EX-99.1
Published on February 15, 2007
Exhibit 99.1
Contact: | Steve Richards | |||
Chief Financial Officer | ||||
714/241-0303 |
FOR IMMEDIATE RELEASE
TTM TECHNOLOGIES, INC. REPORTS FOURTH QUARTER
AND FULL YEAR 2006 RESULTS
AND FULL YEAR 2006 RESULTS
Strong Financial Performance and Progress Integrating Acquired Printed Circuit Group
SANTA ANA, CA February 15, 2007 TTM Technologies, Inc. (Nasdaq: TTMI), a leading
manufacturer of time-critical and technologically advanced printed circuit boards, today reported
results for the fourth quarter of 2006, ended December 31, 2006.
FINANCIAL & OPERATIONAL HIGHLIGHTS
| The Company completed the acquisition of the Printed Circuit Group (PCG), making TTM North Americas largest printed circuit board manufacturer. |
| Fourth quarter net sales of $144.3 million increased 90 percent over the 2006 third quarter and 129 percent over the fourth quarter of 2005. |
| 2006 net sales of $369.4 million increased 54 percent over 2005 net sales. |
FOURTH QUARTER 2006 FINANCIAL RESULTS
Fourth quarter 2006 results include two months of the operations of PCG, which TTM acquired from
Tyco International Ltd. on October 27, 2006.
Fourth quarter 2006 net sales increased $68.5 million, or 90 percent, to $144.3 million from the
third quarter of 2006 and $81.1 million, or 129 percent, from the fourth quarter of 2005, due
primarily to the inclusion of PCG.
PCB quick-turn business represented approximately 13 percent of net sales in the fourth quarter of
2006, compared to 17 percent for the third quarter of 2006 and 22 percent for the fourth quarter of
2005. The decrease was primarily due to PCGs limited quick-turn capacity.
Gross margins were 18.9 percent for the fourth quarter of 2006, compared with 29.7 percent in the
third quarter of 2006 and 23.8 percent for the fourth quarter of 2005. Gross profit was negatively
impacted by approximately $4.0 million for the value of the manufacturing profit added to the PCG
inventories at the acquisition date. These inventories were substantially sold during the fourth
quarter. Gross margins also were affected by the inclusion of PCGs backplane assembly operations,
which inherently carry a lower gross margin than printed circuit board manufacturing.
.../2 TTM
Selling expense for the fourth quarter of 2006 was $6.3 million, representing 4.4 percent of sales.
This compares to $3.3 million, or 4.4 percent of sales, in the third quarter of 2006 and $3.0
million, or 4.8 percent of sales, in the year-ago period.
General and administrative expense, including amortization of intangibles, was $9.5 million in the
fourth quarter of 2006, compared to $4.1 million in the third quarter of 2006 and $3.1 million in
the year-ago period. G&A expense for the fourth quarter of 2006 included approximately $700,000
of audit and consulting fees related to our accounting for and integration of the PCG acquisition.
TTM posted operating income of $11.2 million for the fourth quarter of 2006, compared to $15.0
million for the third quarter of 2006 and $8.8 million for the fourth quarter of 2005.
TTM
recorded its fourth quarter income tax provision at a higher rate in
order to adjust the full-year provision. The PCG acquisition included
additional domestic locations in different states with higher tax
rates, most notably California. The company anticipates that its tax
rate in the first quarter of 2007 will be approximately 38 percent.
Net income for the fourth quarter of 2006 was $4.9 million, or $0.12 per diluted share, compared
with $10.5 million, or $0.25 per diluted share, for the third quarter of 2006 and $19.0 million, or
$0.46 per diluted share, for the fourth quarter of 2005. Fourth quarter 2005 earnings included a
$0.31 per diluted share benefit from the reversal in TTMs deferred income tax asset valuation
allowance.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the fourth quarter of
2006 was $18.2 million, compared with $19.0 million for the third quarter of 2006 and $12.5 million
for the fourth quarter of 2005. A reconciliation of this non-GAAP measure is provided after the
GAAP financial statements below.
The Company noted that financial results for the fourth quarter may be subject to change pending
the resolution of certain accounting matters relating to the acquisition of PCG. Such changes are
likely to affect the opening balance sheet of the acquired entity. Should results for the fourth
quarter change from those established in this press release, the Company expects that revised
numbers would be issued when it files its Annual Report on Form 10-K on or about March 16, 2007.
BALANCE SHEET
The $226 million purchase price for the PCG acquisition was financed with a $200 million, 6-year
term loan and $26 million from cash on the balance sheet.
Cash and short-term investments at the end of the fourth quarter totaled $70.7 million, compared
with $110.3 million in the third quarter of 2006. The change in cash was primarily attributable to
the PCG purchase price plus related acquisition costs of approximately $34 million and capital
expenditures of $5.1 million in the fourth quarter.
FULL YEAR 2006 FINANCIAL RESULTS
Net sales for 2006, including two months of operations from PCG, were $369.4 million, compared to
$240.2 million for 2005. Net income increased to $34.8 million, or $0.82 per diluted share, in
2006, compared to $30.8 million, or $0.74 per diluted share, in 2005. The reversal of the deferred
income tax asset valuation allowance accounted for $12.7 million, or $0.31 per diluted share, of
TTMs 2005 net income.
.../3 TTM
PROGRESS INTEGRATING ACQUIRED PRINTED CIRCUIT GROUP
Commenting on TTMs results for the fourth quarter and year end, Kent Alder, President and CEO,
noted, We are very pleased with our performance, both operationally and financially. Our financial
results were solid, and we continue to make rapid and significant progress toward our goal of
integrating TTM Technologies and the Printed Circuit Group as soon as possible. In addition, TTMs
exclusive focus on printed circuit boards and backplane assembly enables us to bring greater
operating efficiency and productivity to all aspects of the business.
Alder continued, Although quick-turn business has declined as a percentage of sales, the
acquisition of PCG provides us with a significant opportunity to cross-sell TTMs quick-turn
capabilities to the PCG customer base. We are seeing strength in the networking and military
markets. We gained about 500 customers through the acquisition, and we added 30 new customers
during the quarter. Alder concluded, We are excited by our momentum and believe that we are well
positioned to capitalize on the opportunities in the printed circuit board industry.
FORECAST FOR FIRST QUARTER ENDING APRIL 2, 2007
For the first quarter of 2007, TTM estimates revenues in a range of $168 million to $174 million
and earnings in a range of $0.13 to $0.18 per diluted share.
TO ACCESS THE LIVE WEB CAST / CONFERENCE CALL
The company will conduct a conference call to discuss its fourth-quarter performance and outlook
today at 4:30 p.m. Eastern/1:30 p.m. Pacific time. Investors will have the opportunity to listen
to the conference call over the Internet. To listen to the live web cast, log on to the company
website at www.ttmtech.com. To access the live conference call, dial 800-967-7185.
TO ACCESS A REPLAY OF THE WEB CAST
A replay of the conference call will be available until Thursday, February 22, on the companys Web
site, www.ttmtech.com.
SAFE HARBOR STATEMENT
This release contains forward-looking statements that relate to future events or performance. These statements reflect the companys 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 companys 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 companys dependence upon the electronics industry, the companys 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
This release contains forward-looking statements that relate to future events or performance. These statements reflect the companys 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 companys 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 companys dependence upon the electronics industry, the companys 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
.../4 TTM
results, the risks and uncertainties associated with the integration of the recently acquired PCG
business, increased competition from low-cost foreign manufacturers, and other Risk Factors set
forth in the companys most recent SEC filings.
ABOUT TTMI
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 companys time-critical, one-stop manufacturing services enable customers to shorten the time required to develop new products and bring them to market. TTMIs common stock is publicly traded on the NASDAQ Global Market (NASDAQ GM: TTMI). The company is based in Santa Ana, California. Additional information can be found at http://www.ttmtechnologies.com.
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 companys time-critical, one-stop manufacturing services enable customers to shorten the time required to develop new products and bring them to market. TTMIs common stock is publicly traded on the NASDAQ Global Market (NASDAQ GM: TTMI). The company is based in Santa Ana, California. Additional information can be found at http://www.ttmtechnologies.com.
- Tables Follow -
TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
Selected Unaudited Financial Information
(In thousands, except per share data)
Fourth Quarter | Third Quarter | Full Year | ||||||||||||||||||
2006 | 2005 | 2006 | 2006 | 2005 | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||||||
Net sales |
$ | 144,261 | $ | 63,131 | $ | 75,765 | $ | 369,397 | $ | 240,209 | ||||||||||
Cost of goods sold |
117,049 | 48,102 | 53,288 | 276,536 | 186,453 | |||||||||||||||
Gross profit |
27,212 | 15,029 | 22,477 | 92,861 | 53,756 | |||||||||||||||
Operating expenses: |
||||||||||||||||||||
Selling and marketing |
6,331 | 3,045 | 3,329 | 16,473 | 11,977 | |||||||||||||||
General and administrative |
8,587 | 2,840 | 3,822 | 19,656 | 14,135 | |||||||||||||||
Amortization of intangibles |
885 | 301 | 300 | 1,786 | 1,202 | |||||||||||||||
Restructuring charges |
199 | | | 199 | | |||||||||||||||
Total operating expenses |
16,002 | 6,186 | 7,451 | 38,114 | 27,314 | |||||||||||||||
Operating income |
11,210 | 8,843 | 15,026 | 54,747 | 26,442 | |||||||||||||||
Interest expense |
(2,937 | ) | (63 | ) | (16 | ) | (3,020 | ) | (179 | ) | ||||||||||
Amortization of debt issuance costs |
(316 | ) | (20 | ) | (19 | ) | (374 | ) | (72 | ) | ||||||||||
Interest income and other, net |
998 | 733 | 1,369 | 4,462 | 2,126 | |||||||||||||||
Income before income taxes |
8,955 | 9,493 | 16,360 | 55,815 | 28,317 | |||||||||||||||
Income tax benefit (provision) |
(4,048 | ) | 9,555 | (5,837 | ) | (21,018 | ) | 2,524 | ||||||||||||
Net income |
$ | 4,907 | $ | 19,048 | $ | 10,523 | $ | 34,797 | $ | 30,841 | ||||||||||
Earnings per common share: |
||||||||||||||||||||
Basic |
$ | 0.12 | $ | 0.46 | $ | 0.25 | $ | 0.83 | $ | 0.75 | ||||||||||
Diluted |
$ | 0.12 | $ | 0.46 | $ | 0.25 | $ | 0.82 | $ | 0.74 | ||||||||||
Weighted average common shares: |
||||||||||||||||||||
Basic |
42,012 | 41,301 | 41,823 | 41,740 | 41,232 | |||||||||||||||
Diluted |
42,389 | 41,810 | 42,310 | 42,295 | 41,770 |
SELECTED BALANCE SHEET DATA
December 31, 2006 | December 31, 2005 | |||||||
Cash and short-term investments |
$ | 70,656 | $ | 82,358 | ||||
Accounts receivable, net |
125,720 | 38,631 | ||||||
Inventories, net |
66,962 | 12,564 | ||||||
Total current assets |
272,504 | 140,415 | ||||||
Net property, plant and equipment |
152,006 | 51,798 | ||||||
Other assets |
148,507 | 80,930 | ||||||
Total assets |
573,017 | 273,143 | ||||||
Accounts
Payable |
$ | 40,014 | $ | 11,310 | ||||
Current liabilities |
144,343 | 29,191 | ||||||
Long-term liabilities |
141,538 | | ||||||
Stockholders equity |
287,136 | 243,952 | ||||||
Total liabilities and stockholders equity |
573,017 | 273,143 |
SUPPLEMENTAL DATA
Fourth Quarter | Third Quarter | Full Year | ||||||||||||||||||
2006 | 2005 | 2006 | 2006 | 2005 | ||||||||||||||||
EBITDA |
$ | 18,167 | $ | 12,477 | $ | 19,001 | $ | 73,290 | $ | 39,177 | ||||||||||
EBITA |
$ | 13,122 | $ | 9,906 | $ | 16,725 | $ | 61,112 | $ | 29,887 | ||||||||||
Gross margin |
18.9 | % | 23.8 | % | 29.7 | % | 25.1 | % | 22.4 | % | ||||||||||
EBITDA margin |
12.6 | 19.8 | 25.1 | 19.8 | 16.3 | |||||||||||||||
Operating margin |
7.8 | 14.0 | 19.8 | 14.8 | 11.0 | |||||||||||||||
End Market Breakdown: |
Fourth Quarter | ||||||||
2006 | 2005 | |||||||
Networking/Communications |
43 | % | 43 | % | ||||
Military/Aerospace |
22 | 11 | ||||||
Computing/Storage/Peripherals |
22 | 33 | ||||||
Medical/Industrial/Instrumentation/Other |
13 | 13 |
Stock-based Compensation:
Fourth Quarter | ||||
2006 | ||||
Amount included in: |
||||
Cost of goods sold |
$ | 154 | ||
Selling and marketing |
42 | |||
General and administrative |
318 | |||
Total stock-based compensation expense |
$ | 514 | ||
RECONCILIATIONS*
Fourth Quarter | Third Quarter | Full Year | ||||||||||||||||||
2006 | 2005 | 2006 | 2006 | 2005 | ||||||||||||||||
EBITA/EBITDA reconciliation: |
||||||||||||||||||||
Net income |
$ | 4,907 | $ | 19,048 | $ | 10,523 | $ | 34,797 | $ | 30,841 | ||||||||||
Add back items: |
||||||||||||||||||||
Income taxes |
4,048 | (9,555 | ) | 5,837 | 21,018 | (2,524 | ) | |||||||||||||
Interest expense |
2,937 | 63 | 16 | 3,020 | 179 | |||||||||||||||
Amortization of debt issuance costs |
316 | 20 | 19 | 374 | 72 | |||||||||||||||
Amortization of intangibles |
914 | 330 | 330 | 1,903 | 1,319 | |||||||||||||||
EBITA |
13,122 | 9,906 | 16,725 | 61,112 | 29,887 | |||||||||||||||
Depreciation expense |
5,045 | 2,571 | 2,276 | 12,178 | 9,290 | |||||||||||||||
EBITDA |
$ | 18,167 | $ | 12,477 | $ | 19,001 | $ | 73,290 | $ | 39,177 | ||||||||||
* | 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 of America. |