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What changed in DIODES INC /DEL/'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of DIODES INC /DEL/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+103 added−116 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-09)

Top changes in DIODES INC /DEL/'s 2024 10-K

103 paragraphs added · 116 removed · 85 edited across 2 sections

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

21 edited+1 added−3 removed33 unchanged
Biggest changeHeadquarters/R&D center USA - Plano, Texas 41,835 Regional sales office/Administrative office/R&D center/apartment USA - Milpitas, California 86,321 Manufacturing facility/office/chemical warehouse/wellness building USA - South Portland, Maine 323,462 Manufacturing facilities/Administrative office/R&D center/Logistics China - Chengdu 1,660,963 Regional sales office/R&D center/Warehouse China - Hong Kong 33,777 Administrative office/Land use right/manufacturing facility/R&D center China - Jinan, Shandong 1,058,324 Manufacturing facility/R&D center/Logistics/Dormitory/Manufacturing facility/Sales/Administrative office China - Shanghai 2,558,968 Regional sales office China - Shenzhen 17,292 Manufacturing facility China - Wuxi 1,166,347 R&D center China - Yangzhou 6,085 Regional sales office China, Beijing 969 Regional sales office China, Hubei, WuHan 1,265 Regional Sales Office China, ShanDong, QingDao 1,469 Administrative office/Logistics/Manufacturing/R&D center England - Oldham 156,076 Sales office Germany - Munich 6,297 Manufacturing facility/R&D center Germany - Neuhaus 52,508 Regional Sales Office Japan - Milnato-ku 11,525 Regional sales office Japan - Tokyo 145 Regional sales office Korea - Seongnam-si 1,295 Manufacturing facility/R&D center/Logistics/Administrative office Scotland - Greenock 1,001,873 Regional sales office Singapore City, Singapore 1,755 Manufacturing facility/R&D center/Logistics/Administrative office Taiwan - Hsinbei 98,752 Manufacturing facility Taiwan - Hsinchu 652,672 Regional sales office Taiwan - Kaohsiung 108 Manufacturing Taiwan - Keelung 149,548 Office Taiwan - Taichung 11,187 R&D center Taiwan - Tainan 1,927 Regional sales office/Administrative office/Logistics/R&D Taiwan - Taipei 19,012 Regional sales office/Administrative office/Logistics Taiwan - Taoyuan 266,466 Regional sales office/Administrative office/Logistics Taiwan - Taoyuan 266,466 Regional sales office/Administrative office/R&D center/apartment USA - Milpitas, California 86,321 Ite m 3.
Biggest changeHeadquarters/R&D center USA - Plano, Texas 41,835 Regional sales office/Administrative office/R&D center/apartment USA - Milpitas, California 86,321 Manufacturing facility/office/chemical warehouse/wellness building USA - South Portland, Maine 323,462 Regional sales office/RD Center/Administrative Office/Marketing Office USA-San Jose, California 10,253 Manufacturing facilities/Administrative office/R&D center/Logistics China - Chengdu 1,660,963 Regional sales office China - Hong Kong 9,113 Administrative office/Land use right/manufacturing facility/R&D center China - Shandong 1,058,324 Marketing Office/R&D center/Logistics/Sales/Administrative office China - Shanghai 2,542,853 Regional sales office/RD Center/Administrative Office/Marketing Office China - Shenzhen 23,062 Manufacturing facility China - Wuxi 1,166,347 Regional Sales Office China-Xiamen 1,507 R&D center China - Yangzhou 6,085 Regional Sales Office China - Guangzhou 1,646 Regional sales office/RD Center China, Beijing 2,925 Regional sales office China, WuHan 1,265 Regional Sales Office China, QingDao 1,469 RD Center/Administrative office China-Nanjing 11,155 Administrative office/Logistics/Manufacturing/R&D center England - Oldham 156,076 Sales office Germany - Munich 6,297 Manufacturing facility/R&D center Germany - Neuhaus 52,508 Regional Sales Office Germany-Eltvile 700 Regional Sales Office Japan - Milnato-ku 11,525 Regional sales office/RD Center/Administrative Office/Marketing Office Korea - Seongnam-si 21,616 Manufacturing facility/R&D center/Logistics/Administrative office Scotland - Greenock 1,001,873 Regional sales office/RD Center/Administrative Office Singapore, Singapore City 1,766 Regional sales office/Administrative office/Logistics/Manufacturing Facility Taiwan - Chongli 78,781 Manufacturing facility/R&D center/Logistics/Administrative office Taiwan - Hsinbei 68,825 Manufacturing facility/R&D center/Production/Administrative office Taiwan - Hsinchu 571,156 R&D center/Regional Sales Office/Administrative Office/Marketing Office/Production Taiwan - Tainan 26,581 Regional sales office/Administrative office/Logistics/R&D/Marketing Office Taiwan - Taipei 35,613 Ite m 3.
The information security team performs a bi-annual third-party assessment 26 using industry standard frameworks of our information security program. Results are shared with the Company's management and with the Board of Directors. We have defined policies and procedures for cybersecurity incident detection, containment, response and remediation and have adopted physical, technological and administrative cybersecurity and data privacy controls.
The information security team performs a bi-annual third-party assessment using industry standard frameworks of our information security program. Results are shared with the Company's management and with the Board of Directors. We have defined policies and procedures for cybersecurity incident detection, containment, response, and remediation and have adopted physical, technological, and administrative cybersecurity and data privacy controls.
In addition, given the constant and evolving threat of cyber-based attacks, we incur significant costs in an effort to detect and prevent security breaches and incidents, and these costs may increase in the future. Ite m 2. Properties. Our corporate headquarters are located in Plano, Texas.
In addition, given the constant and evolving threat of cyber-based attacks, we incur significant costs in an effort to detect and prevent security breaches and incidents, and these costs may increase in the future. 28 Ite m 2. Properties. Our corporate headquarters are located in Plano, Texas.
Securities Authorized for Issuance Under Equity Compensation Plans The information regarding our equity compensation plans required to be disclosed by Item 201(d) of Regulation S-K is incorporated by reference from our 2024 definitive proxy statement, which we expect to file with the SEC in April 2024, in Item 12 of Part III of this Annual Report.
Securities Authorized for Issuance Under Equity Compensation Plans The information regarding our equity compensation plans required to be disclosed by Item 201(d) of Regulation S-K is incorporated by reference from our 2025 definitive proxy statement, which we expect to file with the SEC in April 2025, in Item 12 of Part III of this Annual Report.
See “Risk Factors – Risks Related to Our International Operations.” in Part I, Item 1A of this Annual Report for a more detailed summary of the intellectual property technology risks associated with our international business operations. Item 4. Mine Safety Disclosures. Not Applicable. 28 PA RT II Ite m 5.
See “Risk Factors – Risks Related to Our International Operations.” in Part I, Item 1A of this Annual Report for a more detailed summary of the intellectual property technology risks associated with our international business operations. Item 4. Mine Safety Disclosures. Not Applicable. 29 PA RT II Ite m 5.
See Item 1A – Risk Factors – “System security risks, data protection breaches, cyber-attacks and other related cybersecurity issues could disrupt our internal operations, and any such disruption could reduce our expected net sales, increase our expenses, damage our reputation and adversely affect our stock price,” above.
See Item 1A – Risk Factors – “ System security risks, data protection breaches, cyber-attacks and other related cybersecurity issues could disrupt our internal operations, and any such disruption could reduce our expected net sales, increase our expenses, damage our reputation, and adversely affect our stock price ,” above.
Performance Graph The following graph compares the yearly percentage change in the cumulative total stockholder return of our Common Stock against the cumulative total return of the Nasdaq Composite and the Nasdaq Industrial Index for the five calendar years ending December 31, 2023. The graph is not necessarily indicative of future price performance.
Performance Graph The following graph compares the yearly percentage change in the cumulative total stockholder return of our Common Stock against the cumulative total return of the Nasdaq Composite and the Nasdaq Industrial Index for the five calendar years ending December 31, 2024. The graph is not necessarily indicative of future price performance.
Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2023. Index Data: Copyright NASDAQ OMX, Inc. Used with permission.
Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2025. Index Data: Copyright NASDAQ OMX, Inc. Used with permission.
All rights reserved. 29 The graph assumes $100 invested on December 31, 2018 in our Common Stock, the stock of the companies in the Nasdaq Composite Index and the stock of companies in the Nasdaq Industrial Index, and that all dividends received within a quarter, if any, were reinvested in that quarter.
All rights reserved. 30 The graph assumes $100 invested on December 31, 2019 in our Common Stock, the stock of the companies in the Nasdaq Composite Index and the stock of companies in the Nasdaq Industrial Index, and that all dividends received within a quarter, if any, were reinvested in that quarter.
The Risk Oversight Committee members have varied expertise and experience including risk management, technology and finance, equipping them to oversee cybersecurity risks effectively. The Risk Oversight Committee has delegated day-to-day oversight of our information security program to our executive officers, including the Vice President of Information Technology ("VP of IT") along with our Global Cybersecurity Director ("Director").
The Risk Oversight Committee members have varied expertise and experience including risk management, technology, and finance, equipping them to oversee cybersecurity risks effectively. The Risk Oversight Committee has delegated day-to-day oversight of our information security program to our executive officers, including the Vice President of Information Technology (“VP of IT”) along with our Global Cybersecurity Director (“Director”).
A substantially greater number of holders of the Company's common stock are "street name" or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.
A substantially greater number of holders of the Company’s common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.
The Director is a 30-year veteran of the information technology industry having served in the military and with a Fortune 500 company with over 20 years of cybersecurity experience including leading incident responses, policy development, and building security architectures.
The Director reports to the VP of IT and is a 31-year veteran of the information technology industry having served in the military and with a Fortune 500 company with over 20 years of cybersecurity experience including leading incident responses, policy development, and building security architectures.
These senior leaders include representation from functions including product line, sales and marketing, manufacturing, legal, 25 finance, human resources, supply chain, information technology and regional representation.
These s enior leaders include representation from functions including product line, sales and marketing, manufacturing, legal, finance, human resources, supply chain, information technology, and regional representation.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our Common Stock is traded on the Nasdaq Global Select Market (“NasdaqGS”) under the symbol “DIOD.” Holders As of February 2, 2024, there were approximately 201 registered holders of record of the Company's common stock.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our Common Stock is traded on the Nasdaq Global Select Market under the symbol “DIOD.” Holders As of February 3, 2025, there were approximately 192 registered holders of record of the Company’s common stock.
As of December 31, 2023, we own approximately 4.1 million square feet of property and lease approximately 5.3 million square feet of property, with leases expiring at various times between 2024 and 2028 and with land rights expiring in 2061.
As of December 31, 2024, we own approximately 3.7 million square feet of property and lease approximately 5.3 million square feet of property, with leases expiring at various times between 2025 and 2029 and with land rights expiring in 2061.
We also own and lease properties around the world for use as sales offices, design centers, research and development labs, warehouses, logistic centers, and manufacturing support. The size and/or location of these properties change from time to time based on business requirements.
We also own and lease properties around the world for use as sales offices, design centers, research and development labs, warehouses, logistic centers, and manufacturing support. The size and/or location of these properties change from time to time based on business requirements. The table below sets forth the largest of the properties either owned or leased by the Company.
The VP of IT has a monthly meeting with the Company's President to provide an update of cybersecurity incidents and risks, irrespective of materiality. The Company's Board of Directors is provided a quarterly update on cybersecurity roadmaps and progress.
The VP of IT has a monthly meeting with the Company’s President to provide an update of cybersecurity incidents and risks, irrespective of materiality.
To supplement our cybersecurity and data privacy risk assessment, identification, management and mitigation efforts, we regularly consult with third-party experts, which include the following services: • conduct annual cybersecurity and data privacy risk assessments; • conduct external and internal penetration tests; • monitor critical infrastructure for abnormal behavior; and • provide validation of the Company’s cybersecurity and operations processes against the National Institute of Standards and Technology cybersecurity framework.
To supplement our cybersecurity and data privacy risk assessment, identification, management, and mitigation efforts, we regularly consult with third-party experts, which include the following services: • conduct annual cybersecurity and data privacy risk assessments; • conduct external and internal penetration tests; • monitor critical infrastructure for abnormal behavior; and • provide validation of the Company’s cybersecurity and operations processes against the National Institute of Standards and Technology cybersecurity framework. 27 Impact of cybersecurity risks on business strategy, results of operations or financial condition Cybersecurity threats, such as threats of attacks from computer hackers, cyber criminals, nation-State actors, and other malicious internet-based activity, continue to increase.
Risk Management and Strategy The Company has a robust cybersecurity program that has direct involvement from the Board of Directors and senior management. Our business operations and relationships with customers and suppliers are heavily reliant on technology, and any failure or disruption in our technological systems could have significant negative impacts on our business.
Our business operations and relationships with customers and suppliers are heavily reliant on technology, and any failure or disruption in our technological systems could have significant negative impacts on our business. Protecting information, including information of our customers, is a top priority.
December 2023 2018 2019 2020 2021 2022 2023 Diodes Incorporated Return % 74.74 25.07 55.76 (30.67 ) 5.74 Cum $ 100 174.74 218.54 340.39 235.99 249.53 NASDAQ Industrial Index Return % 27.17 52.72 8.81 (35.05 ) 28.93 Cum $ 100 127.17 194.22 211.33 137.26 176.97 NASDAQ Composite-Total Returns Return % 36.69 44.92 22.18 (32.54 ) 44.64 Cum $ 100 136.69 198.10 242.03 163.28 236.17 Issuer Purchases of Equity Securities There were no repurchases of our Common Stock during the fourth quarter of 2023.
December 2024 2019 2020 2021 2022 2023 2024 Diodes Incorporated Return % 25.07 55.76 (30.67 ) 5.74 (23.42 ) Cum $ 100 125.07 194.80 135.05 142.80 109.36 NASDAQ Industrial Index Return % 52.72 8.81 (35.05 ) 28.93 25.67 Cum $ 100 152.72 166.18 107.93 139.16 174.89 NASDAQ Composite-Total Returns Return % 44.92 22.18 (32.54 ) 44.64 29.57 Cum $ 100 144.92 177.06 119.45 172.77 223.87 Issuer Purchases of Equity Securities There were no repurchases of our Common Stock during the fourth quarter of 2024.
The table below sets forth the largest of the properties either owned or leased by the Company. 27 We believe our current facilities are adequate for the foreseeable future. Primary use Location Sq. Ft.
We believe our current facilities are adequate for the foreseeable future. Primary use Location Sq. Ft.
Removed
Our VP of IT is a 24-year information technology industry veteran having served in key information technology roles at a Fortune 500 company with over 15 years of direct influence over cybersecurity roadmaps and operations.
Added
The Company’s Board of Directors is provided a quarterly update on cybersecurity roadmaps and progress. 26 Risk Management and Strategy The Company has a robust cybersecurity program that has direct involvement from the Board of Directors and senior management.
Removed
Protecting information, including information of our customers, is a top priority.
Removed
Impact of cybersecurity risks on business strategy, results of operations or financial condition Cybersecurity threats, such as threats of attacks from computer hackers, cyber criminals, nation-State actors and other malicious internet-based activity, continue to increase.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

64 edited+17 added−28 removed59 unchanged
Biggest changeAdditional engineering, sales, warehouse, and logistics offices are located in Taipei, Taiwan; Hong Kong; Milan, Italy; Singapore City, Singapore; Oldham, UK; Shanghai, Shenzhen, Wuhan, and Yangzhou, China; Seongnam-si, South Korea; and Munich, Frankfurt, Germany; with support offices throughout the world. • The Company’s manufacturing facilities have achieved certifications in the internationally recognized standards of ISO 9001:2015, ISO 14001:2015, and, for automotive products, IATF 16949:2016; • The Company is also C-TPAT certified; and • We believe these quality awards reflect the superior quality-control techniques established at the Company and further enhance our credibility as a vendor-of-choice to original equipment manufacturers ("OEMs") increasingly concerned with quality and consistency.
Biggest changeWe operate from the following locations, with additional support offices throughout the world: • Corporate Headquarters Plano, Texas, United States • Design, Engineering, and Marketing Shanghai, Yangzhou, Shenzhen, and Hong Kong, China Oldham, England New Taipei City, Hsinchu, and Tainan, Taiwan Milpitas, California, and Plano, Texas, United States • Wafer Fabrication Shanghai and Wuxi, China Oldham, England Greenock, Scotland Hsinchu, Taiwan South Portland, Maine, United States • Assembly and Test Shanghai, Chengdu, and Wuxi, China Neuhaus am Rennweg, Germany Chongli, Taiwan • Sales, Warehouse, and Logistics Hong Kong, Shanghai, Beijing, Shenzhen, Wuhan, Guangzhou, Qingdao, and Xiamen, China 32 Oldham, England Frankfurt and Munich, Germany Milan, Italy Tokyo, Japan Singapore Seongnam-si, South Korea New Taipei City, Taiwan Milpitas, California and Plano, Texas, United States The Company’s manufacturing facilities have achieved certifications in the internationally recognized standards of ISO 9001:2015, ISO 14001:2015, and, for automotive products, IATF 16949:2016 and the Company is also C-TPAT certified.
Summary for the Twelve Months Ended December 31, 2023 • Net sales were $1.7 billion, a decrease of 16.9% over the $2.0 billion in 2022; • Gross profit was $658.2 million, a 20.4% decrease from $827.2 million in 2022; • Gross profit margin declined 170 basis points to 39.6% compared to 41.3% in 2022; • Operating income decreased 38.6% to $250.6 million, or 15.1% of revenue, compared to $408.2 million, or 20.4% of revenue, in 2022; • Net income was $227.2 million, a decrease of 31.4% from the $331.3 million last year; • Earnings per share was $4.91 per diluted share, a 31.8% decrease from the $7.20 per diluted share in 2022; • We achieved $280.9 million cash flow from operations.
Summary for the Twelve Months Ended December 31, 2023 • Net sales were $1.7 billion, a decrease of 16.9% over the $2.0 billion in 2022; • Gross profit was $658.2 million, a 20.4% decrease from $827.2 million in 2022; • Gross profit margin declined 170 basis points to 39.6% compared to 41.3% in 2022; • Operating income decreased 38.6% to $250.6 million, or 15.1% of revenue, compared to $408.2 million, or 20.4% of revenue, in 2022; • Net income was $227.2 million, a decrease of 31.4% from the $331.3 million last year; • Earnings per share was $4.91 per diluted share, a 31.8% decrease from the $7.20 per diluted share in 2022; • We achieved $280.9 million of cash flow from operations.
This process involves using an asset and liability approach whereby deferred tax assets and liabilities are recorded for differences in the financial reporting bases and tax bases of our assets and liabilities. A valuation allowance is provided against deferred tax assets unless it is more likely than not that such deferred tax assets will be realized.
This process involves using an asset and liability approach whereby deferred tax assets and liabilities are recorded for differences in the financial reporting bases and tax bases of our assets and liabilities. A valuation allowance 39 is provided against deferred tax assets unless it is more likely than not that such deferred tax assets will be realized.
See “Risk Factors – Changes in actuarial assumptions for our defined benefit plan could increase the volatility of the plan’s asset value, require us to increase cash contributions to the plan and have a negative impact on our cash flows, operating results and financial condition ” in Part I, Item 1A of this Annual Report for additional information. 39 Interest Rate Risk We have credit facilities with financial institutions in the U.S., Asia and Europe as well as other debt instruments with interest rates equal to SOFR or similar indices plus a negotiated margin.
See “Risk Factors – Changes in actuarial assumptions for our defined benefit plan could increase the volatility of the plan’s asset value, require us to increase cash contributions to the plan and have a negative impact on our cash flows, operating results and financial condition ” in Part I, Item 1A of this Annual Report for additional information. 41 Interest Rate Risk We have credit facilities with financial institutions in the U.S., Asia, and Europe as well as other debt instruments with interest rates equal to SOFR or similar indices plus a negotiated margin.
Financial Condition Liquidity and Capital Resources Our primary sources of liquidity are cash and cash equivalents, short-term investments, funds from operations and, if necessary, borrowings under our credit facilities. 35 Liquidity requirements Our primary liquidity requirements have been to meet our capital expenditure needs and to fund ongoing operations.
Financial Condition Liquidity and Capital Resources Our primary sources of liquidity are cash and cash equivalents, short-term investments, funds from operations, and, if necessary, borrowings under our credit facilities. Liquidity requirements Our primary liquidity requirements have been to meet our capital expenditure needs and to fund ongoing operations.
The expected return on plan assets is determined based on historical and expected future returns of the various assets classes and as such, each 1.0% increase/(decrease) in the expected rate of return assumption would increase/(decrease) the net-period benefit cost by approximately $1.2 million.
The expected return on plan assets is determined based on historical and expected future returns of the various assets classes and as such, each 1.0% increase/(decrease) in the expected rate of return assumption would increase/(decrease) the net-period benefit cost by approximately $1.0 million.
We believe the long-term outlook for our business remains generally favorable despite the uncertainties in the global economy as we continue to execute on the strategy that 32 has proven successful for us over the years.
We believe the long-term outlook for our business remains generally favorable despite the uncertainties in the global economy as we continue to execute on the strategy that has proven successful for us over the years.
Amortization of acquisition-related intangible assets Amortization of acquisition-related intangible assets consists of assets such as developed technologies and customer relationships. Interest income / expense 33 Interest income consists of interest earned on our cash and investment balances. Interest expense consists of interest payable on our outstanding credit facilities and other debt instruments.
Amortization of acquisition-related intangible assets Amortization of acquisition-related intangible assets consists of assets such as developed technologies and customer relationships. Interest income / expense Interest income consists of interest earned on our cash and investment balances. Interest expense consists of interest payable on our outstanding credit facilities and other debt instruments.
General Diodes Incorporated, together with its subsidiaries (collectively the “Company,” “we” or “our” (Nasdaq: DIOD)), a Standard and Poor's Smallcap 600 and Russell 3000 Index company, is a leading global manufacturer and supplier of high-quality application-specific standard products within the broad discrete, logic, analog, and mixed-signal semiconductor markets. The Company serves the industrial, automotive, computing, communications and consumer markets.
General Diodes Incorporated, together with its subsidiaries (collectively the “Company,” “we,” or “our” (Nasdaq: DIOD)), a Standard and Poor’s Smallcap 600 and Russell 3000 Index company, is a leading global manufacturer and supplier of high-quality application-specific standard products within the broad discrete, logic, analog, and mixed-signal semiconductor markets. The Company serves the industrial, automotive, computing, communications, and consumer markets.
Recently Issued Accounting Pronouncements See Note 1 of “Notes to Consolidated Financial Statements” of this Annual Report for additional information regarding the status of recently issued accounting pronouncements. 38 Ite m 7A. Quantitative and Qualitative Disclosures About Market Risk. Foreign Currency Risk We face exposure to adverse movements in foreign currency exchange rates, primarily in Asia and Europe.
Recently Issued Accounting Pronouncements See Note 1 of “Notes to Consolidated Financial Statements” of this Annual Report for additional information regarding the status of recently issued accounting pronouncements. 40 Ite m 7A. Quantitative and Qualitative Disclosures About Market Risk. Foreign Currency Risk We face exposure to adverse movements in foreign currency exchange rates, primarily in Asia and Europe.
See “Risk Factors,” – “ We are subject to interest rate risk that could have an adverse effect on our cost of working capital and interest expenses, which could adversely affect our business, operating results and financial condition” in Part I, Item 1A of this Annual Report for additional information.
See “Risk Factors, – We are subject to interest rate risk that could have an adverse effect on our cost of working capital and interest expenses, which could adversely affect our business, operating results, and financial condition ” in Part I, Item 1A of this Annual Report for additional information.
Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer 40 and implemented by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer 42 and implemented by our Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
The effectiveness of our internal control over financial reporting as of December 31, 2023, has been audited by Moss Adams LLP, an independent registered public accounting firm, as stated in their report which appears in Item 8 of this Annual Report on Form 10-K.
The effectiveness of our internal control over financial reporting as of December 31, 2024, has been audited by Moss Adams LLP, an independent registered public accounting firm, as stated in their report which appears in Item 8 of this Annual Report on Form 10-K.
The weighted-average discount rate assumption used to determine benefit obligations as of December 31, 2023, was 4.7%. A 0.2% increase/(decrease) in the discount rate used to calculate the net period benefit cost for the year would reduce/increase annual benefit cost by less than $0.5 million.
The weighted-average discount rate assumption used to determine benefit obligations as of December 31, 2024, was 4.7%. A 0.2% increase/(decrease) in the discount rate used to calculate the net period benefit cost for the year would reduce/increase annual benefit cost by less than $0.5 million.
This discussion summarizes the significant factors affecting the consolidated operating results, financial condition and liquidity of the Company for the twelve months ended December 31 2023. This discussion should be read in conjunction with Item 8, the consolidated financial statements and the notes to consolidated financial statements.
This discussion summarizes the significant factors affecting the consolidated operating results, financial condition, and liquidity of the Company for the twelve months ended December 31 2024. This discussion should be read in conjunction with Item 8, the consolidated financial statements and the notes to consolidated financial statements.
Whitmire, with the participation of our management, carried out an evaluation as of December 31, 2023, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended).
Whitmire, with the participation of our management, carried out an evaluation as of December 31, 2024, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended).
This evaluation included review of the documentation of controls, testing of operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2023.
This evaluation included review of the documentation of controls, testing of operating effectiveness of controls, and a conclusion on this evaluation. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2024.
Description of Sales and Expenses Net sales The principal factors that have affected or could affect our net sales from period to period are: • The condition of the economy in general and of the semiconductor industry in particular; • The February 2022 invasion of Ukraine by Russia, the conflict in the Middle East, and the resulting and continuing global impact; • Political tension, including the implementation of tariffs, among and between the countries in which we do business; • Our customers’ adjustments in their order levels; • Changes in our pricing policies or the pricing policies of our competitors or suppliers; • The addition or termination of key supplier relationships; • The rate of introduction and acceptance by our customers of new products; • Our ability to compete effectively with our current and future competitors; • Our ability to enter into and renew key corporate and strategic relationships with our customers, vendors and strategic alliances; • Changes in foreign currency exchange rates; • A major disruption of our information technology infrastructure; • Unforeseen catastrophic events, such as armed conflict, terrorism, fires, typhoons and earthquakes; • Any other disruptions, such as change in the political or governmental policies, labor shortages, unplanned maintenance or other manufacturing problems; and • Other risks, uncertainties, and assumptions identified in item 1A, "Risk Factors," of this Annual Report and risks, uncertainties, and assumptions reflected in other documents we file with the SEC.
Description of Sales and Expenses Net sales The principal factors that have affected or could affect our net sales from period to period are: • The condition of the economy in general and of the semiconductor industry in particular; • The continued hostilities between Ukraine and Russia, the conflict in the Middle East, and the resulting and continuing global impact; • Political tension, including the implementation of tariffs, among and between the countries in which we do business; • Our customers’ adjustments in their order levels; • Changes in our pricing policies or the pricing policies of our competitors or suppliers; • The addition or termination of key supplier relationships; • The rate of introduction and acceptance by our customers of new products; • Our ability to compete effectively with our current and future competitors; • Our ability to enter into and renew key corporate and strategic relationships with our customers, vendors, and strategic alliances; • Changes in foreign currency exchange rates; • A major disruption of our information technology infrastructure; • Unforeseen catastrophic events, such as pandemics, armed conflict, terrorism, fires, typhoons, and earthquakes; • Any other disruptions, such as change in the political or governmental policies, labor shortages, unplanned maintenance, or other manufacturing problems; and • Other risks, uncertainties, and assumptions identified in item 1A, “Risk Factors,” of this Annual Report and risks, uncertainties, and assumptions reflected in other documents we file with the SEC.
A 0.2% increase/(decrease) in the discount rate used to calculate the year-end projected benefit obligation would (decrease)increase the year–end projected benefit obligation by approximately $2.5 million.
A 0.2% increase/(decrease) in the discount rate used to calculate the year-end projected benefit obligation would (decrease)increase the year end projected benefit obligation by approximately $2.1 million.
See “Risk Factors” – Risks Related to our International Operations” in Part I, Item 1A of this Annual Report for additional information. Inflation Risk Inflation did not have a material effect on net sales or net income in fiscal year 2023. A significant increase in inflation could affect future performance.
See “Risk Factors – Risks Related to our International Operations” in Part I, Item 1A of this Annual Report for additional information. Inflation Risk Inflation did not have a material effect on net sales or net income in fiscal year 2024. A significant increase in inflation could affect future performance.
Based on the allowance/reserve balance as of December 31, 2023, a 1% change would increase or decrease the estimated allowance/reserve and net revenue by approximately $0.7 million. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined principally by the first-in, first-out method.
Based on the allowance/reserve balance as of December 31, 2024, a 1% change would increase or decrease the estimated allowance/reserve and net revenue by approximately $0.8 million. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined principally by the first-in, first-out method.
Short-term debt Our Asia subsidiaries maintain credit facilities with several financial institutions through our foreign entities worldwide totaling $147.9 million. Other than two Taiwanese credit facilities that are collateralized by assets, our foreign credit lines are unsecured, uncommitted and contain no restrictive covenants.
Short-term debt Our Asia subsidiaries maintain credit facilities with several financial institutions through our foreign entities worldwide totaling $146.0 million. Other than two Taiwanese credit facilities that are collateralized by assets, our foreign credit lines are unsecured, uncommitted and contain no restrictive covenants.
The increase in the effective tax rate for 2023 compared to 2022 is primarily attributable to a decrease in overall pre-tax book income and the impact of changes to the outside basis difference in foreign subsidiaries where the Company does not assert permanent reinvestment.
The increase in the effective tax rate for 2024 compared to 2023 is primarily attributable to a decrease in overall pre-tax book income, the impact of the geographical mix of pre-tax income and the impact of changes to the outside basis difference in foreign subsidiaries where the Company does not assert permanent reinvestment.
Based on our debt balances at December 31, 2023, an increase or decrease in interest rates by 1.0% for the year on our credit facilities would increase or decrease our annual interest rate expense by approximately $0.2 million, net of the amounts realized from our interest rate swaps.
Based on our debt balances at December 31, 2024, an increase or decrease in interest rates by 1.0% for the year on our credit facilities would increase or decrease our annual interest rate expense by approximately $0.5 million, net of the amounts realized from our interest rate swaps.
Based on balances at December 31, 2023, if the Chinese Yuan, the Taiwanese dollar, the Euro and the British Pound Sterling were to weaken (or strengthen) by 1.0% against the U.S. dollar, we would experience currency transaction gain (or loss) of approximately $2.0 million (partially offset by any foreign currency hedges).
Based on balances at December 31, 2024, if the Chinese Yuan, the Taiwanese dollar, the Euro, and the British Pound Sterling were to weaken (or strengthen) by 1.0% against the U.S. dollar, we would experience currency transaction gain (or loss) of approximately $3.7 million (partially offset by any foreign currency hedges).
The amount recognized in accumulated other comprehensive income was a net loss of $43.5 million. If the British Pound Sterling were to (weaken) or strengthen by 1.0% against the U.S. dollar, we would experience currency translation liability (decrease) or increase of less than $0.5 million.
The amount recognized in accumulated other comprehensive income was a net loss of $40.8 million. If the British Pound Sterling were to (weaken) or strengthen by 1.0% against the U.S. dollar, we would experience currency translation liability (decrease) or increase of less than $0.2 million.
Item 6. Reserved . 30 Ite m 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Item 6. Reserved . 31 Ite m 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
A rise in interest rates could have an adverse impact upon our cost of working capital and our interest expense. As of December 31, 2023, our outstanding principal long-term debt was $21.4 and outstanding short-term debt was $40.7 million.
A rise in interest rates could have an adverse impact upon our cost of working capital and our interest expense. As of December 31, 2024, our outstanding principal long-term debt was $20.7 and outstanding short-term debt was $31.4 million.
The Company has recorded outside basis differences in the limited instances where they do not assert permanent reinvestment. As of December 31, 2023, our foreign subsidiaries held approximately $190.3 million of cash, cash equivalents and investments of which approximately $52.2 million would be subject to foreign withholding tax if distributed outside the country in which the related earnings were generated.
The Company has recorded outside basis differences in the limited instances where they do not assert permanent reinvestment. As of December 31, 2024, our foreign subsidiaries held approximately $236.3 million of cash, cash equivalents and investments, of which approximately $76.7 million would be subject to foreign withholding tax if distributed outside the country in which the related earnings were generated.
The projected unit credit method is the actuarial cost method used to compute the pension liabilities and related expenses. As of December 31, 2023, the plan was underfunded and a liability of approximately $10.1 million was reflected in our consolidated financial statements as a noncurrent liability.
The projected unit credit method is the actuarial cost method used to compute the pension liabilities and related expenses. As of December 31, 2024, the plan was underfunded and a liability of approximately $7.3 million was reflected in our consolidated financial statements as a noncurrent liability.
Results of Operations The following table sets forth, for the periods indicated, the percentage that certain items in the statements of income bear to net sales: Percent of Net Sales Twelve Months Ended December 31, 2023 2022 Net sales 100.0 % 100.0 % Cost of goods sold (60.4 ) (58.7 ) Gross profit 39.6 41.4 Operating expenses (24.5 ) (21.0 ) Income from operations 15.1 20.4 Interest income 0.8 0.2 Interest expense (0.3 ) (0.4 ) Foreign currency gain (loss), net (0.3 ) 0.1 Unrealized gain (loss) on investments 1.1 (0.8 ) Other income 0.4 0.3 Income before income taxes and noncontrolling interest 16.7 19.8 Income tax provision (2.8 ) (2.8 ) Net income 13.9 17.0 Net (income) attributable to noncontrolling interest (0.2 ) (0.4 ) Net income attributable to common stockholders 13.7 16.6 The following discussion explains in greater detail our consolidated operating results and financial condition.
Net income attributable to common stockholders Net income attributable to common stockholders is net income less net income attributable to noncontrolling interest. 35 Results of Operations The following table sets forth, for the periods indicated, the percentage that certain items in the statements of income bear to net sales: Percent of Net Sales Twelve Months Ended December 31, 2024 2023 Net sales 100.0 % 100.0 % Cost of goods sold (66.8 ) (60.4 ) Gross profit 33.2 39.6 Total operating expense (29.4 ) (24.5 ) Income from operations 3.8 15.1 Interest income 1.4 0.8 Interest expense (0.2 ) (0.3 ) Foreign currency (loss) gain, net (0.5 ) (0.3 ) Unrealized (loss) gain on investments (0.0 ) 1.1 Other income 0.2 0.4 Income before income taxes and noncontrolling interest 4.8 16.7 Income tax provision (0.9 ) (2.8 ) Net income 3.9 13.9 Net (income) attributable to noncontrolling interest (0.5 ) (0.2 ) Net income attributable to common stockholders 3.4 13.7 The following discussion explains in greater detail our consolidated operating results and financial condition.
The Credit Agreement, which represents a complete amendment and restatement of the Existing Credit Agreement, consists of a Revolving Credit Facility in the amount of $225.0 million, including a swing line sublimit equal to the lesser of $50.0 million and the Revolving Credit Facility, a letter of credit sublimit equal to the lesser of $100.0 million and the Revolving Credit Facility, and an alternative currency sublimit equal to the lesser of $40.0 million and the Revolving Credit Facility.
The Credit Agreement consists of a Revolving Credit Facility in the amount of $225.0 million, including a swing line sublimit equal to the lesser of $50.0 million and the Revolving Credit Facility, a letter of credit sublimit equal to the lesser of $100.0 million and the Revolving Credit Facility, and an alternative currency sublimit equal to the lesser of $40.0 million and the Revolving Credit Facility.
Short-term investments As of December 31, 2023, we had short-term investments of approximately $10.2 million. These investments are highly liquid with maturity dates greater than three months at the date of purchase. We generally can access these investments in a relatively short amount of time but in doing so we generally forfeit a portion of interest income.
These investments are highly liquid with maturity dates greater than three months at the date of purchase. We generally can access these investments in a relatively short amount of time but in doing so we generally forfeit a portion of interest income.
On an ongoing basis, we evaluate our estimates, which are based upon historical experiences, market trends and financial forecasts and projections, and upon various assumptions that management believes to be reasonable under the circumstances at that certain point in time.
On an ongoing basis, we evaluate our estimates, which are based upon historical experiences, market trends, and financial forecasts and projections, and upon various assumptions that management believes to be reasonable under the circumstances at that certain point in time. Actual results may differ, significantly at times, from these estimates under different assumptions or conditions.
Income tax provision We recognized income tax expense of approximately $47.3 million for the twelve months ended December 31, 2023, and income tax expense of approximately $56.7 million for the twelve months ended December 31, 2022, resulting in effective income tax rates of 17.0% and 14.3%, respectively.
Income tax provision We recognized income tax expense of approximately $11.8 million for the twelve months ended December 31, 2024, and income tax expense of approximately $47.3 million for the twelve months ended December 31, 2023, resulting in effective income tax rates of 18.9% and 17.0%, respectively.
We had cash capital expenditures of $150.8 million, or 9.1% of net sales. Net cash flow was a negative $22.6 million, which includes the net pay-down of $124.3 million of total debt.
We had cash capital expenditures of $73.0 million, or 5.6% of net sales. Net cash flow was a negative $3.8 million, which includes the net pay-down of $7.6 million of total debt.
The Borrowers have the option to increase the Revolving Facility and/or incur Incremental Term Loans in an aggregate principal amount of up to $350.0 million. The Revolving Credit Facility bears interest at Term SOFR or similar other indices plus a specified margin.
The Company has the option to increase the Revolving Credit Facility and/or incur Incremental Term Loans in an aggregate principal amount of up to $350.0 million. The Credit Agreement bears interest at Term Secured Overnight Financing Rate (“SOFR”) or similar other indices plus a specified margin and matures in May 2028.
Selling, general and administrative Selling, general and administrative expenses relate primarily to compensation and associated expenses for personnel in general management, sales and marketing, information technology, engineering, human resources, procurement, planning and finance, and sales commissions, as well as outside legal, investor relations, accounting, consulting and other operating expenses.
Cost of goods sold is also affected by inventory obsolescence if our inventory management is not efficient. 34 Selling, general, and administrative Selling, general, and administrative expenses relate primarily to compensation and associated expenses for personnel in general management, sales and marketing, information technology, engineering, human resources, procurement, planning and finance, and sales commissions, as well as outside legal, investor relations, accounting, consulting and other operating expenses.
For 2023 and 2022 our working capital was $793.9 million and $729.1 million, respectively. In 2023, our working capital increased primarily due to increases in accounts receivable and inventories, and a decrease in our income taxes payable and accounts payable.
For 2024 and 2023 our working capital was $848.6 million and $793.9 million, respectively. In 2024, our working capital increased primarily due to increases in accounts receivable and inventories, and a decrease in our short-term debt and accounts payable.
Actual results may differ, significantly at times, from these estimates under different assumptions or conditions. 37 We believe the following critical accounting policies and estimates affect the significant estimates and judgments we use in the preparation of our consolidated financial statements, and may involve a higher degree of judgment and complexity than others.
We believe the following critical accounting policies and estimates affect the significant estimates and judgments we use in the preparation of our consolidated financial statements, and may involve a higher degree of judgment and complexity than others.
In addition, cost of goods sold includes the cost of products that we purchase from other manufacturers and sell to our customers. Cost of goods sold is also affected by inventory obsolescence if our inventory management is not efficient.
In addition, cost of goods sold includes the cost of products that we purchase from other manufacturers and sell to our customers.
The table below sets forth summary information from our statements of cash flows: Twelve Months Ended December 31, 2023 2022 Net cash flows provided by operating activities $ 280,914 $ 392,501 Net cash and cash equivalents used in investing activities (158,322 ) (265,263 ) Net cash and cash equivalents used in financing activities (144,723 ) (125,713 ) Effect of exchange rate changes on cash and cash equivalents (485 ) (27,244 ) Change in cash and cash equivalents, including restricted cash $ (22,616 ) $ (25,719 ) Operating Activities Net cash provided by operating activities for 2023 was approximately $280.9 million, due primarily to $230.6 million of net income, $137.3 million in depreciation expense and amortization of intangible assets expense and $30.9 million from non-cash share-based compensation expense.
The table below sets forth summary information from our statements of cash flows: Twelve Months Ended December 31, 2024 2023 Net cash and cash equivalents from operating activities $ 119,435 $ 280,914 Net cash and cash equivalents from investing activities (118,040 ) (158,322 ) Net cash and cash equivalents from financing activities (19,344 ) (144,723 ) Effect of exchange rate changes on cash and cash equivalents 14,190 (485 ) Change in cash and cash equivalents, including restricted cash $ (3,759 ) $ (22,616 ) Operating Activities Net cash flows from operating activities for 2024 was approximately $119.4 million, due primarily to $50.8 million of net income, $137.1 million in depreciation expense and amortization of intangible assets expense and $22.8 million from non-cash share-based compensation expense.
We also have timing and connectivity solutions including clock ICs, crystal oscillators, PCIe packet switches, multi-protocol switches, interface products, and signal integrity solutions for high-speed signals. Diodes’ corporate headquarters and Americas’ sales offices are located in Plano, Texas, and Milpitas, California.
We also have timing and connectivity solutions including clock ICs, crystal oscillators, PCIe packet switches, multi-protocol switches, interface products, and signal integrity solutions for high-speed signals.
The table below sets forth our revenue as a percentage of product revenue by end-user market: Twelve Months Ended December 31, End-Markets 2023 2022 2021 Industrial 27% 27% 23% Automotive 19% 15% 12% Computing 23% 24% 30% Consumer 18% 19% 19% Communications 13% 15% 16% Cost of Goods Sold Cost of goods sold decreased approximately $169.8 million for the twelve months ended December 31, 2023 compared to the same period last year, reflecting the decrease in revenue.
The table below sets forth our revenue as a percentage of product revenue by end-user market: Twelve Months Ended December 31, End-Markets 2024 2023 2022 Industrial 23% 27% 27% Automotive 19% 19% 15% Computing 25% 23% 24% Consumer 19% 18% 19% Communications 14% 13% 15% Gross profit For the twelve months ended December 31, 2024, gross profit decreased approximately 33.8% when compared to the prior year, reflective of the lower revenue in 2024.
The Facility is governed by the laws of Hong Kong. 36 Capital expenditures and investments In 2023 and 2022, our total cash capital expenditures were approximately $150.8 million and $211.7 million, respectively. Our capital expenditures for these periods were primarily related to manufacturing expansion in both our assembly/test and wafer fabrication facilities.
Capital expenditures and investments In 2024 and 2023, our total cash capital expenditures were approximately $73.0 million and $150.8 million, respectively. Our capital expenditures for these periods were primarily related to manufacturing expansion in both our assembly/test and wafer fabrication facilities.
Discussion of Cash Flows Cash and cash equivalents, including restricted cash, decreased approximately $22.6 million to $318.5 million in 2023 from $341.1 million in 2022.
Discussion of Cash Flows Cash and cash equivalents, including restricted cash, decreased approximately $3.8 million to $314.7 million in 2024 from $318.5 million in 2023.
Our market focus is on high-growth, end-user applications in the following areas: • Industrial: embedded systems, precision controls, and Industrial IoT; • Automotive: connected driving, comfort/style/safety, and electrification/powertrain; • Computing: cloud computing including artificial intelligence servers, storage, and data center applications; 31 • Communications: smartphones, 5G networks, advanced protocols, and charging solutions; and • Consumer: IoT, wearables, home automation, and smart infrastructure.
Our market focus is on high-growth, end-user applications in the following areas: • Industrial: embedded systems, precision controls, medical, clean energy, machine to machine, robotics, motor control, and AIoT; • Automotive: connected driving, comfort/style/safety, and electrification/powertrain; • Computing: cloud computing: server, AI server, storage, data centers, and edge AI; • Communications: smart phones, 5G networks, and enterprise networking; and • Consumer: IoT: wearables, home automation, home appliances, smart infrastructure, and charging solutions.
See Note 8 “Bank Credit Agreements and Other Short-term and Long-term Debt, Note 9 - "Leases", Note 13 - "Employee Benefit Plans" and Note 17 - "Commitments and Contingencies” of the notes to consolidated financial statements" included elsewhere in this Annual Report for additional information.
Contractual Obligations Our estimated future obligations consist of debt, interest on long-term debt, leases, defined benefit obligation and purchase obligations. See Note 8–“Bank Credit Agreements and Other Short-term and Long-term Debt, Note 9–“Leases”, Note 13– “Employee Benefit Plans”, and Note 17–“Commitments and Contingencies” of the notes to consolidated financial statements” included elsewhere in this Annual Report for additional information.
The unused and available credit under the various facilities as of December 31, 2023, was approximately $106.8 million, net of $40.7 million advanced under our foreign credit lines and $0.4 million credit used for import and export guarantee.
The unused and available credit under the various facilities as of December 31, 2024, was approximately $114.0 million, net of $31.4 million advanced under our foreign credit lines and $0.6 million credit used for import and export guarantee. Long-term debt The Company maintains a long-term credit facility (“Credit Agreement”).
The increases were partially offset by a net decrease in operating capital assets and liabilities of $77.6 million, non-cash gains on investments of $19.4 million and a decrease in deferred income taxes of $13.3 million.
The increases were partially offset by a net decrease in operating assets and liabilities of $70.6 million, interest income from forward and collars of $10.4 million, gain on disposal of property, plant and equipment of $7.6 million, non-cash gains on investments of $0.3 million, and a decrease in deferred income taxes of $1.0 million.
The Company’s restricted cash primarily consisted of the cash required to be on deposit under contractual agreements with banks to support outstanding loan and import/export guarantees. As of December 31, 2023, restricted cash of $3.0 million was pledged as collateral for issuance of bank loans, bank acceptance notes and letters of credit.
The Company‘s restricted cash primarily consisted of the cash required to be on deposit under contractual agreements with banks to support outstanding loan and import/export guarantees.
Operating expenses Operating expenses for the twelve months ended December 31, 2023 decreased approximately $11.4 million, or 2.7%, compared to the same period last year due to product mix changes and lower prices. Selling, general and administrative expenses (“SG&A”) decreased approximately $22.9 million. The decrease in SG&A was due to lower wages and benefits and freight and duty costs.
Operating expenses Operating expenses for the twelve months ended December 31, 2024 decreased approximately $22.2 million, or 5.4%, compared to the same period last year. Selling, general, and administrative expenses (“SG&A”) decreased approximately $24.0 million or 9.3%, compared to the same period last year.
For the twelve months ended December 31, 2023, gross profit decreased approximately 20.4% when compared to the prior year. Gross profit margin for the twelve month periods ended December 31, 2023 and 2022, was 39.6% and 41.3%, respectively.
Gross profit margin for the twelve month periods ended December 31, 2024 and 2023, was 33.2% and 39.6%, respectively.
Summary for the Twelve Months Ended December 31, 2022 • Net sales were $2.0 billion, an increase of 10.8% over the $1.81 billion in 2021; • Gross profit was $827.2 million, a 23.4% increase from $670.4 million in 2021; • Gross profit margin improved 420 basis points to a record 41.3% from 37.1% in 2021; • Operating income increased 47.9% to a record $408.2 million, or 20.4% of revenue, compared to $276.0 million, or 15.3% of revenue, in 2021; • Net income was a record $331.3 million, an increase of 44.8% from the $228.8 million last year; • Earnings per share was $7.20 per diluted share, a 44.0% improvement from the $5.00 per diluted share in 2021; • We achieved $392.5 million cash flow from operations.
Summary for the Twelve Months Ended December 31, 2024 • Net sales were $1.3 billion, a decrease of 21.1% over the $1.7 billion in 2023; • Gross profit was $435.9 million, a 33.8% decrease from $658.2 million in 2023; • Gross profit margin was 33.2% compared to 39.6% in 2023; • Operating income decreased 79.9% to $50.4 million, or 3.8% of revenue, compared to $250.6 million, or 15.1% of revenue, in 2023; • Net income was $44.0 million, a decrease of 80.6% from the $227.2 million in 2023; • Earnings per share was $0.95 per diluted share, an 80.7% decrease from the $4.91 per diluted share in 2023; • We achieved $119.4 million of cash flow from operations.
Average unit cost increased 0.2% for the twelve months ended December 31, 2023, compared to the same period last year, due to cost increases from various subcontractors and foundries, as well as the cost for a more premium mix of products that were sold in 2023.
Average unit cost decreased 6.0% for the twelve months ended December 31, 2024, compared to the same period last year, due to the mix of the product being on lower margin/lower cost products, cost decreases from various foundries, as well as cost reductions from our own factories.
Going forward, over the long term, the Company expects capital expenditures to be within the 5% to 9% of net sales target model range. The Company also made an additional purchase of $13.9 million of equity in a privately held wafer design company.
Cash capital expenditures in 2024 were approximately 5.6% of our net sales, inline with the Company’s target model of 5% to 9% of net sales. Going forward, over the long term, the Company expects capital expenditures to continue to be within the 5% to 9% of net sales target model range.
Twelve Months Ended December 31, 2023 2022 Increase/(Decrease) % Change Net sales $ 1,661,739 $ 2,000,580 $ (338,841 ) (16.9 %) Cost of goods sold 1,003,557 1,173,343 (169,786 ) (14.5 %) Gross profit 658,182 827,237 (169,055 ) (20.4 %) Total operating expense 407,611 419,044 (11,433 ) (2.7 %) Interest income 13,338 3,672 9,666 263.2 % Interest expense (5,700 ) (8,320 ) (2,620 ) (31.5 %) Foreign currency (loss) gain, net (5,264 ) 2,122 7,386 348.1 % Unrealized gain (loss) on investments 18,267 (16,514 ) 34,781 210.6 % Other income 6,721 6,787 (66 ) (1.0 %) Income tax provision 47,285 56,685 (9,400 ) (16.6 %) 34 Net Sales Our net sales decreased approximately $338.8 million, or 16.9%, for the twelve months ended December 31, 2023, compared to the prior year, due to widespread decreased demand for our semiconductor products.
Twelve Months Ended December 31, 2024 2023 Increase/(Decrease) % Change Net sales $ 1,311,120 $ 1,661,739 $ (350,619 ) (21.1 %) Cost of goods sold 875,258 1,003,557 (128,299 ) (12.8 %) Gross profit 435,862 658,182 (222,320 ) (33.8 %) Total operating expense 385,412 407,611 (22,199 ) (5.4 %) Interest income 18,303 13,338 4,965 37.2 % Interest expense (2,334 ) (5,700 ) (3,366 ) (59.1 %) Foreign currency (loss) gain, net (6,308 ) (5,264 ) 1,044 (19.8 %) Unrealized (loss) gain on investments (321 ) 18,267 (18,588 ) 101.8 % Other income 2,892 6,721 (3,829 ) (57.0 %) Income tax provision 11,840 47,285 (35,445 ) (75.0 %) Net Sales Our net sales decreased approximately $350.6 million, or 21.1%, for the twelve months ended December 31, 2024, compared to the prior year, due to widespread decreased demand for our semiconductor products and the continued inventory adjustments by the customers that we serve.
Research and development expenses (“R&D”) increased approximately $8.6 million primarily due to increases in materials, supplies and depreciation, partially offset by decreases in professional services fees as compared to the same period last year. R&D, as a percentage of net sales, was 8.1% and 6.3% for the twelve-month periods ended December 31, 2023 and 2022, respectively.
SG&A, as a percentage of net sales, was 17.8% and 15.5% for the twelve-month periods ended December 31, 2024 and 2023, respectively. Research and development expenses (“R&D”) was relatively flat compared to the previous year, declining $0.8 million. R&D, as a percentage of net sales, was 10.2% and 8.1% for the twelve-month periods ended December 31, 2024 and 2023, respectively.
Financing Activities Net cash used in financing activities for 2023 was approximately $144.7 million, due primarily to the net reduction in our outstanding indebtedness of $124.3 million and taxes on net share settlements of $15.6 million. Contractual Obligations Our estimated future obligations consist of debt, interest on long-term debt, leases, defined benefit obligation and purchase obligations.
Financing Activities Net cash flows from financing activities for 2024 was approximately ($19.3) million, due primarily to the net reduction in our outstanding indebtedness of $7.6 million, taxes on net share settlements of $9.6 million, and net changes in noncontrolling interests of $2.1 million.
On an ongoing basis, we evaluate our inventory for obsolescence and slow-moving items. This evaluation includes analysis of sales levels, sales projections, and purchases by item, as well as raw material usage related to our manufacturing facilities. If our review indicates a reduction in utility below carrying value, we reduce our inventory to a new cost basis.
On an ongoing basis, we evaluate our inventory for salability, obsolescence and any other available applicable information. If our review indicates a reduction in utility below carrying value, we reduce our inventory to a new cost basis.
The discussion of our financial condition and results of operations for the year ended December 31, 2021 included in Item 7.
A discussion of our results of operations for the year ended December 31, 2024 compared to December 31, 2023 is included below.
Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022 is incorporated by reference into this Management’s Discussion and Analysis of Financial Condition and Results of Operations.
For a discussion and comparison of the results of our operations for the year ended December 31, 2023 with the year ended December 31, 2022, refer to “Management's Discussion and Analysis of Financial Conditions and Results of Operations” in our Form 10-K for the year ended December 31, 2023 filed with the SEC on February 9, 2024.
The Company has experienced growth in higher-margin end markets which have enabled the Company to increase its net sales and margins, even in the midst of the current supply-constrained environment. For the twelve months ended December 31, 2023, weighted-average sales price of the Company's products decreased 2.7% when compared to the prior year.
For the twelve months ended December 31, 2024, weighted-average sales price of the Company’s products decreased 14.9% and volumes decreased 7.3% when compared to the prior year.
The decrease in interest expense is due to lower levels of debt partially offset by increased interest rates on our floating rate debt. Unrealized gain on investments increased from 2022 due to mark to market adjustments on investments.
Other (expense)/income Interest income increased $5.0 million or 37.2% when compared to 2023 due to increased interest rates on our short-term investments and income from cross-currency swaps. The decrease in interest expense is due to lower debt levels. Unrealized gain on investments decreased from 2023 due to mark-to-market adjustments on investments recorded in 2023 and not repeated in 2024.
Removed
Design, marketing, and engineering centers are located in Plano, Milpitas, U.S.; Taipei, Taoyuan City, Taiwan; Shanghai, Yangzhou, China; Oldham, England; and Neuhaus, Germany. Diodes’ wafer fabrication facilities are located in South Portland, Maine, U.S., Oldham, Greenock, UK; Shanghai and Wuxi, China; and Keelung and Hsinchu, Taiwan.
Added
We believe these quality awards reflect the superior quality-control techniques established at the Company and further enhance our credibility as a vendor-of-choice to original equipment manufacturers (“OEMs”) increasingly concerned with quality and consistency.
Removed
Diodes has assembly and test facilities located in Shanghai, Chengdu, and Wuxi, China; Neuhaus, Germany; and Jhongli and Keelung, Taiwan.
Added
We had cash capital expenditures of $150.8 million, or 9.1% of net sales.
Removed
We had cash capital expenditures of $211.7 million, or 10.6% of net sales. Net cash flow was a negative $25.7 million , which includes the net pay-down of $112.2 million of total debt.
Added
Net cash flow was a negative $22.6 million, which includes the net pay-down of $124.3 million of total debt. 33 Business Outlook and Factors Relevant to Our Results of Operations Fiscal year 2024 continued to be challenging as overall global demand environment remains challenging, especially in Europe and North America.
Removed
Business Outlook and Factors Relevant to Our Results of Operations Fiscal year 2023 proved to be challenging as the consumer, computing and communications markets experienced an extended slowdown, coupled with an inventory rebalancing in the industrial market in late 2023 as well as softness in certain areas of the automotive market.
Added
In 2024 we were able to maintain our automotive and industrial mix percentage at 42 percent of total product revenue, which is a testament to the progress we have made on our new product and content expansion initiatives.
Removed
Despite this global weakness, we made notable progress on improving the quality and mix of our product portfolio as we continued to focus on the automotive and industrial markets through expanding design wins and increased investment in new product development, which resulted in over 350 new automotive-compliant products in 2023.
Added
Diodes enters the new year having strong POS in Asia for 2024, improved levels of channel inventory and a solid balance sheet combined with a committed focus on expanding growth in our target markets, especially the automotive and industrial markets, and capitalizing on new opportunities in AI-related applications.
Removed
The combined revenue from these two markets expanded to 46% of product revenue in 2023 compared to 42% in 2022. The Company's product mix improvements were evident in our ability to maintain full year gross margin near 40% for 2023, meeting our target model despite the lower annual revenue.
Added
Based on current data available, we expect 2025 to be a stronger year for Diodes than 2024. Additionally, with our past efforts to lower manufacturing costs and further develop our process technology and capabilities, combined with our hybrid manufacturing model, we have the available capacity to support future expected growth.
Removed
Throughout fiscal year 2023, the Company continued to drive manufacturing cost reductions and operating efficiencies, while also further developing our process technology for expansion of our internal facility utilization. Overall, we maintained strong cash generation in 2023 that enabled us to reduce total debt by $124.3 million to $62.1 million as of December 31, 2023.
Added
Our focus remains on prioritizing investments in the automotive and industrial markets, emphasizing our development of our analog and power discrete products that support all of the market segments we serve, and continuing to improve the quality and mix of our portfolio.
Removed
During 2024 the Company will remain focused on driving further improvements in the quality and mix of our portfolio with our analog and power discrete products, including our newly introduced SiC product family, especially targeted at the automotive and industrial markets.
Added
With our revenue contribution from auto and industrial remaining consistently above our target model, we are well positioned for growth and margin expansion as the market recovery broadens across our end markets in 2025 and beyond.

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