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TTM Technologies, Inc. Reports Fiscal First Quarter 2022 Results

SANTA ANA, Calif., May 04, 2022 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ:TTMI), a leading global manufacturer of printed circuit boards (“PCB”), radio frequency (“RF”) components and RF microwave/microelectronic assemblies, today reported results for the first quarter fiscal 2022, which ended on April 4, 2022.  

First Quarter 2022 Highlights

  • Net sales were $581.3 million
  • GAAP net income of $17.2 million, or $0.17 per diluted share
  • Non-GAAP net income was $25.3 million, or $0.24 per diluted share
  • Operating cash flow of $36.0 million
  • Repurchased 2.4 million shares of common stock for $30.2 million at an average price of $12.74 per share
  • Announced investment in a greenfield production facility in Malaysia

First Quarter 2022 GAAP Financial Results
Net sales for the first quarter of 2022 were $581.3 million, compared to $526.4 million in the first quarter of 2021.

GAAP operating income for the first quarter of 2022 was $25.9 million. This compares to GAAP operating income of $19.8 million in the first quarter of 2021.

GAAP net income for the first quarter of 2022 was $17.2 million, or $0.17 per diluted share, compared to net loss of $3.2 million, or ($0.03) per diluted share in the first quarter of 2021.     

First Quarter 2022 Non-GAAP Financial Results        
On a non-GAAP basis, net income for the first quarter of 2022 was $25.3 million, or $0.24 per diluted share. This compares to non-GAAP net income of $25.3 million, or $0.23 per diluted share, for the first quarter of 2021.

Adjusted EBITDA in the first quarter of 2022 was $62.0 million compared to adjusted EBITDA of $61.0 million for the first quarter of 2021.

“In the first quarter, TTM achieved revenues at the high end of guidance and non-GAAP earnings above the mid-point of the guided range. This outperformance was driven by strength in our commercial end markets, despite labor and production challenges in North America and inflationary pressures globally,” said Tom Edman, CEO of TTM. “We also took significant steps to advance our strategy of differentiation with the agreement to acquire Telephonics Corporation which provides engineered system level solutions for the Aerospace and Defense end market and enables TTM to move further up the value chain. In addition, we announced the building of a new manufacturing facility in Malaysia which enables TTM to offer our customers a regional alternative for high volume, high layer count PCBs to meet their supply chain resiliency requirements,” continued Mr. Edman.

Business Outlook
TTM estimates that revenue for the second quarter of 2022 will be in the range of $580 million to $620 million, and non-GAAP net income will be in the range of $0.30 to $0.36 per diluted share. This guidance does not include any contribution of the previously announced acquisition of Telephonics as we are awaiting regulatory approvals prior to closing.

Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss first quarter 2022 results and the second quarter 2022 outlook on Wednesday, May 4th, 2022 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 888-220-8474 or international 323-794-2588 (ID 5381401). 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 and backplane assemblies as well as a global designer and manufacturer of high-frequency radio frequency (RF) and microwave/microelectronics components and assemblies. 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
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.

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 is not available without unreasonable effort and has not been provided.

- Tables Follow -

TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)

  First Quarter
  2022 2021
         
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS        
         
Net sales $                 581,260   $                526,432  
Cost of goods sold 490,337   444,832  
         
Gross profit 90,923   81,600  
         
Operating expenses:        
 Selling and marketing 18,272   16,282  
 General and administrative 32,954   31,527  
 Research and development 5,555   4,470  
 Amortization of definite-lived intangibles 8,274   9,521  
  Total operating expenses 65,055   61,800  
         
Operating income 25,868   19,800  
         
Interest expense (11,361 ) (11,389 )
Loss on extinguishment of debt -   (15,217 )
Other, net 1,970   2,507  
         
Income (loss) before income taxes 16,477   (4,299 )
Income tax benefit 769   1,107  
         
Net income (loss) $                   17,246   $                  (3,192 )
         
         
Earnings (loss) per share:        
 Basic  $                      0.17   $                    (0.03 )
 Diluted  0.17   (0.03 )
         
Weighted-average shares used in computing per share amounts:          
 Basic  102,613   106,825    
 Diluted  104,304   106,825    
           
           
Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:        
           
Weighted-average shares outstanding                    102,613        
Dilutive effect of warrants                              6        
Dilutive effect of performance-based stock units, restricted stock units & stock options                       1,685        
Diluted shares                    104,304        
           
SELECTED BALANCE SHEET DATA           
  April 4, 2022  January 3, 2022   
Cash and cash equivalents, including restricted cash $                  519,079   $                 537,678    
Accounts and notes receivable, net                    412,432                    386,347    
Contract assets                    318,713                    324,862    
Inventories                    137,343                    127,612    
Total current assets                 1,434,183                  1,407,413    
Property, plant and equipment, net                    663,394                    665,755    
Operating lease right of use asset                      19,503                      20,802    
Other non-current assets                    927,068                    931,577    
Total assets                 3,044,148                  3,025,547    
           
Accounts payable $                  383,929   $                 361,484    
Total current liabilities                    586,566                    558,148    
Debt, net of discount                    928,210                    927,818    
Total long-term liabilities                 1,009,753                  1,011,982    
Total equity                 1,447,829                  1,455,417    
Total liabilities and equity                 3,044,148                  3,025,547    
           
SUPPLEMENTAL DATA          
  First Quarter    
  2022   2021    
Gross margin 15.6 % 15.5 %  
Operating margin 4.5 % 3.8 %  
           
End Market Breakdown:          
  First Quarter    
  2022   2021    
           
    30   35 %
    20 %   18 %
 Data Center Computing 16 % 14 %  
 Medical/Industrial/Instrumentation 21 % 17 %  
 Networking/Communications 13 % 15 %  
 Other  0 % 1 %  
           
Stock-based Compensation:          
  First Quarter    
  2022   2021    
 Amount included in:          
  Cost of goods sold $                      1,276   $                    1,165    
  Selling and marketing                          650                           646    
  General and administrative                       2,053                        2,355    
  Research and development                          255                             43    
  Total stock-based compensation expense $                      4,234   $                    4,209    
           
           
Operating Segment Data:          
  First Quarter    
 Net sales: 2022   2021    
 PCB  $                  566,070   $                 510,486    
 RF&S Components                      15,190                      12,690    
 Other1                             -                        3,256    
  Total net sales $                  581,260   $                 526,432    
           
 Operating segment income:          
 PCB  $                    56,540   $                  57,232    
 RF&S Components                       5,750                        3,862    
 Corporate & Other1                    (26,764 )                   (30,389 )  
  Total operating segment income                      35,526                      30,705    
 Amortization of definite-lived intangibles                      (9,658 )                   (10,905 )  
  Total operating income                      25,868                      19,800    
  Total other expense                      (9,391 )                   (24,099 )  
 Income (loss) before income taxes $                    16,477   $                   (4,299 )  
           
RECONCILIATIONS2          
           
  First Quarter    
  2022   2021    
Non-GAAP gross profit reconciliation3:          
 GAAP gross profit $                    90,923   $                  81,600    
 Add back item:          
  Amortization of definite-lived intangibles                       1,384                        1,384    
  Stock-based compensation                       1,276                        1,165    
  Unrealized gain on commodity hedge                      (1,403 )                           -    
  Restructuring and other charges                            -                           254    
 Non-GAAP gross profit $                    92,180   $                  84,403    
 Non-GAAP gross margin 15.9 % 16.0 %  
           
Non-GAAP operating income reconciliation4:          
 GAAP operating income $                    25,868   $                  19,800    
 Add back items:          
  Amortization of definite-lived intangibles                       9,658                      10,905    
  Stock-based compensation                       4,234                        4,209    
  Gain on sale of assets                            -                         (410 )  
  Unrealized gain on commodity hedge                      (1,403 )                           -    
  Restructuring, acquisition-related and other charges                       1,138                        3,285    
 Non-GAAP operating income $                    39,495   $                  37,789    
 Non-GAAP operating margin 6.8 % 7.2 %  
           
Non-GAAP net income and EPS reconciliation5:          
 GAAP net income (loss) $                    17,246   $                   (3,192 )  
 Add back items:          
  Amortization of definite-lived intangibles                       9,658                      10,905    
  Stock-based compensation                       4,234                        4,209    
  Non-cash interest expense                          532                           537    
  Gain on sale of assets                         (827 )                       (980 )  
  Change in fair value of warrant liabilities                           (99 )                       (172 )  
  Loss on extinguishment of debt                            -                      15,217    
  Unrealized gain on commodity hedge                      (1,403 )                           -    
  Restructuring, acquisition-related and other charges                       1,138                        3,285    
  Income taxes6                      (5,226 )                     (4,551 )  
 Non-GAAP net income $                    25,253   $                  25,258    
 Non-GAAP earnings per diluted share $                       0.24   $                      0.23    
           
Non-GAAP diluted number of shares:          
 GAAP diluted number of shares                    104,304                    106,825    
 Dilutive effect of performance-based stock units, restricted stock units & stock options                              -                        1,879    
 Non-GAAP diluted number of shares                    104,304                    108,704    
           
Adjusted EBITDA reconciliation7:          
 GAAP net income (loss) $                    17,246   $                   (3,192 )  
 Add back items:          
  Income tax benefit                         (769 )                     (1,107 )  
  Interest expense                      11,361                      11,389    
  Amortization of definite-lived intangibles                       9,658                      10,905    
  Depreciation expense                      21,500                      21,476    
  Stock-based compensation                       4,234                        4,209    
  Gain on sale of assets                         (827 )                       (980 )  
  Change in fair value of warrant liabilities                           (99 )                       (172 )  
  Loss on extinguishment of debt                            -                      15,217    
  Unrealized gain on commodity hedge                      (1,403 )                           -    
  Restructuring, acquisition-related and other charges                       1,138                        3,285    
 Adjusted EBITDA $                    62,039   $                  61,030    
 Adjusted EBITDA margin 10.7 % 11.6 %  
           
Free cash flow reconciliation:          
 Operating cash flow $                    35,991   $                  41,145    
 Capital expenditures, net                    (23,420 )                   (20,966 )  
 Free cash flow $                    12,571   $                  20,179    
           


1 Other represents the Shanghai E-MS and Shenzhen plant results.
 
2 This 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.
 
3 Non-GAAP gross profit and gross margin measures exclude amortization of intangibles, stock-based compensation expense, unrealized gain on commodity hedge, restructuring and other charges.
 
4 Non-GAAP operating income and operating margin measures exclude amortization of intangibles, stock-based compensation expense, gain on sale of assets, unrealized gain on commodity hedge, restructuring, acquisition-related costs, and other charges.
 
5 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, 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, unrealized gain on commodity hedge, 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.
 
6 Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate.
 
7 Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, unrealized gain on commodity hedge, 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.
 

Contact:

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


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Source: TTM Technologies