Achieves Record Full Year Revenue and Gross
Margin, Driving Record EBITDA, Net Income and EPS
Diodes Incorporated (Nasdaq: DIOD) today reported its financial
results for the fourth quarter and fiscal year ended December 31,
2019.
Year 2019 Highlights
- Revenue grew to a record $1.25 billion, an increase of 2.9
percent over the $1.21 billion in 2018;
- GAAP gross profit was a record $465.8 million, a 7.0 percent
increase from $435.3 million last year;
- GAAP gross margin improved 140 basis points to a record 37.3
percent from 35.9 percent in 2018;
- GAAP operating income increased 29.9 percent to a record $200.6
million, or 16.1 percent of revenue and 15.8 percent on a non-GAAP
basis, which compared to 12.7 percent and 14.5 percent,
respectively, in 2018;
- GAAP net income was a record $153.3 million, or $2.96 per
diluted share, compared to $104.0 million, or $2.04 per diluted
share, last year;
- Non-GAAP adjusted net income increased 24.6 percent to a record
$151.1 million, or $2.91 per diluted share, compared to $121.3
million, or $2.38 per diluted share, in 2018;
- Excluding $16.2 million, net of tax, non-cash share-based
compensation expense, both GAAP net income and non-GAAP adjusted
net income would have increased by $0.31 per diluted share;
- EBITDA improved 20.1 percent to a record $313.6 million, or
25.1 percent of revenue, compared to $261.1 million, or 21.5
percent of revenue last year; and
- Achieved a record $229.8 million cash flow from operations and
a record $131.3 million of free cash flow, including $98.5 million
of capital expenditures, or 7.9 percent of revenue. Net cash flow
was a positive $17.7 million, which includes the pay down of $117.3
million of long-term debt.
Fourth Quarter Highlights
- Revenue was $301.2 million as compared to $314.4 million in the
fourth quarter 2018;
- GAAP gross profit was $109.4 million as compared to $114.2
million in the fourth quarter 2018;
- GAAP gross profit margin was 36.3 percent in both the fourth
quarter 2018 and the fourth quarter 2019;
- GAAP net income was $47.2 million, or $0.90 per diluted share
as compared to $29.5 million, or $0.58 per diluted share, in the
fourth quarter 2018;
- Non-GAAP adjusted net income was $33.8 million, or $0.65 per
diluted share as compared to $33.2 million, or $0.65 per diluted
share, in the fourth quarter 2018;
- Excluding $4.1 million, net of tax, of non-cash share-based
compensation expense, both GAAP and non-GAAP earnings per share
would have increased by $0.08 per diluted share;
- EBITDA was $88.3 million, or 29.3 percent of revenue, compared
to $70.5 million, or 22.4 percent of revenue, in the fourth quarter
2018; and
- Achieved cash flow from operations of $52.1 million and $29.7
million free cash flow, including $22.4 million of capital
expenditures. Net cash flow was a positive $39.8 million, which
includes the pay-down of $22.6 million of long-term debt.
Commenting on the results, Dr. Keh-Shew Lu, President and Chief
Executive Officer, stated, “2019 was another record year for Diodes
across all financial metrics, generating solid revenue growth as
well as increasing profitability and cash flow. Additionally, our
record performance in the automotive and industrial markets
combined with record sales from our Pericom IC products continue to
be key contributors to our growth and margin expansion. As a result
of our strong cash flow generation, we have also been able to
strengthen our balance sheet and significantly reduce long-term
debt to below $100 million.
“Our full year revenue growth of 2.9% once again outperformed
our served market, which was down 6.6% in 2019. This consistent,
above-market performance is a direct result of our targeted sales
strategy to serve as a total solutions provider, leveraging our
expanded product portfolio and broadened customer relationships.
Our approach has also resulted in increased market share and
content gains across key end equipment, while also addressing new
application areas.
“Looking forward to the coming year, we expect to maintain our
strong performance and continued achievement of record results, as
we take further steps toward our long-term financial goals of 40%
gross margin and 20% operating margin. With the automotive and
industrial markets approaching our target of 40% of total revenue,
we are well positioned to further drive growth and margin
expansion. Our focus remains on increasing content across the
growing end markets of automotive, industrial, high-end servers and
storage, 5G as well as IoT.”
Fourth Quarter 2019
Revenue for fourth quarter 2019 was $301.2 million, compared to
$314.4 million in the fourth quarter 2018 and $323.7 million in the
third quarter 2019.
GAAP gross profit for the fourth quarter 2019 was $109.4
million, or 36.3 percent of revenue, compared to the fourth quarter
2018 of $114.2 million, or 36.3 percent of revenue, and the third
quarter 2019 of $122.0 million, or 37.7 percent of revenue.
GAAP operating expenses for fourth quarter 2019 were $48.1
million, or 16.0 percent of revenue, and on a non-GAAP basis were
$65.2 million, or 22.0 percent of revenue, which excludes a pre-tax
$24.3 million gain on land sales, $4.5 million of amortization of
acquisition-related intangible asset expenses, $1.6 million loss on
asset impairments and $1.2 million acquisition related costs. GAAP
operating expenses in the fourth quarter 2018 were $70.3 million,
or 22.4 percent of revenue, and in the third quarter 2019 were
$73.3 million, or 22.7 percent of revenue.
Fourth quarter 2019 GAAP net income was $47.2 million, or $0.90
per diluted share, compared to GAAP net income of $29.5 million, or
$0.58 per diluted share, in fourth quarter 2018 and GAAP net income
of $38.1 million, or $0.73 per diluted share, in third quarter
2019.
Fourth quarter 2019 non-GAAP adjusted net income was $33.8
million, or $0.65 per diluted share, which excluded, net of tax,
$19.2 million gain on land sales, $3.7 million of non-cash
acquisition-related intangible asset amortization costs and $1.3
million of asset impairment charges. This compares to non-GAAP
adjusted net income of $33.2 million, or $0.65 per diluted share,
in the fourth quarter 2018 and $41.9 million, or $0.81 per diluted
share, in the third 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
December 31, 2019
GAAP net income
$
47,190
GAAP diluted earnings per share
$
0.90
Adjustments to reconcile net income to non-GAAP net
income: Amortization of acquisition-related
intangible assets
3,689
Acquisition related costs
938
Land sale inspection extension fee
(99
)
Gain on land sale
(19,201
)
Loss on impairment
1,283
Non-GAAP net income
$
33,800
Non-GAAP diluted earnings per share
$
0.65
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 2019 GAAP net income and non-GAAP
adjusted net income was approximately $4.1 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 $0.08 per diluted
share for fourth quarter 2019, $0.07 for fourth quarter 2018 and
$0.09 for third quarter 2019.
EBITDA (a non-GAAP measure), which represents earnings before
net interest expense, income tax, depreciation and amortization, in
the fourth quarter 2019 was $88.3 million, or 29.3 percent of
revenue, compared to $70.5 million, or 22.4 percent of revenue, in
the fourth quarter 2018 and $78.3 million, or 24.2 percent of
revenue, in the third quarter 2019. For a reconciliation of GAAP
net income to EBITDA, see the table near the end of this release
for further details.
For fourth quarter 2019, net cash provided by operating
activities was $52.1 million. Net cash flow was a positive $39.8
million, including $22.6 million pay-down of long-term debt. Free
cash flow (a non-GAAP measure) was $29.7 million, which includes
$22.4 million of capital expenditures.
Balance Sheet
As of December 31, 2019, the Company had approximately $263
million in cash, cash equivalents and short-term investments.
Long-term debt (including the current portion) totaled
approximately $97.5 million and working capital was approximately
$525 million.
The results announced today are preliminary and unaudited, as
they are subject to the Company finalizing its closing procedures
and completion of the Company's 2019 annual audit 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, 2019.
Business Outlook
Dr. Lu concluded, “For the first quarter of 2020, we expect
revenue to be approximately $290 million, plus or minus 3 percent.
At the mid-point, this represents a reduction of approximately 3.7
percent sequentially, which is better than typical seasonality. We
expect GAAP gross margin to be 35.0 percent, plus or minus 1
percent. These guidance ranges reflect the delayed start to
manufacturing production following the extended Chinese New Year
holiday due to the coronavirus outbreak in China. All production,
including wafer fabs and assembly test facilities in China, resumed
on February 10th, but we anticipate it will take longer to return
to full production. At this time, it is difficult for us to fully
determine the potential impact to the supply chain or customer
demand disruption resulting from the prevailing crisis. As a
reminder, Diodes does not have a manufacturing facility in the
affected areas of Wuhan and Hubei province, as our primary
facilities are located in Shanghai and Chengdu. Similar to many
other companies, we will continue to closely monitor the
situation.
“Non-GAAP operating expenses, which are GAAP operating expenses
adjusted for amortization of acquisition-related intangible assets,
are expected to be approximately 22.5 percent of revenue, plus or
minus 1 percent. We expect net interest expense to be approximately
$2.0 million. Our income tax rate is expected to be 20 percent,
plus or minus 3 percent, and shares used to calculate diluted EPS
for the first quarter are anticipated to be approximately 52.9
million.”
Purchase accounting adjustments related to amortization of
acquisition-related intangible assets of $3.7 million, after tax,
for Pericom and previous acquisitions are not included in these
non-GAAP estimates.
Conference Call
Diodes will host a conference call on Tuesday, February 11, 2020
at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its
fourth quarter and full year 2019 financial results. Investors and
analysts may join the conference call by dialing
1-855-232-8957 and providing the confirmation code
6836058. International callers may join the teleconference
by dialing +1-315-625-6979 and entering the same confirmation code
at the prompt. A telephone replay of the call will be made
available approximately two hours after the call and will remain
available until February 18, 2020 at midnight Central Time. The
replay number is 1-855-859-2056 with a pass code of 6836058.
International callers should dial +1-404-537-3406 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
http://www.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, is a leading global
manufacturer and supplier of high-quality, application-specific
standard products within the broad discrete, logic, analog, and
mixed-signal semiconductor markets. We serve the consumer
electronics, computing, communications, industrial, and automotive
markets. Our products include diodes, rectifiers, transistors,
MOSFETs, protection devices, function-specific arrays, single gate
logic, amplifiers and comparators, Hall-effect and temperature
sensors, power management devices, including LED drivers, AC-DC
converters and controllers, DC-DC switching and linear voltage
regulators, and voltage references along with special function
devices, such as USB power switches, load switches, voltage
supervisors, and motor controllers. Diodes also has timing,
connectivity, switching, and signal integrity solutions for
high-speed signals. Our corporate headquarters and Americas’ sales
offices are located in Plano, Texas and Milpitas, California.
Design, marketing, and engineering centers are located in Plano;
Milpitas; Taipei, Taoyuan City, and Zhubei City, Taiwan; Oldham,
England; and Neuhaus, Germany. Our wafer fabrication facilities are
located in Oldham; Shanghai, China; and Greenock, Scotland. We have
assembly and test facilities located in Shanghai, Jinan, and
Chengdu, China; as well as in Hong Kong; Neuhaus; and Taipei.
Additional engineering, research and development, sales, warehouse,
and logistics offices are located in Taipei; Hong Kong; Oldham;
Shanghai; Shenzhen and Yangzhou, China; Seongnam-si, South Korea;
Munich, Germany; and Tokyo, Japan, with support offices throughout
the world.
Recent news releases, annual reports and SEC filings are
available at the Company’s website: http://www.diodes.com. Written
requests may be sent directly to the Company, or they may be
e-mailed to: diodes-fin@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 revenue growth, market share
gains, increase in gross margin and increase in gross profits in
2020 and beyond; that for the first quarter of 2020, we expect
revenue to be approximately $290 million plus or minus 3.7 percent;
represents a reduction of approximately 3 percent sequentially,
which is better than typical seasonality; we expect GAAP gross
margin to be 35.0 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 22.5 percent of revenue, plus or minus 1
percent; we expect net interest expense to be approximately $2.0
million; we expect our income tax rate to be 20 percent, plus or
minus 3 percent; shares used to calculate diluted EPS for the first
quarter are anticipated to be approximately 52.9 million. Potential
risks and uncertainties include, but are not limited to, such
factors as: 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 we may not be able to
consummate our previously announced acquisition of Lite-On
Semiconductor Corporation (“LSC”) on the terms and in the time
frame currently contemplated (including the risk that regulatory
reviews may delay the acquisition or require significant revisions
to the terms and conditions associated with the acquisition); 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
risk that we may not continue our share repurchase program; 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.
DIODES INCORPORATED AND
SUBSIDIARIES
CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share
data)
Three Months Ended
Twelve Months Ended
December 31, 2019
December 31, 2019
2019
2018
2019
2018
Net sales
$
301,157
$
314,446
$
1,249,130
$
1,213,989
Cost of goods sold
191,795
200,247
783,323
778,713
Gross profit
109,362
114,199
465,807
435,276
Operating expenses Selling, general and
administrative
44,199
44,419
181,343
176,197
Research and development
21,951
21,487
88,517
86,286
Amortization of acquisition-related intangible assets
4,502
4,488
18,041
18,351
Gain on disposal of fixed assets
(24,271
)
(55
)
(24,429
)
(636
)
Other operating expense
1,727
-
1,727
596
Total operating expense
48,108
70,339
265,199
280,794
Income from operations
61,254
43,860
200,608
154,482
Other income (expense) Interest income
409
547
2,189
1,978
Interest expense
(1,730
)
(2,282
)
(7,893
)
(9,901
)
Foreign currency loss, net
(2,355
)
(317
)
(3,737
)
(3,701
)
Other income
2,022
1,031
7,079
7,104
Total other income (expense)
(1,654
)
(1,021
)
(2,362
)
(4,520
)
Income before income taxes and noncontrolling
interest
59,600
42,839
198,246
149,962
Income tax provision
12,046
12,830
44,131
44,556
Net income
47,554
30,009
154,115
105,406
Less net (income) loss attributable to noncontrolling
interest
(364
)
(490
)
(865
)
(1,385
)
Net income attributable to common stockholders
$
47,190
$
29,519
$
153,250
$
104,021
Earnings per share attributable to common
stockholders: Basic
$
0.92
$
0.59
$
3.02
$
2.09
Diluted
$
0.90
$
0.58
$
2.96
$
2.04
Number of shares used in earnings per share computation:
Basic
51,086
50,221
50,787
49,841
Diluted
52,144
50,929
51,860
50,935
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, 2019:
Operating Expenses
Income Tax Provision
Net Income
Per-GAAP
$
47,190
Diluted earnings per share (Per-GAAP)
$
0.90
Adjustments to reconcile net income to non-GAAP net
income: Amortization of acquisition-related
intangible assets
4,502
(813
)
3,689
Acquisition related costs
1,192
(254
)
938
Land sale inspection extension fee
(125
)
26
(99
)
Gain on land sale
(24,305
)
5,104
(19,201
)
Loss on impairment
1,624
(341
)
1,283
Non-GAAP
$
33,800
Diluted shares used in computing earnings per share
52,144
Non-GAAP diluted earnings per share
$
0.65
Note: Included in GAAP and non-GAAP net income was approximately
$4.1 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 $0.08
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, 2018:
COGS
Operating Expenses
Income Tax Provision
Net Income
Per-GAAP
$
29,519
Earnings per share (Per-GAAP) Diluted
$
0.58
Adjustments to reconcile net income to non-GAAP net
income: M&A Pericom
2,619
Amortization of acquisition-related intangible assets
3,193
(574
)
Others
1,059
Amortization of acquisition-related intangible assets
1,295
(236
)
Non-GAAP
$
33,197
Diluted shares used in computing earnings per share
50,929
Non-GAAP earnings per share Diluted
$
0.65
Note: Included in GAAP and non-GAAP adjusted net income was
approximately $3.8 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 $0.07 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 twelve
months ended December 31, 2019:
Operating Expenses
Income Tax Provision
Net Income
Per-GAAP
$
153,250
Diluted earnings per share (Per-GAAP)
$
2.96
Adjustments to reconcile net income to non-GAAP net
income: Amortization of acquisition-related
intangible assets
18,040
(3,261
)
14,779
Acquisition related costs
1,663
(349
)
1,314
Land sale inspection extension fee
(425
)
89
(336
)
Gain on land sale
(24,305
)
5,104
(19,201
)
Loss on impairment
1,624
(341
)
1,283
Non-GAAP
$
151,089
Diluted shares used in computing earnings per share
51,860
Non-GAAP diluted earnings per share
$
2.91
Note: Included in GAAP and non-GAAP adjusted net income was
approximately $16.2 million, net of tax, non-cash share-based
compensation expense, excluding officer severance. Excluding
share-based compensation expense, both GAAP and non-GAAP adjusted
diluted earnings per share would have improved by $0.31 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 twelve
months ended December 31, 2018:
COGS
Operating Expenses
Income Tax Provision
Net Income
Per-GAAP
$
104,021
Earnings per share (Per-GAAP) Diluted
$
2.04
Adjustments to reconcile net income to non-GAAP net
income: M&A Pericom
10,430
Amortization of acquisition-related intangible assets
12,719
(2,289
)
KFAB
194
Restructuring
206
(12
)
Others
6,616
Amortization of acquisition-related intangible assets
5,632
(1,030
)
Officer retirement
2,550
(536
)
Non-GAAP
$
121,261
Diluted shares used in computing earnings per share
50,935
Non-GAAP earnings per share Diluted
$
2.38
Note: Included in GAAP and non-GAAP adjusted net income was
approximately $15.0 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 $0.29 per share.
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 the United States (“GAAP”). The Company’s
management makes adjustments to the GAAP measures that it feels are
necessary to allow investors and other readers of the Company’s
financial releases to view the Company’s operating results as
viewed by the Company’s management, board of directors and research
analysts in the semiconductor industry. These non-GAAP measures are
not prepared in accordance with, and should not be considered
alternatives or necessarily superior to, GAAP financial data and
may be different from non-GAAP measures used by other companies.
Because non-GAAP financial measures are not standardized, it may
not be possible to compare these financial measures with other
companies’ non-GAAP financial measures, even if they have similar
names. The explanation of the adjustments made in the table above,
are set forth below:
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.
KFAB restructuring - The
Company has recorded restructuring charges related to the shutdown
and relocation of its wafer fabrication facility located in Lee’s
Summit, MO (“KFAB”). 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.
Officer retirement – In
2018, 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 the acquisition of
Lite-On Semiconductor, which consisted 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.
Land sale inspection extension
fee – The Company excluded receipt of inspection
extension fees related to the sale of the land located in Plano,
TX. This fee is paid by the land purchaser for the right to extend
the sale close date, and the fee is not applied to the purchase
price. The Company feels it is appropriate to exclude these fees
since they don’t represent ongoing operating income and their
exclusion will present investors with a more accurate indication of
our continuing operations.
Loss on impairment – The
Company excluded impairment loss related to the intangible assets
previously acquired from TFSS. The Company feels it is appropriate
to exclude this impairment loss since they don’t represent ongoing
operating expenses and will present investors with a more accurate
indication of our continuing operations.
Gain on land sale – The
Company excluded the gain related to the sale of the land located
in Plano, TX during December 2019. The Company feels it is
appropriate to exclude this gain since they don’t represent ongoing
operating income and their exclusion will present investors with a
more accurate indication of our continuing operations.
CASH FLOW
ITEMS
Free cash flow (FCF)
(Non-GAAP)
FCF for the fourth quarter of 2019 is a non-GAAP financial
measure, which is calculated by subtracting capital expenditures
from cash flow from operations. For the fourth quarter of 2019, FCF
was $29.7 million, which represents the cash and cash equivalents
that we are able to generate after taking into account cash outlays
required to maintain or expand property, plant and equipment. FCF
is important because it allows us to pursue opportunities to
develop new products, make acquisitions and reduce debt.
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
December 31, 2019
December 31, 2019
2019
2018
2019
2018
Net income (per-GAAP)
$
47,190
$
29,519
$
153,250
$
104,021
Plus: Interest expense, net
1,321
1,735
5,704
7,923
Income tax provision
12,046
12,830
44,131
44,556
Depreciation and amortization
27,757
26,424
110,562
104,642
EBITDA (non-GAAP)
$
88,314
$
70,508
$
313,647
$
261,142
DIODES INCORPORATED AND
SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE
SHEETS
(in thousands)
December 31,
December 31,
2019
2018
(unaudited)
(audited)
Assets Current assets: Cash and cash equivalents
$
258,390
$
241,053
Short-term investments
4,825
7,499
Accounts receivable, net of allowances of $4,866 and $4,102 at
December 31, 2019 and 2018, respectively
260,322
228,405
Inventories
236,472
215,435
Prepaid expenses and other
49,950
42,446
Total current assets
809,959
734,838
Property, plant and equipment, net
469,574
446,835
Deferred income tax
17,516
31,652
Goodwill
141,318
132,437
Intangible assets, net
119,523
137,935
Other long-term assets
81,494
42,674
Total assets
$
1,639,384
$
1,526,371
Liabilities Current liabilities: Line of credit
$
13,342
$
10,254
Accounts payable
122,148
117,808
Accrued liabilities
100,571
82,605
Income tax payable
16,156
15,744
Current portion of long-term debt
33,105
27,613
Total current liabilities
285,322
254,024
Long-term debt, net of current portion
64,401
186,143
Deferred tax liabilities
16,333
17,993
Other long-term liabilities
120,545
90,779
Total liabilities
486,601
548,939
Commitments and contingencies
Stockholders'
equity Preferred stock - par value $1.00 per share; 1,000,000
shares authorized; no shares issued or outstanding
-
-
Common stock - par value $0.66 2/3 per share; 70,000,000 shares
authorized; 51,206,969 and 50,221,035, issued and outstanding at
December 31, 2019 and 2018, respectively
35,111
34,454
Additional paid-in capital
427,262
399,915
Retained earnings
789,958
636,708
Treasury stock, at cost, 1,457,206 shares held at December 31, 2019
and 2018
(37,768
)
(37,768
)
Accumulated other comprehensive loss
(108,139
)
(101,846
)
Total stockholders' equity
1,106,424
931,463
Noncontrolling interest
46,359
45,969
Total equity
1,152,783
977,432
Total liabilities and stockholders' equity
$
1,639,384
$
1,526,371
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200211006022/en/
Company Contact: Diodes Inc. Laura Mehrl Director of
Investor Relations P: 972-987-3959 E: laura_mehrl@diodes.com
Investor Relations Contact: Shelton Group Leanne Sievers
President, Investor Relations P: 949-224-3874 E:
lsievers@sheltongroup.com
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