(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 2022 GAAP net income and non-GAAP adjusted net income was approximately $7.6 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 $0.16 per diluted share for the fourth quarter 2022, $0.14 for fourth quarter 2021 and $0.18 for the third quarter 2022.
EBITDA (a non-GAAP measure), which represents earnings before net interest expense, income tax, depreciation and amortization, in fourth quarter 2022 was $129.6 million, or 26.1 percent of revenue, increasing from $139.0 million, or 28.9 percent of revenue, in fourth quarter 2021 and a decrease from the $141.9 million, or 27.2 percent of revenue, in third 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 2022, net cash provided by operating activities was $102.9 million. Net cash flow was a negative $44.7 million, which includes the pay down of $114.1 million of total debt. Free cash flow (a non-GAAP measure) was $39.1 million, which includes $63.8 million of capital expenditures.
Balance Sheet
As of December 31, 2022, the Company had approximately $348 million in cash and cash equivalents, restricted cash, and short-term investments. Total debt (including long-term and short-term) amounted to approximately $186 million and working capital was approximately $729 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, 2022.
Business Outlook
Dr. Lu concluded, “For the first quarter of 2023, we expect revenue to be approximately $467 million, plus or minus 3 percent. GAAP gross margin is expected to be 41.0 percent, plus or minus 1 percent. Even with the revenue and loading decrease in the first quarter, we expect to maintain our gross margin effectively comparable to last quarter and above our target model of 40 percent. Non-GAAP operating expenses, which are GAAP operating expenses adjusted for amortization of acquisition-related intangible assets, are expected to be approximately 22.2 percent of revenue, plus or minus 1 percent. We expect net interest expense to be approximately $2.5 million. Our income tax rate is expected to be 19.0 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 Monday, February 6, 2023 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, 2023 at midnight Central Time. The replay number is 1-877-344-7529 with a pass code of 1311288. 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 Investors’ section of Diodes' website at https://investor.diodes.com. 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 2023, we expect revenue to be approximately $467 million plus or minus 3 percent; we expect GAAP gross margin to be 41.0 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 22.2 percent of revenue, plus or minus 1 percent; we expect non-GAAP net interest expense to be approximately $2.5 million; we expect our income tax rate to be 19.0 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 the COVID-19 pandemic may continue and have a material adverse effect on customer demand and staffing of our production, sales and administration facilities; 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, and diversion of management attention associated with the LSC acquisition may be greater than we currently expect; 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.
DIODES INCORPORATED AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data) |
||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||
| December 31 | December 31 | |||||||||||||||||
| 2022 |
2021 |
2022 |
2021 |
|||||||||||||||
| Net sales | $ |
496,212 |
|
$ |
480,171 |
|
$ |
2,000,580 |
|
$ |
1,805,162 |
|
||||||
| Cost of goods sold |
|
290,016 |
|
|
289,480 |
|
|
1,173,343 |
|
|
1,134,802 |
|
||||||
| Gross profit |
|
206,196 |
|
|
190,691 |
|
|
827,237 |
|
|
670,360 |
|
||||||
| Operating expenses | ||||||||||||||||||
| Selling, general and administrative |
|
71,822 |
|
|
70,951 |
|
|
280,877 |
|
|
257,710 |
|
||||||
| Research and development |
|
34,090 |
|
|
30,096 |
|
|
126,316 |
|
|
119,200 |
|
||||||
| Amortization of acquisition-related intangible assets |
|
3,830 |
|
|
4,077 |
|
|
15,610 |
|
|
16,216 |
|
||||||
| Loss (gain) on disposal of fixed assets |
|
4 |
|
|
177 |
|
|
(3,651 |
) |
|
246 |
|
||||||
| Other operating expense(income) |
|
(1 |
) |
|
(601 |
) |
|
(108 |
) |
|
1,003 |
|
||||||
| Total operating expense |
|
109,745 |
|
|
104,700 |
|
|
419,044 |
|
|
394,375 |
|
||||||
| Income from operations |
|
96,451 |
|
|
85,991 |
|
|
408,193 |
|
|
275,985 |
|
||||||
| Other (expense) income | ||||||||||||||||||
| Interest income |
|
1,123 |
|
|
788 |
|
|
3,672 |
|
|
3,139 |
|
||||||
| Interest expense |
|
(2,892 |
) |
|
(1,193 |
) |
|
(8,320 |
) |
|
(7,491 |
) |
||||||
| Foreign currency (loss) gain, net |
|
(410 |
) |
|
(1,123 |
) |
|
2,122 |
|
|
(2,107 |
) |
||||||
| Unrealized (loss) gain on investments |
|
(554 |
) |
|
13,180 |
|
|
(16,514 |
) |
|
28,018 |
|
||||||
| Other income |
|
1,046 |
|
|
11,153 |
|
|
6,787 |
|
|
17,551 |
|
||||||
| Total other (expense) income |
|
(1,687 |
) |
|
22,805 |
|
|
(12,253 |
) |
|
39,110 |
|
||||||
| Income before income taxes and noncontrolling interest |
|
94,764 |
|
|
108,796 |
|
|
395,940 |
|
|
315,095 |
|
||||||
| Income tax provision |
|
1,406 |
|
|
42,487 |
|
|
56,685 |
|
|
78,807 |
|
||||||
| Net income |
|
93,358 |
|
|
66,309 |
|
|
339,255 |
|
|
236,288 |
|
||||||
| Less net (income) attributable to noncontrolling interest |
|
(1,307 |
) |
|
(796 |
) |
|
(7,972 |
) |
|
(7,525 |
) |
||||||
| Net income attributable to common stockholders | $ |
92,051 |
|
$ |
65,513 |
|
$ |
331,283 |
|
$ |
228,763 |
|
||||||
| Earnings per share attributable to common stockholders: | ||||||||||||||||||
| Basic | $ |
2.02 |
|
$ |
1.46 |
|
$ |
7.31 |
|
$ |
5.11 |
|
||||||
| Diluted |
|
2.00 |
|
$ |
1.43 |
|
$ |
7.20 |
|
$ |
5.00 |
|
||||||
| Number of shares used in earnings per share computation: | ||||||||||||||||||
| Basic |
|
45,470 |
|
|
45,018 |
|
|
45,330 |
|
|
44,772 |
|
||||||
| Diluted |
|
46,111 |
|
|
45,942 |
|
|
46,036 |
|
|
45,781 |
|
||||||
| 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, 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 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 diluted earnings per share would have improved by $0.16 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, 2021: |
||||||||||||
| Operating
Expenses |
Other Income
(Expense) |
Income Tax
Provision |
Net Income | |||||||||
| Per-GAAP | $ |
65,513 |
|
|||||||||
| Diluted earnings per share (Per-GAAP) | $ |
1.43 |
|
|||||||||
| Adjustments to reconcile net income to non-GAAP net income: | ||||||||||||
| Amortization of acquisition-related intangible assets | 4,077 |
(748 |
) |
|
3,329 |
|
||||||
| Acquisition-related costs | 551 |
(116 |
) |
|
435 |
|
||||||
| LSC investments related | (13,181 |
) |
26,642 |
|
|
13,461 |
|
|||||
| Gain on sale of manufacturing subsidiary | (9,446 |
) |
- |
|
|
(9,446 |
) |
|||||
| Non-GAAP | $ |
73,292 |
|
|||||||||
| Diluted shares used in computing earnings per share |
|
45,942 |
|
|||||||||
| Non-GAAP diluted earnings per share | $ |
1.60 |
|
|||||||||
| Note: Included in GAAP and non-GAAP adjusted net income was approximately $6.5 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 $0.14 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. |
||||||||||||
| 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, 2021: |
||||||||||||
| Operating
Expenses |
Other Income
(Expense) |
Income Tax
Provision |
Net Income | |||||||||
| Per-GAAP | $ |
228,763 |
|
|||||||||
| Diluted earnings per share (Per-GAAP) | $ |
5.00 |
|
|||||||||
| Adjustments to reconcile net income to non-GAAP net income: | ||||||||||||
| Amortization of acquisition-related intangible assets | 16,216 |
(2,974 |
) |
|
13,242 |
|
||||||
| Acquisition-related costs | 2,816 |
(591 |
) |
|
2,225 |
|
||||||
| LSC investments related | (28,018 |
) |
29,609 |
|
|
1,591 |
|
|||||
| Gain on sale of manufacturing subsidiary | (9,446 |
) |
- |
|
|
(9,446 |
) |
|||||
| Restructuring costs | 961 |
(144 |
) |
|
817 |
|
||||||
| Non-GAAP | $ |
237,192 |
|
|||||||||
| Diluted shares used in computing earnings per share |
|
45,781 |
|
|||||||||
| Non-GAAP diluted earnings per share | $ |
5.18 |
|
|||||||||
| Note: Included in GAAP and non-GAAP adjusted net income was approximately $26.2 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 $0.57 per share. |
||||||||||||
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE
