Diodes Incorporated reports 36.0% Net Income decline in 2020 and 1.6% Revenue decline
02/16/2021 • About Diodes Incorporated (
$DIOD) • By InTwits
Diodes Incorporated reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Diodes Incorporated has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.6%. At the same time it's in pair with industry average of 7.3%
- CAPEX is quite volatile: $35m in 2020, $45m in 2019, $22m in 2018, $19m in 2017, $12m in 2016
- The company has business model with low profitability: ROIC is 9.6%
- It operates with high leverage: Net Debt/EBITDA is 0.9x while industry average is 0.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased slightly on 1.6%. Annual revenue decline showed slowdown in 20Q4 - revenue surged on 16.3%. During the last 5 years Revenue growth topped in 2018 at 15.2% and was decelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.1 pp from 26.0% to 20.9% in 2020. During 2016-2020 EBITDA Margin topped in 2019 at 26.0%.
Gross Margin decreased on 2.2 pp from 37.3% to 35.1% in 2020. During the last 5 years Gross Margin topped in 2019 at 37.3%. SG&A as a % of Revenue increased slightly on 0.54 pp from 14.5% to 15.1% in 2020. During the last 5 years SG&A as a % of Revenue bottomed in 2018 at 14.5% and was growing since that time.
Net Income margin decreased on 4.3 pp from 12.3% to 8.0% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 Diodes Incorporated had CAPEX/Revenue of 6.2%. The company showed decline in CAPEX/Revenue of 4.4 pp from 10.5% in 2017 to 6.2% in 2020. For the last three years the average CAPEX/Revenue was 7.1%.
Return on investment
The company operates at low ROIC (9.6%) and ROE (9.5%). ROIC decreased on 6.4 pp from 16.0% to 9.6% in 2020. ROE decreased on 5.6 pp from 15.0% to 9.5% in 2020. During 2016-2020 ROIC topped in 2019 at 16.0%.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and 1.9x Debt / EBITDA. Net Debt / EBITDA surged on 1.2x from -0.3x to 0.9x in 2020. Debt surged on 223% while cash increased on 3.7%. During the last 5 years Net Debt/EBITDA bottomed in 2019 at -0.3x.
Diodes Incorporated has no short term refinancing risk: cash is higher than short term debt (154.9%).
Valuation and dividends
The company's trades at EV/EBITDA 14.5x and P/E 35.8x.
Management team
The company's CEO Keh-Shew Lu has spent 15 years with the company. The company's CFO Brett R Whitmire has spent 2 years with the company.
Financial and operational results
FY ended 12/31/2020
Diodes Incorporated ($DIOD) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 942 | 1,054 | 1,214 | 1,249 | 1,229 | -1.6% |
| Gross Profit | 287 | 357 | 435 | 466 | 431 | -7.4% |
| SG&A | 158 | 169 | 176 | 181 | 185 | 2.1% |
| EBITDA | 137 | 175 | 259 | 325 | 257 | -20.8% |
| EBIT | 38 | 79 | 154 | | | |
| Interest expence | 13 | 13 | 10 | | | |
| Tax | 7 | 62 | 45 | | | |
| Net Income | 16 | -2 | 104 | 153 | 98 | -36.0% |
| Stock Based Compensation | 13 | 19 | 21 | | | |
Balance Sheet
|
|---|
| Cash | 248 | 204 | 241 | 258 | 268 | 3.7% |
| Accounts Receivable | 217 | 200 | 228 | | | |
| Inventory | 193 | 217 | 215 | | | |
| Accounts Payable | 88 | 108 | 118 | | | |
| Short Term Debt | 14 | 22 | 38 | 59 | 173 | 193.4% |
| Long Term Debt | 413 | 247 | 186 | 92 | 315 | 242.8% |
Cash flow
|
|---|
| Capex | 59 | 111 | 88 | 99 | 76 | -23.0% |
Ratios
|
|---|
| Revenue growth | 11.0% | 11.9% | 15.2% | 2.9% | -1.6% | |
| EBITDA growth | 12.1% | 27.8% | 48.0% | 25.4% | -20.8% | |
|
|---|
| Gross Margin | 30.5% | 33.8% | 35.9% | 37.3% | 35.1% | -2.2% |
| EBITDA Margin | 14.5% | 16.6% | 21.3% | 26.0% | 20.9% | -5.1% |
| EBIT Margin | 4.0% | 7.5% | 12.7% | | |
| SG&A, % of revenue | 16.8% | 16.0% | 14.5% | 14.5% | 15.1% | 0.5% |
| SBC, % of revenue | 1.4% | 1.8% | 1.7% | | |
| Net Income Margin | 1.7% | -0.2% | 8.6% | 12.3% | 8.0% | -4.3% |
| CAPEX, % of revenue | 6.2% | 10.5% | 7.2% | 7.9% | 6.2% | -1.7% |
|
|---|
| ROIC | 3.0% | 6.7% | 13.1% | 16.0% | 9.6% | -6.4% |
| ROE | 2.0% | -0.2% | 11.8% | 15.0% | 9.5% | -5.6% |
| Net Debt/EBITDA | 1.3x | 0.4x | -0.1x | -0.3x | 0.9x | 1.2x |
| Interest expence / Average debt | 3.1% | 3.9% | 4.0% | | | |
People
|
|---|
| Insider ownership | 6.1% | 6.1% | 6.1% | | | |
| Employees | 7,693 | 8,586 | 7,710 | | | |
| Revenue/Employee, th. $ | 122 | 123 | 157 | | | |
Diodes Incorporated ($DIOD) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 281 | 289 | 309 | 350 | | -7.1% | -10.4% | -4.4% | 16.3% |
| EBITDA | 57 | 61 | 68 | 71 | | -21.9% | -19.2% | -18.1% | -23.6% |
| Net Income | 20 | 21 | 27 | 30 | | -36.4% | -42.0% | -28.7% | -37.0% |
Balance Sheet
|
|---|
| Cash | 270 | 503 | 588 | 268 | | -10.5% | 113.8% | 169.1% | 3.7% |
| Short Term Debt | 60 | 88 | 97 | 173 | | 13.8% | 52.7% | 58.8% | 193.4% |
| Long Term Debt | 71 | 305 | 352 | 315 | | -68.2% | 74.0% | 199.1% | 242.8% |
Ratios
|
|---|
| Gross Margin | 34.1% | 35.2% | 35.9% | 35.0% | | -3.0% | -2.7% | -1.8% | -1.3% |
| EBITDA Margin | 20.2% | 21.3% | 22.0% | 20.3% | | -3.8% | -2.3% | -3.7% | -10.6% |
| Net Income Margin | 7.2% | 7.3% | 8.8% | 8.5% | | -3.3% | -4.0% | -3.0% | -7.2% |
Peers in Semiconductors
Below we provide Diodes Incorporated benchmarking against other companies in Semiconductors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| |
|---|
| Median (43 companies) | 1.2% | 10.9% | 4.4% | -3.2% | 2.8% |
|---|
| Diodes Incorporated ($DIOD) | - | 11.9% | 15.2% | 2.9% | -1.6% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| |
|---|
| Median (43 companies) | 48.0% | 49.1% | 50.4% | 50.7% | 49.4% |
|---|
| Diodes Incorporated ($DIOD) | 30.5% | 33.8% | 35.9% | 37.3% | 35.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.3% | 12.9% | 17.3% |
|---|
| Diodes Incorporated ($DIOD) | 14.5% | 16.6% | 21.3% | 26.0% | 20.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| |
|---|
| Median (40 companies) | 3.6% | 4.7% | 4.2% | 3.7% | 3.6% |
|---|
| Diodes Incorporated ($DIOD) | 6.2% | 10.5% | 7.2% | 7.9% | 6.2% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (45 companies) | 1.4% | 3.2% | 2.2% | 2.2% | 5.3% |
|---|
| Diodes Incorporated ($DIOD) | 3.0% | 6.7% | 13.1% | 16.0% | 9.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| |
|---|
| Median (31 companies) | -0.0x | 0.4x | 0.3x | 0.5x | 0.1x |
|---|
| Diodes Incorporated ($DIOD) | 1.3x | 0.4x | -0.1x | -0.3x | 0.9x |
