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TTM Technologies, Inc. Reports Fiscal First Quarter 2017 Results
Broad Based Growth Drives Results to the High End of Guidance

COSTA MESA, Calif., May 03, 2017 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) manufacturer, today reported results for the first quarter of fiscal 2017, which ended April 3rd, 2017. 

First Quarter 2017 Highlights

  • Net sales were $625.2 million
  • GAAP net income attributable to stockholders was $33 million, or $0.28 per diluted share
  • Non-GAAP net income attributable to stockholders was $39.2 million, or $0.37 per diluted share
  • Adjusted EBITDA was $95.6 million

First Quarter 2017 Financial Results
Net sales for the first quarter of 2017 were $625.2 million, compared to $583.3 million in the first quarter of 2016 and $706.5 million in the fourth quarter of 2016.

GAAP operating income for the first quarter of 2017 was $52.6 million, compared to $18.9 million in the first quarter of 2016 and $69.6 million in the fourth quarter of 2016. 

GAAP net income attributable to stockholders for the first quarter of 2017 was $33 million, or $0.28 per diluted share.  This compares to a GAAP net loss attributable to stockholders of $7.3 million, or $0.07 per share, in the first quarter of 2016 and a GAAP net loss of $2 million, or $0.02 per share, in the fourth quarter of 2016. 

On a non-GAAP basis, net income attributable to stockholders for the first quarter of 2017 was $39.2 million, or $0.37 per diluted share.  This compares to non-GAAP net income attributable to stockholders of $13.9 million, or $0.14 per diluted share, for the first quarter of 2016 and $59.8 million, or $0.58 per diluted share, in the fourth quarter of 2016.

Adjusted EBITDA for the first quarter of 2017 was $95.6 million, or 15.3 percent of net sales, compared to adjusted EBITDA of $74.5 million, or 12.8 percent of net sales, for the first quarter of 2016 and $128.5 million, or 18.2 percent of net sales, for the fourth quarter of 2016.

“TTM delivered strong organic year on year growth in the first quarter of 7 percent, near the high end of our guidance, and profitability which exceeded our forecast,” said Tom Edman, CEO of TTM.  “On a year over year basis, most end markets grew, with the fastest growth coming from the cellular, computing and aerospace and defense end markets.  This growth, along with strong operational execution, resulted in non-GAAP EPS above the high end of our guidance.  These results represent the highest revenue and EBITDA for a first quarter in the history of the company.”

Business Outlook
For the second quarter of 2017, TTM estimates that revenue will be in the range of $605 million to $645 million, and non-GAAP net income attributable to stockholders will be in the range of $0.31 to $0.37 per diluted share.

To Access the Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss first quarter 2017 results and second quarter 2017 outlook on Wednesday, May 3rd, 2017, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time).  The conference call will include forward-looking statements.

Telephone access is available by dialing domestic 888-206-4824 or international 913-312-1522 (ID 1867334).  The conference call also will be webcast on TTM’s website at www.ttm.com.

To Access a Replay of the Webcast
The replay of the webcast will remain accessible for one week following the live event on TTM’s website at www.ttm.com.  

About TTM
TTM Technologies, Inc. is a leading global printed circuit board manufacturer, focusing on quick-turn and volume production of technologically advanced PCBs, backplane assemblies and electro-mechanical solutions. TTM stands for time-to-market, representing how TTM's time-critical, one-stop manufacturing services enable customers to shorten the time required to develop new products and bring them to market. Additional information can be found at www.ttm.com.

Forward-Looking Statements
This release contains forward-looking statements that relate to future events or performance. TTM cautions you that such statements are simply predictions and actual events or results may differ materially. These statements reflect TTM's current expectations, and TTM does not undertake to update or revise these forward looking statements, even if experience or future changes make it clear that any projected results expressed or implied in this or other TTM statements will not be realized. Further, these statements involve risks and uncertainties, many of which are beyond TTM's control, which could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties include, but are not limited to, general market and economic conditions, including interest rates, currency exchange rates and consumer spending, demand for TTM's products, market pressures on prices of TTM's products, warranty claims, changes in product mix, contemplated significant capital expenditures and related financing requirements, TTM's dependence upon a small number of customers and other factors set forth in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's public reports filed with the SEC.

About Our Non-GAAP Financial Measures
This release includes information about TTM’s adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share, all of which are non-GAAP financial measures. TTM presents non-GAAP financial information to enable investors to see TTM through the eyes of management and to provide better insight into TTM’s ongoing financial performance. 

A material limitation associated with the use of the above non-GAAP financial measures is that they have no standardized measurement prescribed by GAAP and may not be comparable to similar non-GAAP financial measures used by other companies.  TTM compensates for these limitations by providing full disclosure of each non-GAAP financial measure and reconciliation to the most directly comparable GAAP financial measure.  However, the non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

- Tables Follow -

TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
                       
            First Quarter   Fourth Quarter  
              2017       2016       2016    
                       
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS              
                       
  Net sales     $   625,247     $   583,258     $   706,534    
  Cost of goods sold       520,228         499,695         573,689    
                       
  Gross profit       105,019         83,563         132,845    
                       
  Operating expenses:              
    Selling and marketing       16,655         17,306         16,848    
    General and administrative       30,822         36,149         38,998    
    Amortization of definite-lived intangibles       5,912         5,947         6,407    
    Restructuring charges       609         1,913         946    
    Impairment of long-lived assets       -          3,346         -     
    Gain on sale of assets       (1,549 )       -          -     
      Total operating expenses       52,449         64,661         63,199    
                       
  Operating income       52,570         18,902         69,646    
                       
  Interest expense       (13,596 )       (21,784 )       (15,267 )  
  Loss on extinguishment of debt       -          -          (47,767 )  
  Other, net         (1,710 )       1,209         8,994    
                       
  Income before income taxes       37,264         (1,673 )       15,606    
  Income tax provision       (4,139 )       (5,477 )       (17,416 )  
                       
  Net income (loss)   $   33,125     $   (7,150 )   $   (1,810 )  
                       
  Net income attributable to noncontrolling interest       (166 )       (114 )       (195 )  
  Net income (loss) attributable to stockholders   $   32,959     $   (7,264 )   $   (2,005 )  
                       
  Earnings (loss) per share attributable to stockholders:              
    Basic     $   0.33     $   (0.07 )   $   (0.02 )  
    Diluted     $   0.28     $   (0.07 )   $   (0.02 )  
                       
  Weighted-average shares used in computing per share amounts:              
    Basic         100,932         99,596         100,365    
    Diluted         130,922         99,596         100,365    
                       
                       
  Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share:      
                       
  Net income attributable to stockholders   $   32,959            
    Add back items: interest expense, net of tax       3,394            
  Adjusted net income attributable to stockholders   $   36,353            
  Weighted-average shares outstanding       100,932            
  Dilutive effect of convertible debt       25,940            
  Dilutive effect of warrants       2,183            
  Dilutive effect of performance-based stock units, restricted stock units and stock options       1,867            
  Diluted shares       130,922            
  Earnings per share attributable to stockholders:              
    Basic     $   0.33            
    Diluted     $   0.28            
                       
                       
SELECTED BALANCE SHEET DATA               
            April 3, 2017   January 2, 2017      
  Cash and cash equivalents, including restricted cash   $   282,871     $   256,277        
  Accounts and notes receivable, net       419,216         432,596        
  Inventories         275,092         269,212        
  Total current assets       1,027,291         1,012,841        
  Property, plant and equipment, net       976,446         966,638        
  Other non-current assets       526,508         520,597        
  Total assets       2,530,245         2,500,076        
                       
  Short-term debt, including current portion of long-term debt   $   160,658     $   110,652        
  Accounts payable       344,257         355,774        
  Total current liabilities       721,580         689,065        
  Debt, net of discount       861,391         909,030        
  Total long-term liabilities       935,983         981,886        
  Total equity       872,682         829,125        
  Total liabilities and equity       2,530,245         2,500,076        
                       
SUPPLEMENTAL DATA              
            First Quarter   Fourth Quarter  
              2017       2016       2016    
  Gross margin     16.8 %     14.3 %     18.8 %  
  Operating margin     8.4 %     3.2 %     9.9 %  
                       
  End Market Breakdown:              
            First Quarter   Fourth Quarter  
              2017       2016       2016    
                       
    Aerospace/Defense     15 %     15 %     14 %  
    Automotive     20 %     21 %     19 %  
    Cellular Phone     14 %     9 %     19 %  
    Computing/Storage/Peripherals     15 %     13 %     12 %  
    Medical/Industrial/Instrumentation     15 %     16 %     13 %  
    Networking/Communications     20 %     24 %     21 %  
    Other       1 %     2 %     2 %  
                       
  Stock-based Compensation:              
            First Quarter   Fourth Quarter  
              2017       2016       2016    
    Amount included in:              
      Cost of goods sold   $   394     $   320     $   469    
      Selling and marketing   $   253         210         305    
      General and administrative       2,981         1,716         2,426    
      Total stock-based compensation expense   $   3,628     $   2,246     $   3,200    
                       
                       
  Operating Segment Data:              
            First Quarter   Fourth Quarter  
     Net sales:      2017       2016       2016    
     PCB      $   586,695     $   529,945     $   654,379    
     E-M Solutions        41,669         56,478         55,332    
     Corporate        -          -          -     
       Total sales        628,364         586,423         709,711    
     Inter-segment sales        (3,117 )       (3,165 )       (3,177 )  
       Total net sales    $   625,247     $   583,258     $   706,534    
                       
     Operating segment income:               
     PCB      $   82,256     $   49,367     $   95,208    
     E-M Solutions        (1,642 )       387         3,029    
     Corporate        (22,132 )       (24,905 )       (22,184 )  
       Total operating segment income        58,482         24,849         76,053    
     Amortization of definite-lived intangibles        (5,912 )       (5,947 )       (6,407 )  
       Total operating income        52,570         18,902         69,646    
     Total other expense        (15,306 )       (20,575 )       (54,040 )  
     Income before income taxes    $   37,264     $   (1,673 )   $   15,606    
                       
RECONCILIATIONS1              
            First Quarter   Fourth Quarter  
              2017       2016       2016    
  Non-GAAP gross profit reconciliation2:              
    GAAP gross profit   $   105,019     $   83,563     $   132,845    
    Add back item:              
      Stock-based compensation       394         320         469    
    Non-GAAP gross profit   $   105,413     $   83,883     $   133,314    
    Non-GAAP gross margin     16.9 %     14.4 %     18.9 %  
                       
  Non-GAAP operating income reconciliation3:              
    GAAP operating income   $   52,570     $   18,902     $   69,646    
    Add back items:              
      Amortization of definite-lived intangibles       5,912         5,947         6,407    
      Stock-based compensation       3,628         2,246         3,200    
      Gain on sale of assets       (1,549 )       -          -     
      Impairments, restructuring, acquisition-related, and other charges       709         5,950         1,725    
    Non-GAAP operating income   $   61,270     $   33,045     $   80,978    
    Non-GAAP operating margin     9.8 %     5.7 %     11.5 %  
                       
  Non-GAAP net income and EPS attributable to stockholders reconciliation4:              
    GAAP net income (loss) attributable to stockholders   $   32,959     $   (7,264 )   $   (2,005 )  
    Add back items:              
      Amortization of definite-lived intangibles       5,912         5,947         6,407    
      Stock-based compensation       3,628         2,246         3,200    
      Non-cash interest expense       2,627         6,154         2,697    
      Gain on sale of assets       (1,549 )       -          -     
      Loss on extinguishment of debt       -          -          47,767    
      Impairments, restructuring, acquisition-related, and other charges       709         5,950         1,725    
      Income taxes       (5,093 )       821         49    
    Non-GAAP net income attributable to stockholders   $   39,193     $   13,854     $   59,840    
    Non-GAAP earnings per diluted share attributable to stockholders   $   0.37     $   0.14     $   0.58    
                       
  Non-GAAP diluted number of shares5:              
    Diluted shares       130,922         99,596         102,563    
    Dilutive effect of convertible debt       (25,940 )       -         -    
    Non-GAAP diluted number of shares       104,982         99,596         102,563    
                       
  Adjusted EBITDA reconciliation6:              
    GAAP net income (loss)   $   33,125     $   (7,150 )   $   (1,810 )  
    Add back items:              
      Income tax provision (benefit)       4,139         5,477         17,416    
      Interest expense       13,596         21,784         15,267    
      Amortization of definite-lived intangibles       5,912         5,947         6,407    
      Depreciation expense       36,077         40,227         38,539    
      Stock-based compensation       3,628         2,246         3,200    
      Gain on sale of assets       (1,549 )       -          -     
      Loss on extinguishment of debt       -          -          47,767    
      Impairments, restructuring, acquisition-related, and other charges       709         5,950         1,725    
    Adjusted EBITDA   $   95,637     $   74,481     $   128,511    
    Adjusted EBITDA margin     15.3 %     12.8 %     18.2 %  
                       
  Free cash flow reconciliation:              
    Operating cash flow       49,584         17,892         97,650    
    Add back items:              
      Payment of acquisition-related costs       153         2,324         869    
    Adjusted operating cash flow       49,737         20,216         98,519    
    Capital expenditures, net       (23,378 )       (20,116 )       (20,501 )  
    Free cash flow   $   26,359     $   100     $   78,018    
                       
  1 This information provides a reconciliation of non-GAAP gross profit, non-GAAP operating income, non-GAAP net income attributable to stockholders, non-GAAP EPS attributable to stockholders, and adjusted EBITDA to the financial information in our consolidated condensed statements of operations.
                       
  2 Non-GAAP gross profit and gross margin measures exclude stock-based compensation expense.
                       
  3 Non-GAAP operating income and operating margin measures exclude amortization of intangibles, stock-based compensation expense, gain on sale of assets, acquisition-related costs, asset impairments, restructuring and other charges.
                       
  4 This information provides non-GAAP net income attributable to stockholders and non-GAAP EPS attributable to stockholders, which are non-GAAP financial measures. Management believes that both measures -- which add back amortization of intangibles, stock-based compensation expense, non-cash interest expense on debt (before consideration of capitalized interest), gain on sale of assets, acquisition-related costs, asset impairments, restructuring and other charges as well as the associated tax impact of these charges and discrete tax items -- provide additional useful information to investors regarding the Company's ongoing financial condition and results of operations.
                       
  5 Non-GAAP diluted number of shares used in computing non-GAAP earnings per share attributable to stockholders excludes the dilutive effect of convertible debt.
                       
  6 Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, acquisition-related costs, asset impairments, restructuring and other charges. We present adjusted EBITDA to enhance the understanding of our operating results, and it is a key measure we use to evaluate our operations.  In addition, we provide our adjusted EBITDA because we believe that investors and securities analysts will find adjusted EBITDA to be a useful measure for evaluating our operating performance and comparing our operating performance with that of similar companies that have different capital structures and for evaluating our ability to meet our future debt service, capital expenditures, and working capital requirements.  However, adjusted EBITDA should not be considered as an alternative to cash flows from operating activities as a measure of liquidity or as an alternative to net income as a measure of operating results in accordance with accounting principles generally accepted in the United States of America.
                       

 

Contact:
Sameer Desai,
Senior Director, Corporate Development & Investor Relations
sameer.desai@ttmtech.com
714-327-3050

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