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TTM Technologies, Inc. Reports Third Quarter 2002 Results and Stock Buy-Back Program

REDMOND, Wash., Oct 16, 2002 /PRNewswire-FirstCall via COMTEX/ -- TTM Technologies, Inc. (Nasdaq: TTMI), a leading manufacturer of time-critical, technologically advanced printed circuit boards, today reported results for the third quarter ended September 30, 2002. The company also announced that its board of directors has authorized a stock buy-back program.

Third-Quarter Results

In the third quarter, revenue and profitability declined, year-over-year, due to continued weakness in the electronics industry. Net sales declined 24 percent to $20.6 million, compared to $26.9 million for the third quarter of 2001. For the third quarter of 2002, quick-turn business increased to 45 percent of total revenues, compared to 40 percent for the third quarter of 2001.

Gross profit declined 52 percent to $2.8 million, as gross margins declined to 13.8 percent in the third quarter of 2002, compared to 21.8 percent for the same period in 2001. As a result of lower volume and reduced absorption of fixed manufacturing overhead, TTM reported an operating loss of $446,000, for the third quarter of 2002, compared to operating income of $2.0 million for the third quarter of 2001. Prior-period results included a quarterly goodwill amortization charge of $900,000, which was eliminated with the adoption of Statement of Financial Accounting Standards No. 142 in the first quarter of 2002.

For the third quarter of 2002, the net loss was $369,000, or $0.01 per diluted share, compared to net income of $1.0 million, or $0.03 per diluted share, for the same period in 2001. The net cash loss was $69,000, or breakeven on a per-share basis, compared to cash earnings of $2.2 million, or $0.06 per diluted share, for the same period in 2001.

Earnings before interest, taxes, depreciation and amortization (EBITDA) declined 63 percent to $1.9 million for the third quarter of 2002, compared to $5.3 million for the same period in 2001.

"Business conditions remained challenging during the quarter," said Kent Alder, President and CEO of TTM Technologies. "Nonetheless, we've continued to successfully manage costs, surpassing the cost savings expected from the second-quarter production realignment and headcount reduction. As a result, gross profit increased 45 percent sequentially, as gross margins increased from 8.4 percent in the second quarter of 2002 to 13.8 percent in the third quarter of 2002."

Financial Strength

"Throughout the downturn in the electronics industry, we have maintained a strong balance sheet and excellent liquidity," said Alder. At the end of the third quarter, TTM had net cash (cash less current and long-term debt obligations) of $8.5 million, compared with net debt of $8.1 million at year-end 2001. Cash flow from operations remained positive, at $1.8 million in the third quarter of 2002, and the company has the full $25 million available under its revolving line of credit.

Stock Buy-Back

TTM's board authorized a stock repurchase program, enabling the company to buy back up to $10 million of common stock. "With the current depressed state of the electronics industry, there are a lot of undervalued assets," said Alder. "With our strong balance sheet and net cash position, we have the ability to purchase undervalued assets, including our own stock."

The repurchase program authorizes management, at its discretion, to make purchases from time to time on the open market or in privately negotiated block transactions. The stock repurchases would be based on management's assessment of TTM's capital structure and liquidity, the market price of TTM's stock compared to management's assessment of its underlying value, as well as regulatory, accounting and other factors.

On October 15, 2002, the closing price of TTM common stock was $1.55 per share, and the company had approximately 40 million shares outstanding.

While the stock buy-back program is not expected to have a material impact on earnings per share at current income levels, it should have an accretive impact when the company is generating positive net income.

Production Realignment and Cost Savings

In the second quarter of 2002, TTM realigned production among its three facilities, located in Burlington and Redmond, Washington, and Santa Ana, California, and reduced headcount by approximately 130 employees. As a result, beginning in the third quarter of 2002, the company realized quarterly cost savings of more than $1 million.

Outlook

For the fourth quarter of 2002, TTM anticipates revenues ranging from $19 million to $22 million, earnings per share between breakeven and a loss of $0.03, and cash earnings per share between a profit of $0.01 and a loss of $0.02.

"Despite the protracted and deep downturn in the electronics industry, we aggressively managed the business to market conditions and enhanced operating efficiencies," concluded Alder. "And with our low-cost production capabilities and strong balance sheet, we plan to capitalize on the opportunities presented by the downturn and are well positioned for an industry upturn."

TTM Technologies, Inc. is a leading supplier of time-critical, technologically advanced printed circuit boards to original equipment manufacturers and electronics manufacturing services companies. TTM stands for time-to-market, representing how the company's time-critical, one-stop manufacturing services enable customers to shorten the time required to develop new products and bring them to market.

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 23, 2002, 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, which 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 and related excess capacity, the unpredictability of future revenues and expenses, potential fluctuations in revenues and operating results, and other "Risk Factors" set forth in the company's Form 10-K for 2001.

                            TTM TECHNOLOGIES, INC.

                   Selected Unaudited Financial Information

                    (In thousands, except per share data)

                           Third Quarter        First Three Fiscal Quarters
                      2002     2001     2001     2002      2001      2001
                                      Adjusted*                    Adjusted*

    CONSOLIDATED
     STATEMENTS OF
     OPERATIONS

    Net sales       $20,557  $26,895  $26,895   $67,578  $103,563  $103,563
    Cost of goods
     sold            17,716   21,021   21,021    60,430    71,631    71,631

    Gross profit      2,841    5,874    5,874     7,148    31,932    31,932

    Operating
     expenses:
      Sales and
       marketing      1,534    1,490    1,490     4,780     5,861     5,861
      General and
       administrative 1,453    1,168    1,168     3,070     4,089     4,089
      Amortization of
       intangibles      300    1,202      301       901     3,606       901
      Restructuring
       charges          ---      ---      ---       907       ---       ---
        Total
         operating
         expenses     3,287    3,860    2,959     9,658    13,556    10,851

    Operating income
     (loss)            (446)   2,014    2,915    (2,510)   18,376    21,081

    Interest expense   (266)    (569)    (569)     (808)   (2,101)   (2,101)
    Amortization of
     debt issuance
     costs              (10)     (10)     (10)      (31)      (31)      (31)
    Interest income
     and other, net     192       96       96       500       530       530

    Income before
     income taxes      (530)   1,531    2,432    (2,849)   16,774    19,479
    Income tax
     benefit
     (provision)        161     (552)    (877)      918    (6,055)   (7,029)

    Net income
     (loss)           $(369)    $979   $1,555   $(1,931)  $10,719   $12,450

    Earnings per
     common share
     (EPS):
      Basic          $(0.01)   $0.03    $0.04    $(0.05)    $0.29     $0.33
      Diluted         (0.01)    0.03     0.04     (0.05)     0.28      0.32
      Cash
       (diluted)**    (0.00)    0.06     0.05     (0.03)     0.37      0.34

    Weighted average
     common shares:
      Basic          39,844   37,544   37,544    39,426    37,455    37,455
      Diluted        39,844   38,862   38,862    39,426    38,893    38,893

     *  Adjusted to show the pro-forma impact of eliminating goodwill
        amortization and the related income tax effect for the 2001 periods.

     ** Fully diluted EPS plus amortization of intangibles -- see
        reconciliations table below.


    SELECTED BALANCE SHEET DATA               09/30/02          12/31/01

    Cash                                      $35,255           $24,490
    Accounts receivable, net                    9,113            11,208
    Inventories                                 3,157             3,126
    Total current assets                       53,757            43,971
    Net PP&E                                   51,252            50,906
    Other assets                               93,269            98,199
    Total assets                              198,278           193,076

    Current maturities of long-term debt       $5,344            $4,500
    Other current liabilities                   7,427            10,372
    Long-term liabilities                      21,375            28,125
    Shareholders' equity                      164,132           150,079
    Total liabilities and
     shareholders' equity                     198,278           193,076


    SUPPLEMENTAL DATA
                              Third Quarter      First Three Fiscal Quarters
                       2002       2001     2001    2002     2001     2001
                                        Adjusted*                  Adjusted*

    EBITDA            $1,946     $5,321  $5,321   $5,113   $28,135  $28,135
    EBITA              $(146)    $3,216  $3,216  $(1,609)  $21,982  $21,982

    Gross margin        13.8%      21.8%   21.8%    10.6%     30.8%    30.8%
    EBITDA margin        9.5       19.8    19.8      7.6      27.2     27.2
    Operating margin    (2.2)       7.5    10.8     (3.7)     17.7     20.4


    End Market Breakdown:
                          Third Quarter
                        2002       2001

    Networking/
     communications     29.8%      28.6%
    High-end computing  11.5       25.8
    Industrial/Medical  27.9       29.6
    Computer
     peripherals        22.6        8.4
    Handheld             2.5        2.6
    Other                5.7        5.0


    RECONCILIATIONS***
                               Third Quarter    First Three Fiscal Quarters
                        2002      2001    2001     2002     2001     2001
                                       Adjusted*                   Adjusted*

    EBITA/EBITDA
     Reconciliation:
      Operating income
       (loss)          $(446)    $2,014  $2,915  $(2,510)  $18,376  $21,081

      Amortization of
       intangibles       300      1,202     301      901     3,606      901
      EBITA             (146)     3,216   3,216   (1,609)   21,982   21,982

      Depreciation
       expense         2,092      2,105   2,105    6,722     6,153    6,153

      EBITDA           1,946      5,321   5,321    5,113    28,135   28,135


    Cash Earnings
     Reconciliation:
      Net income
      (loss)           $(369)      $979  $1,555  $(1,931)  $10,719  $12,450
      Amortization of
       intangibles       300      1,202     301      901     3,606      901
      Cash net income
       (loss)            (69)     2,181   1,856   (1,030)   14,325   13,351

      Diluted
       Weighted
       Average
       Common
       Shares         39,844     38,862  38,862   39,426    38,893   38,893

      Cash Earnings
       per Share
       (Diluted)       (0.00)      0.06    0.05    (0.03)     0.37     0.34

     *** This information provides a reconciliation of EBITA/EBITDA and cash
         earnings to the financial information in our consolidated statements
         of operations.
SOURCE TTM Technologies, Inc.

CONTACT: Stacey Peterson, Chief Financial Officer of TTM Technologies, Inc., +1-714-241-0303

URL: http://www.ttmtech.com

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