Diodes Incorporated

And welcome to Diode's Incorporated's fourth quarter and fiscal 2023 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 zero on your touch-tone phone. As a reminder, this conference call is being recorded today, Tuesday, February 6, 2024. I would now like to turn the call over to Leanne Sievers of Shelton Group Investor Relations. Leanne, please go ahead.

Good afternoon and welcome to DIODE's fourth quarter and fiscal 2023 financial results conference call. I'm Leanne Sievers, president of Shelton Group, DIODE's investor relations firm. Joining us today are Diode's President, Gary Yu, Chief Financial Officer, Brett Whitmire, Senior Vice President of Worldwide Sales and Marketing, Emily Yang, and Director of Investor Relations, Gurmeet Dhaliwal. 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 firms. As such, these results are unaudited and subject to revision until the company files its Form 10-K for its fiscal year ending December 31, 2023. 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, February 6, 2024. 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 the conference call, we refer to the 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 president, Gary Yu. Gary, please go ahead.

Thank you, Leanne. Welcome, everyone, to our result conference call. I'm pleased to be joining you today as Diode's recent appointed president, effective January the 2nd, As announced at the end of last year, my promotion was part of Dial's multi-year CEO succession plan. Dr. Liu will continue to serve as Chairman and CEO until at least May 31, 2027, which is consistent with current employment agreement. As many of you may know, I had previously served as Dial's Chief Operating Officer and have been with Dial since 2008. I'm very excited to be serving in this new role and leading BIOS into the next stage of growth, which will focus on developing a broad portfolio of innovative products to enable customers to assist in the market we serve. In terms of our 2023 results, this past year proved to be challenging as the consumer, computing, and communications markets experienced an extended slowdown. coupled with inventory rebalancing in the industrial markets late in the year, as well as softness in certain areas of automotive market. Despite this global weakness, we make notable progress on improving the quality and mix of product portfolio. We continue to focus on automotive and industrial markets through expanding design wings and increased investment in new product development. which result in over 350 new automotive-compliant products. The combined revenue from those two markets expanded to 46% of product revenue in 2023, compared to 42% last year. Our product mix improvements were especially evident in our ability to maintain full-year gross margin near 40%, meeting our target model despite the lower annual revenue. Throughout the year, we continue to drive manufacturing cost reductions, operating efficiency, while also further developing our process technology for expansion of our internal facility utilization. Overall, we maintain strong cash generation in 2023 that enable us to reduce total debt by $124 million to $62 million, maintain a solid cash position over $315 million and increased total cashless debt by 67% to approximately $253 million. Additionally, we renewed and expanded our line of credit to approximately $315 million to provide added financial flexibility. As we look to 2024, we remain focused on driving further improvements in the quality and the mix of our portfolio with our analog and power discrete products. including our newly introduced SIC product family, especially targeted at automotive and industrial markets. We also continue to make good progress, ramping our previous acquired FAB, SPFAB, and GFAB in terms of process and product qualifications, which will support future utilization and further complement our hybrid manufacturing model. We believe our total solution sales approach that has been successful in the past, along with a further emphasized place on key account development. We'll continue to deliver increasing content opportunities, design wins, and a profitable growth in the future. With that, let me now turn the call over to Brad to discuss our first quarter and the full year financial results, as well as our first quarter guidance in more detail.