||||||||||
Diluted shares used in computing earnings per share |
|
46,378 |
|
||||||||||
Non-GAAP diluted earnings per share |
$ |
1.05 |
|
Note: Included in GAAP and non-GAAP 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 nine months ended |
||||||||
Operating Expenses |
Other (Income) Expense |
Income Tax Provision |
Net Income | |||||
Per-GAAP |
|
|||||||
Diluted earnings per share (per-GAAP) |
|
|||||||
Adjustments to reconcile net income to non-GAAP net income: | ||||||||
Amortization of acquisition-related intangible assets |
11,476 |
(2,105) |
9,371 |
|||||
Officer retirement |
2,788 |
(571) |
2,217 |
|||||
Non-cash market-to-market investment value adjustments |
(16,463) |
|
1,329 |
|
(15,134) |
|||
Investment gain |
(1,136) |
227 |
(909) |
|||||
Restructuring Cost |
2,566 |
(642) |
1,924 |
|||||
Non-GAAP |
|
|||||||
Diluted shares used in computing earnings per share |
46,296 |
|||||||
Non-GAAP diluted earnings per share |
|
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.
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
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 charge – The Company recorded restructuring charges related to various 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.
Investment gain – The Company excluded the gain realized on the sale of an equity investment. The Company believes this is not reflective of the ongoing operations and exclusion of this item provides investors an enhanced view of the Company’s operating results.
CASH FLOW ITEMS
Free cash flow (FCF) (Non-GAAP)
FCF for the third quarter of 2024 is a non-GAAP financial measure, which is calculated by subtracting capital expenditures from cash flow from operations. For the third quarter of 2024, 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 |
|
Nine Months Ended |
||||||||||||||
|
|
|
||||||||||||||
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
||
Net income (per-GAAP) |
$ |
13,745 |
|
$ |
48,720 |
|
$ |
35,783 |
|
$ |
201,890 |
|
||||
Plus: | ||||||||||||||||
Interest expense, net |
|
(4,076 |
) |
|
(3,609 |
) |
|
(11,543 |
) |
|
(3,284 |
) |
||||
Income tax provision |
|
3,619 |
|
|
10,674 |
|
|
9,799 |
|
|
44,514 |
|
||||
Depreciation and amortization |
|
33,650 |
|
|
34,827 |
|
|
102,300 |
|
|
102,723 |
|
||||
EBITDA (non-GAAP) |
$ |
46,938 |
|
$ |
90,612 |
|
$ |
136,339 |
|
$ |
345,843 |
|
DIODES INCORPORATED AND SUBSIDIARIES |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(Unaudited) |
||||||||
(In thousands, except share and per share data) |
||||||||
|
|
|
|
|
||||
|
|
|
2024 |
|
|
|
2023 |
|
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents |
$ |
311,864 |
|
$ |
315,457 |
|
||
Restricted Cash |
|
5,220 |
|
|
3,026 |
|
||
Short-term investments |
|
7,463 |
|
|
10,174 |
|
||
Accounts receivable, net of allowances of |
|
358,938 |
|
|
371,930 |
|
||
Inventories |
|
482,038 |
|
|
389,774 |
|
||
Prepaid expenses and other |
|
96,921 |
|
|
97,024 |
|
||
Total current assets |
|
1,262,444 |
|
|
1,187,385 |
|
||
Property, plant and equipment, net |
|
703,725 |
|
|
746,169 |
|
||
Deferred income tax |
|
52,443 |
|
|
51,620 |
|
||
|
148,512 |
|
|
146,558 |
|
|||
Intangible assets, net |
|
53,698 |
|
|
63,937 |
|
||
Other long-term assets |
|
168,560 |
|
|
171,990 |
|
||
Total assets |
$ |
2,389,382 |
|
$ |
2,367,659 |
|
||
Liabilities | ||||||||
Current liabilities: | ||||||||
Line of credit |
$ |
35,704 |
|
$ |
40,685 |
|
||
Accounts payable |
|
150,247 |
|
|
158,261 |
|
||
Accrued liabilities |
|
161,880 |
|
|
179,674 |
|
||
Income tax payable |
|
3,506 |
|
|
10,459 |
|
||
Current portion of long-term debt |
|
1,446 |
|
|
4,419 |
|
||
Total current liabilities |
|
352,783 |
|
|
393,498 |
|
||
Long-term debt, net of current portion |
|
20,717 |
|
|
16,979 |
|
||
Deferred tax liabilities |
|
11,600 |
|
|
13,662 |
|
||
Unrecognized tax benefits |
|
34,035 |
|
|
34,035 |
|
||
Other long-term liabilities |
|
86,938 |
|
|
99,808 |
|
||
Total liabilities |
|
506,073 |
|
|
557,982 |
|
||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
Preferred stock - par value |
|
- |
|
|
- |
|
||
Common stock - par value |
|
37,082 |
|
|
36,819 |
|
||
Additional paid-in capital |
|
517,129 |
|
|
509,861 |
|
||
Retained earnings |
|
1,711,057 |
|
|
1,675,274 |
|
||
|
(338,100 |
) |
|
(337,986 |
) |
|||
Accumulated other comprehensive loss |
|
(115,584 |
) |
|
(143,227 |
) |
||
Total stockholders' equity |
|
1,811,584 |
|
|
1,740,741 |
|
||
Noncontrolling interest |
|
71,725 |
|
|
68,936 |
|
||
Total equity |
|
1,883,309 |
|
|
1,809,677 |
|
||
Total liabilities and stockholders' equity |
$ |
2,389,382 |
|
$ |
2,367,659 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107153031/en/
Company Contact:
Director, IR & Corporate Marketing
P: 408-232-9003
E: Gurmeet_Dhaliwal@diodes.com
Investor Relations Contact:
President, Investor Relations
P: 949-224-3874
E: lsievers@sheltongroup.com
Source: