Diodes Incorporated Reports Fourth Quarter and Fiscal 2022 Financial Results
Diodes Incorporated (Nasdaq: DIOD) reported strong financial results for 2022, achieving record revenue of $2.0 billion, a 10.8% increase from 2021. GAAP EPS rose 44% to $7.20, while Non-GAAP EPS increased 42% to $7.36. Gross profit reached $827.2 million, driven by a 23.4% increase. Fourth quarter revenue was $496.2 million, a year-over-year increase of 3.3% but down from the previous quarter. The company anticipates Q1 2023 revenue around $467 million with a gross margin of 41%. Diodes experienced significant growth in the automotive sector, contributing to a 40% increase in that market.
- Record revenue of $2.0 billion for 2022, up 10.8% year-over-year.
- GAAP EPS increased 44% to $7.20, and Non-GAAP EPS rose 42% to $7.36.
- GAAP gross profit margin improved to 41.3%, a 420 basis point increase from the previous year.
- Fourth quarter revenue increased 3.3% year-over-year, demonstrating resilience.
- Automotive market revenue grew 40%, representing 15% of product revenue.
- Fourth quarter revenue decreased 4.8% from Q3 2022.
- Negative net cash flow of $44.7 million due to debt paydown.
Achieves Record Full Year GAAP EPS Increasing
Year 2022 Highlights
-
Revenue grew to a record
, an increase of 10.8 percent over the$2.0 billion in 2021;$1.8 billion -
GAAP gross profit was a record
, a 23.4 percent increase from$827.2 million in the prior year;$670.4 million - GAAP gross profit margin improved 420 basis points to a record 41.3 percent from 37.1 percent in 2021;
-
GAAP operating income increased 47.9 percent to a record
, or 20.4 percent of revenue, compared to$408.2 million , or 15.3 percent of revenue, in 2021;$276.0 million -
GAAP net income was a record
, an increase of 44.8 percent from the$331.3 million last year;$228.8 million -
Non-GAAP adjusted net income was a record
, an increase of 42.9 percent from the$339.0 million in 2021;$237.2 million -
GAAP EPS was a record
per diluted share, a 44.0 percent improvement from the$7.20 per diluted share in 2021;$5.00 -
Non-GAAP EPS was a record
per diluted share, a 42.1 percent improvement from the$7.36 per diluted share in 2021;$5.18 -
Excluding
, net of tax, non-cash share-based compensation expense, both GAAP net income and non-GAAP adjusted net income would have increased by$28.7 million per diluted share;$0.62 -
EBITDA improved 19.7 percent to a record
, or 26.0 percent of revenue, compared to$520.4 million , or 24.1 percent of revenue in 2021; and$434.6 million -
Achieved a record
cash flow from operations and$392.5 million of free cash flow, including$180.8 million of capital expenditures, or 10.6 percent of revenue. Net cash flow was a negative$211.7 million , which includes the net pay-down of$25.7 million of total debt.$112.3 million
Commenting on the results, Dr.
“Underpinning the Company’s noteworthy performance was continued strong growth in our automotive end market, which increased
Fourth Quarter 2022
Revenue for fourth quarter 2022 was
GAAP gross profit for the fourth quarter 2022 was
GAAP operating expenses for fourth quarter 2022 were
Fourth quarter 2022 GAAP net income was
Fourth quarter 2022 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 | $ |
92,051 |
|
|||
GAAP diluted earnings per share | $ |
2.00 |
|
|||
Adjustments to reconcile net income to non-GAAP net income: | ||||||
Amortization of acquisition-related intangible assets |
|
3,130 |
|
|||
Loss on sale of manufacturing facilities |
|
224 |
|
|||
LSC investment related |
|
(15,832 |
) |
|||
Non-GAAP net income | $ |
79,573 |
|
|||
Non-GAAP diluted earnings per share | $ |
1.73 |
|
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 2022 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 fourth quarter 2022 was
For fourth quarter 2022, 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-K for the year 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 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
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
The Diodes logo is a registered trademark of
DIODES INCORPORATED AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data) |
||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||
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 |
|||||||||||
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 |
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 | $ |
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 |
DIODES INCORPORATED AND SUBSIDIARIES RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (in thousands, except per share data) (unaudited) |
||||||||||||
For the twelve months ended |
||||||||||||
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 |
DIODES INCORPORATED AND SUBSIDIARIES RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (in thousands, except per share data) (unaudited) |
||||||||||||
For the twelve months ended |
||||||||||||
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 |
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE
The Company’s financial statements present net income and earnings per share that are calculated using accounting principles generally accepted in
Detail of non-GAAP adjustments
Amortization of acquisition-related intangible assets – The Company excluded this item, including amortization of developed technologies and customer relationships. The fair value of the acquisition-related intangible assets is amortized using straight-line methods which approximate the proportion of future cash flows estimated to be generated each period over the estimated useful life of the applicable assets. The Company believes that exclusion of this item is appropriate because a significant portion of the purchase price for its acquisitions was allocated to the intangible assets that have short lives and exclusion of the amortization expense allows comparisons of operating results that are consistent over time for both the Company’s newly acquired and long-held businesses. In addition, the Company excluded this item because there is significant variability and unpredictability among companies with respect to this expense.
Acquisition related costs – The Company excluded expenses associated with 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
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 market-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 market 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
CASH FLOW ITEMS
Free cash flow (FCF) (Non-GAAP)
FCF for the fourth quarter of 2022 is a non-GAAP financial measure, which is calculated by subtracting capital expenditures from cash flow from operations. For the fourth quarter of 2022, 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 | Twelve Months Ended | |||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||
Net income (per-GAAP) | $ |
92,051 |
$ |
65,513 |
$ |
331,283 |
$ |
228,763 |
||||
Plus: | ||||||||||||
Interest expense, net |
|
1,769 |
|
405 |
|
4,648 |
|
4,352 |
||||
Income tax provision |
|
1,406 |
|
42,487 |
|
56,685 |
|
78,807 |
||||
Depreciation and amortization |
|
34,363 |
|
30,572 |
|
127,776 |
|
122,656 |
||||
EBITDA (non-GAAP) | $ |
129,589 |
$ |
138,977 |
$ |
520,392 |
$ |
434,578 |
DIODES INCORPORATED AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands) |
||||||||
2022 |
2021 |
|||||||
(unaudited) | (audited) | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ |
336,732 |
|
$ |
363,599 |
|
||
Restricted Cash |
|
4,367 |
|
|
3,219 |
|
||
Short-term investments |
|
7,059 |
|
|
6,542 |
|
||
Accounts receivable, net of allowances of |
|
369,233 |
|
|
358,496 |
|
||
Inventories |
|
360,281 |
|
|
348,622 |
|
||
Prepaid expenses and other |
|
83,999 |
|
|
107,194 |
|
||
Total current assets |
|
1,161,671 |
|
|
1,187,672 |
|
||
Property, plant and equipment, net |
|
736,730 |
|
|
582,079 |
|
||
Deferred income tax |
|
35,308 |
|
|
21,256 |
|
||
|
144,757 |
|
|
149,890 |
|
|||
Intangible assets, net |
|
79,137 |
|
|
94,550 |
|
||
Other long-term assets |
|
130,709 |
|
|
159,048 |
|
||
Total assets | $ |
2,288,312 |
|
$ |
2,194,495 |
|
||
Liabilities | ||||||||
Current liabilities: | ||||||||
Line of credit | $ |
36,280 |
|
$ |
18,068 |
|
||
Accounts payable |
|
160,442 |
|
|
221,254 |
|
||
Accrued liabilities |
|
214,433 |
|
|
184,649 |
|
||
Income tax payable |
|
19,682 |
|
|
29,682 |
|
||
Current portion of long-term debt |
|
1,693 |
|
|
17,381 |
|
||
Total current liabilities |
|
432,530 |
|
|
471,034 |
|
||
Long-term debt, net of current portion |
|
147,470 |
|
|
265,574 |
|
||
Deferred tax liabilities |
|
12,903 |
|
|
32,230 |
|
||
Other long-term liabilities |
|
112,490 |
|
|
122,933 |
|
||
Total liabilities |
|
705,393 |
|
|
891,771 |
|
||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
Preferred stock - par value |
|
- |
|
|
- |
|
||
Common stock - par value |
|
36,503 |
|
|
36,195 |
|
||
Additional paid-in capital |
|
494,773 |
|
|
471,649 |
|
||
Retained earnings |
|
1,448,092 |
|
|
1,116,809 |
|
||
|
(337,490 |
) |
|
(336,894 |
) |
|||
Accumulated other comprehensive loss |
|
(128,233 |
) |
|
(50,517 |
) |
||
Total stockholders' equity |
|
1,513,645 |
|
|
1,237,242 |
|
||
Noncontrolling interest |
|
69,274 |
|
|
65,482 |
|
||
Total equity |
|
1,582,919 |
|
|
1,302,724 |
|
||
Total liabilities and stockholders' equity | $ |
2,288,312 |
|
$ |
2,194,495 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230206005541/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:
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