Continued Market Share Gains Result in Record Historical Financial Performance and Profits with Above Seasonal Results Expected for the Fourth Quarter

PLANO, Texas — (BUSINESS WIRE) — November 6, 2018 — Diodes Incorporated (Nasdaq: DIOD), a leading global manufacturer and supplier of high-quality application specific standard products within the broad discrete, logic, analog and mixed-signal semiconductor markets, today reported its financial results for the third quarter ended September 30, 2018.

Third Quarter Highlights

• Revenue was a record $320.9 million, an increase of 12.5 percent from the $285.2 million in the third quarter 2017 and an increase of 5.5 percent from the $304.1 million in the second quarter 2018;
• GAAP gross profit was a record $115.2 million, compared to $96.3 million in the third quarter 2017 and $107.3 million in the second quarter 2018;
• GAAP gross profit margin was 35.9 percent, compared to 33.8 percent in the third quarter 2017 and 35.3 percent in the second quarter 2018;
• GAAP net income was a record $30.9 million, or $0.61 per diluted share, compared to GAAP net income of $14.5 million, or $0.29 per diluted share, in the third quarter 2017 and GAAP net income of $25.1 million, or $0.49 per diluted share, in the second quarter 2018;
• Non-GAAP adjusted net income was a record $34.5 million, or $0.68 per diluted share, compared to $22.6 million, or $0.45 per diluted share, in the third quarter 2017 and $29.3 million, or $0.58 per diluted share, in the second quarter 2018;
• Excluding $3.8 million, net of tax, of non-cash share-based compensation expense, both GAAP and non-GAAP earnings per share would have increased by $0.07 per diluted share;
• EBITDA was a record $72.0 million, or 22.4 percent of revenue, compared to $46.8 million, or 16.4 percent of revenue, in the third quarter 2017 and $64.5 million, or 21.2 percent of revenue, in the second quarter 2018; and
• Achieved cash flow from operations of $35.5 million and $16.4 million free cash flow, including $19.2 million of capital expenditures. Net cash flow was a negative $2.7 million, which includes the pay down of $21.7 million of long-term debt.

Commenting on the results, Dr. Keh-Shew Lu, president and chief executive officer, stated, “The third quarter marked Diodes’ best quarterly performance in the Company’s history, achieving record financial results and the sixth quarter of sequential organic revenue growth in the past seven quarters. Our consistently strong growth reflects our aggressive past design win activity and continued market share gains at new and existing customers, which also contributed to record automotive revenue growing 27% year-over-year as well as record industrial revenue increasing 32% over the same time period. This above-average corporate growth has resulted in these two end markets combined reaching 36% of total revenue, bringing us closer to our goal of 40%. Diodes’ solid positioning with customers, diversified product lines and end markets, as well as continued advancements in technology and packaging innovation has generated exceptional performance across multiple product categories, including continued growth from our Pericom products.

“Also worth highlighting is Diodes’ significant earnings power and cash generation as we drive revenue growth with non-GAAP operating expenses at our target model of 20% of revenue, which we achieved in the third quarter. In fact, our trailing twelve months non-GAAP earnings per share exceeds the two-year combined total for 2016 and 2017.

“As we look to the fourth quarter, we expect to further extend our better-than-market performance due to our strong past design win momentum and ongoing market share gains. Strength in Asia is anticipated to largely offset the typical seasonality in U.S. and Europe, resulting in our guidance for revenue being down only 1.9% sequentially at the mid-point. Based on our current expectations, we are on track to report one of the best performing years in Diodes’ history.”

Third Quarter 2018

Revenue for third quarter 2018 was $320.9 million, an increase of 12.5 percent from $285.2 million in third quarter 2017 and an increase of 5.5 percent from $304.1 million in the second quarter 2018.

GAAP gross profit for the third quarter 2018 was a record $115.2 million, or 35.9 percent of revenue, compared $93.3 million in the third quarter 2017, or 33.8 percent of revenue, and $107.3 million in the second quarter 2018, or 35.3 percent of revenue. The increase in gross margin was due primarily to favorable product mix as well as improved capacity utilization and the continued 8” ramp at the Company’s Shanghai fabrication facility (SFAB).