Diodes Incorporated Reports Record Second Quarter Fiscal 2022 Financial Results

Achieves 6th Consecutive Quarter of Record Revenue, Gross Profit and Earnings

PLANO, Texas — (BUSINESS WIRE) — August 4, 2022 — Diodes Incorporated (Diodes) (Nasdaq: DIOD) today reported its financial results for the second quarter ended June 30, 2022.

Second Quarter Highlights

  • Successfully closed the acquisition of the onsemi wafer fabrication facility on June 3, 2022;
  • Revenue was a record $501.0 million, increasing 13.7 percent from $440.4 million in the second quarter 2021 and 3.9 percent from $482.1 million in the first quarter 2022;
  • GAAP gross profit was a record $206.5 million, increasing 29.2 percent from $159.8 million in the second quarter 2021 and 5.0 percent from $196.7 million in the first quarter 2022;
  • GAAP gross profit margin was a record 41.2 percent, an increase of 490 basis points from the 36.3 percent in the second quarter 2021 and 40 basis points from 40.8 percent in the first quarter 2022;
  • GAAP net income was a record $80.2 million, compared to $55.4 million in the second quarter 2021 and $72.7 million in the first quarter 2022;
  • Non-GAAP adjusted net income was a record $86.9 million, compared to $54.6 million in the second quarter 2021 and $80.3 million in the first quarter 2022;
  • GAAP EPS was a record $1.75 per diluted share, a 43.4 percent improvement from the $1.22 per diluted share in the second quarter 2021 and a 10.1 percent increase compared to $1.59 per diluted share in the first quarter 2022;
  • Non-GAAP EPS was a record $1.90 per diluted share, a 58.3 percent improvement from the $1.20 per diluted share in the prior year quarter and an 8.6 percent increase from the $1.75 per diluted share last quarter;
  • Excluding $6.6 million, net of tax, of non-cash share-based compensation expense, both GAAP and non-GAAP earnings per share would have increased by $0.14 per diluted share;
  • EBITDA was $130.6 million, or 26.0 percent of revenue, compared to $99.4 million, or 22.6 percent of revenue, in the second quarter 2021 and $118.2 million, or 24.5 percent of revenue, in the first quarter 2022; and
  • Achieved cash flow from operations of $85.0 million and $45.5 million of free cash flow, including $39.6 of capital expenditures. Net cash flow was a positive $1.5 million, including capital expenditures and additional borrowings of $35.1 million related to the purchase of the onsemi wafer fabrication facility.

Commenting on the results, Dr. Keh-Shew Lu, Chairman, President and Chief Executive Officer, stated, “Our achievement of the sixth consecutive quarter of record revenue, gross profit and earnings is a strong testament to our team’s continued execution, especially considering the COVID-related quarantine in China and Taiwan that constrained production during the quarter. In the Shanghai area and other major locations, we shifted our manufacturing facilities to closed-loop operations for two months in the quarter, yet still delivered results above the mid-point of our guidance. Notably, second quarter revenue grew approximately 14% year-over-year, while adjusted earnings per share grew 58% over the same period.

“Our execution was also evidenced by our achievement of 41.2% gross margin, which was the fifth consecutive quarter of improvement and the second consecutive quarter above our target model of 40% largely due to product mix improvements. Contributing to this improvement was our industrial and automotive end markets reaching a combined total of 41% of revenue for the first time, which exceeds our 2025 business model target of 40%. The automotive market, which represented a record 14% of revenue in the quarter, remains a key focus area for Diodes as we continued to gain strong traction with both new and existing customers in all regions.

“Also during the quarter, we successfully closed our acquisition of onsemi’s South Portland, Maine wafer fabrication facility (SPFAB), which provides additional available capacity to support our future growth, especially in the automotive and industrial end markets. We were pleased to welcome the SPFAB workforce to the Diodes’ family as we continue to maintain operational efficiency and fully integrate this facility into our global manufacturing operation. With our third quarter expectations indicating our 10th consecutive quarter of revenue growth and overall record results, Diodes has solidly positioned itself not only as a reliable supplier and partner to our customers, but also a consistent performing investment for our shareholders.”

Second Quarter 2022

Revenue for second quarter 2022 was a record $501.0 million, increasing 13.7 percent from $440.4 million in the second quarter 2021 and 3.9 percent from $482.1 million in the first quarter 2022.

GAAP gross profit for the second quarter 2022 was a record $206.5 million, or a record 41.2 percent of revenue, increasing from $159.8 million, or 36.3 percent of revenue, in the second quarter of 2021 and $196.7 million, or 40.8 percent of revenue, in the first quarter 2022.

GAAP operating expenses for second quarter 2022 were $100.3 million, or 20.0 percent of revenue, and on a non-GAAP basis were $99.7 million, or 19.9 percent of revenue, which excludes $4.0 million of amortization of acquisition-related intangible asset expenses, $0.2 million of acquisition-related costs and a $3.6 million gain on insurance recovery. GAAP operating expenses in the second quarter 2021 were $94.4 million, or 21.4 percent of revenue, and in the first quarter 2022 were $103.6 million, or 21.5 percent of revenue.

Second quarter 2022 GAAP net income was a record $80.2 million, or $1.75 per diluted share, compared to GAAP net income in the second quarter 2021 of $55.4 million, or $1.22 per diluted share, and GAAP net income of $72.7 million, or $1.59 per diluted share, in the first quarter 2022.

Second quarter 2022 non-GAAP adjusted net income was a record $86.9 million, or $1.90 per diluted share, which excluded, net of tax, $6.2 million non-cash mark-to-market adjustment of investments, $3.3 million of acquisition-related intangible asset costs, $0.2 million of acquisition-related costs and a $2.9 million gain on insurance recovery. This compares to non-GAAP adjusted net income of $54.6 million, or $1.20 per diluted share, in the second quarter 2021 and $80.3 million, or $1.75 per diluted share, in the first quarter 2022.

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

June 30, 2022

Per-GAAP

$

80,155

 

 
Diluted earnings per share (Per-GAAP)

$

1.75

 

 
Adjustments to reconcile net income to non-GAAP net income:
 
Amortization of acquisition-related intangible assets

 

3,251

 

 
Acquisition-related costs

 

160

 

 
Insurance Recovery for Manufacturing Facility

 

(2,875

)

 
Non-cash market-to-market investment adjustments

 

6,211

 

 
Non-GAAP

$

86,902

 

 
Non-GAAP diluted earnings per share

$

1.90

 

 

Note: Throughout this release, we refer to “net income attributable to common stockholders” as “net income.”


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