Form: 8-K

Current report filing

July 26, 2006

 

Exhibit 99.1
         
 
  Contact:   Steve Richards
 
      Chief Financial Officer
 
      714/241-0303
TTM TECHNOLOGIES, INC. REPORTS STRONG SECOND QUARTER 2006 RESULTS
SANTA ANA, CA — July 26, 2006 — TTM Technologies, Inc. (Nasdaq: TTMI), a leading manufacturer of time-critical and technologically advanced printed circuit boards, today reported results for the second quarter of 2006.
Second-Quarter Results
Second quarter 2006 net sales increased $4.0 million, or 5.5 percent, to a record $76.7 million from $72.7 million in the first quarter of 2006 and increased $19.5 million, or 34.0 percent, from $57.2 million in the second quarter of 2005. These favorable comparisons resulted from strong pricing and rising demand.
For the second quarter of 2006, quick-turn business represented 19.5 percent of net sales, compared to 20.7 percent for the first quarter of 2006 and 21.8 percent for the second quarter of 2005.
Gross margin increased to 30.0 percent for the second quarter of 2006 from 27.8 percent in the first quarter of 2006 and 19.3 percent for the second quarter of 2005. Gross margin benefited from higher prices as well as better absorption of fixed costs due to increased production.
General and administrative expense, including amortization of intangibles, was $4.0 million in the second quarter of 2006, an increase of $80,000 over the first quarter of 2006 and $628,000 over the year-ago period. As a percent of sales, G&A expense declined to 5.2 percent in the second quarter of 2006, compared to 5.3 percent in the first quarter of 2006 and 5.8 percent in the second quarter of 2005. The year-over-year increase in G&A expense was due primarily to higher incentive compensation expense and stock-based compensation expense.
As a result of strong revenue growth and higher profitability, TTM posted operating income of $15.6 million for the second quarter of 2006, compared to $13.0 million for the first quarter of 2006 and $4.8 million for the second quarter of 2005.
Net income for the second quarter of 2006 was $10.6 million, or $0.25 per diluted share, compared with $8.8 million, or $0.21 per diluted share, for the first quarter of 2006, and $3.3 million, or $0.08 per diluted share, for the second quarter of 2005.
EBITDA (earnings before interest, taxes, depreciation and amortization) increased to $19.4 million for the second quarter of 2006 from $16.7 million for the first quarter of 2006 and $7.9 million for the second quarter of 2005.

 


 

In the second quarter of 2006, TTM generated cash flow from operations of $10.8 million, enabling it to fund net capital expenditures of $2.3 million, while expanding its cash and short-term investments to a total of $101.2 million, an increase of $10.7 million during the quarter.
“We again posted excellent results in the second quarter of 2006 as we capitalized on solid market conditions and continued to execute our time and technology strategy. We are proud of the fact that we consistently increase market share and generate superior profitability in the printed circuit board marketplace,” said Kent Alder, President and CEO of TTM Technologies.
Outlook
For the third quarter of 2006, TTM is estimating revenues in a range of $73 million to $78 million and earnings in a range of $0.20 to $0.25 per diluted share.
“Business indicators for the printed circuit board industry, while somewhat mixed, suggest relative stability in the third quarter of 2006,” concluded Alder. “And TTM will continue to expand on its time and technology leadership.”
Conference Call/Webcast
TTM Technologies, Inc. is a leading supplier of time-critical and technologically advanced printed circuit boards to original equipment manufacturers and electronics manufacturing services companies. TTM stands for time-to-market, representing how the company’s time-critical, one-stop manufacturing services enable customers to shorten the time required to develop new products and bring them to market.
The company will conduct a conference call to discuss its second-quarter performance and outlook today at 4:30 p.m. Eastern/1:30 p.m. Pacific time. The call will be simulcast and available for replay until August 3, 2006, on the company’s website, www.ttmtech.com.
This release contains forward-looking statements that relate to future events or performance. These statements reflect the company’s current expectations, and the company does not undertake to update or revise these forward-looking statements, even if experience or future changes make it clear that any projected results expressed or implied in this or other company statements will not be realized. Furthermore, readers are cautioned that these statements involve risks and uncertainties, many of which are beyond the company’s control, which could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties include, but are not limited to, the company’s dependence upon the electronics industry, the company’s dependence upon a small number of customers, general economic conditions and specific conditions in the markets TTM addresses, the unpredictability of and potential fluctuation in future revenues and operating results, increased competition from low-cost foreign manufacturers, and other “Risk Factors” set forth in the company’s most recent SEC filings.
— Tables Follow —

 


 

TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
                                         
    Second Quarter     First Quarter     First Two Fiscal Quarters  
    2006     2005     2006     2006     2005  
CONSOLIDATED STATEMENTS OF OPERATIONS
                                       
 
                                       
Net sales
  $ 76,683     $ 57,216     $ 72,688     $ 149,371     $ 116,099  
Cost of goods sold
    53,714       46,179       52,485       106,199       91,524  
 
                             
 
                                       
Gross profit
    22,969       11,037       20,203       43,172       24,575  
 
                             
 
                                       
Operating expenses:
                                       
Selling and marketing
    3,454       2,865       3,359       6,813       5,882  
General and administrative
    3,663       3,035       3,584       7,247       6,439  
Amortization of intangibles
    301       301       300       601       601  
 
                             
Total operating expenses
    7,418       6,201       7,243       14,661       12,922  
 
                             
 
                                       
Operating income
    15,551       4,836       12,960       28,511       11,653  
 
                                       
Interest expense
    (25 )     (49 )     (42 )     (67 )     (100 )
Amortization of debt issuance costs
    (20 )     (13 )     (19 )     (39 )     (26 )
Interest income and other, net
    1,118       462       977       2,095       846  
 
                             
 
                                       
Income before income taxes
    16,624       5,236       13,876       30,500       12,373  
Income tax provision
    (6,068 )     (1,964 )     (5,065 )     (11,133 )     (4,641 )
 
                             
 
                                       
Net income
  $ 10,556     $ 3,272     $ 8,811     $ 19,367     $ 7,732  
 
                             
 
                                       
Earnings per common share:
                                       
Basic
    0.25       0.08       0.21       0.47       0.19  
Diluted
    0.25       0.08       0.21       0.46       0.19  
 
                                       
Weighted average common shares:
                                       
Basic
    41,694       41,267       41,441       41,566       41,171  
Diluted
    42,512       41,772       41,978       42,242       41,778  

 


 

SELECTED BALANCE SHEET DATA
                 
    July 3, 2006   December 31, 2005
Cash and short-term investments
  $ 101,244     $ 82,358  
Accounts receivable, net
    44,837       38,631  
Inventories, net
    13,886       12,564  
Total current assets
    165,100       140,415  
Net property, plant and equipment
    52,553       51,798  
Other assets
    79,223       80,930  
Total assets
    296,876       273,143  
 
               
Accounts payable
  $ 12,112     $ 11,310  
Total current liabilities
    28,119       29,191  
Stockholders’ equity
    268,757       243,952  
Total liabilities and stockholders’ equity
    296,876       273,143  
SUPPLEMENTAL DATA
                                         
    Second Quarter   First Quarter   First Two Fiscal Quarters
    2006   2005   2006   2006   2005
EBITDA
  $ 19,444     $ 7,887     $ 16,677     $ 36,121     $ 17,570  
EBITA
  $ 16,999     $ 5,628     $ 14,266     $ 31,265     $ 13,158  
 
                                       
Gross margin
    30.0 %     19.3 %     27.8 %     28.9 %     21.2 %
EBITDA margin
    25.4       13.8       22.9       24.2       15.1  
Operating margin
    20.3       8.5       17.8       19.1       10.0  
End Market Breakdown:
                 
    Second Quarter
    2006   2005
Networking/communications
    43.9 %     43.5 %
High-end computing
    27.3       29.6  
Industrial/medical
    16.3       15.3  
Computer peripherals
    6.4       5.1  
Handheld
    2.1       3.1  
Other
    4.0       3.4  
RECONCILIATIONS*
                                         
    Second Quarter     First Quarter     First Two Fiscal Quarters  
    2006     2005     2006     2006     2005  
EBITA/EBITDA reconciliation:
                                       
Net income
  $ 10,556     $ 3,272     $ 8,811     $ 19,367     $ 7,732  
Add back items:
                                       
Income taxes
    6,068       1,964       5,065       11,133       4,641  
Interest expense
    25       49       42       67       100  
Amortization of debt issuance costs
    20       13       19       39       26  
Amortization of intangibles
    330       330       329       659       659  
 
                             
EBITA
    16,999       5,628       14,266       31,265       13,158  
 
                                       
Depreciation expense
    2,445       2,259       2,411       4,856       4,412  
 
                             
EBITDA
  $ 19,444     $ 7,887     $ 16,677     $ 36,121     $ 17,570  
 
                             
 
*   This information provides a reconciliation of EBITA/EBITDA to the financial information in our consolidated statements of operations.
 
    “EBITDA” means earnings before interest expense, income taxes, depreciation and amortization. “EBITA” means earnings before interest expense, income taxes and amortization. We present EBITDA / EBITA to enhance the understanding of our operating results. EBITDA / EBITA is a key measure we use to evaluate our operations. In addition, we provide our EBITDA / EBITA because we believe that investors and securities analysts will find EBITDA / EBITA 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, EBITDA / EBITA 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.