UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
April 29, 2003
Date of Report (Date of earliest event reported)
DIODES INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-5740
(Commission File Number)
95-2039518
(I.R.S. Employer Identification Number)
3050 East Hillcrest Drive
Westlake Village, California 91362
(Address of principal executive offices) (Zip Code)
(805) 446-4800
(Registrant's telephone number, including area code)
1
Item 7. Financial Statements, Proforma Financial Information and Exhibits.
(c) EXHIBITS
Exhibit 99.1 - Press Release dated April 29, 2003
Item 9. Regulation FD Disclosure
This information furnished under "Item 9. Regulation FD Disclosure" is
intended to be furnished under "Item 12. Results of Operations and Financial
Condition" in accordance with SEC Release No. 34-47583.
On April 29, 2003, Diodes Incorporated issued a press release announcing
first quarter 2003 earnings. A copy of the press release is attached as Exhibit
99.1.
On April 29, 2003, Diodes Incorporated held an investor teleconference in
reference to first quarter 2003 earnings. During the teleconference, the Company
made the following statements:
"Gross margin at 24.6% was off 70 basis points from 25.3% in the fourth
quarter, but was a significant improvement from 16.2% in the first quarter of
2002. The year-over-year improvement is largely due to increased capacity
utilization in both our China and North America manufacturing facilities and
improvements in our operating efficiencies. For the quarter, our manufacturing
facility in China ran at above 90% capacity, up from 58% in the first quarter of
2002 and 84% in the fourth quarter. Our wafer fab ran at an average of over 80%,
up from 65% last year and 77% in the fourth quarter."
"While net income was modestly below the fourth quarter, as outlined in our
last conference call, in the fourth quarter we had the benefit of the reversal
of some accrued compensation as well as the receipt of two quarters of high
technology grants from China of approximately $244,000. As projected, we did not
receive any grants in the first quarter but we do anticipate receiving a grant
in the second quarter."
"Capital expenditures were approximately $3.9 million in the first quarter
and we maintain our full year capital expenditure estimate of $12 to $14 million
as we approach higher capacity utilizations and bring new products into
production."
"Our book-to-bill is presently over 1.0 and relatively consistent with the
fourth quarter."
"Depreciation for the quarter was approximately $2.6 million."
The information in this Form 8-K and the Exhibits attached hereto shall not
be deemed "filed" for purposes of Section 18 of the Securities Act of 1934, nor
shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933, except as shall be expressly set forth by specific reference in
such filing.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: April 29, 2003 DIODES INCORPORATED
By /s/ Carl C. Wertz
CARL C. WERTZ
Chief Financial Officer
3
Exhibit 99.1
Diodes Incorporated
FOR IMMEDIATE RELEASE
Diodes Incorporated Reports First Quarter 2003 Results
o Revenue increases 9.4% to $29.5 million due to growing penetration in
Asian markets
Westlake Village, California, April 29, 2003 - Diodes Incorporated (Nasdaq:
DIOD), a leading manufacturer and supplier of high quality discrete
semiconductors, today reported financial results for the first quarter of fiscal
year 2003 ended March 31, 2003.
First Quarter Highlights:
Revenue increases 9.4% from 1Q02 to $29.5 million in 1Q03
Net income increased to $1.9 million, or $0.21 per diluted share,
up from $208,000, or $0.02 per diluted share, in the same period last year
Sales from Asia represent 56% of revenue, reflecting growing regional market
share
New product revenue accounts for a record 11% of sales
Develops breakthrough Schottky barrier process for high efficiency applications
Revenues for the first quarter of 2003 were $29.5 million, a sequential increase
of 2.7% from the fourth quarter of 2002, and an increase of 9.4% from the first
quarter of 2002.
Net income for the quarter was $1.9 million, as compared to $208,000 for the
three months ended March 31, 2002 and compared to $2.3 million in the fourth
quarter ended December 31, 2002. Diluted earnings per share were $0.21 for the
first quarter of 2003, as compared to $0.02 for the same period last year.
Commenting on the quarter, C.H. Chen, President and CEO of Diodes Incorporated,
said, "We are encouraged by our results in the first quarter. Despite an
unprecedented combination of challenging factors, including the inconsistent
recovery pattern of the semiconductor industry, seasonal weakness, and
geopolitical issues, Diodes maintained our focus on increasing revenue, growing
market share and continuing our excellence in manufacturing and customer
service. After nearly two years of significant expansion of sales and marketing
in the Asia region, we are beginning to realize the benefits of this strategy."
Diodes growth in the first quarter was driven by the Asian market, which
accounted for 56% of sales, up from 47% in the same period last year. Demand for
the Company's new products for compact energy-efficient devices, including
Powermite(R)3 and Performance Schottky, and the Company's ability to provide
better service and support to a growing Asian customer base, enabled Diodes to
capture a greater share of this market.
"For the first quarter, our gross profit margin was 24.6%, as compared to 16.2%
in the first quarter of 2002 and 25.3% in the prior quarter. Gross margin was
impacted by fluctuations in our product mix and competitive pricing on our
commodity devices and wafers. However, we expect to see gradual margin expansion
going forward, as new products continue to increase as a percentage of sales,"
stated Mr. Chen.
For the quarter, SG&A expenses were $4.1 million as compared to $3.9 million in
the fourth quarter of 2002 and $3.8M in the first quarter of 2002. The increase
is primarily due to increased insurance costs, selling expenses and incentives,
but SG&A expenses as a percentage of sales remained relatively flat at 14.1%.
"Diodes continues to invest in research and development efforts to develop new
technology and increase our product range towards higher margin, differentiated
products. We expect that our R&D expenditures will increase and that most of
these dollars will be spent at our product development facility at
Diodes-FabTech," said Mr. Chen.
4
"Last year, we began the collaborative development and manufacturing effort
between Diodes-FabTech and Diodes-China with the launch of the UDZ series.
During the quarter, we announced the development of a breakthrough ultra-low
leakage, high voltage Schottky barrier rectifier process. This breakthrough
technology, which was developed at Diodes- FabTech, will lead to new products
for high efficiency switch-mode power supply (SMPS) applications, such as
adaptors, desktops and automotive uses, and allows our customers to boost their
power supplies' overall efficiency and gain a competitive edge. We expect to
introduce several new higher margin products using this technology over the next
two quarters, including a new line of Powermite(R)3 products manufactured at our
Diodes-China facility."
At March 31, 2003, Diodes had $8.5 million in cash and cash equivalents, $16.9
million in long-term debt, $6.5 million outstanding on its revolving credit line
and $59.9 million in shareholders' equity.
Mr. Chen concluded, "In light of the current economic climate, we remain
cautious about predicting the timing of any improvement in the computer and
communications markets. Therefore, for the second quarter, we are projecting
revenue to be flat to slightly up on a sequential basis. However, as capital
spending and PC demand improves and as we continue to introduce new higher
margin, proprietary products, we expect the second half of the year to be
stronger and to realize the operating leverage in our business."
Conference Call Diodes
Incorporated will hold its first quarter conference call for all interested
persons at 8 a.m. PST (11 a.m. EST) today to discuss its results. This
conference call will be broadcast live over the Internet and can be accessed by
all interested parties on the investor section of Diodes' website at
WWW.DIODES.COM. To listen to the live call, please go to the Investor section of
Diodes website and click on the Conference Call link at least fifteen 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 90 days.
About Diodes Incorporated
Diodes Incorporated (Nasdaq: DIOD) is a leading manufacturer and supplier of
high-quality discrete semiconductor products, primarily to the communications,
computing, industrial, consumer electronics and automotive markets. The Company
operates three Far East subsidiaries, Diodes-China (QS-9000 and ISO-14001
certified) in Shanghai, Diodes-Taiwan (ISO-9000 certified) in Taipei, and
Diodes-Hong Kong. Diodes-China's manufacturing focus is on subminiature
surface-mount devices destined for wireless devices, notebook, flat panel
display, digital camera, mobile handset, set-top box, DC to DC conversion, and
automotive applications, among others. Diodes-Taiwan is our Asia-Pacific sales,
logistics and distribution center. Diodes-Hong Kong covers sales, warehouse and
logistics functions. The Company's 5" wafer foundry, Diodes-FabTech (QS-9000
certified), specializes in Schottky products and is located just outside Kansas
City, Missouri. The Company's ISO-9000 corporate sales, marketing, engineering
and logistics headquarters is located in Southern California. For further
information, including SEC filings, visit the Company's website at
HTTP://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. Potential risks and uncertainties include, but are not limited to,
such factors as fluctuations in product demand, the introduction of new
products, the Company's ability to maintain customer and vendor relationships,
technological advancements, impact of competitive products and pricing, growth
in targeted markets, risks of foreign operations, and other information detailed
from time to time in the Company's filings with the United States Securities and
Exchange Commission.
Source: Diodes Incorporated
CONTACT: Crocker Coulson, Partner, Coffin Communications Group; (818) 789-0100
e-mail: crocker.coulson@coffincg.com or Carl Wertz, Chief Financial Officer,
Diodes, Incorporated; (805) 446-4800
5
Recent news releases, annual reports, and SEC filings are available at
the Company's website: HTTP://WWW.DIODES.COM.
Written requests may be sent directly to the Company, or they may be e-mailed
to: DIODES-FIN@DIODES.COM.
CONSOLIDATED CONDENSED INCOME STATEMENT and BALANCE SHEET FOLLOWS
6
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
-----------------------------------------
2002 2003
------------------ ------------------
Net sales $ 26,924,000 $ 29,453,000
Cost of goods sold 22,572,000 22,205,000
------------------ ------------------
Gross profit 4,352,000 7,248,000
Research and development expenses 313,000 260,000
Selling, general and administrative expenses 3,765,000 4,149,000
------------------ ------------------
Total operating expenses 4,078,000 4,409,000
Income from operations 274,000 2,839,000
Other income (expense)
Interest income 8,000 4,000
Interest expense (346,000) (248,000)
Other 16,000 42,000
------------------ ------------------
(322,000) (202,000)
Income (loss) before income taxes and minority interest (48,000) 2,637,000
Income tax benefit (provision) 295,000 (617,000)
------------------ ------------------
Income before minority interest 247,000 2,020,000
Minority interest in joint venture earnings (39,000) (97,000)
------------------ ------------------
Net income $ 208,000 $ 1,923,000
================== ==================
Earnings per share
Basic $ 0.03 $ 0.23
================== ==================
Diluted $ 0.02 $ 0.21
================== ==================
Weighted average shares outstanding
Basic 8,165,325 8,314,662
================== ==================
Diluted 8,774,016 9,151,496
================== ==================
The accompanying notes are an integral part of these financial statements.
7
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
ASSETS
December 31, March 31,
2002 2003
------------------- -------------------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 7,284,000 $ 8,536,000
Accounts receivable
Customers 19,387,000 20,161,000
Related parties 3,138,000 1,684,000
------------------- -------------------
22,525,000 21,845,000
Less: Allowance for doubtful receivables 353,000 305,000
------------------- -------------------
22,172,000 21,540,000
Inventories 15,711,000 17,741,000
Deferred income taxes, current 4,338,000 4,339,000
Prepaid expenses, income taxes and other current assets 1,433,000 1,504,000
------------------- -------------------
Total current assets 50,938,000 53,660,000
PROPERTY, PLANT AND EQUIPMENT, at cost, net
of accumulated depreciation and amortization 44,693,000 45,660,000
DEFERRED INCOME TAXES, non-current 3,205,000 2,772,000
OTHER ASSETS
Goodwill, net 5,090,000 5,090,000
Other 1,084,000 1,091,000
------------------- -------------------
TOTAL ASSETS $ 105,010,000 $ 108,273,000
=================== ===================
The accompanying notes are an integral part of these financial statements.
8
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, March 31,
2002 2003
------------------ ------------------
(Unaudited)
CURRENT LIABILITIES
Line of credit $ 3,025,000 $ 6,543,000
Accounts payable
Trade 9,039,000 9,216,000
Related parties 3,361,000 3,776,000
Accrued liabilities 8,693,000 7,046,000
Current portion of long-term debt
Related party 2,500,000 2,500,000
Other 3,333,000 3,333,000
Current portion of capital lease obligations 157,000 158,000
------------------ ------------------
Total current liabilities 30,108,000 32,572,000
LONG-TERM DEBT, net of current portion
Related party 6,250,000 5,625,000
Other 6,333,000 5,500,000
CAPITAL LEASE OBLIGATIONS, net of current portion 2,495,000 2,441,000
MINORITY INTEREST IN JOINT VENTURE 2,145,000 2,243,000
STOCKHOLDERS' EQUITY
Class A convertible preferred stock - par value $1.00 per share; 1,000,000
shares authorized;
no shares issued and outstanding -- --
Common stock - par value $0.66 2/3 per share;
30,000,000 shares authorized; 9,292,764 and 9,483,764
shares issued at December 31, 2002
and March 31, 2003, respectively 6,195,000 6,322,000
Additional paid-in capital 8,060,000 8,195,000
Retained earnings 45,684,000 47,607,000
------------------ ------------------
59,939,000 62,124,000
Less:
Treasury stock - 1,075,672 shares of common stock, at cost 1,782,000 1,782,000
Accumulated other comprehensive loss 478,000 450,000
------------------ ------------------
2,260,000 2,232,000
Total stockholders' equity 57,679,000 59,892,000
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 105,010,000 $ 108,273,000
================== ==================
The accompanying notes are an integral part of these financial statements.
# # #
9