Diodes(DIOD)2025-05-08 21:05Financial Performance - Net sales for the three months ended March 31, 2025, were $332.1 million, a 10.0% increase from $302.0 million in the same period of 2024[81]. - Gross profit for the same period was $104.7 million, up 5.1% from $99.6 million in the first quarter of 2024, with a gross profit margin of 31.5%[81][87]. - The company reported a net loss of $4.4 million for the first quarter of 2025, compared to a net income of $14.0 million in the first quarter of 2024[81]. - Operating expenses increased by $16.8 million, or 19.3%, compared to the same period last year, with total operating expenses at $103.4 million[88]. - The company experienced a net loss of $2.8 million in Q1 2025, which was offset by various operating items[100]. Cash Flow and Liquidity - Cash flow provided by operations was $56.7 million, with capital expenditures of $15.9 million, resulting in a net cash flow of $26.2 million[81]. - Net cash flows from operating activities for Q1 2025 were $56.7 million, a significant increase from a net cash outflow of $31.1 million in Q1 2024[100][101]. - The company expects cash generated from operations and existing liquidity to cover cash needs for working capital, capital expenditures, and acquisitions for at least the next 12 months[92]. - As of March 31, 2025, cash, cash equivalents, and short-term investments totaled $343.9 million, with an unused borrowing capacity of $225.0 million[81][83]. - Net cash used in investing activities was $(28.5) million in Q1 2025, primarily due to $15.9 million in property, plant, and equipment purchases, representing 4.8% of net sales[102]. - Net cash used in financing activities was $(1.3) million in Q1 2025, compared to $3.2 million provided in Q1 2024[104]. Investments and Acquisitions - The company acquired minority interest in a joint venture in Taiwan for approximately $4.1 million, increasing ownership to 100%[102]. - Capital expenditures for the twelve months ending December 31, 2025, are expected to be within the target model of 5% to 9% of net sales[102]. - Depreciation and amortization of intangible assets for Q1 2025 was $35.9 million, slightly higher than $34.8 million in Q1 2024[100][101]. Market and Operational Risks - The automotive and industrial markets accounted for 42% of first quarter net sales, indicating expanding design opportunities[84]. - The company is exposed to foreign currency risks and uses foreign currency forward agreements to manage this exposure[107]. - The distribution of earnings from foreign subsidiaries may be subject to foreign income taxes, potentially reducing net income[142]. - Variations in quarterly operating results may lead to stock price volatility[143]. - The ongoing conflict between Ukraine and Russia could negatively impact business operations[144]. - Production disruptions due to natural disasters or extraordinary events may affect product availability and sales[145]. - Disruptions in information technology systems could adversely affect cash flows and financial condition[146]. - Cybersecurity issues, including data breaches and cyber-attacks, could reduce expected net sales and damage reputation[147]. - No material changes to market risks have been reported since the last Annual Report filed with the SEC[148]. Other Financial Information - Interest income rose by 26.0% to $5.8 million, reflecting income from derivative hedging instruments[89]. - The company recognized an impairment loss of $5.8 million on an equity investment due to a decline in value[89]. - The company recorded a non-cash impairment charge of $5.8 million in Q1 2025, which positively impacted operating cash flow[100].