Press Release

TTM Technologies, Inc. Reports Fiscal Second Quarter 2017 Results
Results in line with Guidance

COSTA MESA, Calif., Aug. 02, 2017 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) manufacturer, today reported results for the second quarter of fiscal 2017, which ended July 2nd, 2017. 

Second Quarter 2017 Highlights

  • Net sales were $627.2 million
  • GAAP net income attributable to stockholders was $20.6 million, or $0.18 per diluted share
  • Non-GAAP net income attributable to stockholders was $33.3 million, or $0.31 per diluted share
  • Excluding a $6.5 million foreign exchange loss, non-GAAP earnings per diluted share would have been $0.36
  • Adjusted EBITDA was $85.5 million

Second Quarter 2017 Financial Results
Net sales for the second quarter of 2017 were $627.2 million, compared to $601.8 million in the second quarter of 2016 and $625.2 million in the first quarter of 2017.

GAAP operating income for the second quarter of 2017 was $45.1 million, compared to $34.7 million in the second quarter of 2016 and $52.6 million in the first quarter of 2017. 

GAAP net income attributable to stockholders for the second quarter of 2017 was $20.6 million, or $0.18 per diluted share.  This compares to a GAAP net income attributable to stockholders of $18.5 million, or $0.17 per diluted share, in the second quarter of 2016 and a GAAP net income of $33 million, or $0.28 per diluted share, in the first quarter of 2017. 

On a non-GAAP basis, net income attributable to stockholders for the second quarter of 2017 was $33.3 million, or $0.31 per diluted share. This compares to non-GAAP net income attributable to stockholders of $28.4 million, or $0.28 per diluted share, for the second quarter of 2016 and $39.2 million, or $0.37 per diluted share, in the first quarter of 2017.

Adjusted EBITDA for the second quarter of 2017 was $85.5 million, or 13.6 percent of net sales, compared to adjusted EBITDA of $90.2 million, or 15.0 percent of net sales, for the second quarter of 2016 and $95.6 million, or 15.3 percent of net sales, for the first quarter of 2017.

“TTM delivered the third consecutive quarter of year on year organic growth at 4 percent and our operating performance was in line with our expectations” 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, automotive and the aerospace and defense end markets.  Absent a foreign exchange loss due to the weakening dollar, operating results were towards the high end of guidance.” 

Business Outlook
For the third quarter of 2017, TTM estimates that revenue will be in the range of $625 million to $675 million, and non-GAAP net income attributable to stockholders will be in the range of $0.29 to $0.35 per diluted share.  “Our third quarter is being impacted by a slower start in the normal seasonal ramp of cellular products.  We expect this ramp to accelerate in the coming quarters” concluded Tom Edman.

To Access the Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss second quarter 2017 results and third quarter 2017 outlook on Wednesday, August 2nd, 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 877-397-0272 or international 719-325-2322 (ID 5738422).  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)  
                               
                               
            Second Quarter   First Quarter   First Two Quarters  
              2017       2016       2017       2017       2016    
                               
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS                      
                               
  Net sales     $   627,182     $   601,847     $   625,247     $   1,252,429     $   1,185,105    
  Cost of goods sold       531,315         504,202         520,228         1,051,543         1,003,897    
                               
  Gross profit       95,867         97,645         105,019         200,886         181,208    
                               
  Operating expenses:                      
    Selling and marketing       15,851         16,569         16,655         32,506         33,875    
    General and administrative       29,885         37,931         30,822         60,707         74,080    
    Amortization of definite-lived intangibles       5,910         5,949         5,912         11,822         11,896    
    Restructuring charges       416         3,989         609         1,025         5,902    
    Impairment of long-lived assets     -       -       -       -         3,346    
    Gain on sale of assets       (1,251 )       (1,472 )       (1,549 )       (2,800 )       (1,472 )  
      Total operating expenses       50,811         62,966         52,449         103,260         127,627    
                               
  Operating income       45,056         34,679         52,570         97,626         53,581    
                               
  Interest expense       (12,922 )       (20,084 )       (13,596 )       (26,518 )       (41,868 )  
  Other, net         (5,825 )       3,191         (1,710 )       (7,535 )       4,400    
                               
  Income before income taxes       26,309         17,786         37,264         63,573         16,113    
  Income tax provision       (5,558 )       979         (4,139 )       (9,697 )       (4,498 )  
                               
  Net income (loss)   $   20,751     $   18,765     $   33,125     $   53,876     $   11,615    
                               
  Net income attributable to noncontrolling interest       (160 )       (217 )       (166 )       (326 )       (331 )  
  Net income (loss) attributable to stockholders   $   20,591     $   18,548     $   32,959     $   53,550     $   11,284    
                               
  Earnings (loss) per share attributable to stockholders:                      
    Basic     $   0.20     $   0.19     $   0.33     $   0.53     $   0.11    
    Diluted     $   0.18     $   0.17     $   0.28     $   0.46     $   0.11    
                               
  Weighted-average shares used in computing per share amounts:                      
    Basic         101,756         100,170         100,932         101,344         99,883    
    Diluted         133,224         126,950         130,922         132,073         100,789    
                               
                               
  Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share:              
                               
  Net income attributable to stockholders   $   20,591     $   18,548     $   32,959     $   53,550        
    Add back items: interest expense, net of tax       3,432         3,285         3,394         6,826        
  Adjusted net income attributable to stockholders   $   24,023     $   21,833     $   36,353     $   60,376        
  Weighted-average shares outstanding       101,756         100,170         100,932         101,344        
  Dilutive effect of convertible debt       25,940         25,940         25,940         25,940        
  Dilutive effect of warrants       3,924       -         2,183         3,054        
  Dilutive effect of performance-based stock units, restricted stock units & stock options       1,604         840         1,867         1,735        
  Diluted shares       133,224         126,950         130,922         132,073        
  Earnings per share attributable to stockholders:                      
    Basic     $   0.20     $   0.19     $   0.33     $   0.53        
    Diluted     $   0.18     $   0.17     $   0.28     $   0.46        
                               
                               
SELECTED BALANCE SHEET DATA                       
            July 3, 2017   January 2, 2017              
  Cash and cash equivalents, including restricted cash   $   246,947     $   256,277                
  Accounts and notes receivable, net       452,796         432,596                
  Inventories         282,485         269,212                
  Total current assets       1,025,261         1,012,841                
  Property, plant and equipment, net       1,034,385         966,638                
  Other non-current assets       512,304         520,597                
  Total assets       2,571,950         2,500,076                
                               
  Short-term debt, including current portion of long-term debt   $   110,669     $   110,652                
  Accounts payable       365,254         355,774                
  Total current liabilities       722,675         689,065                
  Debt, net of discount       863,847         909,030                
  Total long-term liabilities       938,684         981,886                
  Total equity       910,591         829,125                
  Total liabilities and equity       2,571,950         2,500,076                
                               
SUPPLEMENTAL DATA                      
            Second Quarter   First Quarter   First Two Quarters  
              2017       2016       2017       2017       2016    
  Gross margin     15.3 %     16.2 %     16.8 %     16.0 %     15.3 %  
  Operating margin     7.2 %     5.8 %     8.4 %     7.8 %     4.5 %  
                               
  End Market Breakdown:                      
            Second Quarter   First Quarter          
              2017       2016       2017            
                               
    Aerospace/Defense     17 %     16 %     15 %          
    Automotive     20 %     19 %     20 %          
    Cellular Phone     13 %     10 %     14 %          
    Computing/Storage/Peripherals     14 %     13 %     15 %          
    Medical/Industrial/Instrumentation     15 %     16 %     15 %          
    Networking/Communications     20 %     25 %     20 %          
    Other       1 %     1 %     1 %          
                               
  Stock-based Compensation:                      
            Second Quarter   First Quarter          
              2017       2016       2017            
    Amount included in:                      
      Cost of goods sold   $   639     $   429     $   394            
      Selling and marketing   $   386         271         253            
      General and administrative       3,975         2,145         2,981            
      Total stock-based compensation expense   $   5,000     $   2,845     $   3,628            
                               
                               
  Operating Segment Data:                      
            Second Quarter   First Quarter          
     Net sales:      2017       2016       2017            
     PCB      $   576,566     $   563,574     $   586,695            
     E-M Solutions        52,898         40,427         41,669            
     Corporate      -       -       -            
       Total sales        629,464         604,001         628,364            
     Inter-segment sales        (2,282 )       (2,154 )       (3,117 )          
       Total net sales    $   627,182     $   601,847     $   625,247            
                               
     Operating segment income:                       
     PCB      $   69,435     $   64,970     $   82,256            
     E-M Solutions        2,689         (153 )       (1,642 )          
     Corporate        (21,158 )       (24,189 )       (22,132 )          
       Total operating segment income        50,966         40,628         58,482            
     Amortization of definite-lived intangibles        (5,910 )       (5,949 )       (5,912 )          
       Total operating income        45,056         34,679         52,570            
     Total other expense        (18,747 )       (16,893 )       (15,306 )          
     Income before income taxes    $   26,309     $   17,786     $   37,264            
                               
RECONCILIATIONS1                      
            Second Quarter   First Quarter   First Two Quarters  
              2017       2016       2017       2017       2016    
  Non-GAAP gross profit reconciliation2:                      
    GAAP gross profit   $   95,867     $   97,645     $   105,019     $   200,886     $   181,208    
    Add back item:                      
      Stock-based compensation       639         429         394         1,033         749    
    Non-GAAP gross profit   $   96,506     $   98,074     $   105,413     $   201,919     $   181,957    
    Non-GAAP gross margin     15.4 %     16.3 %     16.9 %     16.1 %     15.4 %  
                               
  Non-GAAP operating income reconciliation3:                      
    GAAP operating income   $   45,056     $   34,679     $   52,570     $   97,626     $   53,581    
    Add back items:                      
      Amortization of definite-lived intangibles       5,910         5,949         5,912         11,822         11,896    
      Stock-based compensation       5,000         2,845         3,628         8,628         5,091    
      Gain on sale of assets       (1,251 )       (1,472 )       (1,549 )       (2,800 )       (1,472 )  
      Impairments, restructuring, acquisition-related, and other charges       417         4,594         709         1,126         10,544    
    Non-GAAP operating income   $   55,132     $   46,595     $   61,270     $   116,402     $   79,640    
    Non-GAAP operating margin     8.8 %     7.7 %     9.8 %     9.3 %     6.7 %  
                               
  Non-GAAP net income and EPS attributable to stockholders reconciliation4:                      
    GAAP net income (loss) attributable to stockholders   $   20,591     $   18,548     $   32,959     $   53,550     $   11,284    
    Add back items:                      
      Amortization of definite-lived intangibles       5,910         5,949         5,912         11,822         11,896    
      Stock-based compensation       5,000         2,845         3,628         8,628         5,091    
      Non-cash interest expense       2,726         5,608         2,627         5,353         11,762    
      Gain on sale of assets       (1,251 )       (1,472 )       (1,549 )       (2,800 )       (1,472 )  
      Impairments, restructuring, acquisition-related, and other charges       417         4,594         709         1,126         10,544    
      Income taxes       (119 )       (7,649 )       (5,093 )       (5,212 )       (6,828 )  
    Non-GAAP net income attributable to stockholders   $   33,274     $   28,423     $   39,193     $   72,467     $   42,277    
    Non-GAAP earnings per diluted share attributable to stockholders   $   0.31     $   0.28     $   0.37     $   0.68     $   0.42    
                               
  Non-GAAP diluted number of shares5:                      
    Diluted shares       133,224         126,950         130,922         132,073         126,730    
    Dilutive effect of convertible debt       (25,940 )       (25,940 )       (25,940 )       (25,940 )       (25,940 )  
    Non-GAAP diluted number of shares       107,284         101,010         104,982         106,133         100,790    
                               
  Adjusted EBITDA reconciliation6:                      
    GAAP net income (loss)   $   20,751     $   18,765     $   33,125     $   53,876     $   11,615    
    Add back items:                      
      Income tax provision (benefit)       5,558         (979 )       4,139         9,697         4,498    
      Interest expense       12,922         20,084         13,596         26,518         41,868    
      Amortization of definite-lived intangibles       5,910         5,949         5,912         11,822         11,896    
      Depreciation expense       36,146         40,457         36,077         72,223         80,684    
      Stock-based compensation       5,000         2,845         3,628         8,628         5,091    
      Gain on sale of assets       (1,251 )       (1,472 )       (1,549 )       (2,800 )       (1,472 )  
      Impairments, restructuring, acquisition-related, and other charges       417         4,594         709         1,126         10,544    
    Adjusted EBITDA   $   85,453     $   90,243     $   95,637     $   181,090     $   164,724    
    Adjusted EBITDA margin     13.6 %     15.0 %     15.3 %     14.5 %     13.9 %  
                               
  Free cash flow reconciliation:                      
    Operating cash flow       59,114         80,057         49,584         108,698         97,949    
    Add back items:                      
      Payment of acquisition-related costs     -         691         153         153         3,015    
    Adjusted operating cash flow       59,114         80,748         49,737         108,851         100,964    
    Capital expenditures, net       (45,626 )       (15,329 )       (23,378 )       (69,004 )       (35,445 )  
    Free cash flow   $   13,488     $   65,419     $   26,359     $   39,847     $   65,519    
                               
  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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