|View printer-friendly version|
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.
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.''
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.
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''.
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.