Revenue Increases Sequentially Driven by Market Share Gains Across All Key Product Groups, Including Strong Growth from the Pericom Products

PLANO, Texas — (BUSINESS WIRE) — August 6, 2020 — Diodes Incorporated (Nasdaq: DIOD) today reported its financial results for the second quarter ended June 30, 2020.

Second Quarter Highlights

• Revenue was $288.7 million, an increase of 2.8 percent compared to $280.7 million in the first quarter 2020;
• Gross profit was $101.5 million, an increase of 5.9 percent compared to $95.8 million in the first quarter 2020;
• Gross profit margin increased 110 basis points to 35.2 percent from 34.1 percent in the first quarter 2020;
• GAAP net income was $21.0 million, or $0.40 per diluted share, as compared to $20.2 million, or $0.38 per diluted share, in the first quarter 2020;
• Non-GAAP adjusted net income was $28.6 million, or $0.54 per diluted share, as compared to $23.9 million, or $0.46 per diluted share, in the first quarter 2020;
• Excluding $4.7 million, net of tax, of non-cash share-based compensation expense, both GAAP and non-GAAP earnings per share would have increased by $0.09 per diluted share;
• EBITDA was $55.3 million, or 19.2 percent of revenue, compared to $52.9 million, or 18.9 percent of revenue, in the first quarter 2020; and
• Achieved cash flow from operations of $33.1 million and $16.5 million free cash flow, including $16.5 million of capital expenditures. Net cash flow was a positive $283.7 million, which includes the initial draw-down of debt as a partial currency hedge associated with the anticipated close of the Lite-On acquisition later in the year.

Commenting on the results, Dr. Keh-Shew Lu, Chairman, President and Chief Executive Officer, stated, “Second quarter revenue was better than expected and increased 2.8% sequentially driven by market share gains across all key product groups due to improving demand and design win momentum. Additionally, our quarter benefitted from strong sequential and year-over-year growth in the consumer market for gaming consoles and IoT devices as well as the computing market as our Pericom IC products continued to gain traction in high-end servers, storage, data centers and notebooks as well as in automotive applications. In fact, our Pericom products achieved the second highest revenue quarter since the acquisition. Our solid results reflect our teams’ ability to maintain a high level of efficiency and productivity despite the market disruptions and delays caused by the COVID-19 pandemic. Our performance also serves as a testament to our diversified product portfolio and end markets as well as solid positioning with long-standing, tier-one customers.

“Although the general market remains uncertain, we believe we’re well positioned to continue gaining market share in the third quarter and are forecasting another quarter of sequential growth. In support of this growth, we took the initiative to build internal inventory, which also provides a level of assurance to customers against possible supply disruptions and shifting demand requirements due to the global pandemic. It’s important to note that our distributor channel inventory was flat in the quarter and is expected to be within our targeted range in the third quarter.

“In summary, I am proud of our consistent performance and financial results achieved during these unprecedented times. Our total solutions sales approach combined with our past design win momentum continue to pay dividends for our business as a trusted supplier of products to our customers.”

Second Quarter 2020

Revenue for second quarter 2020 was $288.7 million, compared to $280.7 million in the first quarter 2020 and $322.0 million in the second quarter 2019.

GAAP gross profit for the second quarter 2020 was $101.5 million, or 35.2 percent of revenue, compared to the first quarter 2020 of $95.8 million, or 34.1 percent of revenue, and the second quarter 2019 of $122.0 million, or 37.9 percent of revenue.

GAAP operating expenses for second quarter 2020 were $70.6 million, or 24.5 percent of revenue, and on a non-GAAP basis were $64.5 million, or 22.3 percent of revenue, which excludes $4.4 million of acquisition-related costs and $1.7 million of board retirement costs. GAAP operating expenses in the first quarter 2020 were $70.0 million, or 24.9 percent of revenue and in the second quarter 2019 were $73.5 million, or 22.8 percent of revenue.

Second quarter 2020 GAAP net income was $21.0 million, or $0.40 per diluted share, compared to GAAP net income of $20.2 million, or $0.38 per diluted share, in first quarter 2020 and GAAP net income of $36.3 million, or $0.70 per diluted share, in second quarter 2019.

Second quarter 2020 non-GAAP adjusted net income was $28.6 million, or $0.54 per diluted share, which excluded, net of tax, $6.3 million of acquisition-related costs and $1.3 million of board retirement costs. This compares to non-GAAP adjusted net income of $23.9 million, or $0.46 per diluted share, in the first quarter 2020 and $40.0 million, or $0.77 per diluted share, in the second 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):