Diodes Incorporated

Good afternoon and welcome to DIODE Incorporated fourth quarter and fiscal 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. If anyone needs assistance at any time during the conference call, please press the star key followed by the zero on your touchtone phone. As a reminder, this conference call is being recorded today, Monday, February 6, 2023. 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 fourth quarter 2022 financial results conference call. I'm Leanne Seavers, president of Shelton Group, DIODE's investor relations firm. Joining us today from Taiwan 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, Ramit 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's finalizing its closing procedures in 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-K for its full fiscal year ending December 31, 2022. In addition, management preparable 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 Exchange Commission, including Forms 10-K and 10-Q. In addition, any projections of the company's future performance represent management's estimates as of today, February 6, 2023. DODES 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, and reconciliation 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 report record performance in 2022, with revenue growth 10.8% over 2021, even when considering the COVID-related shutdown and the power outage throughout the year in China, as well as the global economic slowdown. In fact, The fourth quarter represented our ninth consecutive quarter of year-over-year growth. Additionally, our earning power and cash generation in 2022 were also significantly highlighted with gross margin expansion 422 basis points to 41.3%. Operating margin expanding 510 basis points to 20.4%. And gap EPS increased 44% to $7.20. And down gap EPS grew 42% to $7.36. We also achieved record cash flow for operating of $393 million, underpinning the company's worth-not-see performance. was continued strong growth in our automotive end market, which increased 40% over 2021 and reached 15% of product revenue for the year. We also continued to drive growth in our industrial end market through our ongoing content expansion efforts. which contributed to our industrial and automotive end market represent 42% of product revenue and exceeding our target model of 40%. The growth in those end markets combined with the ongoing increase of our Pelcom products also contributed to our strong gross margin expansion throughout the year. As part of our product mix improvement efforts, reaching the $2 billion revenue level in 2022 was a significant and meaningful achievement of the entire dial team, with the gross profit growth 23% to $827 million for the year. We have taken another giant step toward the next goal in our 2025 financial targets to achieve $1 billion in annual gross profit. I'm very proud of our accomplishment and our ability to consistently deliver both top-line growth and significantly expanded earnings for our shareholders. With that, let me now turn the call over to Brett to discuss our fourth quarter and full-year financial results. and our first quarter 2023 guidance in more detail.