Record Organic Revenue Driven By Market Share Gains and Record Automotive and Pericom Products Revenue

PLANO, Texas — (BUSINESS WIRE) — February 16, 2021 — Diodes Incorporated (Nasdaq: DIOD) today reported its financial results for the fourth quarter and fiscal year ended December 31, 2020.

Fourth Quarter Highlights

• Completed the acquisition of Lite-On Semiconductor (LSC) on November 30, with initial purchase accounting and financing cost adjustments included in the fourth quarter 2020 GAAP results;
• Revenue was a record $350.4 million, which included $16.9 million of one month of revenue from LSC, and compares to $301.2 million in the fourth quarter 2019;
• GAAP gross profit was a record $122.7 million, which included $2.5 million from LSC, as compared to $109.4 million in the fourth quarter 2019;
• GAAP gross profit margin was 35.0 percent, or 36.0 percent for Diodes only, as compared to 36.3 percent in the fourth quarter 2019;
• GAAP net income was $29.7 million, or $0.59 per diluted share, which included $0.03 from LSC, as compared to $47.2 million, or $0.90 per diluted share, in the fourth quarter 2019;
• Non-GAAP adjusted net income was $37.3 million, or $0.74 per diluted share, which included $0.02 from LSC, as compared to $33.8 million, or $0.65 per diluted share, in the fourth quarter 2019;
• Excluding $5.1 million, net of tax, of non-cash share-based compensation expense, both GAAP and non-GAAP earnings per share would have increased by $0.10 per diluted share;
• EBITDA was $67.1 million, or 19.1 percent of revenue, compared to $88.3 million, or 29.3 percent of revenue, in the fourth quarter 2019, which included a $19.2 million gain on land sales; and
• Achieved cash flow from operations of 60.8 million and $33.5 million free cash flow, including $27.3 million of capital expenditures. Net cash flow was a negative $319.3 million, which included the purchase of Lite-On Semiconductor during the quarter for approximately $453.4 million.

Commenting on the results, Dr. Keh-Shew Lu, Chairman, President and Chief Executive Officer, stated, “We ended the year achieving the highest quarterly revenue in the Company’s history, even when excluding the revenue contribution from our acquisition of Lite-On Semiconductor that closed on November 30^th. Total organic revenue grew 7.8% sequentially and 10.7% year-over-year, demonstrating the continued success of our product, content and customer expansion initiatives. Revenue from our Pericom products and automotive market also reached record levels, with automotive revenue growing 24 percent sequentially and 40 percent year-over-year, both of which contributed to our solid market share gains in the quarter. All of these accomplishments are notable achievements especially considering the ongoing global pandemic.

“Further, the LSC business was immediately accretive to our results, adding $0.02 per share on a non-GAAP basis in the fourth quarter, while also offering future opportunities for synergistic growth and expansion across our end markets, product offerings, customers and manufacturing footprint. In addition to these synergies we expect to achieve, the repurchase of 14.7% of Diodes shares that were previously held by LSC will drive additional earnings power when combined with Diodes solid operating leverage.

“As we look to the first quarter, we expect to further extend this strong momentum and once again set a new revenue and gross profit record, with sequential growth projected both organically and on a consolidated basis in what has previously been a seasonally down quarter for our business. This anticipated growth is being driven by record point of sale (POS) revenue in the fourth quarter. We look forward to reporting our ongoing progress and remain focused on integrating the LSC business, while capitalizing on the long-term opportunities for continued growth and earnings expansion.”

Fourth Quarter 2020

Revenue for fourth quarter 2020 was a record $350.4 million, which included $16.9 million of one month of revenue from LSC, compared to $301.2 million in the fourth quarter 2019 and $309.5 million in the third quarter 2020. Sequentially, revenue increased 13.2 percent on a consolidated basis and 7.8 percent on an organic basis.

GAAP gross profit for the fourth quarter 2020 was a record $122.7 million and included $2.5 million from LSC, or 35.0 percent of revenue on a consolidated basis and 36.0 percent for Diodes only. This compares to the fourth quarter 2019 of $109.4 million, or 36.3 percent of revenue, and the third quarter 2020 of $111.1 million, or 35.9 percent of revenue.

GAAP operating expenses for fourth quarter 2020 were $82.9 million, or 23.7 percent of revenue, and on a non-GAAP basis were $75.1 million, or 21.4 percent of revenue, which excludes $4.0 million of amortization of acquisition-related intangible asset expenses, $2.5 million restructuring cost, and $1.4 million other acquisition-related costs. GAAP operating expenses in the fourth quarter 2019 were $48.1 million, or 16.0 percent of revenue, and in the third quarter 2020 were $73.2 million, or 23.7 percent of revenue.

Fourth quarter 2020 GAAP net income was $29.7 million, or $0.59 per diluted share, which included $0.03 per share from LSC, compared to GAAP net income of $47.2 million, or $0.90 per diluted share, in fourth quarter 2019 and GAAP net income of $27.2 million, or $0.51 per diluted share, in third quarter 2020.

Fourth quarter 2020 non-GAAP adjusted net income was $37.3 million, or $0.74 per diluted share, which excluded, net of tax, $4.0 million of acquisition-related financing and other acquisition costs, $3.3 million of non-cash acquisition-related intangible asset amortization costs, $2.0 million restructuring costs, and $1.7 million gain in value on certain LSC investments. LSC contributed $0.02 to non-GAAP earnings per share in the fourth quarter. For the fourth quarter 2019, non-GAAP adjusted net income was $33.8 million, or $0.65 per diluted share, and $32.8 million, or $0.62 per diluted share, in the third quarter 2020.

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):