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TTM Technologies, Inc. Reports Fiscal Third Quarter 2021 Results

SANTA ANA, Calif., Oct. 27, 2021 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) and radio frequency (“RF”) components and assemblies manufacturer, today reported results for the third quarter of fiscal 2021, which ended on September 27, 2021.  

Third Quarter 2021 Highlights

  • Net sales were $556.8 million
  • GAAP net income of $21.0 million, or $0.19 per diluted share
  • Non-GAAP net income was $36.5 million, or $0.34 per diluted share
  • Repurchased 2.11 million shares of common stock for $28.9 million at an average price of $13.71 per share

Third Quarter 2021 Financial Results
Net sales for the third quarter of 2021 were $556.8 million, compared to $513.6 million from continuing operations in the third quarter of 2020.

GAAP operating income for the third quarter of 2021 was $32.2 million. This compares to GAAP operating loss of $40.3 million from continuing operations in the third quarter of 2020, inclusive of a goodwill impairment charge of $69.2 million.

GAAP net income for the third quarter of 2021 was $21.0 million, or $0.19 per diluted share, compared to net loss of $61.5 million, or ($0.58) per diluted share from continuing operations in the third quarter of 2020.     
        
On a non-GAAP basis, net income for the third quarter of 2021 was $36.5 million, or $0.34 per diluted share. This compares to non-GAAP net income of $26.8 million, or $0.25 per diluted share from continuing operations in the third quarter of 2020.

Adjusted EBITDA in the third quarter of 2021 was $68.6 million, or 12.3 percent of net sales, compared to adjusted EBITDA of $67.2 million, or 13.1 percent of net sales, from continuing operations, in the third quarter of 2020.

“In the third quarter, TTM delivered revenue and non-GAAP earnings within the previously guided range despite labor and production inefficiencies in North America and tight supply conditions globally for certain raw materials. Results were led by strong year on year growth from the automotive and data center computing end markets and strength from the medical, industrial and instrumentation end market,” said Tom Edman, CEO of TTM.

Business Outlook
In the fourth quarter, further increases in labor and raw materials costs, along with potential power rationing in China, are expected to negatively affect profitability. As a result, TTM estimates that revenue for the fourth quarter of 2021 will be in the range of $530 million to $570 million, and non-GAAP net income will be in the range of $0.28 to $0.34 per diluted share.

Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss third quarter 2021 results and the fourth quarter 2021 outlook on Wednesday, October 27th, 2021 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 800-263-0877 or international 323-794-2094 (ID 8701149). 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 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-Q 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 and raw materials used in 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)
                       
          Third Quarter   First Three Quarters
           2021    2020    2021    2020
                       
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
             
                       
Net sales     $ 556,784     $ 513,576     $ 1,650,599     $ 1,581,520  
Cost of goods sold     463,605       424,298       1,375,910       1,310,470  
                       
Gross profit     93,179       89,278       274,689       271,050  
                       
Operating expenses:                
  Selling and marketing     15,858       15,895       46,745       48,033  
  General and administrative     32,146       27,998       91,075       95,646  
  Research and development     4,423       5,223       13,075       15,166  
  Amortization of definite-lived intangibles     8,274       10,126       26,837       29,249  
  Restructuring charges     243       1,088       4,034       14,830  
  Impairment of goodwill     -       69,200       -       69,200  
    Total operating expenses     60,944       129,530       181,766       272,124  
                       
Operating income (loss)     32,235       (40,252 )     92,923       (1,074 )
                       
Interest expense     (11,147 )     (20,204 )     (33,615 )     (58,557 )
Loss on extinguishment of debt     -       -       (15,217 )     -  
Other, net       2,525       (2,316 )     5,338       641  
                       
Income (loss) from continuing operations before income taxes     23,613       (62,772 )     49,429       (58,990 )
Income tax (provision) benefit     (2,655 )     1,300       (3,402 )     3,644  
                       
Net income (loss) from continuing operations     20,958       (61,472 )     46,027       (55,346 )
Income from discontinued operations, net of income taxes     -       20,021       -       193,921  
Net income (loss)   $ 20,958     $ (41,451 )   $ 46,027     $ 138,575  
                       
                       
Earnings (loss) per share:                
  Basic earnings (loss) per share from continuing operations   $ 0.20     $ (0.58 )   $ 0.43     $ (0.52 )
  Basic earnings per share from discontinued operations     -       0.19       -       1.83  
    Basic earnings (loss) per share   $ 0.20     $ (0.39 )   $ 0.43     $ 1.31  
                       
  Diluted earnings (loss) per share from continuing operations   $ 0.19     $ (0.58 )   $ 0.42     $ (0.52 )
  Diluted earnings per share from discontinued operations     -       0.19       -       1.83  
    Diluted earnings (loss) per share   $ 0.19     $ (0.39 )   $ 0.42     $ 1.31  
                       
 
                       
Weighted-average shares used in computing per share amounts:                
  Basic       107,098       106,729       106,917       106,130  
  Diluted     108,345       106,729       108,839       106,130  
                       
                       
Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:            
                       
Weighted-average shares outstanding     107,098       106,729       106,917       106,130  
Dilutive effect of warrants     -       -       267       -  
Dilutive effect of performance-based stock units, restricted stock units & stock options   1,247       -       1,655       -  
Diluted shares     108,345       106,729       108,839       106,130  
                       
SELECTED BALANCE SHEET DATA                
  September 27, 2021   December 28, 2020          
Cash and cash equivalents, including restricted cash   $ 529,816     $ 451,565          
Accounts and notes receivable, net     388,233       381,105          
Contract assets     325,774       273,256          
Inventories     140,055       115,651          
Total current assets     1,423,348       1,248,758          
Property, plant and equipment, net     669,736       650,435          
Operating lease right of use asset     16,794       24,340          
Other non-current assets     937,753       972,411          
Total assets     3,047,631       2,895,944          
                       
Accounts payable   $ 386,705     $ 327,102          
Total current liabilities     567,442       518,046          
Debt, net of discount     926,922       842,853          
Total long-term liabilities     1,013,600       933,889          
Total equity     1,466,589       1,444,009          
Total liabilities and equity     3,047,631       2,895,944          
                       
SUPPLEMENTAL DATA                
          Third Quarter   First Three Quarters
           2021    2020    2021    2020
Gross margin     16.7 %     17.4 %     16.6 %     17.1 %
Operating margin     5.8 %     (7.8) %     5.6 %     (0.1) %
                       
End Market Breakdown, excludes Mobility:                
          Third Quarter        
           2021    2020        
                       
  Aerospace/Defense     31 %     36 %        
  Automotive     18 %     14 %        
  Data Center Computing     14 %     12 %        
  Medical/Industrial/Instrumentation     20 %     19 %        
  Networking/Communications     16 %     18 %        
  Other       1 %     1 %        
                       
Stock-based Compensation:                
          Third Quarter        
           2021    2020        
  Amount included in:                
    Cost of goods sold   $ 1,284     $ 1,173          
    Selling and marketing     731       557          
    General and administrative     2,542       2,705          
    Research and development     387       44          
    Total stock-based compensation expense   $ 4,944     $ 4,479          
                       
                       
Operating Segment Data:                
          Third Quarter        
  Net sales:    2021    2020        
  PCB     $ 541,118     $ 481,311          
  RF&S Components     15,666       11,742          
  Other1     -       20,523          
    Total net sales   $ 556,784     $ 513,576          
                       
  Operating segment income:                
  PCB     $ 61,424     $ 65,179          
  RF&S Components     6,537       (66,098 )        
  Corporate & Other1     (26,068 )     (27,823 )        
    Total operating segment income (loss)     41,893       (28,742 )        
  Amortization of definite-lived intangibles     (9,658 )     (11,510 )        
    Total operating income (loss)     32,235       (40,252 )        
  Total other expense     (8,622 )     (22,520 )        
  Income (loss) from continuing operations before income taxes   $ 23,613     $ (62,772 )        
                       
RECONCILIATIONS2                
                       
          Third Quarter   First Three Quarters
           2021    2020    2021    2020
Non-GAAP gross profit reconciliation3:                
  GAAP gross profit from continuing operations   $ 93,179     $ 89,278     $ 274,689     $ 271,050  
  Add back item:                
    Amortization of definite-lived intangibles     1,384       1,384       4,151       4,151  
    Accelerated depreciation     -       2,539       -       4,936  
    Stock-based compensation     1,284       1,173       3,310       2,643  
    Unrealized loss on commodity hedge     164       -       65       -  
    Restructuring and other charges     -       -       254       -  
  Non-GAAP gross profit   $ 96,011     $ 94,374     $ 282,469     $ 282,780  
  Non-GAAP gross margin     17.2 %     18.4 %     17.1 %     17.9 %
                       
Non-GAAP operating income reconciliation4:                
  GAAP operating income (loss) from continuing operations   $ 32,235     $ (40,252 )   $ 92,923     $ (1,074 )
  Add back items:                
    Amortization of definite-lived intangibles     9,658       11,510       30,988       33,400  
    Accelerated depreciation     -       2,940       -       5,694  
    Stock-based compensation     4,944       4,479       12,503       11,961  
    (Gain) on sale of assets     -       -       (421 )     -  
    Unrealized loss on commodity hedge     164       -       65       -  
    Impairments, restructuring, acquisition-related and other charges     699       68,270       4,550       84,139  
  Non-GAAP operating income   $ 47,700     $ 46,947     $ 140,608     $ 134,120  
  Non-GAAP operating margin     8.6 %     9.1 %     8.5 %     8.5 %
                       
Non-GAAP net income and EPS reconciliation5:                
  GAAP net income (loss) from continuing operations   $ 20,958     $ (61,472 )   $ 46,027     $ (55,346 )
  Add back items:                
    Amortization of definite-lived intangibles     9,658       11,510       30,988       33,400  
    Accelerated depreciation     -       2,940       -       5,694  
    Stock-based compensation     4,944       4,479       12,503       11,961  
    Non-cash interest expense     540       7,332       1,613       14,489  
    (Gain) on sale of assets     -       (199 )     (991 )     (706 )
    Change in fair value of warrant liabilities     (2,669 )     -       (3,868 )     -  
    Loss on extinguishment of debt     -       -       15,217       -  
    Unrealized loss on commodity hedge     164       -       65       -  
    Impairments, restructuring, acquisition-related and other charges     699       68,270       4,550       84,139  
    Income taxes6     2,246       (6,081 )     (4,263 )     (17,188 )
  Non-GAAP net income   $ 36,540     $ 26,779     $ 101,841     $ 76,443  
  Non-GAAP earnings per diluted share   $ 0.34     $ 0.25     $ 0.94     $ 0.72  
                       
Adjusted EBITDA reconciliation7:                
  GAAP net income (loss) from continuing operations   $ 20,958     $ (61,472 )   $ 46,027     $ (55,346 )
  Add back items:                
    Income tax provision (benefit)     2,655       (1,300 )     3,402       (3,644 )
    Interest expense     11,147       20,204       33,615       58,557  
    Amortization of definite-lived intangibles     9,658       11,510       30,988       33,400  
    Depreciation expense     20,994       25,669       63,711       75,797  
    Stock-based compensation     4,944       4,479       12,503       11,961  
    (Gain) on sale of assets     -       (199 )     (991 )     (706 )
    Change in fair value of warrant liabilities     (2,669 )     -       (3,868 )     -  
    Loss on extinguishment of debt     -       -       15,217       -  
    Unrealized loss on commodity hedge     164       -       65       -  
    Impairments, restructuring, acquisition-related and other charges     699       68,270       4,550       84,139  
  Adjusted EBITDA   $ 68,550     $ 67,161     $ 205,219     $ 204,158  
  Adjusted EBITDA margin     12.3 %     13.1 %     12.4 %     12.9 %
                       
Free cash flow reconciliation8:                
  Operating cash flow   $ 18,599     $ 84,776     $ 114,263     $ 192,223  
  Capital expenditures, net     (19,766 )     (29,067 )     (61,069 )     (74,338 )
  Free cash flow   $ (1,167 )   $ 55,709     $ 53,194     $ 117,885  
                       
                       
1Other represents the SH E-MS and SZ results.
                       
2This 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, accelerated depreciation, stock-based compensation expense, unrealized loss on commodity hedge, restructuring and other charges.
                       
4 Non-GAAP operating income and operating margin measures exclude amortization of intangibles, accelerated depreciation, stock-based compensation expense, gain on sale of assets, unrealized loss on commodity hedge, impairment of goodwill, 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, accelerated depreciation, 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 loss on commodity hedge, 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.
                       
6 Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate.
                       
7Adjusted 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 loss on commodity hedge, 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.
 
8 Free Cash Flow in 2020 has been restated to exclude the Mobility business which was sold in Q2 of 2020.
                       

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

 



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