8-K
TTM TECHNOLOGIES INC false 0001116942 0001116942 2021-10-27 2021-10-27

 

 

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): October 27, 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 October 27, 2021, TTM Technologies, Inc. (the “Registrant”) issued a press release announcing results for its third quarter 2021, which ended September 27, 2021, and guidance for its fourth 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 Registrant will host a conference call on Wednesday, October 27, 2021, at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to discuss its third quarter 2021 performance and fourth quarter 2021 outlook. Dial-in information for the call is as follows: Telephone access is available by dialing domestic 800-263-0877 or international 323-794-2094 (ID 8701149).

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 dated October 27, 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: October 27, 2021      

/s/ Daniel J. Weber

      By:   Daniel J. Weber
               Executive Vice President, General Counsel & Secretary
EX-99.1
TTM Technologies, Inc., Q3’21   

Contact:

Sameer Desai,

Vice President, Corporate

Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

TTM Technologies, Inc. Reports Fiscal Third Quarter 2021 Results

Santa Ana, CA – October 27, 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 third quarter of fiscal 2021, which ended on September 27, 2021.

Third Quarter 2021 Highlights

 

   

Net sales were $556.8 million

 

   

GAAP net income of $21.0 million, or $0.19 per diluted share

 

   

Non-GAAP net income was $36.5 million, or $0.34 per diluted share

 

   

Repurchased 2.11 million shares of common stock for $28.9 million at an average price of $13.71 per share

Third Quarter 2021 Financial Results

Net sales for the third quarter of 2021 were $556.8 million, compared to $513.6 million from continuing operations in the third quarter of 2020.

GAAP operating income for the third quarter of 2021 was $32.2 million. This compares to GAAP operating loss of $40.3 million from continuing operations in the third quarter of 2020, inclusive of a goodwill impairment charge of $69.2 million.

GAAP net income for the third quarter of 2021 was $21.0 million, or $0.19 per diluted share, compared to net loss of $61.5 million, or ($0.58) per diluted share from continuing operations in the third quarter of 2020.

On a non-GAAP basis, net income for the third quarter of 2021 was $36.5 million, or $0.34 per diluted share. This compares to non-GAAP net income of $26.8 million, or $0.25 per diluted share from continuing operations in the third quarter of 2020.

Adjusted EBITDA in the third quarter of 2021 was $68.6 million, or 12.3 percent of net sales, compared to adjusted EBITDA of $67.2 million, or 13.1 percent of net sales, from continuing operations, in the third quarter of 2020.

“In the third quarter, TTM delivered revenue and non-GAAP earnings within the previously guided range despite labor and production inefficiencies in North America and tight supply conditions globally for certain raw materials. Results were led by strong year on year growth from the automotive and data center computing end markets and strength from the medical, industrial and instrumentation end market,” said Tom Edman, CEO of TTM.

Business Outlook

In the fourth quarter, further increases in labor and raw materials costs, along with potential power rationing in China, are expected to negatively affect profitability. As a result, TTM estimates that revenue for the fourth 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 $0.28 to $0.34 per diluted share.


TTM Technologies, Inc., Q3’21   

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 third quarter 2021 results and the fourth quarter 2021 outlook on Wednesday, October 27th, 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 800-263-0877 or international 323-794-2094 (ID 8701149). 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., Q3’21   

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)    

 

     Third Quarter     First Three Quarters  
     2021     2020     2021     2020  

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

 

     

Net sales

   $ 556,784     $ 513,576     $ 1,650,599     $ 1,581,520  

Cost of goods sold

     463,605       424,298       1,375,910       1,310,470  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     93,179       89,278       274,689       271,050  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Selling and marketing

     15,858       15,895       46,745       48,033  

General and administrative

     32,146       27,998       91,075       95,646  

Research and development

     4,423       5,223       13,075       15,166  

Amortization of definite-lived intangibles

     8,274       10,126       26,837       29,249  

Restructuring charges

     243       1,088       4,034       14,830  

Impairment of goodwill

     —         69,200       —         69,200  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     60,944       129,530       181,766       272,124  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     32,235       (40,252     92,923       (1,074

Interest expense

     (11,147     (20,204     (33,615     (58,557

Loss on extinguishment of debt

     —         —         (15,217     —    

Other, net

     2,525       (2,316     5,338       641  

Income (loss) from continuing operations before income taxes

     23,613       (62,772     49,429       (58,990

Income tax (provision) benefit

     (2,655     1,300       (3,402     3,644  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) from continuing operations

     20,958       (61,472     46,027       (55,346

Income from discontinued operations, net of income taxes

     —         20,021       —         193,921  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 20,958     $ (41,451   $ 46,027     $ 138,575  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings (loss) per share:

        

Basic earnings (loss) per share from continuing operations

   $ 0.20     $ (0.58   $ 0.43     $ (0.52

Basic earnings per share from discontinued operations

     —         0.19       —         1.83  
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings (loss) per share

   $ 0.20     $ (0.39   $ 0.43     $ 1.31  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) per share from continuing operations

   $ 0.19     $ (0.58   $ 0.42     $ (0.52

Diluted earnings per share from discontinued operations

     —         0.19       —         1.83  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) per share

   $ 0.19     $ (0.39   $ 0.42     $ 1.31  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares used in computing per share amounts:

        

Basic

     107,098       106,729       106,917       106,130  

Diluted

     108,345       106,729       108,839       106,130  

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

        

Weighted-average shares outstanding

     107,098       106,729       106,917       106,130  

Dilutive effect of warrants

     —         —         267       —    

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

     1,247       —         1,655       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted shares

     108,345       106,729       108,839       106,130  
  

 

 

   

 

 

   

 

 

   

 

 

 

SELECTED BALANCE SHEET DATA

 

     September 27, 2021      December 28, 2020                                      

Cash and cash equivalents, including restricted cash

   $ 529,816      $ 451,565        

Accounts and notes receivable, net

     388,233        381,105        

Contract assets

     325,774        273,256        

Inventories

     140,055        115,651        

Total current assets

     1,423,348        1,248,758        

Property, plant and equipment, net

     669,736        650,435        

Operating lease right of use asset

     16,794        24,340        

Other non-current assets

     937,753        972,411        

Total assets

     3,047,631        2,895,944        

Accounts payable

   $ 386,705      $ 327,102        

Total current liabilities

     567,442        518,046        

Debt, net of discount

     926,922        842,853        

Total long-term liabilities

     1,013,600        933,889        

Total equity

     1,466,589        1,444,009        

Total liabilities and equity

     3,047,631        2,895,944        


SUPPLEMENTAL DATA

 

     Third Quarter     First Three
Quarters
 
     2021     2020     2021     2020  

Gross margin

     16.7     17.4     16.6     17.1

Operating margin

     5.8     (7.8 )%      5.6     (0.1 )% 

End Market Breakdown, excludes Mobility:

        
     Third Quarter              
     2021     2020              

Aerospace/Defense

     31     36    

Automotive

     18     14    

Data Center Computing

     14     12    

Medical/Industrial/Instrumentation

     20     19    

Networking/Communications

     16     18    

Other

     1     1    

Stock-based Compensation:

        
     Third Quarter              
     2021     2020              

Amount included in:

        

Cost of goods sold

   $ 1,284     $ 1,173      

Selling and marketing

     731       557      

General and administrative

     2,542       2,705      

Research and development

     387       44      
  

 

 

   

 

 

     

Total stock-based compensation expense

   $ 4,944     $ 4,479      
  

 

 

   

 

 

     

Operating Segment Data:

        
     Third Quarter              

Net sales:

     2021       2020      

PCB

   $ 541,118     $ 481,311      

RF&S Components

     15,666       11,742      

Other1

     —         20,523      
  

 

 

   

 

 

     

Total net sales

   $  556,784     $ 513,576      
  

 

 

   

 

 

     

Operating segment income:

        

PCB

   $ 61,424     $ 65,179      

RF&S Components

     6,537       (66,098    

Corporate & Other1

     (26,068     (27,823    
  

 

 

   

 

 

     

Total operating segment income (loss)

     41,893       (28,742    

Amortization of definite-lived intangibles

     (9,658     (11,510    
  

 

 

   

 

 

     

Total operating income (loss)

     32,235       (40,252    

Total other expense

     (8,622     (22,520    
  

 

 

   

 

 

     

Income (loss) from continuing operations before income taxes

   $ 23,613     $ (62,772    
  

 

 

   

 

 

     

RECONCILIATIONS2

 

     Third Quarter     First Three Quarters  
     2021     2020     2021     2020  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit reconciliation3 :

        

GAAP gross profit from continuing operations

   $ 93,179     $ 89,278     $ 274,689     $ 271,050  

Add back item:

        

Amortization of definite-lived intangibles

     1,384       1,384       4,151       4,151  

Accelerated depreciation

     —         2,539       —         4,936  

Stock-based compensation

     1,284       1,173       3,310       2,643  

Unrealized loss on commodity hedge

     164       —         65       —    

Restructuring and other charges

     —         —         254       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit

   $ 96,011     $ 94,374     $ 282,469     $ 282,780  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross margin

     17.2     18.4     17.1     17.9

Non-GAAP operating income reconciliation4:

        

GAAP operating income (loss) from continuing operations

   $ 32,235     $ (40,252   $ 92,923     $ (1,074

Add back items:

        

Amortization of definite-lived intangibles

     9,658       11,510       30,988       33,400  

Accelerated depreciation

     —         2,940       —         5,694  

Stock-based compensation

     4,944       4,479       12,503       11,961  

(Gain) on sale of assets

     —         —         (421     —    

Unrealized loss on commodity hedge

     164       —         65       —    

Impairments, restructuring, acquisition-related and other charges

     699       68,270       4,550       84,139  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income

   $ 47,700     $ 46,947     $ 140,608     $ 134,120  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating margin

     8.6     9.1     8.5     8.5

Non-GAAP net income and EPS reconciliation5:

        

GAAP net income (loss) from continuing operations

   $ 20,958     $ (61,472   $ 46,027     $ (55,346

Add back items:

        

Amortization of definite-lived intangibles

     9,658       11,510       30,988       33,400  

Accelerated depreciation

     —         2,940       —         5,694  

Stock-based compensation

     4,944       4,479       12,503       11,961  

Non-cash interest expense

     540       7,332       1,613       14,489  

(Gain) on sale of assets

     —         (199     (991     (706

Change in fair value of warrant liabilities

     (2,669     —         (3,868     —    

Loss on extinguishment of debt

     —         —         15,217       —    

Unrealized loss on commodity hedge

     164       —         65       —    

Impairments, restructuring, acquisition-related and other charges

     699       68,270       4,550       84,139  

Income taxes6

     2,246       (6,081     (4,263     (17,188
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

   $ 36,540     $ 26,779     $ 101,841     $ 76,443  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP earnings per diluted share

   $ 0.34     $ 0.25     $ 0.94     $ 0.72  


Adjusted EBITDA reconciliation7 :

        

GAAP net income (loss) from continuing operations

   $ 20,958     $ (61,472   $ 46,027     $ (55,346

Add back items:

        

Income tax provision (benefit)

     2,655       (1,300     3,402       (3,644

Interest expense

     11,147       20,204       33,615       58,557  

Amortization of definite-lived intangibles

     9,658       11,510       30,988       33,400  

Depreciation expense

     20,994       25,669       63,711       75,797  

Stock-based compensation

     4,944       4,479       12,503       11,961  

(Gain) on sale of assets

     —         (199     (991     (706

Change in fair value of warrant liabilities

     (2,669     —         (3,868     —    

Loss on extinguishment of debt

     —         —         15,217       —    

Unrealized loss on commodity hedge

     164       —         65       —    

Impairments, restructuring, acquisition-related and other charges

     699       68,270       4,550       84,139  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 68,550     $ 67,161     $ 205,219     $ 204,158  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     12.3     13.1     12.4     12.9

Free cash flow reconciliation8 :

        

Operating cash flow

   $ 18,599     $ 84,776     $ 114,263     $ 192,223  

Capital expenditures, net

     (19,766     (29,067     (61,069     (74,338
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $ (1,167   $ 55,709     $ 53,194     $ 117,885  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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 loss 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 loss on commodity hedge, impairment of goodwill, 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 loss on commodity hedge, impairment of goodwill, 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 loss on commodity hedge, impairment of goodwill, 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.