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TTM Technologies, Inc. Reports Third Quarter 2001 Cash Earnings of $0.06 Per Share

REDMOND, Wash., Oct. 23 /PRNewswire/ -- TTM Technologies, Inc. (Nasdaq: TTMI - news), a leading manufacturer of time-critical, technologically advanced printed circuit boards, today reported results for the quarter ended October 1, 2001.

Third-Quarter Results

In the third quarter, continued economic weakness and a sharp downturn in the electronics industry led to a year-over-year decline in revenue and profitability. Net sales declined 51 percent to $26.9 million, compared to $55.1 million for the third quarter of 2000. Gross profit declined 73 percent to $5.9 million, as gross margins declined to 21.8 percent in the third quarter of 2001, compared to 39.0 percent for the same period in 2000.

As a result of lower revenues, operating income declined 86 percent to $2.0 million in the third quarter of 2001, compared to adjusted operating income (excluding one-time costs associated with the buyout of compensation and management contracts) of $14.7 million for the third quarter of 2000.

Net income was $1.0 million, or $0.03 per diluted share, for the third quarter of 2001, compared to adjusted net income (excluding the above-listed nonrecurring items, an extraordinary item related to the extinguishment of debt, and a one-time tax benefit) of $6.8 million, or $0.20 per diluted share, for the same period in 2000. Diluted cash earnings per share were $0.06 for the third quarter of 2001, compared to adjusted cash earnings per share of $0.24 in the same period in 2000.

Earnings before interest, taxes, depreciation and amortization (EBITDA) declined 71 percent to $5.3 million for the third quarter of 2001, compared to $18.2 million for the third quarter of 2000.

For the third quarter of 2001, quick-turn business as a percentage of total revenues remained stable at 40 percent, compared to 41 percent for the third quarter of 2000. While the number of jobs tooled was steady and the percentage of quick-turn panels sold increased, year-over-year, pricing pressures in the quick-turn segment dampened its impact on total revenues. During the quarter, the company captured 48 new customers.

``Despite a challenging business environment, we generated solid profitability in the third quarter,'' said Kent Alder, President and CEO of TTM Technologies. ``Our focus on time-to-market and new customer capture, combined with proactive cost cutting-including a 35 percent reduction in headcount this year and lower material costs-helped us mitigate pricing pressure and lower demand in all segments of our business.''

Year-to-Date Results

Net sales for the first three fiscal quarters ended October 1, 2001 declined 28 percent to $103.6 million compared to $143.2 million for the same period in 2000. Gross profit declined 35 percent to $31.9 million, as gross margins declined to 30.8 percent for the first nine months of 2001, compared to 34.1 percent for the same period in 2000.

During the first nine months of 2001, operating income declined 40 percent to $18.4 million, compared to adjusted operating income of $30.8 million for the same period in 2000.

Net income was $10.7 million, or $0.28 per diluted share, for the first three quarters of 2001, compared to adjusted net income of $12.0 million, or $0.37 per diluted share, for the same period in 2000. Diluted cash earnings per share were $0.37 for the first three quarters of 2001, compared to adjusted diluted cash earnings per share of $0.48 in the same period in 2000.

Earnings before interest, taxes, depreciation and amortization (EBITDA) declined 30 percent to $28.1 million for the first three quarters of 2001, compared to $40.5 million for the same period in 2000.

Return on Invested Capital and Liquidity

TTM's return on invested capital (ROIC), based on tax-affected EBITA, was 7.7 percent in the third quarter of 2001, compared with 27.4 percent in the year-ago period. On a trailing 12-month basis, TTM generated an ROIC of 19.6 percent.

The company's balance sheet strengthened further during the quarter. Through the first three quarters of the year, TTM reduced its net debt to $10.5 million, down $23.5 million since year-end 2000. As a result, TTM had a net debt-to-capital ratio of 6.6 percent, compared to 19.8 percent at year-end 2000. In addition, during the third quarter, the company reduced its cash conversion cycle by more than 15% compared to the same period last year.

Outlook

For the fourth quarter of 2001, the company is estimating revenues of $24 to $27 million and cash earnings per share from $0.03 to $0.06. ``As we navigate the ongoing slowdown in our industry, we actively manage our business to maximize profitability and cash flow,'' said Alder.

``We remain optimistic about our future. As our results demonstrate, our focus on the most attractive niches of the printed circuit board market provides higher profitability than the overall industry. In addition, our specialized and integrated facilities enable us to meet customer needs at any stage, from prototype through volume production. As the printed circuit board industry continues to consolidate, our full-service capabilities, technological sophistication, and strong financial position will enable us to continue to capture market share,'' concluded Alder.

TTM Technologies, Inc. is a leading supplier of time-critical, technologically advanced printed circuit boards to original equipment manufacturers and electronic manufacturing services companies. TTM stands for time-to-market, representing how the company's time-critical, one-stop shopping manufacturing services enable customers to shorten the time required to develop new products and bring them to market. TTM trades on the Nasdaq National Market System under the symbol ``TTMI''.

Conference Call/Webcast

The company will conduct a conference call to discuss its third-quarter performance and outlook today at 4:30 p.m. Eastern/1:30 p.m. Pacific time. The call will be simulcast, and available for replay until October 30, 2001, on the company's Web site at www.ttmtech.com .

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, that 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, including the recent significant slowdown in the technology sector, the unpredictability of future revenues and expenses, potential fluctuations in revenues and operating results, and the other ``Factors That May Affect Future Results'' set forth in the company's Form 10-K for 2000.

                            TTM TECHNOLOGIES, INC.
                        Selected Financial Information
                    (In thousands, except per share data)
                           Third Quarter         First Three Fiscal Quarters
                     2001      2000      2000     2001      2000      2000
                                       Adjusted*                    Adjusted*

    CONSOLIDATED STATEMENTS OF INCOME
    Net sales      $26,895   $55,060   $55,060  $103,562  $143,220  $143,220
    Cost of goods
     sold           21,021    33,588    33,588    71,631    94,418    94,418
    Gross profit     5,874    21,472    21,472    31,931    48,802    48,802
    Operating
     expenses:
    Sales and
     marketing       1,490     2,912     2,912     5,861     6,939     6,939
    General and
     administrative  1,168     2,037     2,037     4,088     5,429     5,429
    Amortization
     of intangibles  1,202     1,204     1,204     3,606     3,608     3,608
    Amortization
     of deferred
     retention bonus     -     4,546       463         -     5,470     1,387
    Management fees      -     1,650       150         -     2,150       650
    Total operating
     expenses        3,860    12,349     6,766    13,555    23,596    18,013

    Operating income 2,014     9,123    14,706    18,376    25,206    30,789

    Interest expense  (569)   (3,570)   (3,570)   (2,102)  (11,197)  (11,197)
    Amortization of
     debt issuance
     costs             (10)     (236)     (236)      (30)     (731)     (731)
    Interest income
     and other, net     96       (85)      (85)      529       124       124

    Income before
     income taxes    1,531     5,232    10,815    16,773    13,402    18,985
    Income tax
     provision
     (benefit)         552   (11,763)    4,002     6,055    (8,731)    7,024

    Income before
     extraordinary
     item              979    16,995     6,813    10,718    22,133    11,961
    Extraordinary
     item, net of
     taxes               -    (6,792)        -         -    (6,792)        -

    Net income         979    10,203     6,813    10,718    15,341    11,961

    Earnings per
     common share
     (EPS):
      Basic          $0.03     $0.33     $0.22    $ 0.29     $0.51     $0.40
      Diluted         0.03      0.30      0.20      0.28      0.47      0.37
      Cash
       (diluted)**    0.06      0.34      0.24      0.37      0.58      0.48

    Weighted average
     common shares:
      Basic         37,544    30,677    30,677    37,445    30,173    30,173
      Diluted       38,862    33,590    33,590    38,893    32,543    32,543

    *  Excluding one-time costs associated with the buyout of compensation and
       management advisory contracts, the extinguishment of debt and tax
       benefits and adjustments related to our IPO

    ** Fully diluted EPS plus amortization of intangibles


    SELECTED BALANCE SHEET DATA
                                             Oct. 1, 2001    Dec. 31, 2000

    Cash                                        $24,083         $9,294
    Accounts receivable, net                     13,111         33,690
    Inventories                                   4,068          6,893
    Total current assets                         45,536         50,296
    Net PP&E                                     46,244         44,774
    Other assets                                104,009        107,063
    Total assets                                195,790        202,133

    Current maturities of long-term debt          4,219          7,031
    Other current liabilities                    12,021         21,079
    Long-term liabilities                        30,375         36,281
    Shareholders' equity                        149,175        137,742
    Total liabilities and
     shareholders' equity                       195,790        202,133


    SUPPLEMENTAL DATA
                           Third Quarter         First Three Fiscal Quarters
                     2001      2000      2000      2001       2000    2000
                                       Adjusted*                    Adjusted*

    EBITDA***       $5,334   $18,173   $18,173   $28,149   $40,459   $40,459
    EBITA****        3,216    16,523    16,523    21,982    36,434    36,434

    Gross margin      21.8      39.0%     39.0%      30.8%     34.1%   34.1%
    EBITDA margin     19.8      33.0      33.0      27.2      28.2      28.2
    Operating margin   7.5      16.6      26.7      17.7      17.6      21.5

    Return on
     Invested
     Capital
    (after tax)        7.7%     27.4%


    End Market Breakdown:
                                        Third Quarter
                                    2001               2000

    Networking/communications      28.6%               39.7%
    High-end computing              25.8                24.9
    Industrial/Medical              29.6                17.9
    Computer peripherals             8.4                 8.8
    Handheld                         2.6                 5.3
    Other                            5.0                 3.4

    *  Excluding one-time costs associated with the buyout of compensation and
       management advisory contracts, the extinguishment of debt and tax
       benefits and adjustments related to our IPO

    *** EBITDA (earnings before interest, taxes, depreciation and
        amortization) is the sum of operating income, management fees,
        amortization of deferred retention bonus, amortization of intangibles
        and depreciation expense

    **** EBITA (earnings before interest, taxes and amortization) is the sum
         of operating income, management fees amortization of deferred
         retention bonus and amortization of intangibles.