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 fourth quarter 2020 GAAP net income and non-GAAP adjusted net income was approximately $5.1 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 $0.10 per diluted share for fourth quarter 2020, $0.08 for fourth quarter 2019 and $0.09 for third quarter 2020.

EBITDA (a non-GAAP measure), which represents earnings before net interest expense, income tax, depreciation and amortization, in the fourth quarter 2020 was $67.1 million, or 19.1 percent of revenue, compared to $88.3 million, or 29.3 percent of revenue, in the fourth quarter 2019, which included a $19.2 million gain on the sale of land, and $63.3 million, or 20.5 percent of revenue, in the third quarter 2020. For a reconciliation of GAAP net income to EBITDA, see the table near the end of this release for further details.

For fourth quarter 2020, net cash provided by operating activities was 60.8 million. Net cash flow was a negative $319.3 million, which included the purchase of Lite-On Semiconductor during the quarter for approximately $453.4 million. Free cash flow (a non-GAAP measure) was $33.5 million, which includes $27.3 million of capital expenditures.

Balance Sheet

As of December 31, 2020, the Company had approximately $327 million in cash and cash equivalents, restricted cash, and short-term investments. Total debt (including long-term and short-term) amounted to approximately $451 million and working capital was approximately $514 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 2020 annual audit by its independent registered public accounting firm. As such, these results are subject to revision until the Company files its Form 10-K for the year ending December 31, 2020.

Business Outlook

Dr. Lu concluded, “For the first quarter of 2021, we expect revenue to increase to approximately $400 million, plus or minus 3 percent, which represents a record on both an organic and consolidated basis for a combined increase of about 14 percent sequentially at the mid-point. This guidance represents organic growth significantly better than typical seasonality of sequentially down 5 percent on average in the same prior two-year periods. We expect GAAP gross margin on a consolidated basis to be 33.6 percent, plus or minus 1 percent, which includes an approximately 3 percent impact due to a full quarter of LSC. Non-GAAP operating expenses, which are GAAP operating expenses adjusted for amortization of acquisition-related intangible assets, are expected to be approximately 22.0 percent of revenue, plus or minus 1 percent. We expect net interest expense to be approximately $3.3 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 first quarter are anticipated to be approximately 45.7 million.”

Purchase accounting adjustments related to amortization of acquisition-related intangible assets of $3.3 million, after tax, for Pericom and previous acquisitions is not included in these non-GAAP estimates.

Conference Call

Diodes will host a conference call on Tuesday, February 16, 2021 at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its fourth quarter and full year 2020 financial results. Investors and analysts may join the conference call by dialing 1-855-232-8957 and providing the confirmation code 8035448. 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 until February 23, 2021 at midnight Central Time. The replay number is 1-855-859-2056 with a pass code of 8035448. 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 revenue growth, market share gains, increase in gross margin and increase in gross profits in 2020 and beyond; that for the first quarter of 2021, we expect revenue to be a record and increase to approximately $400 million plus or minus 3 percent; we expect GAAP gross margin to be 33.6 percent, plus or minus 1 percent which includes an approximately 3 percent impact due to a full quarter of LSC.; non-GAAP operating expenses, which are GAAP operating expenses adjusted for amortization of acquisition-related intangible assets, are expected to be approximately 22.0 percent of revenue, plus or minus 1 percent; we expect non-GAAP net interest expense to be approximately $3.3 million; we expect our income tax rate to be 18 percent, plus or minus 3 percent; shares used to calculate diluted EPS for the first quarter are anticipated to be approximately 45.7 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									Twelve Months Ended
		December 31, 2020									December 31, 2020
		2020				2019					2020				2019
Net sales		$	350,370			$	301,157				$	1,229,215			$	1,249,130
Cost of goods sold			227,673				191,795					798,094				783,323
Gross profit			122,697				109,362					431,121				465,807
Operating expenses
Selling, general and administrative			52,829				44,199					185,067				181,343
Research and development			24,819				21,951					94,288				88,517
Amortization of acquisition-related intangible assets			4,012				4,502					16,261				18,041
Loss (gain) on disposal of fixed assets			214				(24,271	)				106				(24,429	)
Other operating expense			1,067				1,727					1,067				1,727
Total operating expense			82,941				48,108					296,789				265,199
Income from operations			39,756				61,254					134,332				200,608
Other income (expense)
Interest income			487				409					1,066				2,189
Interest expense			(4,019	)			(1,730	)				(11,662	)			(7,893	)
Foreign currency loss, net			(3,671	)			(2,355	)				(9,814	)			(3,737	)
Other income			3,517				2,022					6,419				7,079
Total other income (expense)			(3,686	)			(1,654	)				(13,991	)			(2,362	)
Income before income taxes and noncontrolling interest			36,070				59,600					120,341				198,246
Income tax provision			6,015				12,046					21,112				44,131
Net income			30,055				47,554					99,229				154,115
Less net (income) loss attributable to noncontrolling interest			(320	)			(364	)				(1,141	)			(865	)
Net income attributable to common stockholders		$	29,735			$	47,190				$	98,088			$	153,250
Earnings per share attributable to common stockholders:
Basic		$	0.60			$	0.92				$	1.92			$	3.02
Diluted		$	0.59			$	0.90				$	1.88			$	2.96
Number of shares used in earnings per share computation:
Basic			49,340				51,086					51,004				50,787
Diluted			50,418				52,144					52,133				51,860
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 December 31, 2020:
		COGS		Operating Expenses		Other Income (Expense)			Income Tax Provision			Net Income
Per-GAAP												$	29,735
Diluted earnings per share (Per-GAAP)													0.59
Adjustments to reconcile net income to non-GAAP net income:
Amortization of acquisition-related intangible assets				4,012					(742	)			3,270
Acquisition-related financing costs						3,277			(721	)			2,556
Acquisition-related costs		306		1,397		59			(290	)			1,472
Reverse Gain on LSC Investments						(2,143	)		429				(1,714	)
Restructuring Cost				2,471					(462	)			2,009
Non-GAAP												$	37,328
Diluted shares used in computing earnings per share													50,418
Non-GAAP diluted earnings per share												$	0.74
Note: Included in GAAP and non-GAAP net income was approximately $5.1 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 $0.10 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 December 31, 2019:
			Operating Expenses			Income Tax Provision			Net Income
Per-GAAP									$	47,190
Diluted earnings per share (Per-GAAP)									$	0.90
Adjustments to reconcile net income to non-GAAP net income:
Amortization of acquisition-related intangible assets			4,502			(813	)			3,689
Acquisition related costs			1,192			(254	)			938
Land sale inspection extension fee			(125	)		26				(99	)
Gain on land sale			(24,305	)		5,104				(19,201	)
Loss on impairment			1,624			(341	)			1,283
Non-GAAP									$	33,800
Diluted shares used in computing earnings per share										52,144
Non-GAAP diluted earnings per share									$	0.65
Note: Included in GAAP and non-GAAP adjusted net income was approximately $4.1 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 $0.08 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 twelve months ended December 31, 2020:
			COGS		Operating Expenses		Other Income (Expense)			Income Tax Provision			Net Income
Per-GAAP													$	98,088
Diluted earnings per share (Per-GAAP)													$	1.88
Adjustments to reconcile net income to non-GAAP net income:
Amortization of acquisition-related intangible assets					16,261					(2,991	)			13,270
Acquisition-related financing costs							9,395			(2,064	)			7,331
Acquisition-related costs			306		2,521		59			(520	)			2,366
Restructuring Cost					2,471					(462	)			2,009
Board-member retirement costs					1,705					(358	)			1,347
Reverse Gain on LSC Investments							(2,143	)		429				(1,714	)
Non-GAAP													$	122,697
Diluted shares used in computing earnings per share														52,133
Non-GAAP diluted earnings per share													$	2.35
Note: Included in GAAP and non-GAAP adjusted net income was approximately $18.6 million, net of tax, non-cash share-based compensation expense, excluding officer severance. Excluding share-based compensation expense, both GAAP and non-GAAP adjusted diluted earnings per share would have improved by $0.36 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 twelve months ended December 31, 2019:
			Operating Expenses			Income Tax Provision			Net Income
Per-GAAP									$	153,250
Diluted earnings per share (Per-GAAP)									$	2.96
Adjustments to reconcile net income to non-GAAP net income:
Amortization of acquisition-related intangible assets			18,040			(3,261	)			14,779
Acquisition related costs			1,663			(349	)			1,314
Land sale inspection extension fee			(425	)		89				(336	)
Gain on land sale			(24,305	)		5,104				(19,201	)
Loss on impairment			1,624			(341	)			1,283
Non-GAAP									$	151,089
Diluted shares used in computing earnings per share										51,860
Non-GAAP diluted earnings per share									$	2.91
Note: Included in GAAP and non-GAAP adjusted net income was approximately $16.2 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 $0.31 per share.

ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE