8-K
TTM TECHNOLOGIES INC false 0001116942 0001116942 2021-07-28 2021-07-28

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 28, 2021

 

 

TTM TECHNOLOGIES, INC.

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware   0-31285   91-1033443
(State of Incorporation)   (Commission
File Number)
  (I.R.S. Employer
Identification No.)

 

200 East Sandpointe, Suite 400, Santa Ana, CA   92707
(Address of principal executive offices)   (Zip Code)

(714) 327-3000

Registrant’s telephone number, including area code

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading
Symbol(s)

  

Name of each exchange
on which registered

Common Stock    TTMI    NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition

On July 28, 2021, TTM Technologies, Inc. (the “Company”) issued a press release announcing results for its second quarter of fiscal year 2021, which ended June 28, 2021, and guidance for its third quarter 2021. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

As previously announced, the Company will host a conference call on Wednesday, July 28, 2021, at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to discuss its second quarter 2021 performance and third quarter 2021 outlook. Dial-in information for the call is as follows: Telephone access is available by dialing domestic 800-367-2403 or international 334-777-6978 (ID 3384553). The conference call also will be webcast on TTM’s website at www.ttm.com.

As provided in General Instruction B.2 to Form 8-K, the information furnished in Item 2.02 and Exhibit 99.1 hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities under that Section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly provided by specific reference in such filing.

 

Item 9.01.

Financial Statements and Exhibits

 

Exhibit
Number

  

Description

99.1    Press release regarding earnings results, dated July 28, 2021
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    TTM TECHNOLOGIES, INC.
Date: July 28, 2021    

/s/ Daniel J. Weber

    By:   Daniel J. Weber
      Senior Vice President, General Counsel & Secretary
EX-99.1

Exhibit 99.1

 

TTM Technologies, Inc., Q2’21    Contact:   
   Sameer Desai,   
   Vice President, Corporate

Development & Investor Relations

  
   Sameer.desai@ttmtech.com   
   714-327-3050   

TTM Technologies, Inc. Reports Fiscal Second Quarter 2021 Results

Santa Ana, CA – July 28, 2021– TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) and radio frequency (“RF”) components and assemblies manufacturer, today reported results for the second quarter of fiscal 2021, which ended on June 28, 2021.

Second Quarter 2021 Highlights

 

   

Net sales were $567.4 million

 

   

GAAP net income of $28.3 million, or $0.26 per diluted share

 

   

Non-GAAP net income was $40.0 million, or $0.36 per diluted share

 

   

Cash flow from operations was $56.9 million, or 10% of revenues

Second Quarter 2021 Financial Results

Net sales for the second quarter of 2021 were $567.4 million, compared to $570.3 million from continuing operations in the second quarter of 2020.

GAAP operating income for the second quarter of 2021 was $40.9 million. This compares to GAAP operating income of $23.0 million from continuing operations in the second quarter of 2020.

GAAP net income for the second quarter of 2021 was $28.3 million, or $0.26 per diluted share, compared to net income of $9.3 million, or $0.09 per diluted share from continuing operations in the second quarter of 2020.

On a non-GAAP basis, net income for the second quarter of 2021 was $40.0 million, or $0.36 per diluted share. This compares to non-GAAP net income of $33.0 million, or $0.31 per diluted share from continuing operations in the second quarter of 2020.

Adjusted EBITDA in the second quarter of 2021 was $75.6 million, or 13.3 percent of net sales, compared to adjusted EBITDA of $76.8 million, or 13.5 percent of net sales, from continuing operations, in the second quarter of 2020.

“In the second quarter, TTM delivered revenue and non-GAAP earnings above the high end of the previously guided range despite significant challenges from COVID-19 and tight supply conditions for certain raw materials. The solid performance was driven by better than expected sales in our commercial end markets led by strong year on year growth from the automotive and data center computing end markets,” said Tom Edman, CEO of TTM. “Additionally, strict financial discipline drove strong and consistent operating cash flow in the quarter. These achievements reflect the strategic changes made to strengthen TTM, particularly the divestiture of the volatile mobility business which historically caused weak seasonal results in the first half of the year.”

Business Outlook

The stronger than expected revenues in Q2 pulled forward some demand from Q3 and the tight raw material supply conditions will have a greater impact in our third quarter. As a result, TTM estimates that revenue for the third quarter of 2021 will be in the range of $530 million to $570 million, and non-GAAP net income will be in the range of $0.31 to $0.37 per diluted share.


TTM Technologies, Inc., Q2’21    Contact:   
   Sameer Desai,   
   Vice President, Corporate

Development & Investor Relations

  
   Sameer.desai@ttmtech.com   
   714-327-3050   

 

Live Webcast/Conference Call

TTM will host a conference call and webcast to discuss second quarter 2021 results and the third quarter 2021 outlook on Wednesday, July 28th, 2021 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call will include forward-looking statements.

Telephone access is available by dialing domestic 800-367-2403 or international 334-777-6978 (ID 3384553). The conference call also will be webcast on TTM’s website at www.ttm.com.

To Access a Replay of the Webcast

The replay of the webcast will remain accessible for one week following the live event on TTM’s website at www.ttm.com.

About TTM

TTM Technologies, Inc. is a leading global printed circuit board manufacturer, focusing on quick-turn and volume production of technologically advanced PCBs and backplane assemblies as well as a global designer and manufacturer of high-frequency radio frequency (RF) and microwave components and assemblies. TTM stands for time-to-market, representing how TTM’s time-critical, one-stop manufacturing services enable customers to shorten the time required to develop new products and bring them to market. Additional information can be found at www.ttm.com.

Forward-Looking Statements

The preliminary financial results included in this press release represent the most current information available to management. The company’s actual results when disclosed in its Form 10-Q may differ from these preliminary results as a result of the completion of the company’s financial closing procedures; final adjustments; completion of the review by the company’s independent registered accounting firm; and other developments that may arise between now and the disclosure of the final results. This release contains forward-looking statements that relate to future events or performance. TTM cautions you that such statements are simply predictions and actual events or results may differ materially. These statements reflect TTM’s current expectations, and TTM does not undertake to update or revise these forward looking statements, even if experience or future changes make it clear that any projected results expressed or implied in this or other TTM statements will not be realized. Further, these statements involve risks and uncertainties, many of which are beyond TTM’s control, which could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties include, but are not limited to, the impact of COVID-19, general market and economic conditions, including interest rates, currency exchange rates and consumer spending, demand for TTM’s products, market pressures on prices of TTM’s products and raw materials used in TTM’s products, warranty claims, changes in product mix, contemplated significant capital expenditures and related financing requirements, TTM’s dependence upon a small number of customers and other factors set forth in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC.

About Our Non-GAAP Financial Measures

This release includes information about TTM’s adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share, all of which are non-GAAP financial measures. TTM presents non-GAAP financial information to enable investors to see TTM through the eyes of management and to provide better insight into TTM’s ongoing financial performance.

A material limitation associated with the use of the above non-GAAP financial measures is that they have no standardized measurement prescribed by GAAP and may not be comparable to similar non-GAAP financial measures used by other companies. TTM compensates for these limitations by providing full disclosure of each non-GAAP financial measure and reconciliation to the most directly comparable GAAP financial measure. However, the non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.


TTM Technologies, Inc., Q2’21    Contact:   
   Sameer Desai,   
   Vice President, Corporate

Development & Investor Relations

  
   Sameer.desai@ttmtech.com   
   714-327-3050   

 

With respect to the Company’s outlook for non-GAAP net income per diluted share, we are unable to predict with reasonable certainty or without unreasonable effort certain items that may affect a comparable measure calculated and presented in accordance with GAAP. Our expected non-GAAP net income per diluted share excludes primarily the future impact of restructuring actions, impairment charges, unusual gains and losses, and tax adjustments. These reconciling items are highly variable and difficult to predict due to various factors outside of management’s control and could have a material impact on our future period net income per diluted share calculated and presented in accordance with GAAP. Accordingly, a reconciliation of non-GAAP net income per diluted share to a comparable measure calculated and presented in accordance with GAAP is not available without unreasonable effort and has not been provided.

- Tables Follow -


TTM TECHNOLOGIES, INC.

Selected Unaudited Financial Information

(In thousands, except per share data)

 

     Second Quarter     First Two Quarters  
     2021     2020*     2021     2020*  

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

        

Net sales

   $ 567,383     $ 570,298     $ 1,093,815     $ 1,067,944  

Cost of goods sold

     467,473       469,868       912,305       886,172  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     99,910       100,430       181,510       181,772  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Selling and marketing

     14,605       15,969       30,887       32,138  

General and administrative

     30,634       33,309       58,929       67,648  

Research and development

     4,182       5,181       8,652       9,943  

Amortization of definite-lived intangibles

     9,042       9,561       18,563       19,123  

Restructuring charges

     559       13,414       3,791       13,742  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     59,022       77,434       120,822       142,594  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     40,888       22,996       60,688       39,178  

Interest expense

     (11,079     (18,572     (22,468     (38,353

Loss on extinguishment of debt

     —         —         (15,217     —    

Other, net

     306       455       2,813       2,957  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes

     30,115       4,879       25,816       3,782  

Income tax (provision) benefit

     (1,854     4,467       (747     2,344  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income from continuing operations

     28,261       9,346       25,069       6,126  

Income from discontinued operations, net of income taxes

     —         172,421       —         174,467  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 28,261     $ 181,767     $ 25,069     $ 180,593  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

        

Basic earnings per share from continuing operations

   $ 0.26     $ 0.09     $ 0.23     $ 0.06  

Basic earnings per share from discontinued operations

     —         1.62       —         1.64  
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

   $ 0.26     $ 1.71     $ 0.23     $ 1.70  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share from continuing operations

   $ 0.26     $ 0.09     $ 0.23     $ 0.06  

Diluted earnings per share from discontinued operations

     —         1.60       —         1.62  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 0.26     $ 1.69     $ 0.23     $ 1.68  
  

 

 

   

 

 

   

 

 

   

 

 

 

*  Prior period amounts have been revised to correct an immaterial error to income from discontinued operations, net of income taxes, net income, basic earnings per share from discontinued operations, basic earnings per share, diluted earnings per share from discontinued operations and diluted earnings per share.

   

Weighted-average shares used in computing per share amounts:

        

Basic

     107,148       106,295       106,987       105,990  

Diluted

     109,795       107,485       109,250       107,431  

Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:

        

Weighted-average shares outstanding

     107,148       106,295       106,987       105,990  

Dilutive effect of warrants

     802       —         401       —    

Dilutive effect of performance-based stock units, restricted stock units & stock options

     1,845       1,190       1,862       1,441  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted shares

     109,795       107,485       109,250       107,431  
  

 

 

   

 

 

   

 

 

   

 

 

 

SELECTED BALANCE SHEET DATA

 

     June 28, 2021      December 28, 2020  

Cash and cash equivalents, including restricted cash

   $ 558,291      $ 451,565  

Accounts and notes receivable, net

     378,762        381,105  

Contract assets

     300,697        273,256  

Inventories

     126,355        115,651  

Total current assets

     1,404,515        1,248,758  

Property, plant and equipment, net

     650,764        650,435  

Operating lease right of use asset

     20,134        24,340  

Other non-current assets

     950,323        972,411  

Total assets

     3,025,736        2,895,944  

Accounts payable

   $ 364,005      $ 327,102  

Total current liabilities

     554,750        518,046  

Debt, net of discount

     926,523        842,853  

Total long-term liabilities

     1,000,615        933,889  

Total equity

     1,470,371        1,444,009  

Total liabilities and equity

     3,025,736        2,895,944  


SUPPLEMENTAL DATA         
     Second Quarter     First Two Quarters  
     2021     2020     2021     2020  

Gross margin

     17.6     17.6     16.6     17.0

Operating margin

     7.2     4.0     5.5     3.7

End Market Breakdown, excludes Mobility:

        
     Second Quarter              
     2021     2020              

Aerospace/Defense

     33     33    

Automotive

     18     12    

Data Center Computing

     14     13    

Medical/Industrial/Instrumentation

     19     21    

Networking/Communications

     15     20    

Other

     1     1    

Stock-based Compensation:

        
     Second Quarter              
     2021     2020              

Amount included in:

        

Cost of goods sold

   $ 861     $ 620      

Selling and marketing

     442       291      

General and administrative

     2,015       1,690      

Research and development

     32       46      
  

 

 

   

 

 

     

Total stock-based compensation expense

   $ 3,350     $ 2,647      
  

 

 

   

 

 

     

Operating Segment Data:

        
     Second Quarter              

Net sales:

     2021       2020      

PCB

   $ 553,480     $ 536,843      

RF&S Components

     13,903       12,091      

Other1

     —         21,364      
  

 

 

   

 

 

     

Total net sales

   $ 567,383     $ 570,298      
  

 

 

   

 

 

     

Operating segment income:

        

PCB

   $ 73,055     $ 77,714      

RF&S Components

     4,730       4,310      

Corporate & Other1

     (26,472     (48,083    
  

 

 

   

 

 

     

Total operating segment income

     51,313       33,941      

Amortization of definite-lived intangibles

     (10,425     (10,945    
  

 

 

   

 

 

     

Total operating income

     40,888       22,996      

Total other expense

     (10,773     (18,117    
  

 

 

   

 

 

     

Income from continuing operations before income taxes

   $ 30,115     $ 4,879      
  

 

 

   

 

 

     
RECONCILIATIONS2         
     Second Quarter     First Two Quarters  
     2021     2020     2021     2020  

Non-GAAP gross profit reconciliation3 :

        

GAAP gross profit from continuing operations

   $ 99,910     $ 100,430     $ 181,510     $ 181,772  

Add back item:

        

Amortization of definite-lived intangibles

     1,383       1,384       2,767       2,767  

Accelerated depreciation

     —         2,397       —         2,397  

Stock-based compensation

     861       620       2,026       1,470  

Unrealized gain on commodity hedge

     (99     —         (99     —    

Restructuring and other charges

     —         —         254       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit

   $ 102,055     $ 104,831     $ 186,458     $ 188,406  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross margin

     18.0     18.4     17.0     17.6

Non-GAAP operating income reconciliation4 :

        

GAAP operating income from continuing operations

   $ 40,888     $ 22,996     $ 60,688     $ 39,178  

Add back items:

        

Amortization of definite-lived intangibles

     10,425       10,945       21,330       21,890  

Accelerated depreciation

     —         2,754       —         2,754  

Stock-based compensation

     3,350       2,647       7,559       7,482  

(Gain) on sale of assets

     (11     —         (421     —    

Unrealized gain on commodity hedge

     (99     —         (99     —    

Restructuring, acquisition-related, and other charges

     566       14,273       3,851       15,869  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income

   $ 55,119     $ 53,615     $ 92,908     $ 87,173  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating margin

     9.7     9.4     8.5     8.2

Non-GAAP net income and EPS reconciliation5 :

        

GAAP net income from continuing operations

   $ 28,261     $ 9,346     $ 25,069     $ 6,126  

Add back items:

        

Amortization of definite-lived intangibles

     10,425       10,945       21,330       21,890  

Accelerated depreciation

     —         2,754       —         2,754  

Stock-based compensation

     3,350       2,647       7,559       7,482  

Non-cash interest expense

     536       3,604       1,073       7,157  

(Gain) on sale of assets

     (11     (274     (991     (507

Change in fair value of warrant liabilities

     (1,027     —         (1,199     —    

Loss on extinguishment of debt

     —         —         15,217       —    

Unrealized gain on commodity hedge

     (99     —         (99     —    

Restructuring, acquisition-related, and other charges

     566       14,273       3,851       15,869  

Income taxes6

     (1,958     (10,292     (6,509     (11,107
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

   $ 40,043     $ 33,003     $ 65,301     $ 49,664  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP earnings per diluted share

   $ 0.36     $ 0.31     $ 0.60     $ 0.46  


Adjusted EBITDA reconciliation7 :

        

GAAP net income from continuing operations

   $ 28,261     $ 9,346     $ 25,069     $ 6,126  

Add back items:

        

Income tax provision (benefit)

     1,854       (4,467     747       (2,344

Interest expense

     11,079       18,572       22,468       38,353  

Amortization of definite-lived intangibles

     10,425       10,945       21,330       21,890  

Depreciation expense

     21,241       25,756       42,717       50,128  

Stock-based compensation

     3,350       2,647       7,559       7,482  

(Gain) on sale of assets

     (11     (274     (991     (507

Change in fair value of warrant liabilities

     (1,027     —         (1,199     —    

Loss on extinguishment of debt

     —         —         15,217       —    

Unrealized gain on commodity hedge

     (99     —         (99     —    

Restructuring, acquisition-related, and other charges

     566       14,273       3,851       15,869  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 75,639     $ 76,798     $ 136,669     $ 136,997  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     13.3     13.5     12.5     12.8

Free cash flow reconciliation8 :

        

Operating cash flow

   $ 56,909     $ 100,820     $ 98,054     $ 107,447  

Capital expenditures, net

     (22,727     (21,339     (43,693     (45,271
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $ 34,182     $ 79,481     $ 54,361     $ 62,176  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

1 

Other represents the SH E-MS and SZ results.

2 

This information provides a reconciliation of non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP EPS, and adjusted EBITDA to the financial information in our consolidated condensed statements of operations.

3 

Non-GAAP gross profit and gross margin measures exclude amortization of intangibles, accelerated depreciation, stock-based compensation expense, unrealized gain on commodity hedge, restructuring and other charges.

4 

Non-GAAP operating income and operating margin measures exclude amortization of intangibles, accelerated depreciation, stock-based compensation expense, gain on sale of assets, unrealized gain on commodity hedge, restructuring, acquisition-related costs, and other charges.

5 

This information provides non-GAAP net income and non-GAAP EPS, which are non-GAAP financial measures. Management believes that both measures – which add back amortization of intangibles, accelerated depreciation, stock-based compensation expense, non-cash interest expense on debt (before consideration of capitalized interest), gain on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, unrealized gain on commodity hedge, restructuring, acquisition-related costs, and other charges as well as the associated tax impact of these charges and discrete tax items – provide additional useful information to investors regarding the Company’s ongoing financial condition and results of operations.

6 

Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate.

7 

Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, unrealized gain on commodity hedge, restructuring, acquisition-related costs, and other charges. We present adjusted EBITDA to enhance the understanding of our operating results, and it is a key measure we use to evaluate our operations. In addition, we provide our adjusted EBITDA because we believe that investors and securities analysts will find adjusted EBITDA to be a useful measure for evaluating our operating performance and comparing our operating performance with that of similar companies that have different capital structures and for evaluating our ability to meet our future debt service, capital expenditures, and working capital requirements. However, adjusted EBITDA should not be considered as an alternative to cash flows from operating activities as a measure of liquidity or as an alternative to net income as a measure of operating results in accordance with accounting principles generally accepted in the United States of America.

8 

Free Cash Flow in 2020 has been restated to exclude the Mobility business which was sold in Q2 of 2020.