Diodes Incorporated

Good afternoon and welcome to DIODES Incorporated's second quarter 2022 financial results conference call. At this time, all participants are in a listen-only mode. At the conclusion of today's conference call, instructions will be given for the question and answer session. To ask a question over the phone, you will need to press star followed by the number one on your telephone keypad. To reach an operator at any time, please press star followed by the number zero. As a reminder, this conference call is being recorded today, Thursday, August 4th, 2022. I would now like to turn the call over to Leanne Seavers of Shelton Group Investor Relations.

Leanne, please go ahead. Good afternoon and welcome to DIODE's second 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. Teixu 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, Gurmeet 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 June 30, 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, August 4, 2022. DOWS 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. Included in the company's press release are 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 DIODE's chairman, president, and CEO, Dr. Kashi Liu. Dr. Liu, please go ahead.

Thank you, Leanne. Welcome, everyone, and thank you for joining us today. I'm pleased to be reporting today our achievement of the sixth consecutive quarter of record revenue, gross profit, and earnings. This accomplishment is a strong testament to our team's continuous execution, especially considering the COVID-related quarantine in China and Taiwan that constrained production during the quarter. In the Shanghai area and other major cities, we shift our manufacturing facility to closed-loop operations for two months in the quarter, yet still delivered results above the midpoint of our guidance. Notably, Second quarter revenue grew approximately 14% year-over-year, while adjusted earnings per share grew 58% over the same period. Our execution was also evidenced by our achievement of 41.2% gross margin, which was the fifth consecutive quarter of improvements, and the second consecutive quarter above our target model of 40%, largely due to products' mixed improvements. Contributing to this improvement was our industrial and automotive end markets, reaching a combined total of 41% of revenue for the first time, which exceeded our 2025 business model target of 40%. The automotive market, which represented a record 14% of the revenue in the quarter, remain a key focus area for DIOS as we continue to gain strong traction with both new and existing customers in all regions. Also, during the quarter, we successfully closed our acquisition of Onsenmite's South Poland main welfare facility. which provides additional variable capacity to support our future growth, especially in automotive and industrial end markets. We were pleased to welcome the SPFAB workforce to DIOS family as we continue to maintain operational efficiency and fully integrate this facility into our global manufacturing operation. With our third quarter expectation indicating our 10th consecutive quarter of revenue growth and overall record results, DIO has solid positions in itself not only as a reliable supplier, and a partner to our customers, but also a consistent performing investment for our shareholders. With that, let me now turn the call over to Brett to discuss our second quarter financial results and our third quarter 2022 guidance in more detail.