EX-99.1
Published on May 2, 2007
Exhibit 99.1
Contact:
|
Steve Richards Chief Financial Officer 714/241-0303 |
TTM TECHNOLOGIES REPORTS STRONG FIRST QUARTER 2007 RESULTS
Printed Circuit Group Accretive to First Quarter Earnings Ahead of Schedule
Printed Circuit Group Accretive to First Quarter Earnings Ahead of Schedule
SANTA ANA, CA May 2, 2007 TTM Technologies, Inc. (Nasdaq: TTMI), North Americas largest
printed circuit board manufacturer, today reported results for the first quarter of 2007, which
ended April 2, 2007.
Financial & Operational Highlights First Quarter 2007
| First quarter net sales of $176.9 million increased 143 percent compared with the same period a year ago and 23 percent sequentially. | ||
| The Printed Circuit Group (PCG) acquisition was accretive to earnings in the first quarter 2007, which was ahead of plan. | ||
| First quarter gross profit of $34.7 million increased $7.2 million sequentially. | ||
| The Company benefited from the PCG acquisition, which diversified our customer base and broadened our end market exposure. |
First Quarter 2007 Financial Results
First quarter 2007 net sales increased $32.7 million, or 23 percent, from the fourth quarter of
2006, and $104.2 million, or 143 percent, to $176.9 million from the first quarter of 2006 due to
the inclusion of PCG. First quarter 2007 results included a full quarter of the operations of PCG,
which TTM acquired from Tyco International Ltd. on October 27, 2006, compared with two months in
the fourth quarter of 2006.
Gross margins were 19.6 percent for the first quarter of 2007, compared with 19.1 percent in the
fourth quarter of 2006 and 27.8 percent for the first quarter of 2006. On a year-over-year basis,
gross margins were affected by the inclusion of PCGs backplane assembly operations, which
inherently carry a lower gross margin than printed circuit board manufacturing.
Selling and marketing expense for the first quarter of 2007 was $7.6 million, representing 4.3
percent of sales. This compares with $6.3 million, or 4.4 percent of sales, in the fourth quarter
of 2006 and $3.4 million, or 4.6 percent of sales, in the year-ago period.
General and administrative expense, including amortization of intangibles, was $9.4 million in the
first quarter of 2007, compared with $9.5 million in the fourth
quarter of 2006 and $3.9 million in
the year-ago period.
TTM posted operating income of $17.8 million for the first quarter of 2007, compared with $11.5
million for the fourth quarter of 2006 and $13.0 million for the first quarter of 2006.
Net income for the first quarter of 2007 was $8.5 million, or $0.20 per diluted share, compared
with $5.1 million, or $0.12 per diluted share, for the fourth quarter of 2006 and $8.8 million, or
$0.21 per diluted share, for the first quarter of 2006.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the first quarter of
2007 was $25.5 million, compared with $18.5 million for the fourth quarter of 2006 and $16.7
million for the first quarter of 2006. (A reconciliation of this non-GAAP measure is provided
after the GAAP financial statements below.)
PCB quick-turn business represented approximately 15 percent of net sales in the first quarter of
2007, compared to 13 percent for the fourth quarter of 2006 and 21 percent for the first quarter of
2006. The year-over-year decline was primarily due to PCGs limited quick-turn capacity.
We are pleased with the Companys solid financial results for the first quarter of 2007, the
first full quarter of contributions from the PCG acquisition, said Kent Alder, President and CEO.
Our results reflect the success of our strategy to diversify our customer base through the
acquisition of PCG, which clearly differentiates us from our peers. With the exception of high-end
computing and the inventory realignment by one of our key customers, we saw continued steady
demand.
Commenting on TTMs integration of PCG, Alder noted, The integration is basically complete, which
is a tribute to the planning and execution of our combined management team. The Company has paid
down debt ahead of schedule, which helped make the acquisition accretive to earnings in the first
quarter of 2007. Alder concluded, We are off to a solid start in 2007 and will continue to
benefit from the greater size, expanded customer base, diversification, and cross-selling
opportunities that we gain with the acquisition of the Printed Circuit Group.
The Company noted that financial results for the first 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 first
quarter change from those established in this press release, the Company expects that revised
numbers would be issued when it files its Quarterly Report on Form 10-Q on or about May 14, 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. In the first quarter of 2007, TTM paid
down $50 million, or 25 percent of the debt, and funded net capital expenditures of $3.6 million. Cash
and short-term investments at the end of the first quarter of 2007 totaled $45.4 million, compared
with $70.7 million at year-end 2006.
Second Quarter Forecast
For the
second quarter of 2007, TTM estimates revenues in a range of $158 million to $167 million
and earnings in a range of $0.13 to $0.19 per diluted share. We expect satisfactory demand from
most end markets, and we anticipate that the aerospace/defense sector will remain solid, said
Alder. In addition, we expect the PCG acquisition to continue to be accretive to earnings despite
the closure of the Dallas, Oregon, facility on April 6, 2007, which will reduce second quarter
revenues by approximately $10 million. We paid down an
additional $25 million of debt in April, reducing our outstanding balance to $125 million, and we
expect to continue paying down debt ahead of the required schedule in the second quarter.
To Access the Live Web Cast/Conference Call
The company will conduct a conference call to discuss its first-quarter performance and outlook
today at 10 a.m. Eastern/7 a.m. Pacific time. To listen to the live web cast on the Internet, log
on to the company website at www.ttmtech.com. To access the live conference call, dial
800-946-0742.
To Access A Replay of the Web Cast
A replay of the conference call will be available until Monday, May 7, 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 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 TTM
TTM Technologies, Inc. is North Americas largest printed circuit board manufacturer, focusing on
quick-turn and technologically advanced PCBs and the backplane and sub-system assembly business.
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. Additional information can be found at www.ttmtech.com.
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Tables Follow -
TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
First Quarter | Fourth Quarter | |||||||||||
2007 | 2006 | 2006 | ||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||
Net sales |
$ | 176,897 | $ | 72,688 | $ | 144,180 | ||||||
Cost of goods sold |
142,176 | 52,485 | 116,681 | |||||||||
Gross profit |
34,721 | 20,203 | 27,499 | |||||||||
Operating expenses: |
||||||||||||
Selling and marketing |
7,560 | 3,359 | 6,331 | |||||||||
General and administrative |
8,342 | 3,584 | 8,587 | |||||||||
Amortization of intangibles |
1,025 | 300 | 885 | |||||||||
Restructuring charges |
| | 199 | |||||||||
Total operating expenses |
16,927 | 7,243 | 16,002 | |||||||||
Operating income |
17,794 | 12,960 | 11,497 | |||||||||
Interest expense |
(5,098 | ) | (61 | ) | (3,253 | ) | ||||||
Interest income and other, net |
759 | 977 | 998 | |||||||||
Income before income taxes |
13,455 | 13,876 | 9,242 | |||||||||
Income tax provision |
(4,990 | ) | (5,065 | ) | (4,093 | ) | ||||||
Net income |
$ | 8,465 | $ | 8,811 | $ | 5,149 | ||||||
Earnings per common share: |
||||||||||||
Basic |
$ | 0.20 | $ | 0.21 | $ | 0.12 | ||||||
Diluted |
$ | 0.20 | $ | 0.21 | $ | 0.12 | ||||||
Weighted average common shares: |
||||||||||||
Basic |
42,149 | 41,441 | 42,012 | |||||||||
Diluted |
42,398 | 41,978 | 42,389 |
SELECTED BALANCE SHEET DATA |
April 2, 2007 | December 31, 2006 | |||||||
Cash and short-term investments |
$ | 45,381 | $ | 70,656 | ||||
Accounts receivable, net |
119,823 | 125,435 | ||||||
Inventories, net |
66,781 | 67,020 | ||||||
Total current assets |
239,497 | 271,748 | ||||||
Net property, plant and equipment |
132,424 | 150,837 | ||||||
Other assets |
165,510 | 151,113 | ||||||
Total assets |
537,431 | 573,698 | ||||||
Current portion long-term liabilities |
$ | 55,000 | $ | 60,705 | ||||
Accounts Payable |
54,281 | 49,276 | ||||||
Current liabilities |
144,477 | 144,343 | ||||||
Long-term liabilities |
95,928 | 142,040 | ||||||
Stockholders equity |
297,026 | 287,315 | ||||||
Total liabilities and stockholders equity |
537,431 | 573,698 | ||||||
SUPPLEMENTAL DATA |
First Quarter | Fourth Quarter | |||||||||||
2007 | 2006 | 2006 | ||||||||||
EBITDA |
$ | 25,468 | $ | 16,678 | $ | 18,454 | ||||||
EBITA |
$ | 19,608 | $ | 14,267 | $ | 13,409 | ||||||
Gross margin |
19.6 | % | 27.8 | % | 19.1 | % | ||||||
EBITDA margin |
14.4 | 22.9 | 12.8 | |||||||||
Operating margin |
10.1 | 17.8 | 8.0 | |||||||||
End Market Breakdown: |
First Quarter | ||||||||
2007 | 2006 | |||||||
Networking/Communications |
43 | % | 42 | % | ||||
Aerospace/Defense |
28 | 13 | ||||||
Computing/Storage/Peripherals |
13 | 32 | ||||||
Medical/Industrial/Instrumentation/Other |
16 | 13 | ||||||
Stock-based Compensation: |
First Quarter | Fourth Quarter | |||||||||||
2007 | 2006 | 2006 | ||||||||||
Amount included in: |
||||||||||||
Cost of goods sold |
$ | 187 | $ | 90 | $ | 154 | ||||||
Selling and marketing |
50 | 20 | 42 | |||||||||
General and administrative |
423 | 145 | 318 | |||||||||
Total stock-based compensation expense |
$ | 660 | $ | 255 | $ | 514 | ||||||
RECONCILIATIONS* |
First Quarter | Fourth Quarter | |||||||||||
2007 | 2006 | 2006 | ||||||||||
EBITA/EBITDA reconciliation: |
||||||||||||
Net income |
$ | 8,465 | $ | 8,811 | $ | 5,149 | ||||||
Add back items: |
||||||||||||
Income taxes |
4,990 | 5,065 | 4,093 | |||||||||
Interest expense |
5,098 | 61 | 3,253 | |||||||||
Amortization of intangibles |
1,055 | 330 | 914 | |||||||||
EBITA |
19,608 | 14,267 | 13,409 | |||||||||
Depreciation expense |
5,860 | 2,411 | 5,045 | |||||||||
EBITDA |
$ | 25,468 | $ | 16,678 | $ | 18,454 | ||||||
* | 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.