Diodes Incorporated

Good afternoon and welcome to Diodes Incorporated First Quarter 2022 Financial Results Conference Call. At this time, all participants are in listen-only mode. At the conclusion of today's conference call, instructions will be given for the question and answer session. If anyone needs assistance at any time during the conference call, please press the star key followed by the zero on your touchtone telephone. As a reminder, this conference call is being recorded today, Wednesday, May 4, 2022. I would now like to turn the call over to Leanne Seavers of the Shelton Group Investor Relations. Leanne, please go ahead.

Good afternoon and welcome to DIODE's first quarter 2022 financial results conference call. I'm Leanne Seavers, president of Shelton Group, DIODE's investor relations firm. Joining us today are DIODE's chairman, president, and CEO, Dr. Kei-Shu Liu, Chief Financial Officer, Brett Whitmire, Senior Vice President of Worldwide Sales and Marketing, Emily Yang, Senior Vice President of Business Groups, Gary Yu, and Director of Investor Relations, Urmeet Dhaliwal. Before I turn the call over to Dr. Liu, I'd like to remind our listeners that the results announced today are preliminary as they are subject to the company finalizing its closing procedures and customary quarterly review by the company's independent registered public accounting firm. As such, these results are unaudited and subject to revision until the company files its Form 10-Q for its 2022 fiscal quarter ending today. March 31st, 2022. In addition, management's prepared remarks contain forward-looking statements which are subject to risks and uncertainties, and management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today, and therefore, we refer you to a more detailed discussion of the risks and uncertainties in the company's filings with the Securities and Exchange Commission, including Forms 10-K and 10-Q. In addition, any projections as to the company's future performance represent management's estimates as of today, May 4, 2022. Douds assumes no obligation to update these projections in the future as market conditions may or may not change, except to the extent required by applicable law. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms. including the company's press release or definitions and reconciliations of GAAP to non-GAAP items, which provide additional details. Also, throughout the company's press release and management statements during this conference call, we refer to net income attributable to common stockholders as GAAP net income. For those of you unable to listen to the entire call at this time, a recording will be available via webcast for 90 days in the investor relations section of DIODE's website at www.diodes.com. And now I'll turn the call over to DIOS Chairman, President, and CEO, Dr. Kei-Shu Liu. Dr. Liu, please go ahead.

Thank you, Leanne. Welcome, everyone, and thank you for joining us today. The first quarter represented a continuation of outstanding execution by the DIOS team, especially considering the quarter is typically done seasonally and the recent COVID-related lockdown in China, most notably in the Shanghai area. We once again set new records across key financial metrics, including the sixth consecutive quarter of record revenue and the gross profit, record gross margin that exceeded 40% for the first time in the company's history, and the fifth consecutive quarter of record non-GAAP earnings per share. Before continuing, let me first take this moment to extend our well-wish to those affected by the lockdowns in China, in particular our employees and their families. We have been providing relief assistance for impacted employees, including sleeping and shower arrangements at our local facilities. In addition to providing formulae, we consider all our employees' family members and It is important to the company to be part in helping them get through those difficult times. Turning back to our result, our strong revenue and margin performance in the quarter continued to be driven by record achievement in the automotive end market, which reached 13% of revenue. the industrial market as well as for our Pelcom product. Gross margin expanded 720 basis point year over year due to a greater mix of higher margin product along with expanded factory utilization and the loading. Another key factor, to our ongoing success has been our content expansion initiatives and our total solution sale approach, resolving expanded customer relationships and including design in momentum. And when we combined it with our diligent expense management, we delivered an almost 90% increase in adjusted earning per share over the previous year period. During the quarter, we were also pleased to announce the proposed acquisition of the Onsemi South Portland Man Waver Fabrication Facility and operations. which provided additional 200-millimeter wafer-fab capacity for aero products to accelerate our growth initiatives in automotive and industrial air markets. We expect this transaction to close today in the second quarter. The U.S.-based facility, together with our existing facilities in Asia, and Europe will further enhance our global manufacturing footprint and greatly increase our internal capacity to support our future growth. Looking forward, the backlog and the demand for our products remain at a high level across all target end markets and geographies. And we are guiding for our ninth consecutive quarter of growth and our seventh consecutive quarter of record revenue in the second quarter. And also anticipating another 30 year of strong growth and profitability for DIOS. With that, Let me now turn the call over to Brad to discuss our first quarter financial results and our second quarter 2022 guidance in more detail.