TTM Technologies, Inc. Reports Fourth Quarter and Full Year 2023 Results

SANTA ANA, Calif., Feb. 07, 2024 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ: TTMI), a leading global manufacturer of technology solutions including mission systems, radio frequency (“RF”) components and RF microwave/microelectronic assemblies, and quick-turn and technologically advanced printed circuit boards (“PCB”), today reported results for the fourth quarter and full year 2023, which ended on January 1, 2024.

Fourth Quarter 2023 Highlights

Net sales were $569.0 million
GAAP net income of $17.3 million, or $0.17 per diluted share
Non-GAAP net income was $43.0 million, or $0.41 per diluted share
Cash flow from operations was $47.5 million
Repurchased 784 thousand shares of common stock for $9.8 million at an average price of $12.52 per share

Fourth Quarter 2023 GAAP Financial Results

Net sales for the fourth quarter of 2023 were $569.0 million, compared to $617.2 million in the fourth quarter of 2022.

GAAP operating income for the fourth quarter of 2023 was $34.6 million. GAAP operating income for the fourth quarter of 2022 was $97.6 million and included a gain of $51.8 million in December 2022 from the sale of the property occupied by our former Shanghai E-MS entity.

GAAP net income for the fourth quarter of 2023 was $17.3 million, or $0.17 per diluted share, compared to GAAP net income of $6.0 million, or $0.06 per diluted share in the fourth quarter of 2022.

Fourth Quarter 2023 Non-GAAP Financial Results

On a non-GAAP basis, net income for the fourth quarter of 2023 was $43.0 million, or $0.41 per diluted share. This compares to non-GAAP net income of $42.7 million, or $0.41 per diluted share, for the fourth quarter of 2022.

Adjusted EBITDA in the fourth quarter of 2023 was $80.9 million, or 14.2% of sales compared to adjusted EBITDA of $81.6 million, or 13.2% of sales for the fourth quarter of 2022.

“TTM executed a strong finish to the year registering a Non-GAAP EPS that was above the high end of the guided range due to excellent operating performance and favorable product mix. Revenues were within the guided range as upside in our Aerospace and Defense and Data Center Computing end markets was offset by demand softness in our Automotive and Medical, Industrial and Instrumentation end markets,” said Tom Edman, CEO of TTM. “In addition, cash flow from operations was a healthy 8.3% of revenue enabling us to repurchase stock while maintaining a solid balance sheet with a net leverage ratio of 1.6x. Finally, our Penang facility has all major processes running and we are currently sampling product to customers,” concluded Mr. Edman.

Full Year 2023 Results
Net sales for 2023 decreased to $2.2 billion from $2.5 billion in 2022, an 11% decrease.

GAAP operating income for 2023 was $42.3 million, inclusive of a $44.1 million goodwill impairment charge related to the RF&S Components segment. This is a decrease from GAAP operating income of $210.4 million in 2022.

GAAP net loss for 2023 was $18.7 million, or ($0.18) per diluted share, compared to GAAP net income of $94.6 million, or $0.91 per diluted share, in 2022.

On a non-GAAP basis, net income for 2023 was $139.5 million, or $1.33 per diluted share. This compares to 2022 non-GAAP net income of $181.2 million, or $1.74 per diluted share.

Adjusted EBITDA for 2023 was $298.2 million, or 13.4% of net sales, compared to $343.1 million, or 13.8% of net sales, for 2022.

"We delivered solid results in 2023 despite a challenging year. Declines in our commercial end markets were partially offset with growth in our Aerospace and Defense end market. Better product mix and execution in North America and Asia Pacific helped to mitigate margin declines," continued Edman. “We refinanced our Term Loan and ABL, improving tenor, resulting in no maturities until 2028. Finally, in 2023, we generated $187.3 million in operating cash flow which enabled us to strengthen our balance sheet, while returning $24.4 million of capital to our shareholders.”

Business Outlook

For the first quarter of 2024, TTM estimates that revenues will be in the range of $530 million to $570 million, and non-GAAP net income will be in the range of $0.24 to $0.30 per diluted share.

With respect to the Company’s outlook for non-GAAP net income per diluted share, we are unable to predict with reasonable certainty or without unreasonable effort certain items that may affect a comparable measure calculated and presented in accordance with GAAP. Our expected non-GAAP net income per diluted share excludes primarily the future impact of restructuring actions, impairment charges, unusual gains and losses, and tax adjustments. These reconciling items are highly variable and difficult to predict due to various factors outside of management’s control and could have a material impact on our future period net income per diluted share calculated and presented in accordance with GAAP. Accordingly, a reconciliation of non-GAAP net income per diluted share to a comparable measure calculated and presented in accordance with GAAP has not been provided because the Company is unable to provide such reconciliation without unreasonable effort. For the same reasons, TTM is unable to address the probable significance of the information.

Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss fourth quarter 2023 results and the first quarter 2024 outlook on Wednesday, February 7, 2024, at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time). The conference call will include forward-looking statements.

Access to the conference call is available by clicking on the registration link TTM Technologies, Inc. fourth quarter and full year 2023 conference call. Registering participants will receive dial in information and a unique PIN to join the call. Participants can register at any time up to the start of the conference call. The conference call will also be simulcast on the company’s website, and can be accessed by clicking on the link TTM Technologies, Inc. fourth quarter and full year 2023 webcast. The webcast will remain accessible for one week following the live event.

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 TTM Technologies, Inc. fourth quarter and full year 2023 webcast.

About TTM
TTM Technologies, Inc. is a leading global manufacturer of technology solutions including mission systems, RF components/RF microwave/microelectronic assemblies, quick-turn and technologically advanced PCBs. 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
The preliminary financial results included in this press release represent the most current information available to management. The company’s actual results when disclosed in its Form 10-K may differ from these preliminary results as a result of the completion of the company’s financial closing procedures, final adjustments, completion of the review by the company’s independent registered accounting firm, and other developments that may arise between now and the disclosure of the final results. 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, the impact of COVID-19, 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
To supplement our consolidated condensed financial statements presented on a GAAP basis, 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 reconciliations below 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.

Contact:
Sameer Desai,
Vice President, Corporate Development & Investor Relations
Sameer.desai@ttmtech.com
714-327-3050

TTM TECHNOLOGIES, INC.

Selected Unaudited Financial Information

(In thousands, except per share data)



CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS				Fourth Quarter						Full Year
					2023			2022			2023			2022



	Net sales			$	569,039		$	617,156		$	2,232,567		$	2,495,046
	Cost of goods sold				453,671			495,754			1,819,299			2,037,081

	Gross profit				115,368			121,402			413,268			457,965

	Operating expenses:
		Selling and marketing			18,677			19,529			76,922			75,182
		General and administrative			37,802			36,317			149,631			158,180
		Research and development			7,590			6,698			27,272			24,808
		Amortization of definite-lived intangibles			11,430			10,275			48,675			37,097
		Impairment of goodwill			-			-			44,100			-
		Restructuring charges			5,291			2,827			24,352			4,094
		Gain on sale of SH E-MS property			-			(51,804	)		-			(51,804	)
			Total operating expenses		80,790			23,842			370,952			247,557

	Operating income				34,578			97,560			42,316			210,408

	Interest expense				(13,373	)		(12,506	)		(48,124	)		(45,517	)
	Loss on extinguishment of debt				-			-			(1,154	)		-
	Gain on sale of subsidiary				-			-			1,270			-
	Other, net				(3,321	)		(1,960	)		5,989			17,972

	Income before income taxes				17,884			83,094			297			182,863
	Income tax provision				(546	)		(77,077	)		(19,015	)		(88,280	)

	Net income (loss)			$	17,338		$	6,017		$	(18,718	)	$	94,583

	Earnings (loss) per share:
		Basic		$	0.17		$	0.06		$	(0.18	)	$	0.93
		Diluted			0.17			0.06			(0.18	)		0.91

	Weighted-average shares used in computing per share amounts:
		Basic			102,327			102,217			102,744			102,074
		Diluted			104,302			104,220			102,744			103,866

	Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:
	Weighted-average shares outstanding				102,327			102,217			102,744			102,074
	Dilutive effect of warrants				-			-			-			1
	Dilutive effect of performance-based stock units, restricted stock units & stock options				1,975			2,003			-			1,791
	Diluted shares				104,302			104,220			102,744			103,866

SELECTED BALANCE SHEET DATA			January 1, 2024		January 2, 2023
	Cash and cash equivalents, including restricted cash	$	450,208	$	402,749
	Accounts and notes receivable, net		413,557		473,225
	Receivable from sale of SH E-MS property		6,737		69,240
	Contract assets		292,050		335,788
	Inventories		213,075		170,639
	Total current assets		1,429,687		1,493,056
	Property, plant and equipment, net		807,667		724,204
	Operating lease right of use asset		86,286		18,862
	Other non-current assets		1,000,023		1,087,482
	Total assets		3,323,663		3,323,604

	Short-term debt, including current portion of long-term debt	$	3,500	$	50,000
	Accounts payable		334,609		361,788
	Total current liabilities		703,984		761,325
	Debt, net of discount		914,336		879,407
	Total long-term liabilities		1,108,640		1,026,700
	Total equity		1,511,039		1,535,579
	Total liabilities and equity		3,323,663		3,323,604

SUPPLEMENTAL DATA				Fourth Quarter						Full Year
					2023			2022		2023		2022
	Gross margin				20.3	%		19.7	%	18.5	%	18.4	%
	Operating margin				6.1	%		15.8	%	1.9	%	8.4	%

	End Market Breakdown:
				Fourth Quarter
					2023			2022
		Aerospace and Defense			46	%		40	%
		Automotive			15	%		16	%
		Data Center Computing			17	%		14	%
		Medical/Industrial/Instrumentation			16	%		17	%
		Networking			6	%		13	%

	Stock-based Compensation:
				Fourth Quarter
		Amount included in:			2023			2022
			Cost of goods sold	$	2,084		$	1,699
			Selling and marketing		878			717
			General and administrative		2,891			2,674
			Research and development		306			304
			Total stock-based compensation expense	$	6,159		$	5,394

	Operating Segment Data:
				Fourth Quarter
		Net sales:			2023			2022
		PCB		$	559,728		$	605,268
		RF&S Components			9,311			11,888
			Total net sales	$	569,039		$	617,156

		Operating segment income:
		PCB		$	78,117		$	79,573
		RF&S Components			2,913			5,122
		Corporate & Other			(32,687	)		24,523
			Total operating segment income		48,343			109,218
		Amortization of definite-lived intangibles			(13,765	)		(11,658	)
			Total operating income		34,578			97,560
			Total other expense		(16,694	)		(14,466	)
		Income before income taxes		$	17,884		$	83,094

RECONCILIATIONS¹				Fourth Quarter						Full Year
					2023			2022			2023			2022

	Non-GAAP gross profit reconciliation²:
		GAAP gross profit		$	115,368		$	121,402		$	413,268		$	457,965
		Add back item:
			Amortization of definite-lived intangibles		2,335			1,383			12,901			5,534
			Accelerated depreciation associated with plant closures/restructuring		1,950			-			5,324			124
			Stock-based compensation		2,084			1,699			7,455			5,846
			Unrealized (gain) loss on commodity hedge		(701	)		(2,407	)		(1,192	)		1,785
			Purchase accounting related inventory markup		-			79			327			327
		Non-GAAP gross profit		$	121,036		$	122,156		$	438,083		$	471,581
		Non-GAAP gross margin			21.3	%		19.8	%		19.6	%		18.9	%

	Non-GAAP operating income reconciliation³:
		GAAP operating income		$	34,578		$	97,560		$	42,316		$	210,408
		Add back items:
			Amortization of definite-lived intangibles		13,765			11,658			61,576			42,631
			Accelerated depreciation associated with plant closures/restructuring		1,950			-			5,324			124
			Stock-based compensation		6,159			5,394			22,887			19,525
			Gain on sale of assets		-			(55,979	)		(104	)		(55,979	)
			Unrealized (gain) loss on commodity hedge		(701	)		(2,407	)		(1,192	)		1,785
			Purchase accounting related inventory markup		-			79			327			327
			Impairment, restructuring, acquisition-related and other charges		5,291			3,261			67,239			16,066
		Non-GAAP operating income		$	61,042		$	59,566		$	198,373		$	234,887
		Non-GAAP operating margin			10.7	%		9.7	%		8.9	%		9.4	%

	Non-GAAP net income and EPS reconciliation⁴:
		GAAP net income (loss)		$	17,338		$	6,017		$	(18,718	)	$	94,583
		Add back items:
			Amortization of definite-lived intangibles		13,765			11,658			61,576			42,631
			Accelerated depreciation associated with plant closures/restructuring		1,950			-			5,324			124
			Stock-based compensation		6,159			5,394			22,887			19,525
			Non-cash interest expense		478			543			2,204			2,152
			Gain on sale of assets		-			(55,979	)		(104	)		(56,806	)
			Change in fair value of warrant liabilities		-			-			-			(99	)
			Loss on extinguishment of debt		-			-			1,154			-
			Gain on sale of subsidiary		-			-			(1,270	)		-
			Unrealized (gain) loss on commodity hedge		(701	)		(2,407	)		(1,192	)		1,785
			Purchase accounting related inventory markup		-			79			327			327
			Impairment, restructuring, acquisition-related and other charges		5,291			3,261			67,239			16,066
			Income taxes⁵		(1,314	)		74,131			113			60,895
		Non-GAAP net income		$	42,966		$	42,697		$	139,540		$	181,183
		Non-GAAP earnings per diluted share		$	0.41		$	0.41		$	1.33		$	1.74

	Non-GAAP diluted number of shares:
		GAAP diluted number of shares			104,302			104,220			102,744			103,866
		Dilutive effect of performance-based stock units, restricted stock units & stock options			-			-			1,851			-
		Non-GAAP diluted number of shares			104,302			104,220			104,595			103,866

	Adjusted EBITDA reconciliation⁶:
		GAAP net income (loss)		$	17,338		$	6,017		$	(18,718	)	$	94,583
		Add back items:
			Income tax provision		546			77,077			19,015			88,280
			Interest expense		13,373			12,506			48,124			45,517
			Amortization of definite-lived intangibles		13,765			11,658			61,576			42,631
			Depreciation expense		25,095			23,970			99,155			91,276
			Stock-based compensation		6,159			5,394			22,887			19,525
			Gain on sale of assets		-			(55,979	)		(104	)		(56,806	)
			Change in fair value of warrant liabilities		-			-			-			(99	)
			Loss on extinguishment of debt		-			-			1,154			-
			Gain on sale of subsidiary		-			-			(1,270	)		-
			Unrealized (gain) loss on commodity hedge		(701	)		(2,407	)		(1,192	)		1,785
			Purchase accounting related inventory markup		-			79			327			327
			Impairment, restructuring, acquisition-related and other charges		5,291			3,261			67,239			16,066
		Adjusted EBITDA		$	80,866		$	81,576		$	298,193		$	343,085
		Adjusted EBITDA margin			14.2	%		13.2	%		13.4	%		13.8	%

	Free cash flow reconciliation:
		Operating cash flow		$	47,470		$	77,559		$	187,284		$	272,873
		Capital expenditures, net			(45,954	)		(20,779	)		(159,737	)		(96,874	)
		Free cash flow		$	1,516		$	56,780		$	27,547		$	175,999

¹This information provides a reconciliation of non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP EPS, and adjusted EBITDA to the financial information in our consolidated condensed statements of operations.

²Non-GAAP gross profit and gross margin measures exclude amortization of intangibles, accelerated depreciation associated with plant closures/restructuring, stock-based compensation expense, unrealized (gain) loss on commodity hedge, and purchase accounting related inventory markup.

³Non-GAAP operating income and operating margin measures exclude amortization of intangibles, accelerated depreciation associated with plant closures/restructuring, stock-based compensation expense, gain on sale of assets, unrealized (gain) loss on commodity hedge, purchase accounting related inventory markup, impairment of goodwill, restructuring, acquisition-related costs, and other charges.

⁴ This information provides non-GAAP net income and non-GAAP EPS, which are non-GAAP financial measures. Management believes that both measures -- which add back amortization of intangibles, accelerated depreciation associated with plant closures/restructuring, stock-based compensation expense, non-cash interest expense on debt (before consideration of capitalized interest), gain on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, gain on sale of subsidiary, unrealized (gain) loss on commodity hedge, purchase accounting related inventory markup, impairment of goodwill, restructuring, acquisition-related costs, 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 Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate.

⁶Adjusted EBITDA is defined as earnings before income taxes, interest expense, amortization of intangibles, depreciation, stock-based compensation expense, gain on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, gain on sale of subsidiary, unrealized (gain) loss on commodity hedge, purchase accounting related inventory markup, impairment of goodwill, restructuring, acquisition-related costs, 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.

Source: TTM Technologies, Inc.

Released February 7, 2024

TTM Technologies, Inc. Reports Fourth Quarter and Full Year 2023 Results

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