0001564590-21-007045 | 10-K | XBRL Viewer

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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 28, 2020	Feb. 17, 2021	Jun. 29, 2020
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 28, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Trading Symbol	TTMI
Entity Registrant Name	TTM TECHNOLOGIES, INC.
Entity Central Index Key	0001116942
Current Fiscal Year End Date	--12-28
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity File Number	0-31285
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	91-1033443
Entity Address, Address Line One	200 East Sandpointe
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Santa Ana
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92707
City Area Code	714
Local Phone Number	327-3000
Title of 12(b) Security	Common Stock
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		106,770,572
Entity Public Float			$ 1,142,137,689
Document Annual Report	true
Document Transition Report	false
Documents Incorporated by Reference	Portions of the registrant’s definitive Proxy Statement for its 2021 Annual Meeting of Stockholders are incorporated by reference into Part III of this report. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 28, 2020	Dec. 30, 2019
Current assets:
Cash and cash equivalents	$ 451,565	$ 379,818
Accounts receivable, net	381,105	503,598
Contract assets	273,256	254,600
Inventories	115,651	113,753
Current assets held for sale		67,572
Prepaid expenses and other current assets	27,181	23,343
Total current assets	1,248,758	1,342,684
Property, plant and equipment, net	650,435	678,201
Operating lease right-of-use assets	24,340	22,173
Goodwill	637,324	706,524
Definite-lived intangibles, net	281,307	325,680
Non-current assets held for sale		425,597
Deposits and other non-current assets	53,780	60,074
Total assets	2,895,944	3,560,933
Current liabilities:
Short-term debt, including current portion of long-term debt		249,975
Accounts payable	327,102	329,866
Contract liabilities	4,254	3,838
Accrued salaries, wages and benefits	97,268	85,114
Current liabilities held for sale		185,391
Other current liabilities	89,422	92,482
Total current liabilities	518,046	946,666
Long-term debt, net of discount and issuance costs	842,853	1,225,962
Operating lease liabilities	17,211	15,413
Non-current liabilities held for sale		1,530
Other long-term liabilities	73,825	92,325
Total long-term liabilities	933,889	1,335,230
Commitments and contingencies (Note 13)
Equity:
Common stock, $0.001 par value; 300,000 shares authorized, 106,770 and 105,510 shares issued and outstanding as of December 28, 2020 and December 30, 2019, respectively	107	106
Additional paid-in capital	830,971	814,708
Retained earnings	651,844	474,309
Accumulated other comprehensive loss	(38,913)	(10,086)
Total stockholders’ equity	1,444,009	1,279,037
Total liabilities and stockholders' equity	$ 2,895,944	$ 3,560,933

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 28, 2020	Dec. 30, 2019
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	106,770,000	105,510,000
Common stock, shares outstanding	106,770,000	105,510,000

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 28, 2020	Dec. 30, 2019	Dec. 31, 2018
Income Statement [Abstract]
Net sales	$ 2,105,322	$ 2,133,210	$ 2,237,742
Cost of goods sold	1,746,299	1,756,033	1,835,073
Gross profit	359,023	377,177	402,669
Operating expenses:
Selling and marketing	63,882	69,171	70,082
General and administrative	122,477	129,284	138,256
Research and development	19,770	17,937	13,717
Amortization of definite-lived intangibles	38,838	45,776	56,983
Restructuring charges	16,764	5,380	4,660
Impairment of goodwill	69,200
Total operating expenses	330,931	267,548	283,698
Operating income	28,092	109,629	118,971
Other (expense) income:
Interest expense	(73,156)	(82,087)	(75,764)
Other, net	(1,213)	6,784	3,978
Total other expense, net	(74,369)	(75,303)	(71,786)
(Loss) income from continuing operations before income taxes	(46,277)	34,326	47,185
Income tax benefit (provision)	29,891	(2,405)	88,207
Net (loss) income from continuing operations	(16,386)	31,921	135,392
Income from discontinued operations, net of income taxes	193,921	9,380	38,192
Net income	$ 177,535	$ 41,301	$ 173,584
Earnings per share:
Basic (loss) earnings per share from continuing operations	$ (0.15)	$ 0.30	$ 1.31
Basic earnings per share from discontinued operations	1.82	0.09	0.37
Basic earnings per share	1.67	0.39	1.68
Diluted (loss) earnings per share from continuing operations	(0.15)	0.30	1.10
Diluted earnings per share from discontinued operations	1.82	0.09	0.28
Diluted earnings per share	$ 1.67	$ 0.39	$ 1.38

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 28, 2020	Dec. 30, 2019	Dec. 31, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 177,535	$ 41,301	$ 173,584
Other comprehensive (loss) income, net of tax:
Pension obligation adjustments, net	(1,271)	(300)	(1,284)
Reclassification adjustment for foreign currency translation	(346)
Derecognition of foreign currency translation adjustments due to sale of Mobility business unit	(27,341)
Foreign currency translation adjustments, net	1,745	(463)	(2,567)
Derecognition of unrealized losses on cash flow hedge due to sale of Mobility business unit	384
Net unrealized losses on cash flow hedges:
Unrealized loss on effective cash flow hedges during the year, net	(8,718)	(7,296)	(4,846)
Loss realized in the statement of operations, net	6,720	1,893	1,374
Net	(1,998)	(5,403)	(3,472)
Other comprehensive loss, net of tax	(28,827)	(6,166)	(7,323)
Comprehensive income, net of tax	$ 148,708	$ 35,135	$ 166,261

Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	New Revenue Standard Adjustment	Common Stock	Additional Paid-In Capital	Retained Earnings	Retained Earnings New Revenue Standard Adjustment	Accumulated Other Comprehensive (Loss) Income
Beginning balance at Jan. 01, 2018	$ 1,011,380	$ 28,574	$ 102	$ 777,025	$ 230,850	$ 28,574	$ 3,403
Beginning balance (in shares) at Jan. 01, 2018			101,820
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201409Member
Net income	$ 173,584				173,584
Other comprehensive loss	(7,323)						(7,323)
Exercise of stock options	191			191
Exercise of stock options (in shares)			20
Issuance of common stock for performance-based restricted stock units			$ 1	(1)
Issuance of common stock for performance-based restricted stock units (in shares)			521
Issuance of common stock for restricted stock units			$ 1	(1)
Issuance of common stock for restricted stock units (in shares)			1,326
Stock-based compensation	20,681			20,681
Ending balance at Dec. 31, 2018	1,227,087		$ 104	797,895	433,008		(3,920)
Ending balance (in shares) at Dec. 31, 2018			103,687
Net income	41,301				41,301
Other comprehensive loss	(6,166)						(6,166)
Redemption of convertible notes, net	(1)			(1)
Issuance of common stock for performance-based restricted stock units			$ 1	(1)
Issuance of common stock for performance-based restricted stock units (in shares)			693
Issuance of common stock for restricted stock units			$ 1	(1)
Issuance of common stock for restricted stock units (in shares)			1,130
Stock-based compensation	16,816			16,816
Ending balance at Dec. 30, 2019	1,279,037		$ 106	814,708	474,309		(10,086)
Ending balance (in shares) at Dec. 30, 2019			105,510
Net income	177,535				177,535
Other comprehensive loss	(28,827)						(28,827)
Exercise of stock options	191			191
Exercise of stock options (in shares)			20
Issuance of common stock for performance-based restricted stock units (in shares)			187
Issuance of common stock for restricted stock units			$ 1	(1)
Issuance of common stock for restricted stock units (in shares)			1,053
Stock-based compensation	16,073			16,073
Ending balance at Dec. 28, 2020	$ 1,444,009		$ 107	$ 830,971	$ 651,844		$ (38,913)
Ending balance (in shares) at Dec. 28, 2020			106,770

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 28, 2020	Dec. 30, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net income	$ 177,535	$ 41,301	$ 173,584
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment	120,947	166,574	162,708
Amortization of definite-lived intangible assets	45,182	53,296	63,026
Amortization of debt discount and issuance costs	17,451	14,265	14,687
Deferred income taxes	6,653	(12,454)	(98,291)
Stock-based compensation	16,073	16,816	20,681
Impairment of goodwill	69,200
Gain on sale of the Mobility business unit	(237,253)
Other	1,968	(2,142)	(3,789)
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable, net	122,547	19,501	1,366
Contract assets	(25,093)	(494)	(3,502)
Inventories	1,380	(12,642)	18,254
Prepaid expenses and other current assets	(3,452)	1,802	5,199
Accounts payable	1,210	42,045	(45,739)
Contract liabilities	416	618	(4,558)
Accrued salaries, wages and benefits	7,940	3,770	(14,862)
Other current liabilities	(35,528)	(20,319)	(15,626)
Net cash provided by operating activities	287,176	311,937	273,138
Cash flows from investing activities:
Acquisition of Anaren, net of cash acquired			(596,396)
Proceeds from sale of the Mobility business unit, net of cash disposed	507,466
Purchase of property, plant and equipment and other assets	(103,289)	(142,576)	(150,127)
Proceeds from sale of property, plant and equipment and other assets	738	6,604	331
Other	(623)
Net cash provided by (used in) investing activities	404,292	(135,972)	(746,192)
Cash flows from financing activities:
Proceeds from long-term debt borrowings			600,000
Repayment of debt borrowings	(649,975)	(30,000)	(114,378)
Repayment of assumed long-term debt in acquisition			(178,604)
Proceeds from borrowings of revolving loan			23,000
Payment of debt issuance costs		(1,803)	(7,653)
Payment of original issue discount			(1,500)
Proceeds from exercise of stock options	191		191
Redemption of convertible notes		(10)
Other	7,478
Net cash (used in) provided by financing activities	(642,306)	(31,813)	321,056
Effect of foreign currency exchange rates on cash and cash equivalents	2,249	(358)	(968)
Net increase (decrease) in cash and cash equivalents	51,411	143,794	(152,966)
Cash and cash equivalents at beginning of year	400,154	256,360	409,326
Cash and cash equivalents at end of year	451,565	400,154	256,360
Cash and cash equivalents in assets held for sale		(20,336)	(28,368)
Cash and cash equivalents as presented on the consolidated balance sheet	451,565	379,818	227,992
Supplemental cash flow information:
Cash paid, net for interest	59,209	71,267	62,967
Cash paid, net for income taxes	18,081	20,120	27,574
Net cash provided by operating activities from discontinued operations	39,462	16,123	78,809
Net cash provided by (used in) investing activities from discontinued operations	497,916	(24,155)	(69,906)
Supplemental disclosure of noncash investing activities:
Property, plant and equipment recorded in accounts payable	$ 29,002	58,606	49,169
Supplemental disclosure of noncash investing activities from discontinued operations:
Property, plant and equipment recorded in accounts payable		$ 8,918	$ 9,363

Nature of Operations and Summary of Significant Accounting Policies

12 Months Ended

Dec. 28, 2020

Accounting Policies [Abstract]

Nature of Operations and Summary of Significant Accounting Policies

(1)	Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

TTM Technologies, Inc. (the Company or TTM) is a leading global printed circuit board (PCB) 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. The Company provides time-to-market and volume production of advanced technology products and offers a one-stop design, engineering and manufacturing solution to customers. This one-stop design, engineering and manufacturing solution allows the Company to align technology developments with the diverse needs of the Company’s customers and to enable them to reduce the time required to develop new products and bring them to market.

The Company serves a diversified customer base in various markets throughout the world, including aerospace and defense, computing, automotive components, medical, industrial and instrumentation related products, as well as networking/communications infrastructure products. The Company’s customers include both original equipment manufacturers (OEMs) and electronic manufacturing services (EMS) providers.

On January 19, 2020, the Company entered into a definitive equity interests purchase agreement with AKMMeadville Electronics (Xiamen) Co., Ltd (the Purchaser) for the sale of the Company’s following subsidiaries, which was completed on April 17, 2020: Shanghai Kaiser Electronics Co., Ltd. (SKE), Shanghai Meadville Electronics Co., Ltd. (SME), Shanghai Meadville Science & Technology Co., Ltd. (SP) and Guangzhou Meadville Electronics Co., Ltd. (GME) (collectively, the Mobility business unit). Prior to the closing of the sale of the Company’s Mobility business unit, all assets and liabilities attributable to the Mobility business unit have been aggregated under the captions “Current assets held for sale”, “Non-current assets held for sale”, “Current liabilities held for sale” and “Non-current liabilities held for sale”. For all periods presented in the consolidated statements of operations, all sales, costs, expenses, income taxes and gain on sale attributable to the Mobility business unit have been aggregated under the caption “Income (loss) from discontinued operations, net of income taxes”. Prior year results have been recast to conform with the current presentation. See Note 3, Discontinued Operations, for additional information.

The Company operates on a 52 or 53 week year ending on the Monday nearest December 31. Fiscal 2020, 2019 and 2018 were 52 weeks ended on December 28, 2020, December 30, 2019 and December 31, 2018, respectively. All references to years relate to fiscal years unless otherwise noted.

Reclassifications

During the year ended December 28, 2020, the Company’s RF and Specialty Components (RF&S Components) operating segment met the quantitative threshold for separate presentation of a reportable segment. In prior periods, the Company had two reportable segments: PCB and E-M Solutions. The RF&S Components reportable segment was previously aggregated with the PCB reportable segment. As a result, certain prior period amounts have been reclassified to conform with this new presentation.

Further, in 2020, the Company began presenting research and development expenses as a separate line item on the consolidated statements of operations to better align with similar presentation made by peers and to provide additional disclosure that is meaningful for investors. The prior year consolidated statements of operations were adjusted to conform with this new presentation. Research and development expense were previously presented within general and administrative expense on the consolidated statements of operations.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Such estimates include the sales return reserve; allowance for doubtful accounts; inventory reserve; product warranty liabilities; legal contingencies; income taxes; pension obligations; and fair values of financial instruments. These estimates and assumptions are based on management’s best estimates and judgment. Due to the coronavirus (COVID-19) global pandemic, the global economy and financial markets have been disrupted and there is a significant amount of uncertainty about the length and severity of the consequences caused by the pandemic. The Company has considered information available to it as of the date of issuance of these financial statements and is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or a revision to the carrying value of its assets or liabilities. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. The actual results we experienced may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and actual results, our future result of operations will be affected.

Principles of Consolidation

The consolidated financial statements include the accounts of TTM and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Foreign Currency Translation and Transactions

The functional currency of certain of the Company’s subsidiaries is the Chinese Renminbi (RMB). Accordingly, assets and liabilities are translated into U.S. dollars using period-end exchange rates. Sales and expenses are translated at the average exchange rates in effect during the period. The resulting translation gains or losses are recorded as a component of accumulated other comprehensive (loss) income in the consolidated statement of stockholders’ equity and the consolidated statement of comprehensive income. Net losses resulting from foreign currency remeasurements and transactions are included in expenses as a component of other, net in the consolidated statements of operations and totaled $10,475, $467 and $786 for the years ended December 28, 2020, December 30, 2019 and December 31, 2018, respectively.

Cash Equivalents

The Company considers highly liquid investments with insignificant interest rate risk and original maturities to the Company of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are reflected at estimated net realizable value, do not bear interest and do not generally require collateral. The Company performs credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current creditworthiness. The Company maintains an allowance for doubtful accounts based upon a variety of factors. The Company considers both current and forecasted future economic conditions in determining the adequacy of its allowance for doubtful accounts.

The Company’s allowance for doubtful accounts was $2,886, $1,929, and $2,750 as of December 28, 2020, December 30, 2019 and December 31, 2018, respectively.

Inventories

Inventories are stated at the lower of cost (determined on a first-in, first-out and weighted average basis) or net realizable value. Assessments to value the inventory at the lower of the actual cost to purchase and/or manufacture the inventory, or net realizable value of the inventory, are based upon assumptions about future demand and market conditions. As a result of the Company’s assessments, when the net realizable value of inventory is less than the carrying value, the inventory cost is written down to the net realizable value and the write down is recorded as a charge to cost of goods sold.

Property, Plant and Equipment, Net

Property, plant and equipment are recorded at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets. Assets recorded under leasehold improvements are amortized using the straight-line method over the lesser of their useful lives or the related lease term. The Company uses the following estimated useful lives:

Land use rights		50-99 years
Buildings and improvements		7-50 years
Machinery and equipment		3-10 years
Furniture and fixtures		3-7 years

Upon retirement or other disposition of property, plant and equipment, the cost and related accumulated depreciation are removed from the accounts. The resulting gain or loss is included in the determination of operating income in the period incurred. Depreciation and amortization expense on property, plant and equipment was $99,572, $93,370, and $91,329 for the years ended December 28, 2020, December 30, 2019 and December 31, 2018, respectively.

The Company capitalizes interest on borrowings during the active construction period of major capital projects. Capitalized interest is amortized over the average useful lives of such assets, which primarily consist of buildings and machinery and equipment. The Company capitalized interest costs of $1,783, $1,810 and $1,438 during the years ended December 28, 2020, December 30, 2019 and December 31, 2018, respectively, in connection with various capital projects.

Major renewals and betterments are capitalized and depreciated over their estimated useful lives while minor expenditures for maintenance and repairs are included in operating income as incurred.

Goodwill

Goodwill represents the excess of purchase price of an acquisition over the fair value of net assets acquired. Goodwill is not amortized but instead is assessed for impairment, at a reporting unit level, annually and when events and circumstances warrant an evaluation. Goodwill is allocated to reporting units, which are operating segments or one level below the Company’s operating segments (the component level). Reporting units are determined by the discrete financial information available for the component and whether it is regularly reviewed by segment management. Components are aggregated into a single reporting unit if they share similar economic characteristics. The Company evaluates its goodwill on an annual basis in the fourth quarter or more frequently if it believes indicators of impairment exist. The Company assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount or performs an annual impairment test. When tested quantitatively, the Company compares the fair value of the applicable reporting unit with its carrying value. In making this assessment, management relies on a number of factors, including expected future operating results, business plans, economic projections, anticipated future cash flows, business trends and declines in the Company’s market capitalization. The Company estimates the fair values of its reporting units using a combination of the discounted cash flow (DCF) and market approaches. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, the amount by which the carrying value exceeds the fair value is recognized as an impairment loss. See Note 5 for further details.

During the fourth quarter of 2020, the Company changed the date of its annual impairment test of goodwill from year-end to the first day of fiscal November to provide for additional time to complete the required impairment testing. This change does not represent a material change to the Company’s method of applying an accounting principle. The change in annual impairment test date has been prospectively applied beginning the first day of fiscal November 2020.

Intangible Assets

Intangible assets include customer relationships and technology, which are being amortized over their estimated useful lives on a straight-line basis. The estimated useful lives of such intangibles range from 5 years to 13 years.

Impairment of Long-lived Assets

Long-lived tangible assets, including property, plant and equipment, assets held for sale, and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset or asset groups may not be recoverable. The Company regularly evaluates whether events or circumstances have occurred that indicate possible impairment and relies on a number of factors, including expected future operating results, business plans, economic projections, and anticipated future cash flows. The Company uses an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether the assets are recoverable. If the sum of the undiscounted cash flows is less than the carrying amount of the net assets, impairment is measured based on the difference between the net asset’s carrying value and estimated fair value. Fair value is determined through various valuation techniques, including cost-based, market and income approaches as considered necessary.

The Company classifies assets to be sold as assets held for sale when (i) Company management has approved and commits to a plan to sell the asset; (ii) the asset is available for immediate sale in its present condition and is ready for sale; (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated; (iv) the sale of the asset is probable; (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Assets classified as held for sale are recorded at the lower of the carrying amount or fair value less the cost to sell.

The Company classifies assets held for use when a decision to dispose of an asset or a business is made and the held for sale criteria are not met. In evaluating the recoverability of property and intangible assets subject to amortization, in a held for use business, the carrying value is first compared to the sum of the undiscounted cash flows expected to result from the use and eventual disposition. If the carrying value exceeds the undiscounted expected cash flows, then a fair value analysis is performed. An impairment charge is recognized if the carrying value exceeds the fair value.

Leases

The Company adopted the new lease standard as of January 1, 2019 under the retrospective cumulative effect adjustment transition method. Therefore, the consolidated financial statements for the year ended December 31, 2018 have not been adjusted and continued to be reported under previous U.S. GAAP guidance. As a result, beginning in the first quarter of 2019, the Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (ROU) assets, and lease liabilities are included in other current liabilities and operating lease liabilities on the consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components and accounts for the lease and non-lease components as a single lease component.

Revenue Recognition

The Company derives revenues primarily from the sale of PCBs, custom electronic assemblies using customer-supplied engineering and design plans as well as the design and manufacture of RF and microwave components and assemblies. In the absence of a sales agreement, the Company’s standard terms and conditions apply. Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. The Company applies a five-step approach as defined in the new standard in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations in the contract; and (5) recognizing revenue when the corresponding performance obligation is satisfied.

Revenue Streams

For PCBs and custom electronic assemblies, including pursuant to the Company’s long-term contracts related to the manufacture of components, assemblies and subsystems, orders for products generally correspond to the production schedules of the Company’s customers and are supported with firm purchase orders. The Company’s customers have continuous control of the work in progress and finished goods throughout the PCB and custom electronic assemblies manufacturing process, as these are built to customer specifications with no alternative use, and there is an enforceable right to payment for work performed to date. As a result, the Company recognizes revenue progressively over time based on the extent of progress towards completion of the performance obligation. Revenue recognized is based on a cost method as it best depicts the transfer of control to the customer which takes place as we incur costs. Revenues are recorded proportionally as costs are incurred.

In addition, the Company manufactures components, assemblies, and subsystems which service its RF&S Components customers. The Company recognizes revenue at a point in time upon transfer of control of the products to the customer. Point in time recognition was determined as the customer does not simultaneously receive or consume the benefits provided by the Company’s performance and the asset being manufactured has alternative uses to the Company.

Performance Obligations

Each distinct promise to transfer products is considered to be an identified performance obligation for which revenue is recognized upon transfer of control of the products to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of the Company's contracts have a single performance obligation as the promise to transfer the individual good or service is not separately identifiable from other promises in the contract and is, therefore, not distinct. As of December 28, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations for the Company’s long-term contracts was $21,275. The Company expects to recognize revenue on approximately 99% of the remaining performance obligations for the Company’s long-term contracts over the next twelve months with the remaining amount recognized thereafter. The remaining performance obligations for the Company’s short-term contracts are expected to be recognized within one year.

Transaction Price

The Company provides customers a limited right of return for defective PCBs including components, subsystems and assemblies. Estimates of returns are treated as variable consideration for purposes of determining the transaction price. The Company accrues an estimate for sales returns and allowances progressively over time based on the extent of progress towards completion of the performance obligation using the Company’s judgment based on historical results and anticipated returns. To the extent actual experience varies from its historical experience, revisions to the sales returns and allowances accrual may be required. Sales returns and allowances are recorded as a reduction of revenue and included as a component of accrued expenses on the consolidated balance sheets. Shipping and handling fees and related freight costs and supplies associated with shipping products to customers are included as a component of cost of goods sold. Warranty-related services are not considered a separate performance obligation. Incremental warranty costs that are not related to sales returns are recorded in accrued expenses on the consolidated balance sheets and cost of goods sold on the consolidated statements of operations. The following summarizes the activity in the Company’s sales returns and allowances for the years ended December 28, 2020, December 30, 2019 and December 31, 2018:

	For the Year Ended
	December 28,			December 30,			December 31,
	2020			2019			2018
	(In thousands)
Balance at beginning of year	$	12,717		$	15,296		$	8,171
Addition charged as a reduction of sales		7,658			15,632			22,750
Deductions		(7,389	)		(18,228	)		(15,602	)
Effect of foreign currency exchange rates		29			17			(23	)
Balance at end of year	$	13,015		$	12,717		$	15,296

Contract Balances

Accounts receivable represents the Company’s unconditional right to receive consideration from its customer. Payments are generally due within 90 days or less of invoicing and do not include a significant financing component. To date, there have been no material impairment losses on accounts receivable.

A contract asset is recognized when the Company has recognized revenue, but not issued an invoice for payment. Contract assets are classified as current assets and are transferred to receivables when the entitlement to payment becomes unconditional. The Company’s contract assets are generally converted to trade account receivables within 90 days, at which time the Company is entitled to payment of the fixed price upon delivery of the finished product subject to customer payment terms. Contract assets were $273,256 and $254,600 as of December 28, 2020 and December 30, 2019, respectively, and represent unbilled amounts for work performed to date. In 2020, there were no material impairment losses on contract assets.

A contract liability is recognized when the Company has received payment in advance for the future transfer of goods or services. The Company’s contract liabilities are generally converted to revenue within 90 days. Contract liabilities were $4,254 and $3,838 as of December 28, 2020 and December 30, 2019, respectively, and represent customer advances for work yet to be performed.

The Company has elected to account for shipping and handling activities as a fulfillment cost as permitted by the standard. All incremental customer contract acquisition costs are expensed as they are incurred as the amortization period of the asset that the Company otherwise would have recognized is one year or less in duration.

Disaggregated Revenue

Revenue from products and services transferred to customers over time and at a point in time accounted for 98% and 2%, respectively, of the Company’s revenue in 2020, 2019 and 2018.

The following tables represent a disaggregation of revenue by principal end markets with the reportable segments:

	For the Year Ended December 28, 2020
	PCB		RF&S Components		E-M Solutions			Total
End Markets	(In thousands)
Aerospace and Defense	$	745,041	$	189	$	655		$	745,885
Automotive		270,240		—		48,615			318,855
Cellular Phone		1,341		—		—			1,341
Computing/Storage/Peripherals		258,032		834		170			259,036
Medical/Industrial/Instrumentation		374,237		2,967		10,491			387,695
Networking/Communications		234,211		39,160		97,213			370,584
Other		22,141		1,506		(1,721	)		21,926
Total	$	1,905,243	$	44,656	$	155,423		$	2,105,322

	For the Year Ended December 30, 2019
	PCB		RF&S Components		E-M Solutions			Total
End Markets	(In thousands)
Aerospace and Defense	$	696,279	$	777	$	543		$	697,599
Automotive		302,101		—		102,004			404,105
Cellular Phone		1,224		—		—			1,224
Computing/Storage/Peripherals		235,615		1,588		288			237,491
Medical/Industrial/Instrumentation		331,551		3,752		29,682			364,985
Networking/Communications		253,306		43,333		94,435			391,074
Other		24,486		12,865		(619	)		36,732
Total	$	1,844,562	$	62,315	$	226,333		$	2,133,210

	For the Year Ended December 31, 2018
	PCB		RF&S Components		E-M Solutions			Total
End Markets	(In thousands)
Aerospace and Defense	$	606,573	$	153	$	858		$	607,584
Automotive		388,643		—		86,828			475,471
Computing/Storage/Peripherals		280,497		939		1,694			283,130
Medical/Industrial/Instrumentation		345,078		2,271		39,852			387,201
Networking/Communications		322,128		40,982		96,894			460,004
Other		16,171		8,360		(179	)		24,352
Total	$	1,959,090	$	52,705	$	225,947		$	2,237,742

Value Added and Sales Tax Collected from Customers

As a part of the Company’s normal course of business, value added and sales taxes are collected from customers. Such taxes collected are remitted, in a timely manner, to the appropriate governmental tax authority on behalf of the customer. Value added and sales taxes are excluded from reported revenues and costs of goods sold presented in the consolidated statements of operations and comprehensive income.

Stock-Based Compensation

The Company recognizes stock-based compensation expense in its consolidated financial statements for its incentive compensation plan awards. The incentive compensation plan awards include performance-based restricted stock units, restricted stock units, and stock options. The associated compensation expense for all awards is based on the grant date fair value of the awards. For performance-based restricted stock units, compensation expense also includes management’s periodic assessment of annual financial performance goals to be achieved. Compensation expense for the incentive compensation plan awards is recognized on a straight line

basis over the vesting period of the awards. The fair value of performance-based restricted stock units is estimated on the grant date using a Monte Carlo simulation model based on the underlying common stock closing price as of the date of grant, stock price volatility, and risk-free interest rates. The fair value of restricted stock units is measured on the grant date based on the quoted closing market price of the Company’s common stock. The fair value of the stock options is estimated on the grant date using the Black-Scholes option pricing model based on the underlying common stock closing price as of the date of grant, the expected term, stock price volatility, and risk-free interest rates.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income tax assets or liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be settled or realized. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax assets are reviewed for recoverability, and the Company records a valuation allowance to reduce its deferred income tax assets when it is more likely than not that all or some portion of the deferred income tax assets will not be realized.

The Company has various foreign subsidiaries formed or acquired to conduct or support its business outside the United States. The Company expects its earnings attributable to foreign subsidiaries will be indefinitely reinvested except for our material Chinese and Canadian plants and the respective holding companies where a deferred tax liability has been recorded for foreign withholding and estimated federal/state tax impact. For those other companies with earnings currently being reinvested outside of the U.S., no deferred tax liabilities on undistributed earnings are recorded.

The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely to be realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Estimated interest and penalties related to underpayment of income taxes are recorded as a component of income tax provision in the consolidated statements of operations.

Fair Value Measures

The Company measures at fair value certain of its financial and non-financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are:

Level 1 — Quoted market prices in active markets for identical assets or liabilities;

Level 2 — Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable, such as interest rate and yield curves, and market-corroborated inputs); and

Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting unit to develop its own assumptions.

Earnings Per Share

Basic earnings per common share excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common share reflect the potential dilution that could occur if stock options, Convertible Senior Notes or other common stock equivalents were exercised or converted into common stock. The dilutive effect of stock options or other common stock equivalents is calculated using the treasury stock method. During the year ended December 28, 2020, the Company calculated the dilutive effect of Convertible Senior Notes using the treasury stock method because the Company repaid and settled the Convertible Senior Notes in cash. This change in policy from the if-converted method to treasury stock method was applied on a prospective basis.

Comprehensive Income

Comprehensive income includes changes to equity accounts that were not the result of transactions with stockholders. Comprehensive income is comprised of net income, changes in the cumulative foreign currency translation adjustments, pension obligation adjustments, and realized and unrealized gains or losses on hedged derivative instruments.

Loss Contingencies

The Company establishes an accrual for an estimated loss contingency when it is both probable that an asset has been impaired or that a liability has been incurred and the amount of the loss can be reasonably estimated. Any legal fees expected to be incurred in connection with a contingency are expensed as incurred.

Accounting for Retirement Benefit Plans

The Company accounts for its retirement benefit plans and postretirement and postemployment benefit obligations in accordance with ASC Topic 715, Compensation—Retirement Benefits. ASC Topic 715 requires the Company to recognize the overfunded or underfunded status of a defined benefit plan, measured as the difference between the fair value of plan assets and the plan's benefit obligation, as an asset or liability in its consolidated balance sheets and to recognize changes to that funded status in the year in which the changes occur through accumulated other comprehensive loss. ASC Topic 715 also requires measurement of the funded status of a plan as of the Company's consolidated balance sheet dates.

Recently Adopted and Issued Accounting Standards

Recently Adopted Accounting Standards

In March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary relief to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative rates. This guidance became effective beginning on March 12, 2020 and will remain in effect through December 31, 2022. The guidance on contract modifications can be applied prospectively from any date beginning March 12, 2020 and may also be applied to modifications of existing contracts made earlier in the interim period that included March 12, 2020. The guidance on hedging can be applied to eligible hedging relationships existing at the beginning of the interim period that included March 12, 2020 and to new eligible hedging relationships entered into after the beginning of that interim period. The Company adopted this ASU and it did not have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20)—Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in this update change the disclosure requirements for employers that sponsor defined benefit pension and/or other postretirement benefit plans. It eliminates requirements for certain disclosures that are no longer considered cost beneficial and requires new disclosures that the FASB considers pertinent. The Company adopted this ASU as of December 28, 2020 and it did not have a material impact on its consolidated financial statements. See Note 15 for disclosure changes made.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the current accounting guidance and requires the measurement of all expected losses based on historical experience, current conditions and reasonable and supportable forecasts. For trade receivables, loans, and other financial instruments, the Company will be required to use a forward-looking expected loss model that reflects losses that are probable rather than the incurred loss model for recognizing credit losses. The standard became effective for interim and annual periods beginning after December 15, 2019. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company adopted this ASU as of December 31, 2019 and it did not have a material impact on its consolidated financial statements.

Recently Issued Accounting Standards Not Yet Adopted

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company has evaluated the new guidance to determine the impact it may have on its consolidated financial statements and related disclosures and the impact is not expected to be material.

Leases

12 Months Ended

Dec. 28, 2020

Leases [Abstract]

Leases

(2)

Leases

The Company leases some of its manufacturing and assembly plants, sales offices and equipment under non-cancellable operating leases that expire at various dates through 2049. The majority of the Company’s lease arrangements are comprised of fixed payments and certain leases consist of variable payments based on equipment usage. These variable payments are not included in the measurement of the ROU asset or lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. Certain leases contain renewal provisions at the Company’s option. Most of the leases require the Company to pay for certain other costs such as property taxes and maintenance. Certain leases also contain rent escalation clauses (step rents) that require additional rental amounts in the later years of the term. Rent expense for leases with step rents is recognized on a straight-line basis

over the minimum lease term. The lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of lease expense were as follows:

	For the Year Ended
	December 28, 2020		December 30, 2019
	(In thousands)
Operating lease cost	$	9,304	$	8,560
Variable lease cost		529		591
Short-term lease cost		525		520

Supplemental cash flow information related to leases was as follows:

	For the Year Ended
	December 28, 2020		December 30, 2019
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	8,865	$	8,265
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases		10,036		13,596

Supplemental balance sheet information related to leases was as follows:

	As of
	December 28, 2020		December 30, 2019
	(In thousands)
Operating lease right-of-use assets	$	24,340	$	22,173
Other current liabilities		8,144		7,111
Operating lease liabilities		17,211		15,413
Total operating lease liabilities	$	25,355	$	22,524

	As of
	December 28, 2020			December 30, 2019
Weighted average remaining lease term	4.2 years			4.4 years
Weighted average discount rate		3.31	%		3.92	%

Maturities of operating lease liabilities were as follows ⁽¹⁾:

	(In thousands)
Less than one year	$	9,170
1 - 2 years		5,240
2 - 3 years		4,562
3 - 4 years		3,586
4 - 5 years		2,313
Thereafter		2,336
Total lease payments		27,207
Less imputed interest		(1,852	)
Total	$	25,355

(1)

Excludes $955 of legally binding minimum lease payments for leases signed but not yet commenced.

Operating Leases Pre-Topic 842 Adoption

The following is a schedule of future minimum lease payments as of December 31, 2018:

	Operating Leases
	(In thousands)
2019	$	6,204
2020		4,677
2021		3,406
2022		2,408
2023		2,172
Thereafter		4,172
Total minimum lease payments	$	23,039

Total rent expense for the year ended December 31, 2018 was approximately $9,297.

Discontinued Operations

12 Months Ended

Dec. 28, 2020

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

(3)	Discontinued Operations

On January 19, 2020, the Company entered into a definitive equity interests purchase agreement for the sale of the Company’s Mobility business unit. The sale was completed on April 17, 2020 for a base purchase price of $550,000, subject to customary purchase price adjustments. The base purchase price does not include certain accounts receivable of the divested business, which were estimated to total approximately $95,000. Subsequently, the final purchase price was $569,246 after customary purchase price adjustments, which did not include approximately $83,000 accounts receivable of the divested business.

On April 18, 2020, the Company also entered into a Transition Services Agreement (TSA) with the Purchaser pursuant to which the Purchaser is receiving certain services (the Services) to enable it to operate the Mobility business unit after the closing of the sale of the Mobility business unit. The Services include finance and accounting, human resources, legal and compliance, sales, information technology, and other corporate support services. Under the TSA, the Services are being provided at cost for a period of up to 24 months. In addition, the Company entered into a Manufacturing Supply Agreement with the Purchaser pursuant to which the Purchaser will supply products to a few customers of the Company. There was no material impact on the Company’s consolidated financial statements.

Further, on June 29, 2020, the Company entered into a Sales Force Agreement with the Purchaser pursuant to which the Company’s sales representatives will assist the Purchaser in selling PCBs manufactured by the Purchaser to certain customers for a commission for a period up to April 17, 2021. There was no material impact on the Company’s consolidated financial statements.

As the sale of the Company’s Mobility business unit represents a strategic shift that will have a major effect on the Company’s operations and financial results, in accordance with the provisions of FASB authoritative guidance on the presentation of financial statements, Mobility business unit results are classified as discontinued operations in the consolidated statements of operations for all periods presented. Prior year results have been recast to conform with the current presentation.

The following table summarizes the results of Mobility operations for each period prior to sale:

	For the Year Ended
	December 28,			December 30,			December 31,
	2020			2019			2018
	(In thousands, except per share data)
Net sales	$	143,951		$	556,098		$	609,519
Cost of goods sold		136,800			531,592			555,154
Gross profit		7,151			24,506			54,365
Operating expenses:
Selling and marketing		1,461			4,840			3,231
General and administrative		2,317			4,875			7,464
Research and development		147			—			—
Amortization of definite-lived intangibles		809			2,698			2,698
Restructuring charges		—			1,601			858
Total operating expenses		4,734			14,014			14,251
Operating income		2,417			10,492			40,114
Other (expense) income:
Interest expense		(223	)		(1,147	)		(3,194	)
Gain on sale of the Mobility business unit		237,253			—			—
Other, net		1,160			2,513			5,663
Total other income, net