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 first quarter 2024 GAAP net income and non-GAAP adjusted net income was approximately $4.0 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 $0.09 per diluted share for the first quarter 2024, $0.13 for the fourth quarter 2023 and $0.17 for first quarter 2023.

EBITDA (a non-GAAP measure), which represents earnings before net interest expense, income tax, depreciation and amortization, in first quarter 2024 was $48.3 million, or 16.0 percent of revenue, compared to $58.4 million, or 18.1 percent of revenue, in fourth quarter 2023 and $121.8 million, or 26.1 percent of revenue, in first quarter 2023. For a reconciliation of GAAP net income to EBITDA, see the table near the end of this release for further details.

For first quarter 2024, net cash used in operating activities was $31.1 million. Net cash flow was a negative $47.9 million. Free cash flow (a non-GAAP measure) was a negative $51.5 million, which includes $20.4 million of capital expenditures.

Balance Sheet

As of March 31, 2024, the Company had approximately $280 million in cash and cash equivalents, restricted cash, and short-term investments. Total debt (including long-term and short-term) amounted to approximately $70 million and working capital was approximately $824 million.

The results announced today are preliminary and unaudited, as they are subject to the Company finalizing its closing procedures and completion of the quarterly review by its independent registered public accounting firm. As such, these results are subject to revision until the Company files its Form 10-Q for the quarter ending March 31, 2024.

Business Outlook

Gary Yu further commented, “For the second quarter of 2024, we expect revenue to be approximately $316 million, plus or minus 3 percent, representing a 4.6% sequential increase at the mid-point and reflecting a return to typical seasonal growth. GAAP gross margin is expected to be 33.5 percent, plus or minus 1 percent, reflecting the lower mix of revenue from the automotive and industrial markets as the 3C markets recover. Non-GAAP operating expenses, which are GAAP operating expenses adjusted for amortization of acquisition-related intangible assets, are expected to be approximately 28.5 percent of revenue, plus or minus 1 percent. We expect net interest income to be approximately $3.0 million. Our income tax rate is expected to be 18.5 percent, plus or minus 3 percent, and shares used to calculate diluted EPS for the second quarter are anticipated to be approximately 46.5 million.”

Amortization of acquisition-related intangible assets of $3.1 million, after tax, for previous acquisitions is not included in these non-GAAP estimates.

Conference Call

Diodes will host a conference call on Thursday, May 9, 2024 at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its first quarter financial results. Investors and analysts may join the conference call by dialing 1-833-634-2590, and international callers may join the teleconference by dialing +1-412-317-6038. A telephone replay of the call will be made available approximately two hours after the call and will remain available until May 15, 2024 at midnight Central Time. The replay number is 1-877-344-7529 with a pass code of 6259286. International callers should dial +1-412-317-0088 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 Investor Relations section of the Company’s website. 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, delivers high-quality semiconductor products to the world’s leading companies in the automotive, industrial, computing, consumer electronics, and communications markets. We leverage our expanded product portfolio of discrete, analog, and mixed-signal products and leading-edge packaging technology to meet customers’ needs. Our broad range of application-specific solutions and solutions-focused sales, coupled with worldwide operations including engineering, testing, manufacturing, and customer service, enable us to be a premier provider for high-volume, high-growth markets. For more information, visit www.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 that for the second quarter of 2024, we expect revenue to be approximately $316 million plus or minus 3 percent; we expect GAAP gross margin to be 33.5 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 28.5 percent of revenue, plus or minus 1 percent; we expect non-GAAP net interest income to be approximately $3.0 million; we expect our income tax rate to be 18.5 percent, plus or minus 3 percent; shares used to calculate diluted EPS for the second quarter are anticipated to be approximately 46.5 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 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 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 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.

The Diodes logo is a registered trademark of Diodes Incorporated in the United States and other countries.

© 2024 Diodes Incorporated. All Rights Reserved.

DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
		Three Months Ended
		March 31,
		2024				2023
Net sales		$	301,972			$	467,241
Cost of goods sold			202,388				272,787
Gross profit			99,584				194,454
Operating expenses
Selling, general and administrative			53,735				70,991
Research and development			33,964				33,232
Amortization of acquisition-related intangible assets			3,810				3,852
(Gain)loss on disposal of fixed assets			(4,872	)			(48	)
Other operating (income)expense			(1	)			-
Total operating expense			86,636				108,027
Income from operations			12,948				86,427
Other (expense) income
Interest income			4,614				1,772
Interest expense			(532	)			(2,132	)
Foreign currency gain(loss), net			972				(1,893	)
Unrealized gain(loss) on investments			370				3,889
Other income			434				530
Total other income (expense)			5,858				2,166
Income before income taxes and noncontrolling interest			18,806				88,593
Income tax provision			3,537				16,616
Net income			15,269				71,977
Less net (income) attributable to noncontrolling interest			(1,231	)			(827	)
Net income attributable to common stockholders		$	14,038			$	71,150
Earnings per share attributable to common stockholders:
Basic		$	0.30			$	1.56
Diluted		$	0.30			$	1.54
Number of shares used in earnings per share computation:
Basic			46,032				45,600
Diluted			46,285				46,161

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 March 31, 2024 :
		Operating Expenses			Other (Income) Expense			Income Tax Provision			Net Income
Per-GAAP											$	14,038
Diluted earnings per share (per-GAAP)											$	0.30
Adjustments to reconcile net income to non-GAAP net income:
Amortization of acquisition-related intangible assets		3,810						(708	)			3,102
Non-cash mark-to-market investment value adjustments					(370	)		74				(296	)
Insurance recovery for manufacturing facility		(4,804	)					961				(3,843	)
Non-GAAP											$	13,001
Diluted shares used in computing earnings per share												46,285
Non-GAAP diluted earnings per share											$	0.28

Note: Included in GAAP and non-GAAP net income was approximately $4.0 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 $0.09 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 March 31, 2023 :
		Operating Expenses		Other (Income) Expense			Income Tax Provision			Net Income
Per-GAAP										$	71,150
Diluted earnings per share (per-GAAP)										$	1.54
Adjustments to reconcile net income to non-GAAP net income:
Amortization of acquisition-related intangible assets		3,852					(707	)			3,145
Officer retirement		2,845					(583	)			2,262
Non-cash mark-to-market investment value adjustments				(3,889	)		778				(3,111	)
Non-GAAP										$	73,446
Diluted shares used in computing earnings per share											46,161
Non-GAAP diluted earnings per share										$	1.59

Note: Included in GAAP and non-GAAP net income was approximately $7.7 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 $0.17 per share.

ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE