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
JULY 29, 2003
Date of Report (Date of earliest event reported)
DIODES INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 1-5740 95-2039518
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation)
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)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS
Exhibit 99.1 - Press Release dated July 29, 2003
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On July 29, 2003, Diodes Incorporated issued a press release
announcing second quarter 2003 earnings. A copy of the press release is attached
as Exhibit 99.1.
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 or the Securities Exchange Act of 1984, except
as shall be expressly set forth by specific reference in such filing.
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: July 29, 2003 DIODES INCORPORATED
By /s/ Carl Wertz
CARL WERTZ
Chief Financial Officer
EXHIBIT INDEX
EXHIBIT DESCRIPTION
NUMBER
99.1 Press Release dated July 29, 2003
EXHIBIT 99.1
DIODES INCORPORATED
FOR IMMEDIATE RELEASE
DIODES INCORPORATED REPORTS SECOND QUARTER 2003 RESULTS WITH RECORD REVENUE
Revenue up 13.4% sequentially to a record $33.4 million on strength of
new product sales
WESTLAKE VILLAGE, CALIFORNIA, JULY 29, 2003 - Diodes Incorporated (NASDAQ:
DIOD), a leading manufacturer and supplier of high quality discrete
semiconductors, today reported financial results for the second quarter of
fiscal year 2003 ended June 30, 2003.
SECOND QUARTER HIGHLIGHTS:
Revenue increased 13.4% sequentially and 11.5% year-over-year to a record
$33.4 million
New product revenue grew to a record 12.5% of sales
Gross margin improves 120 basis points from 2Q02
Net income increased to $2.2 million, or $0.23 per diluted share, up from
$1.6 million, or $0.18 per diluted share, in 2Q02
Revenues for the second quarter of 2003 were a record $33.4 million, a
sequential increase of 13.4% from the first quarter of 2003, and an increase of
11.5% from the second quarter of 2002.
Net income for the quarter was $2.2 million, up 39% compared to $1.6 million for
the three months ended June 30, 2002. Diluted earnings per share were $0.23 for
the second quarter of 2003, as compared to $0.18 for the same period last year.
For the first six months of 2003, the Company earned $4.1 million, or $0.44 per
diluted share, on revenues of $62.8 million, as compared to net income of $1.8
million, or $0.20 per diluted share, on revenues of $56.9 million for the same
period in 2002.
Commenting on the quarter, C.H. Chen, President and CEO of Diodes Incorporated,
said, "We are pleased with our second quarter results and our ability to
consistently outperform the industry. In a challenging market environment,
Diodes posted record revenue, improved margins and made significant improvement
in net income. Our success is largely attributable to the growing market
acceptance of our higher margin, differentiated discrete products and we look
forward to maintaining the pace of innovation over the coming quarters so as to
position Diodes as the total solution provider for discrete semiconductor
products."
Diodes growth in the second quarter was driven by a combination of the strength
of the Asian market, which accounted for 53% of sales, up from 46% in the same
period last year, and demand for the Company's new next-generation products.
Increased capacity utilization at the Company's Mainland China manufacturing
facility, Diodes-China, and at Diodes-FabTech, the wafer facility, and higher
ASPs from the Company's next generation products contributed to year-over-year
margin improvement. The Company's gross profit margin was 25.0%, compared to
23.8% in the same period last year.
Operating margins increased by 170 basis points to 9.4% in the second quarter,
compared to 7.7% in the second quarter of 2002.
For the quarter, SG&A expenses were $4.8 million as compared to $4.3 million in
the first quarter of 2003 and $4.4 million in the second quarter of 2002. The
Company continues to invest in its sales and marketing efforts and experienced
increased selling expenses and incentives associated with the higher revenue.
SG&A expenses as a percentage of sales decreased slightly to 14.4%, from 14.6%
in the prior-year quarter.
"We are extremely encouraged by the market reception of our next-generation
products," Chen continued. "During the second quarter, sales of new products
grew to represent 12.5% of total revenue, up from 11% last quarter and up from
6% in the second quarter of 2002. This is a record high and especially
noteworthy considering that we achieved record revenue in the same period. Sales
of our performance Schottky and Zener lines were particularly strong during the
quarter as these products fulfill the growing need for high efficiency, compact
essential electronic components.
"We continue to focus on new product development and on working with our
customers to deliver superior value. During the quarter, we collaborated with
several customers to develop application specific multi-chip arrays devices,
which combine multiple discrete technologies within a single device and deliver
compelling improvements in cost, performance and size. In addition, last week,
we introduced two new lines of precision Zener diodes utilizing our integrated
development and manufacturing capabilities and enabling Diodes to offer one of
the most comprehensive portfolios of performance Schottky and Zener devices in
the industry."
At June 30, 2003, Diodes had $7.3 million in cash and cash equivalents, $15.5
million in long-term debt, $6.2 million outstanding on its revolving credit
line, $32.4 million in available credit facilities, and $62.5 million in
shareholders' equity.
Mr. Chen concluded, "We are excited about the progress we have made in the first
half of 2003 and believe that Diodes' fiscal discipline, positioning in the
growing Asian marketplace, and commitment to developing new technology, will
enable the Company to be a leading competitor in discrete technologies. With
respect to our outlook for the third quarter, we continue to be cautiously
optimistic. The geopolitical climate appears to be improving and the threat of
SARS has diminished. However, order cycles remain very short and the outlook for
business spending remains uncertain. As such, we maintain our target to
outperform the semiconductor industry and would expect to provide more specific
guidance for the second half of the year as visibility improves."
CONFERENCE CALL
Diodes Incorporated will hold its second 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, CCG; (818) 789-0100
e-mail: crocker.coulson@ccgir.com or Carl Wertz, Chief Financial Officer,
Diodes, Incorporated; (805) 446-4800
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
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------------------------- -----------------------------------------
2002 2003 2002 2003
------------------ ------------------- ------------------ -------------------
NET SALES $ 29,946,000 $ 33,391,000 $ 56,870,000 $ 62,844,000
COST OF GOODS SOLD 22,815,000 25,045,000 45,387,000 47,037,000
------------------ ------------------- ------------------ -------------------
Gross profit 7,131,000 8,346,000 11,483,000 15,807,000
RESEARCH AND DEVELOPMENT EXPENSES 460,000 400,000 773,000 746,000
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 4,370,000 4,796,000 8,135,000 9,048,000
------------------ ------------------- ------------------ -------------------
Total operating expenses 4,830,000 5,196,000 8,908,000 9,794,000
Income from operations 2,301,000 3,150,000 2,575,000 6,013,000
OTHER INCOME (EXPENSE)
Interest income 16,000 5,000 25,000 9,000
Interest expense (292,000) (223,000) (638,000) (472,000)
Other 109,000 (20,000) 124,000 (1,000)
------------------ ------------------- ------------------ -------------------
(167,000) (238,000) (489,000) (464,000)
Income before income taxes and minority
interest 2,134,000 2,912,000 2,086,000 5,549,000
INCOME TAX BENEFIT (PROVISION) (473,000) (651,000) (178,000) (1,268,000)
------------------ ------------------- ------------------ -------------------
Income before minority interest 1,661,000 2,261,000 1,908,000 4,281,000
MINORITY INTEREST IN JOINT VENTURE EARNINGS (98,000) (89,000) (136,000) (187,000)
------------------ ------------------- ------------------ -------------------
NET INCOME $ 1,563,000 $ 2,172,000 $ 1,772,000 $ 4,094,000
================== =================== ================== ===================
EARNINGS PER SHARE
Basic $ 0.19 $ 0.26 $ 0.22 $ 0.49
Diluted $ 0.18 $ 0.23 $ 0.20 $ 0.44
================== =================== ================== ===================
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 8,176,025 8,452,129 8,170,704 8,383,444
Diluted 8,874,416 9,512,266 8,824,025 9,372,507
================== =================== ================== ===================
The accompanying notes are an integral part of these financial statements.
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
ASSETS
DECEMBER 31, JUNE 30,
2002 2003
------------------- -------------------
(UNAUDITED)
CURRENT ASSETS
Cash and cash equivalents $ 7,284,000 $ 7,283,000
Accounts receivable
Customers 19,387,000 22,159,000
Related parties 3,138,000 3,219,000
------------------- -------------------
22,525,000 25,378,000
Less: Allowance for doubtful receivables 353,000 317,000
------------------- -------------------
22,172,000 25,061,000
Inventories 14,916,000 16,292,000
Deferred income taxes, current 4,338,000 4,338,000
Prepaid expenses, income taxes and other current assets 2,228,000 3,183,000
------------------- -------------------
Total current assets 50,938,000 56,157,000
PROPERTY, PLANT AND EQUIPMENT, at cost, net
of accumulated depreciation and amortization 44,693,000 46,686,000
DEFERRED INCOME TAXES, non-current 3,205,000 2,360,000
OTHER ASSETS
Goodwill, net 5,090,000 5,090,000
Other 1,084,000 1,233,000
------------------- -------------------
TOTAL ASSETS $ 105,010,000 $ 111,527,000
=================== ===================
The accompanying notes are an integral part of these financial statements.
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
DECEMBER 31, JUNE 30,
2002 2003
------------------ ------------------
(UNAUDITED)
CURRENT LIABILITIES
Line of credit $ 3,025,000 $ 6,242,000
Accounts payable
Trade 9,039,000 11,400,000
Related parties 3,361,000 2,806,000
Accrued liabilities 8,693,000 8,154,000
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 157,000 159,000
------------------ ------------------
Total current liabilities 30,108,000 34,594,000
LONG-TERM DEBT, net of current portion
Related party 6,250,000 5,000,000
Other 6,333,000 4,667,000
CAPITAL LEASE OBLIGATIONS, net of current portion 2,495,000 2,405,000
MINORITY INTEREST IN JOINT VENTURE 2,145,000 2,332,000
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 9,583,480
shares issued at December 31, 2002
and June 30, 2003, respectively 6,195,000 6,389,000
Additional paid-in capital 8,060,000 8,559,000
Retained earnings 45,684,000 49,778,000
------------------ ------------------
59,939,000 64,726,000
Less:
Treasury stock - 1,075,672 shares of common stock, at cost 1,782,000 1,782,000
Accumulated other comprehensive loss 478,000 415,000
------------------ ------------------
2,260,000 2,197,000
Total stockholders' equity 57,679,000 62,529,000
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 105,010,000 $ 111,527,000
================== ==================
The accompanying notes are an integral part of these financial statements.
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