Achieves Record Gross Margin of 39.7% in Fourth Quarter; Record Annual Revenue of $1.8 Billion with 47% Growth, Record Gross Profit of $670 Million with 56% Growth and Record GAAP EPS of $5.00 with 166% Growth

PLANO, Texas — (BUSINESS WIRE) — February 8, 2022 — Diodes Incorporated (DIODES™) (Nasdaq: DIOD) today reported its financial results for the fourth quarter and fiscal year ended December 31, 2021.

Fourth Quarter and Recent Highlights

• Revenue was a record $480.2 million, increasing 37.0 percent from $350.4 million in the fourth quarter 2020 and 1.9 percent from $471.4 million in the third quarter 2021;
• GAAP gross profit was a record $190.7 million, increasing 55.4 percent from $122.7 million in the fourth quarter 2020 and 5.2 percent from $181.2 million in the third quarter 2021;
• GAAP gross profit margin was a record 39.7 percent, an increase of 470 basis points from the 35.0 percent in the fourth quarter 2020 and 130 basis points from the 38.4 percent in the third quarter 2021;
• GAAP net income was $65.5 million, compared to $29.7 million in the fourth quarter 2020 and $68.4 million in the third quarter 2021;
• Non-GAAP adjusted net income was a record $73.3 million, compared to $37.3 million in the fourth quarter 2020 and $67.3 million in the third quarter 2021;
• GAAP EPS was $1.43 per diluted share, a 142 percent improvement from the $0.59 per diluted share in the fourth quarter 2020 and a 4.7 percent decrease compared to $1.50 per diluted share in the third quarter 2021;
• Non-GAAP EPS was a record $1.60 per diluted share, a 116 percent improvement from the $0.74 per diluted share in the prior year quarter and an 8.8 percent increase from the $1.47 per diluted share last quarter;
• Excluding $6.5 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 a record $139.0 million, or 28.9 percent of revenue, compared to $67.1 million, or 19.2 percent of revenue, in the fourth quarter 2020 and $114.5 million, or 24.3 percent of revenue, in the third quarter 2021; and
• Achieved cash flow from operations of $77.6 million and $22.5 million of free cash flow, including $55.0 of capital expenditures. Net cash flow was a positive $82.0 million.

Year 2021 Highlights

• Revenue grew to a record $1.81 billion, an increase of 46.9 percent over the $1.23 billion in 2020;
• GAAP gross profit was a record $670.4 million, a 55.5 percent increase from $431.1 million in the prior year;
• GAAP gross profit margin improved 200 basis points to 37.1 percent from 35.1 percent in 2020;
• GAAP operating income increased 105.4 percent to a record $276.0 million, or 15.3 percent of revenue, compared to $134.3 million, or 10.9 percent of revenue, in 2020;
• GAAP net income was a record $228.8 million, an increase of 133 percent from the $98.1 million last year;
• Non-GAAP adjusted net income was a record $237.2 million, an increase of 93.3 percent from the $122.7 million in 2020;
• GAAP EPS was a record $5.00 per diluted share, a 166 percent improvement from the $1.88 per diluted share in 2020;
• Non-GAAP EPS was a record $5.18 per diluted share, a 120 percent improvement from the $2.35 per diluted share in 2020;
• Excluding $26.2 million, net of tax, non-cash share-based compensation expense, both GAAP net income and non-GAAP adjusted net income would have increased by $0.57 per diluted share;
• EBITDA improved 82.1 percent to a record $434.6 million, or 24.1 percent of revenue, compared to $238.6 million, or 19.4 percent of revenue in 2020; and
• Achieved a record $338.5 million cash flow from operations and a record $197.3 million of free cash flow, including $141.2 million of capital expenditures, or 7.8 percent of revenue. Net cash flow was a positive $46.3 million, which includes the pay down of $152.6 million of long-term debt.

Commenting on the results, Dr. Keh-Shew Lu, Chairman, President and Chief Executive Officer, stated, “DIODES had a record year in 2021, reflecting a culmination of sustained execution that consisted of five consecutive quarters of record revenue as well as seven consecutive quarters of adjusted earnings growth. In fact, full year revenue grew 47% with GAAP earnings per share expanding 166% and adjusted earnings per share expanding 120%, demonstrating the significant operating leverage in our model.

“Additionally, gross margin expanded 610 basis points from the first quarter of 2021, the first full quarter after completing the LITE-ON Semiconductor (LSC) acquisition, to the fourth quarter of 2021. This increase was driven by a combination of product mix improvements, manufacturing efficiencies and improved loading. Also contributing to our ongoing margin expansion has been the achievement of five consecutive quarters of record Pericom revenue, three consecutive quarters of record industrial revenue as well as six consecutive quarters of record automotive revenue, which grew 59% in 2021 over the prior year and reached a record 12 percent of total revenue for the full year.

“With full year revenue of $1.8 billion and gross profit of $0.7 billion, 2021 represented a significant step toward our 2025 targets of $1 billion in gross profit on $2.5 billion revenue and 40% gross margin. In addition to the manufacturing synergies provided by the LSC acquisition over this past year, we expect to realize expanded synergies across our product portfolio, customers and end markets in the coming years to drive additional revenue growth and gross margin expansion.”

Fourth Quarter 2021

Revenue for fourth quarter 2021 was a record $480.2 million, increasing 37.0 percent from $350.4 million in the fourth quarter 2020 and 1.9 percent from $471.4 million in the third quarter 2021.

GAAP gross profit for the fourth quarter 2021 was a record $190.7 million, or a record 39.7 percent of revenue, increasing from $122.7 million, or 35.0 percent of revenue, in the fourth quarter of 2020 and $181.2 million, or 38.4 percent of revenue, in the third quarter 2021.

GAAP operating expenses for fourth quarter 2021 were $104.7 million, or 21.8 percent of revenue, and on a non-GAAP basis were $100.1 million, or 20.8 percent of revenue, which excludes $4.1 million of amortization of acquisition-related intangible asset expenses and $0.6 million of acquisition-related costs. GAAP operating expenses in the fourth quarter 2020 were $82.9 million, or 23.7 percent of revenue, and in the third quarter 2021 were $104.0 million, or 22.1 percent of revenue.

Fourth quarter 2021 GAAP net income was $65.5 million, or $1.43 per diluted share, compared to GAAP net income in the fourth quarter 2020 of $29.7 million, or $0.59 per diluted share, and GAAP net income of $68.4 million, or $1.50 per diluted share, in the third quarter 2021.

Fourth quarter 2021 non-GAAP adjusted net income was a record $73.3 million, or $1.60 per diluted share, which excluded, net of tax, $3.3 million of acquisition-related intangible asset costs, $0.4 million of acquisition-related costs, $13.5 million of costs related to certain LSC investments, and a $9.4 million gain on sale of a manufacturing subsidiary. This compares to non-GAAP adjusted net income of $37.3 million, or $0.74 per diluted share, in the fourth quarter 2020 and $67.3 million, or $1.47 per diluted share, in the third quarter 2021.

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):