Diodes Incorporated Net Income surged on 5,863% and Revenue surged on 15.2%
02/13/2019 • About Diodes Incorporated (
$DIOD) • By InTwits
Diodes Incorporated reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 21.3% in 2018 vs. 16.6% in 2017 vs. 18.1% in 2014
- Diodes Incorporated has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.2%. At the same time it's a lot of higher than industry average of 7.6%.
- CAPEX is quite volatile: $88m in 2018, $111m in 2017, $59m in 2016, $133m in 2015, $58m in 2014
- The company has highly profitable business model: ROIC is 13.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Diodes Incorporated's Revenue surged on 15.2%. Revenue growth showed acceleration in 18Q4 - it increased 17.1% YoY. During 2014-2018 Revenue growth bottomed in 2015 at -4.7% and was accelerating since that time. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 4.7 pp from 16.6% to 21.3% in 2018. During the last 5 years EBITDA Margin bottomed in 2015 at 14.4% and was growing since that time.
Gross Margin increased on 2.0 pp from 33.8% to 35.9% in 2018. During 2014-2018 Gross Margin bottomed in 2015 at 29.3% and was growing since that time. SG&A as a % of Revenue decreased slightly on 1.5 pp from 16.0% to 14.5% in 2018. During 2014-2018 SG&A as a % of Revenue topped in 2016 at 16.8% and was declining since that time. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in 2018.
Net Income margin increased on 8.7 pp from -0.17% to 8.6% in 2018. During the last 5 years Net Income margin bottomed in 2017 at -0.17%. The efficient tax rate was 30.0% in 2018.
Investments (CAPEX, working capital and M&A)
Diodes Incorporated's CAPEX/Revenue was 7.2% in 2018. The company showed decline in CAPEX/Revenue of 8.5 pp from 15.7% in 2015 to 7.2% in 2018. Average CAPEX/Revenue for the last three years was 8.0%.
Accounts receivable as a % of Revenue showed almost no change in 2018. Inventories as a % of Revenue decreased on 2.8 pp from 20.5% to 17.7% in 2018. Accounts payable as a % of Revenue showed almost no change in 2018.
Return on investment
The company operates at good ROIC (13.1%) while ROE is low (11.8%). ROIC increased on 6.4 pp from 6.7% to 13.1% in 2018. ROE surged on 12.0 pp from -0.22% to 11.8% in 2018. During the last 5 years ROIC bottomed in 2016 at 3.0% and was growing since that time. During 2014-2018 ROE bottomed in 2017 at -0.22%.
Leverage (Debt)
Debt level is -0.1x Net Debt / EBITDA and 0.9x Debt / EBITDA. Debt dropped on 16.8% while cash surged on 18.3%.
Diodes Incorporated has good short term financial stability: Interest coverage ratio (ICR) is 15.6x. Diodes Incorporated has no short term refinancing risk: cash is higher than short term debt (636.6%).
Average interest expence charged on company's debt was 4.4% in 2018.
Valuation and dividends
The company's trades at EV/EBITDA 7.9x and P/E 19.8x.
Management team
Ken-Shew Lu is a the company's CEO. Ken-Shew Lu is a founder and has spent 17 years with the company. CEO total compensation was
$6,144,982 in 2018 which included
$689,320 salary and
$26,683 annual bonus.
The company has 6.1% shares owned by insiders. Insider ownership didn't change in 2018.
The company has 7,710 employees. The number of employees dropped on 10.2%. Average revenue per employee in 2018 was
$157,456 and it jumped on 28.2%.
Financial and operational results
FY ended 12/31/2018
Diodes Incorporated ($DIOD) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 891 | 849 | 942 | 1,054 | 1,214 | 15.2% |
| Gross Profit | 277 | 249 | 287 | 357 | 435 | 22.0% |
| SG&A | 134 | 139 | 158 | 169 | 176 | 4.5% |
| EBITDA | 161 | 122 | 137 | 175 | 259 | 48.0% |
| EBIT | 85 | 42 | 38 | 79 | 154 | 94.5% |
| Interest expence | 4 | 4 | 13 | 13 | 10 | -26.4% |
| Tax | 20 | 14 | 7 | 62 | 45 | -28.5% |
| Net Income | 64 | 24 | 16 | -2 | 104 | |
| Stock Based Compensation | 8 | 18 | 13 | 19 | 21 | 11.4% |
Balance Sheet
|
|---|
| Cash | 243 | 218 | 248 | 204 | 241 | 18.3% |
| Accounts Receivable | 188 | 218 | 217 | 200 | 228 | 14.1% |
| Inventory | 182 | 203 | 193 | 217 | 215 | -0.5% |
| Accounts Payable | 79 | 86 | 88 | 108 | 118 | 9.1% |
| Short Term Debt | 1 | 10 | 14 | 22 | 38 | 75.0% |
| Long Term Debt | 141 | 454 | 413 | 247 | 186 | -24.8% |
Cash flow
|
|---|
| Capex | 58 | 133 | 59 | 111 | 88 | -21.3% |
| Acquisitions | | 349 | | | | |
Ratios
|
|---|
| Revenue growth | 7.7% | -4.7% | 11.0% | 11.9% | 15.2% | |
| EBITDA growth | 39.2% | -24.2% | 12.1% | 27.8% | 48.0% | |
|
|---|
| Gross Margin | 31.1% | 29.3% | 30.5% | 33.8% | 35.9% | 2.0% |
| EBITDA Margin | 18.1% | 14.4% | 14.5% | 16.6% | 21.3% | 4.7% |
| EBIT Margin | 9.5% | 5.0% | 4.0% | 7.5% | 12.7% | 5.2% |
| SG&A, % of revenue | 15.0% | 16.4% | 16.8% | 16.0% | 14.5% | -1.5% |
| SBC, % of revenue | 0.9% | 2.1% | 1.4% | 1.8% | 1.7% | -0.1% |
| Net Income Margin | 7.1% | 2.9% | 1.7% | -0.2% | 8.6% | 8.7% |
| CAPEX, % of revenue | 6.5% | 15.7% | 6.2% | 10.5% | 7.2% | -3.3% |
|
|---|
| ROIC | 9.3% | 3.8% | 3.0% | 6.7% | 13.1% | 6.4% |
| ROE | 8.7% | 3.1% | 2.0% | -0.2% | 11.8% | 12.0% |
| Net Debt/EBITDA | -0.6x | 2.0x | 1.3x | 0.4x | -0.1x | -0.4x |
| Interest expence / Average debt | 3.0% | 1.4% | 3.0% | 3.9% | 4.4% | 0.6% |
People
|
|---|
| Insider ownership | 6.1% | 6.1% | 6.1% | 6.1% | 6.1% | 0.0% |
| Employees | 6,794 | 7,695 | 7,693 | 8,586 | 7,710 | -10.2% |
| Revenue/Employee, th. $ | 131 | 110 | 122 | 123 | 157 | 28.2% |
Diodes Incorporated ($DIOD) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 275 | 304 | 321 | 314 | | 16.2% | 15.1% | 12.5% | 17.1% |
| EBITDA | 53 | 64 | 72 | 70 | | 59.1% | 36.2% | 50.4% | 46.6% |
| Net Income | 19 | 25 | 31 | 30 | | 1,422.3% | 90.2% | 113.9% | |
Balance Sheet
|
|---|
| Cash | 182 | 152 | 150 | 241 | | -31.2% | -42.8% | -25.3% | 18.3% |
| Short Term Debt | 26 | 28 | 39 | 38 | | 65.3% | 56.4% | 102.3% | 75.0% |
| Long Term Debt | 200 | 162 | 140 | 186 | | -50.1% | -57.7% | -54.4% | -24.8% |
Ratios
|
|---|
| Gross Margin | 35.9% | 35.3% | 35.9% | 36.3% | | 4.6% | 1.2% | 2.1% | 0.4% |
| EBITDA Margin | 19.1% | 21.2% | 22.4% | 22.4% | | 5.2% | 3.3% | 5.6% | 4.5% |
| Net Income Margin | 6.7% | 8.2% | 9.6% | 9.4% | | 6.2% | 3.3% | 4.6% | 20.8% |
Peers in Semiconductors
Below you can find Diodes Incorporated benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 9.7% | 4.4% | 10.9% | 4.7% |
|---|
| Diodes Incorporated ($DIOD) | | -4.7% | 11.0% | 11.9% | 15.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 46.4% | 47.7% | 48.0% | 49.1% | 51.0% |
|---|
| Diodes Incorporated ($DIOD) | 31.1% | 29.3% | 30.5% | 33.8% | 35.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.6% | 11.3% | 9.2% | 10.7% | 9.8% |
|---|
| Diodes Incorporated ($DIOD) | 18.1% | 14.4% | 14.5% | 16.6% | 21.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.6% | 4.7% | 4.4% |
|---|
| Diodes Incorporated ($DIOD) | 6.5% | 15.7% | 6.2% | 10.5% | 7.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.0% | 3.8% | 1.4% | 3.2% | 3.0% |
|---|
| Diodes Incorporated ($DIOD) | 9.3% | 3.8% | 3.0% | 6.7% | 13.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (45 companies) | -0.5x | -0.3x | -0.0x | 0.4x | 0.3x |
|---|
| Diodes Incorporated ($DIOD) | -0.6x | 2.0x | 1.3x | 0.4x | -0.1x |
