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Diodes Incorporated Reports Third Quarter 2021 Financial Results

Diodes Incorporated (Nasdaq: DIOD) today reported its financial results for the third quarter ended September 30, 2021.

Third Quarter Highlights

  • Revenue was a record $471.4 million, increasing 52 percent from $309.5 million in the third quarter 2020 and 7 percent from $440.4 million in the second quarter 2021;
  • GAAP gross profit was a record $181.2 million, increasing 63 percent from $111.1 million in the third quarter 2020 and 13 percent from $159.8 million in the second quarter 2021 and;
  • GAAP gross profit margin was a record 38.4 percent, an increase of 250 basis points from the 35.9 percent in the third quarter 2020 and 210 basis points from the 36.3 percent in the second quarter 2021;
  • GAAP net income was a record $68.4 million, or $1.50 per diluted share, a 194 percent improvement from the $0.51 per diluted share, or $27.2 million, in the third quarter 2020 and a 23 percent improvement from the $1.22 per diluted share, or $55.4 million, in the second quarter 2021;
  • Non-GAAP adjusted net income was a record $67.3 million, or $1.47 per diluted share, a 137 percent improvement from the $0.62 per diluted share, or $32.8 million, in the third quarter 2020 and a 23 percent improvement from the $1.20 per diluted share, or $54.6 million, in the second quarter 2021;
  • Excluding $8.0 million, net of tax, of non-cash share-based compensation expense, both GAAP and non-GAAP earnings per share would have increased by $0.18 per diluted share;
  • EBITDA was a record $114.5 million, or 24.3 percent of revenue, compared to $63.3 million, or 20.5 percent of revenue, in the third quarter 2020 and $99.4 million, or 22.6 percent of revenue, in the second quarter 2021; and
  • Achieved cash flow from operations of $98.9million and $57.8 million of free cash flow, including $41.1 of capital expenditures. Net cash flow was a negative $10.1 million, including the pay down of $49.7 million of total debt.

Commenting on the results, Dr. Keh-Shew Lu, Chairman, President and Chief Executive Officer, stated, “This quarter represented the fourth consecutive quarter of record revenue and our second consecutive quarter of gross margin expansion over 210 basis points, resulting in record gross margin and profits. Underpinning our growth has been the success of our content expansion initiatives, particularly in the automotive market where revenue grew over 65% year-over-year and 7% sequentially, contributing to a 8-year CAGR of 30%. Additionally, our Pericom products continued to set new revenue records, achieving 4 consecutive quarters of growth primarily driven by traction in high-end computing and server applications.

“Our growth in these higher-margin end markets combined with increased loading at our LITE-ON Semiconductor (LSC) facilities have enabled us to increase our top-line revenue and margins, even in the midst of this supply-constrained environment. Diodes is favorably positioned with a global manufacturing footprint that provides the flexibility to strategically expand our capacity and reduce costs, either by adding equipment to existing lines or converting equipment to larger wafers. These ongoing actions are expected to support our continued growth and margin improvement into next year and toward our longer-term target of $1 billion in gross profit by 2025 on $2.5 billion in revenue and 40% gross margin.”

Third Quarter 2021

Revenue for third quarter 2021 was a record $471.4 million, increasing 52 percent from $309.5 million in the third quarter 2020 and 7 percent from $440.4 million in the second quarter 2021.

GAAP gross profit for the third quarter 2021 was a record $181.2 million, or a record 38.4 percent of revenue, increasing from $111.1 million, or 35.9 percent of revenue, in the third quarter of 2020 and $159.8 million, or 36.3 percent of revenue, in the second quarter 2021.

GAAP operating expenses for third quarter 2021 were $104.0 million, or 22.1 percent of revenue, and on a non-GAAP basis were $99.6 million, or 21.1 percent of revenue, which excludes $4.1 million of amortization of acquisition-related intangible asset expenses. GAAP operating expenses in the third quarter 2020 were $73.2 million, or 23.7 percent of revenue and in the second quarter 2021 were $94.4 million, or 21.4 percent of revenue.

Third quarter 2021 GAAP net income was a record $68.4 million, or $1.50 per diluted share, compared to GAAP net income in the third quarter 2020 of $27.2 million, or $0.51 per diluted share and GAAP net income of $55.4 million, or $1.22 per diluted share, in the second quarter 2021.

Third quarter 2021 non-GAAP adjusted net income was a record $67.3 million, or $1.47 per diluted share, which excluded, net of tax, $3.3 million of acquisition-related intangible asset costs, $0.3 million of acquisition-related and restructuring costs, and a $4.7 million gain in value on certain LSC investments. This compares to non-GAAP adjusted net income of $32.8 million, or $0.62 per diluted share, in the third quarter 2020 and $54.6 million, or $1.20 per diluted share, in the second 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):

        Three Months Ended
        September 30, 2021
GAAP net income      

$

68,424

 

         
GAAP diluted earnings per share      

$

1.50

 

         
Adjustments to reconcile net income to non-GAAP net income:        
         
Amortization of acquisition-related intangible assets      

 

3,313

 

         
Acquisition-related costs      

 

164

 

         
Gain on LSC investments      

 

(4,737)

 

         
Restructuring Cost      

 

120

 

         
Non-GAAP net income      

$

67,284

 

         
Non-GAAP diluted earnings per share      

$

1.47

 

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 third quarter 2021 GAAP net income and non-GAAP adjusted net income was approximately $8.0 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 $0.18 per diluted share for the third quarter 2021, $0.09 for third quarter 2020 and $0.15 for the second quarter 2021.

EBITDA (a non-GAAP measure), which represents earnings before net interest expense, income tax, depreciation and amortization, in third quarter 2021 was a record $114.5 million, or 24.3 percent of revenue, increasing from $63.3 million, or 20.5 percent of revenue, in third quarter 2020 and $99.4 million, or 22.6 percent of revenue, in second quarter 2021. For a reconciliation of GAAP net income to EBITDA, see the table near the end of this release for further details.

For third quarter 2021, net cash provided by operating activities was $98.9 million. Net cash flow was a negative $10.1 million, including the pay down of $49.7 million of total debt. Free cash flow (a non-GAAP measure) was $57.8 million, which includes $41.1 million of capital expenditures.

Balance Sheet

As of September 30, 2021, the Company had approximately $292 million in cash and cash equivalents, restricted cash, and short-term investments. Total debt (including long-term and short-term) amounted to approximately $252 million and working capital was approximately $619 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 2021 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 September 30, 2021.

Business Outlook

Dr. Lu concluded, “For the fourth quarter of 2021, we expect revenue to increase to approximately $476 million, plus or minus 3 percent, which represents a record on both an organic and consolidated basis for a combined increase of about 1 percent sequentially at the mid-point, which is better than typical seasonality of down 5 percent. We expect GAAP gross margin on a consolidated basis to be 38.7 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 21.0 percent of revenue, plus or minus 1 percent. We expect net interest expense to be approximately $1.2 million. Our income tax rate is expected to be 18 percent, plus or minus 3 percent, and shares used to calculate diluted EPS for the fourth quarter are anticipated to be approximately 46.2 million.”

Purchase accounting adjustments related to amortization of acquisition-related intangible assets of $3.4 million, after tax, for previous acquisitions is not included in these non-GAAP estimates.

Conference Call

Diodes will host a conference call on Wednesday, November 3, 2021, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its third quarter financial results. Investors and analysts may join the conference call by dialing 1-855-232-8957 and providing the confirmation code 6125039. 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 untilNovember 10, 2021 at midnight Central Time. The replay number is 1-855-859-2056with a pass code of 6125039. 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, delivers high-quality semiconductor products to the world’s leading companies in the consumer electronics, computing, communications, industrial, and automotive 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 of 31 sites, including engineering, testing, manufacturing, and customer service, enables 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 fourth quarter of 2021, we expect revenue to increase to approximately $476 million plus or minus 3 percent; we expect GAAP gross margin to be 38.7 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 21.0 percent of revenue, plus or minus 1 percent; we expect non-GAAP net interest expense to be approximately $1.2 million; we expect our income tax rate to be 18 percent, plus or minus 3 percent; shares used to calculate diluted EPS for the fourth quarter are anticipated to be approximately 46.2 million. Potential risks and uncertainties include, but are not limited to, such factors as: the risk that the COVID-19 pandemic may continue and have a material adverse effect on customer demand and staffing of our production, sales and administration facilities; 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 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 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

 

 

 

Nine Months Ended

 

 

September 30

 

 

 

September 30

 

 

 

2021

 

 

 

2020

 

 

 

 

 

2021

 

 

 

2020

 

Net sales  

$

471,422

 

 

$

309,459

 

     

$

1,324,991

 

 

$

878,845

 

Cost of goods sold  

 

290,191

 

 

 

198,369

 

     

 

845,322

 

 

 

570,421

 

Gross profit  

 

181,231

 

 

 

111,090

 

     

 

479,669

 

 

 

308,424

 

                     
Operating expenses                    
Selling, general and administrative  

 

67,803

 

 

 

44,651

 

     

 

186,759

 

 

 

132,238

 

Research and development  

 

31,458

 

 

 

24,469

 

     

 

89,104

 

 

 

69,469

 

Amortization of acquisition-related intangible assets  

 

4,056

 

 

 

4,007

 

     

 

12,139

 

 

 

12,249

 

Other operating expense  

 

667

 

 

 

108

 

     

 

1,673

 

 

 

(108)

 

Total operating expense  

 

103,984

 

 

 

73,235

 

     

 

289,675

 

 

 

213,848

 

                     
Income from operations  

 

77,247

 

 

 

37,855

 

     

 

189,994

 

 

 

94,576

 

                     
Other income (expense)                    
Interest income  

 

765

 

 

 

138

 

     

 

2,351

 

 

 

579

 

Interest expense  

 

(1,417)

 

 

 

(3,745)

 

     

 

(6,298)

 

 

 

(7,643)

 

Foreign currency loss, net  

 

805

 

 

 

(2,618)

 

     

 

(984)

 

 

 

(6,143)

 

Unrealized Gain (Loss) on Investments  

 

5,922

 

 

 

-

 

     

 

14,838

 

 

 

-

 

Other income  

 

2,244

 

 

 

1,627

 

     

 

6,398

 

 

 

2,902

 

Total other income (expense)  

 

8,319

 

 

 

(4,598)

 

     

 

16,305

 

 

 

(10,305)

 

                     
Income before income taxes and noncontrolling interest  

 

85,566

 

 

 

33,257

 

     

 

206,299

 

 

 

84,271

 

Income tax provision  

 

14,766

 

 

 

5,871

 

     

 

36,320

 

 

 

15,097

 

Net income  

 

70,800

 

 

 

27,386

 

     

 

169,979

 

 

 

69,174

 

Less net (income) loss attributable to noncontrolling interest  

 

(2,376)

 

 

 

(234)

 

     

 

(6,729)

 

 

 

(821)

 

Net income attributable to common stockholders  

$

68,424

 

 

$

27,152

 

     

$

163,250

 

 

$

68,353

 

                     
Earnings per share attributable to common stockholders:                    
Basic  

$

1.52

 

 

$

0.52

 

     

$

3.65

 

 

$

1.33

 

Diluted  

$

1.50

 

 

$

0.51

 

     

$

3.59

 

 

$

1.03

 

Number of shares used in earnings per share computation:                    
Basic  

 

44,986

 

 

 

51,825

 

     

 

44,689

 

 

 

51,563

 

Diluted  

 

45,642

 

 

 

52,729

 

     

 

45,507

 

 

 

52,612

 

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 September 30, 2021:

 
      COGS   Operating Expenses   Other Income (Expense)   Income Tax Provision   Net Income
Per-GAAP                    

$

68,424

 

                       
Diluted earnings per share (Per-GAAP)                    

 

1.50

 

                       
Adjustments to reconcile net income to non-GAAP net income:                  
                       
Amortization of acquisition-related intangible assets      

4,057

     

(744)

 

 

 

3,313

 

                       
Acquisition-related costs        

208

     

(44)

 

 

 

164

 

                       
Gain on LSC investments            

(5,921)

 

 

1,184

 

 

 

(4,737)

 

                       
Restructuring costs        

141

     

(21)

 

 

 

120

 

                       
Non-GAAP                    

$

67,284

 

                       
Diluted shares used in computing earnings per share                    

 

45,642

 

                       
Non-GAAP diluted earnings per share                    

$

1.47

 

Note: Included in GAAP and non-GAAP net income was approximately $8.0 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 $0.18 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 September 30, 2020:

 
        Operating Expenses   Other Income (Expense)   Income Tax Provision   Net Income
Per-GAAP                  

$

27,152

                     
Diluted earnings per share (Per-GAAP)                  

$

0.51

                     
Adjustments to reconcile net income to non-GAAP net income:                    
                     
Amortization of acquisition-related intangible assets      

4,007

     

(741)

 

 

 

3,266

                     
Acquisition-related financing costs          

2,698

 

(568)

 

 

 

2,130

                     
Acquisition-related costs      

300

     

(62)

 

 

 

238

                     
Non-GAAP                  

$

32,786

                     
Diluted shares used in computing earnings per share                  

 

52,729

                     
Non-GAAP diluted earnings per share                  

$

0.62

Note: Included in GAAP and non-GAAP adjusted net income was approximately $5.0 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 $0.09 per share.

 

DIODES INCORPORATED AND SUBSIDIARIES

RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME

(in thousands, except per share data)

(unaudited)

 

For the nine months ended September 30, 2021:

 
      COGS   Operating Expenses   Other Income (Expense)   Income Tax Provision   Net Income
Per-GAAP                    

$

163,250

 

                       
Diluted earnings per share (Per-GAAP)                    

$

3.59

 

                       
Adjustments to reconcile net income to non-GAAP net income:                      
                       
Amortization of acquisition-related intangible assets        

12,139

     

(2,227)

 

 

 

9,912

 

                       
Acquisition-related costs        

2,265

     

(475)

 

 

 

1,790

 

                       
Gain on LSC investments            

(14,838)

 

 

2,968

 

 

 

(11,870)

 

                       
Restructuring costs        

961

     

(144)

 

 

 

817

 

                       
Non-GAAP                    

$

163,899

 

                       
Diluted shares used in computing earnings per share                    

 

45,507

 

                       
Non-GAAP diluted earnings per share                    

$

3.60

 

Note: Included in GAAP and non-GAAP net income was approximately $19.7 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 $0.43 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 nine months ended September 30, 2020:

 
        Operating Expenses   Other Income (Expense)   Income Tax Provision   Net Income
Per-GAAP                  

$

68,353

                     
Diluted earnings per share (Per-GAAP)                  

$

1.30

                     
Adjustments to reconcile net income to non-GAAP net income:                    
                     
Amortization of acquisition-related intangible assets      

12,249

     

(2,249)

 

 

 

10,000

                     
Acquisition-related financing costs          

6,118

 

(1,343)

 

 

 

4,775

                     
Acquisition-related costs      

1,124

     

(230)

 

 

 

894

                     
Board-member retirement costs      

1,705

     

(358)

 

 

 

1,347

                     
Non-GAAP                  

$

85,370

                     
Diluted shares used in computing earnings per share                  

 

52,612

                     
Non-GAAP diluted earnings per share                  

$

1.62

Note: Included in GAAP and non-GAAP adjusted net income was approximately $13.4 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 $0.25 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.

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.

Gain on LSC investments  LSC recorded a market to market gain on an equity investment. The Company believes this gain is not reflective of the ongoing operations and exclusion of this gain provides investors an enhanced view of the Company’s operating results.

Restructuring costs – The Company has recorded restructuring charges related to the shutdown and relocation of one of our assembly and test facilities located in Chengdu, China, restructuring at other China sites, and restructuring of select European entities. 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.

Board member retirement costs – The Company excluded expenses in connection with the retirement of a member of the Company’s board of directors. The Company modified that director’s unvested RSU grants to vest upon his retirement. The shares subject to the modified grants will be released that board member as if they were vesting under the original vesting timeline. In connection with this modification the Company recorded additional expense of approximately $1.7 million.

CASH FLOW ITEMS

Free cash flow (FCF) (Non-GAAP)

FCF for the third quarter of 2021 is a non-GAAP financial measure, which is calculated by subtracting capital expenditures from cash flow from operations. For the third quarter of 2021, FCF was $57.8 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

 

Nine Months Ended

   

September 30

 

September 30

   

 

2021

 

 

2020

 

 

2021

 

 

2020

Net income (per-GAAP)  

$

68,424

 

$

27,152

 

$

163,250

 

$

68,353

Plus:                
Interest expense, net  

 

652

 

 

3,607

 

 

3,947

 

 

7,064

Income tax provision  

 

14,766

 

 

5,871

 

 

36,320

 

 

15,097

Depreciation and amortization  

 

30,682

 

 

26,699

 

 

92,084

 

 

81,043

EBITDA (non-GAAP)  

$

114,524

 

$

63,329

 

$

295,601

 

$

171,557

                         

DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands)

 

 

 

 

 

 

 

September 30

 

December 31,

 

 

 

2021

 

 

 

2020

 

 

 

(unaudited)

 

(audited)

Assets        
Current assets:        
Cash and cash equivalents  

$

280,543

 

 

$

268,065

 

Restricted Cash  

 

4,295

 

 

 

52,464

 

Short-term investments  

 

7,364

 

 

 

6,142

 

Accounts receivable, net of allowances of $3,887 and $3,806 at
September 30, 2021 and December 31, 2020, respectively
 

 

348,688

 

 

 

320,061

 

Inventories  

 

322,088

 

 

 

307,062

 

Prepaid expenses and other  

 

100,905

 

 

 

70,193

 

Total current assets  

 

1,063,883

 

 

 

1,023,987

 

Property, plant and equipment, net  

 

540,520

 

 

 

530,815

 

Deferred income tax  

 

52,436

 

 

 

57,841

 

Goodwill  

 

149,592

 

 

 

158,331

 

Intangible assets, net  

 

98,570

 

 

 

110,591

 

Other long-term assets  

 

136,908

 

 

 

97,892

 

Total assets  

$

2,041,909

 

 

$

1,979,457

 

         
Liabilities        
Current liabilities:        
Line of credit  

$

15,690

 

 

$

140,563

 

Accounts payable  

 

195,098

 

 

 

168,045

 

Accrued liabilities  

 

179,908

 

 

 

160,117

 

Income tax payable  

 

35,525

 

 

 

19,177

 

Current portion of long-term debt  

 

18,404

 

 

 

21,860

 

Total current liabilities  

 

444,625

 

 

 

509,762

 

Long-term debt, net of current portion  

 

218,000

 

 

 

288,179

 

Deferred tax liabilities  

 

34,729

 

 

 

34,598

 

Other long-term liabilities  

 

127,442

 

 

 

130,795

 

Total liabilities  

 

824,796

 

 

 

963,334

 

         
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; 45,015,853 and 44,276,194, issued and outstanding at September 30, 2021 and December 31, 2020, respectively  

 

36,194

 

 

 

35,692

 

Additional paid-in capital  

 

463,748

 

 

 

449,598

 

Retained earnings  

 

1,051,296

 

 

 

888,046

 

Treasury stock, at cost, 9,272,513 shares held at September 30, 2021 and 9,259,858 shares held at December 31, 2020  

 

(336,894

)

 

 

(335,910

)

Accumulated other comprehensive loss  

 

(58,281

)

 

 

(73,606

)

Total stockholders' equity  

 

1,156,063

 

 

 

963,820

 

Noncontrolling interest  

 

61,050

 

 

 

52,303

 

Total equity  

 

1,217,113

 

 

 

1,016,123

 

Total liabilities and stockholders' equity  

$

2,041,909

 

 

$

1,979,457

 

         

 

Company Contact:
Diodes Inc.
Gurmeet Dhaliwal
Director, IR & Corporate Marketing
P: 408-232-9003
E: Gurmeet_Dhaliwal@diodes.com

Investor Relations Contact:
Shelton Group
Leanne Sievers
President, Investor Relations
P: 949-224-3874
E: lsievers@sheltongroup.com

Source: Diodes Incorporated (F)