TTM Technologies, Inc. Reports Third Quarter 2007 Results
SANTA ANA, Calif.--(BUSINESS WIRE)--
TTM Technologies, Inc. (Nasdaq:TTMI), North America's largest printed circuit board (PCB) manufacturer, today reported results for the third quarter of 2007, ended October 1, 2007.
Third Quarter 2007 Highlights -- TTM reported strong results for the third quarter, with sequential improvement in all financial metrics. -- The Company continued to pay down debt associated with the Printed Circuit Group (PCG) acquisition, ahead of schedule. TTM paid down $11 million in debt during the third quarter. -- The Company reported a Book to Bill ratio of 1.23, exceeding the North American Industry PCB Book to Bill ratio of 1.08 for the three months ending in September 2007. Third Quarter 2007 Financial Results
Third quarter net sales of $163.1 million improved over second quarter 2007 net sales of $162.0 million, primarily due to increasing demand for TTM's high-tech manufacturing services.
Third quarter gross margin of 19.2 percent increased 100 basis points from 18.2 percent gross margin reported in the second quarter of 2007.
Selling and marketing expense for the third quarter of 2007 was $7.1 million, representing 4.4 percent of sales. This compares to second quarter 2007 selling and marketing expense of $7.6 million, representing 4.7 percent of sales.
General and administrative expense, including amortization of intangibles, for the third quarter of 2007 was $9.0 million, representing 5.5 percent of sales. This compares to second quarter 2007 general and administrative expense, including amortization of intangibles, of $8.9 million, representing 5.5 percent of sales.
TTM posted operating income of $15.2 million for the third quarter of 2007, compared to $13.1 million for the second quarter of 2007.
Net income for the third quarter of 2007 was $8.2 million, or $0.19 per diluted share. This compares with net income of $6.2 million, or $0.15 per diluted share, in the second quarter of 2007.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the third quarter of 2007 was $22.2 million, compared with second quarter 2007 EBITDA of $20.1 million. (A reconciliation of this non-GAAP measure is provided after the GAAP financial statements accompanying this press release.)
"Robust demand for high-tech manufacturing services, combined with continued strength from our aerospace/defense customers, contributed to strong third quarter financial results," said Kent Alder, President and CEO of TTM. "However, the strong demand was tempered by softness in the computing end market." Alder concluded, "The Company had a strong level of bookings as evidenced by our book-to-bill ratio, which significantly exceeded the industry ratio and has rebounded from the beginning of the year."
Third Quarter Segment Information - PCB Manufacturing and Backplane Assembly
TTM Technologies' two reportable operating segments are PCB Manufacturing and Backplane Assembly.
For the PCB Manufacturing segment, net sales (before inter-segment sales) were $140.5 million in the third quarter of 2007, compared with $138.7 million in the second quarter of 2007. Operating segment income (before amortization of intangibles) was $13.9 million in the third quarter of 2007, compared with $12.0 million in the second quarter of 2007.
For the Backplane Assembly segment, net sales (before inter-segment sales) were $30.7 million in the third quarter of 2007, compared with $32.2 million in the second quarter of 2007. Operating segment income (before amortization of intangibles) was $2.3 million in the third quarter of 2007, compared with $2.1 million in the second quarter of 2007.
Balance Sheet
Cash and short-term investments at the end of the third quarter of 2007 totaled $27.3 million, compared with $26.1 million at the end of the second quarter of 2007.
In the third quarter of 2007, TTM continued to pay down debt associated with the PCG acquisition significantly ahead of schedule. During the quarter, the Company reduced debt by $11 million, reducing the debt balance to $109 million at the end of the quarter. In October, the company repaid an additional $10 million. It is noteworthy that the Company has cut its debt in half in roughly one year's time. As a result, the corresponding interest expense is expected to be lower in future quarters.
Fourth Quarter Forecast
For the fourth quarter of 2007, TTM estimates revenues in a range of $164 million to $172 million and earnings in a range of $0.18 to $0.23 per diluted share. "The strength that we are seeing for the fourth quarter is broad-based across all of our end markets," said Alder. "We are pleased with our execution toward improving operational efficiency, and we believe that our increased size optimally positions us to continue to deliver best-in-class solutions to our customers and solid bottom-line financial performance."
To Access the Live Web Cast/Conference Call
The company will host a conference call to discuss the third quarter results and fourth quarter outlook on October 31, 2007, at 4:30 p.m. Eastern Daylight Time (1:30 p.m. Pacific Daylight Time).
To listen to the live web cast, log on to the TTM Technologies website at http://www.ttmtech.com. To access the live conference call, dial 303-262-2130 or 800-218-0204.
To Access a Replay of the Web Cast
A digital replay will be available on TTM Technologies' website at http://www.ttmtech.com and will remain accessible for one week following the live event.
A telephone replay also will be available beginning two hours after the conclusion of the conference call until November 2, 2007. You may access the telephone replay by dialing 303-590-3000 or 800-405-2236 and entering confirmation code 11100051#.
Safe Harbor Statement
This release contains forward-looking statements that relate to future events or performance. These statements reflect the company's current expectations, and the company 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 company statements will not be realized. Furthermore, readers are cautioned that these statements involve risks and uncertainties, many of which are beyond the company'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, the company's dependence upon the electronics industry, the company's dependence upon a small number of customers, general economic conditions and specific conditions in the markets TTM addresses, the unpredictability of and potential fluctuation in future revenues and operating results, increased competition from low-cost foreign manufacturers and other "Risk Factors" set forth in the company's most recent SEC filings.
About TTM
TTM Technologies, Inc. is North America's largest printed circuit board manufacturer, focusing on quick-turn and technologically advanced PCBs and the backplane and sub-system assembly business. TTM stands for time-to-market, representing how the company'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.ttmtech.com.
TTM TECHNOLOGIES, INC. Selected Unaudited Financial Information (In thousands, except per share data) ------------------- --------- ------------------- Second First Three Fiscal Third Quarter Quarter Quarters ------------------- --------- ------------------- 2007 2006 2007 2007 2006 --------- --------- --------- --------- --------- CONSOLIDATED STATEMENTS OF OPERATIONS Net sales $163,079 $ 75,765 $162,016 $501,992 $225,136 Cost of goods sold 131,834 53,288 132,470 406,480 159,487 --------- --------- --------- --------- --------- Gross profit 31,245 22,477 29,546 95,512 65,649 --------- --------- --------- --------- --------- Operating expenses: Selling and marketing 7,101 3,329 7,551 22,212 10,142 General and administrative 7,951 3,822 7,890 24,183 11,069 Amortization of intangibles 1,019 300 1,046 3,090 901 --------- --------- --------- --------- --------- Total operating expenses 16,071 7,451 16,487 49,485 22,112 --------- --------- --------- --------- --------- Operating income 15,174 15,026 13,059 46,027 43,537 Interest expense (2,628) (35) (3,368) (11,094) (141) Interest income and other, net 321 1,369 236 1,316 3,464 --------- --------- --------- --------- --------- Income before income taxes 12,867 16,360 9,927 36,249 46,860 Income tax provision (4,666) (5,837) (3,743) (13,399) (16,970) --------- --------- --------- --------- --------- Net income $ 8,201 $ 10,523 $ 6,184 $ 22,850 $ 29,890 ========= ========= ========= ========= ========= Earnings per common share: Basic $ 0.19 $ 0.25 $ 0.15 $ 0.54 $ 0.72 Diluted $ 0.19 $ 0.25 $ 0.15 $ 0.54 $ 0.71 Weighted average common shares: Basic 42,260 41,823 42,199 42,203 41,651 Diluted 42,625 42,310 42,496 42,506 42,265 SELECTED BALANCE SHEET DATA ------------------- October December 1, 2007 31, 2006 --------- --------- Cash and short-term investments $ 27,315 $ 70,656 Accounts receivable, net 115,304 125,435 Inventories, net 66,333 67,020 Total current assets 222,809 271,748 Net property, plant and equipment 124,291 150,837 Other assets 157,137 151,113 Total assets 504,237 573,698 Current portion long-term liabilities $ 50,000 $ 60,705 Accounts Payable 50,363 49,276 Current liabilities 128,068 144,343 Long-term liabilities 61,360 142,040 Stockholders' equity 314,809 287,315 Total liabilities and stockholders' equity 504,237 573,698 ------------------- SUPPLEMENTAL DATA ------------------- --------- ------------------- Second First Three Fiscal Third Quarter Quarter Quarters ------------------- --------- ------------------- 2007 2006 2007 2007 2006 --------- --------- --------- --------- --------- EBITDA $ 22,174 $ 19,001 $ 20,113 $ 67,755 $ 55,122 EBITA $ 16,543 $ 16,725 $ 14,369 $ 50,520 $ 47,990 Gross margin 19.2% 29.7% 18.2% 19.0% 29.2% EBITDA margin 13.6 25.1 12.4 13.5 24.5 Operating margin 9.3 19.8 8.1 9.2 19.3 End Market Breakdown: ------------------- Third Quarter ------------------- 2007 2006 --------- --------- Networking / Communications 40% 43% Aerospace / Defense 32 12 Computing / Storage / Peripherals 13 34 Medical / Industrial / Instrumentation / Other 15 11 Stock-based Compensation: ------------------- --------- Second Third Quarter Quarter ------------------- --------- 2007 2006 2007 --------- --------- --------- Amount included in: Cost of goods sold $ 258 $ 135 $ 255 Selling and marketing 55 39 48 General and administrative 609 276 581 --------- --------- --------- Total stock- based compensation expense $ 922 $ 450 $ 884 ========= ========= ========= Operating Segment Data: --------- --------- --------- First Three Third Second Fiscal Quarter Quarter Quarters --------- --------- --------- Net sales: 2007 2007 2007 --------- --------- --------- PCB Manufacturing 140,514 138,651 431,316 Backplane Assembly 30,679 32,164 96,500 --------- --------- --------- Total Sales 171,193 170,815 527,816 Inter-Segment Sales (8,114) (8,799) (25,824) --------- --------- --------- Total Net Sales $163,079 $162,016 $501,992 --------- --------- --------- Operating Segment Income: PCB Manufacturing 13,899 12,019 42,285 Backplane Assembly 2,294 2,086 6,832 --------- --------- --------- Total Op Segment Income 16,193 14,105 49,117 Amortization of Intangibles (1,019) (1,046) (3,090) --------- --------- --------- Total Op Income 15,174 13,059 46,027 Total Other Income (Expense) (2,307) (3,132) (9,778) --------- --------- --------- Income Before Income Taxes $ 12,867 $ 9,927 $ 36,249 ========= ========= ========= RECONCILIATIONS* ------------------- --------- ------------------- Second First Three Fiscal Third Quarter Quarter Quarters ------------------- --------- ------------------- 2007 2006 2007 2007 2006 --------- --------- --------- --------- --------- EBITA/EBITDA reconciliation: Net income $ 8,201 $ 10,523 $ 6,184 $ 22,850 $ 29,890 Add back items: Income taxes 4,666 5,837 3,743 13,399 16,970 Interest expense 2,628 35 3,368 11,094 141 Amortization of intangibles 1,048 330 1,074 3,177 989 --------- --------- --------- --------- --------- EBITA 16,543 16,725 14,369 50,520 47,990 Depreciation expense 5,631 2,276 5,744 17,235 7,132 --------- --------- --------- --------- --------- EBITDA $ 22,174 $ 19,001 $ 20,113 $ 67,755 $ 55,122 ========= ========= ========= ========= ========= * This information provides a reconciliation of EBITA/EBITDA to the financial information in our consolidated statements of operations. "EBITDA" means earnings before interest expense, income taxes, depreciation and amortization. "EBITA" means earnings before interest expense, income taxes and amortization. We present EBITDA / EBITA to enhance the understanding of our operating results. EBITDA / EBITA is a key measure we use to evaluate our operations. In addition, we provide our EBITDA / EBITA because we believe that investors and securities analysts will find EBITDA / EBITA 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, EBITDA / EBITA 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.
Source: TTM Technologies, Inc.
Released October 31, 2007