Strong Automotive Market Share Gains Result in Sequential and Year-over-Year Growth in Automotive Revenue
PLANO, Texas — (BUSINESS WIRE) — May 11, 2020 — Diodes Incorporated (Nasdaq: DIOD) today reported its financial results for the first quarter ended March 31, 2020.
First Quarter Overview
- Revenue was $280.7 million as compared to $301.2 million in the fourth quarter 2019;
- GAAP gross profit was $95.8 million as compared to $109.4 million in the fourth quarter 2019;
- GAAP gross profit margin was 34.1 percent as compared to 36.3 percent in the fourth quarter 2019;
- GAAP net income was $20.2 million, or $0.38 per diluted share, as compared to $47.2 million, or $0.90 per diluted share, in the fourth quarter 2019;
- Non-GAAP adjusted net income was $23.9 million, or $0.46 per diluted share, as compared to $33.8 million, or $0.65 per diluted share, in the fourth quarter 2019;
- Excluding $3.7 million, net of tax, of non-cash share-based compensation expense, both GAAP and non-GAAP earnings per share would have increased by $0.07 per diluted share;
- EBITDA was $52.9 million, or 18.9 percent of revenue, compared to $88.3 million, or 29.3 percent of revenue, in the fourth quarter 2019; and
- Achieved cash flow from operations of $53.7 million and $39.5 million free cash flow, including $14.2 million of capital expenditures. Net cash flow was a positive $11.4 million, which includes the pay-down of $16.6 million of long-term debt.
Commenting on the results, Dr. Keh-Shew Lu, President and Chief Executive Officer, stated, “First quarter results were in-line with our original expectations and included the delayed start of our manufacturing production following the extended Chinese New Year holiday. Our results further reflected the temporary closure of our U.K. wafer fabs in the late part of March in response to the global COVID-19 pandemic. Our operations in China have since gradually returned to full production, with our U.K. facilities also resuming full production as of today. Combined revenue in North America and Europe grew more than 12% sequentially, while revenue in Asia declined 12% because of slower than expected customer manufacturing manpower recovery due to the pandemic. With revenue being only slightly below typical seasonality and limited only by customer demand, our first quarter results serve as further testament to our long track record of successfully managing through challenging environments.
“Highlighting the quarter was our continued growth in the automotive end market, in which revenue grew sequentially and year-over-year to 11% of revenue as a result of our increased content gains across an expanding customer base, including a significant new design win in Asia. Additionally, our Pericom IC products had the second highest revenue quarter since the 2015 acquisition due to strong demand in the computing end market for our products used in high-end servers, storage, data centers and notebooks. Our close engagement with customers has enabled us to benefit from the increasing demand for these end equipment applications.
“We continue to prioritize the safety, health and well-being of Diodes’ employees as we navigate these unprecedented times. The diversification and strength of our business and long-standing relationships with customers continue to serve us well as we focus on carefully managing those factors that are within our control. We currently expect to deliver second quarter revenue and gross margin slightly better than the first quarter at the mid-point, which is notable given the increased uncertainty resulting from COVID-19 and the significant softness in the automotive market.”
First Quarter 2020
Revenue for first quarter 2020 was $280.7 million, compared to $301.2 million in the fourth quarter 2019 and $302.3 million in the first quarter 2019.
GAAP gross profit for the first quarter 2020 was $95.8 million, or 34.1 percent of revenue, compared to the fourth quarter 2019 of $109.4 million, or 36.3 percent of revenue, and the first quarter 2019 of $112.4 million, or 37.2 percent of revenue.
GAAP operating expenses for first quarter 2020 were $70.0 million, or 24.9 percent of revenue, and on a non-GAAP basis were $65.4 million, or 23.3 percent of revenue, which excludes, $4.2 million of amortization of acquisition-related intangible asset expenses and $0.4 million acquisition-related costs. GAAP operating expenses in the fourth quarter 2019 were $48.1 million, or 16.0 percent of revenue, which included a $24.3 million pre-tax gain on land sales, and in the first quarter 2019 were $70.3 million, or 23.3 percent of revenue.
First quarter 2020 GAAP net income was $20.2 million, or $0.38 per diluted share, compared to GAAP net income of $47.2 million, or $0.90 per diluted share, in fourth quarter 2019 and GAAP net income of $31.7 million, or $0.62 per diluted share, in first quarter 2019.
First quarter 2020 non-GAAP adjusted net income was $23.9 million, or $0.46 per diluted share, which excluded, net of tax, $3.5 million of non-cash acquisition-related intangible asset amortization costs and $0.3 million of acquisition-related costs. This compares to non-GAAP adjusted net income of $33.8 million, or $0.65 per diluted share, in the fourth quarter 2019 and $35.4 million, or $0.69 per diluted share, in the first quarter 2019
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|
|March 31, 2020|
|GAAP net income||
|GAAP diluted earnings per share||
|Adjustments to reconcile net income to non-GAAP net income:|
|Amortization of acquisition-related intangible assets||
|Acquisition related costs||
|Non-GAAP net income||
|Non-GAAP diluted earnings per share||