August 10, 2023 - 10-Q: Quarterly report pursuant to Section 13 or 15(d)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 3, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to____________

Commission File Number: 000-31285

TTM TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware

91-1033443

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

200 East Sandpointe, Suite 400, Santa Ana, California 92707

(Address of principal executive offices)

(714) 327-3000

(Registrant’s telephone number, including area code)

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, $0.001 par value

TTMI

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of August 4, 2023, there were outstanding 103,871,225 shares of the registrant’s Common Stock, $0.001 par value.

TTM TECHNOLOGIES, INC.

Form 10-Q

For the Quarter Ended July 3, 2023

TABLE OF CONTENTS

Page

PART I: FINANCIAL INFORMATION 

3

Item 1. Financial Statements (unaudited)

3

Consolidated Condensed Balance Sheets as of July 3, 2023 and January 2, 2023

3

Consolidated Condensed Statements of Operations for the quarter and two quarters ended July 3, 2023 and July 4, 2022

4

Consolidated Condensed Statements of Comprehensive Income (Loss) for the quarter and two quarters ended July 3, 2023 and July 4, 2022

5

Consolidated Condensed Statements of Stockholders' Equity for the two quarters ended July 3, 2023 and July 4, 2022

6

Consolidated Condensed Statements of Cash Flows for the two quarters ended July 3, 2023 and July 4, 2022

7

Notes to Consolidated Condensed Financial Statements

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

Item 3. Quantitative and Qualitative Disclosures About Market Risk

28

Item 4. Controls and Procedures

30

PART II: OTHER INFORMATION

31

Item 1. Legal Proceedings

31

Item 1A. Risk Factors

31

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

47

Item 3. Defaults Upon Senior Securities

47

Item 4. Mine Safety Disclosures

47

Item 5. Other Information

47

Item 6. Exhibits

48

SIGNATURES

49

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

TTM TECHNOLOGIES, INC.

Consolidated Condensed Balance Sheets

As of July 3, 2023 and January 2, 2023


	As of
	July 3,			January 2,
	2023			2023
	(Unaudited)
	(In thousands, except par value)
ASSETS
Current assets:
Cash and cash equivalents	$	398,716		$	402,749
Accounts receivable, net		386,903			473,225
Contract assets		312,529			335,788
Inventories		186,765			170,639
Receivable from sale of Shanghai E-MS (SH E-MS) property		6,595			69,240
Prepaid expenses and other current assets		44,546			41,415
Total current assets		1,336,054			1,493,056
Property, plant and equipment, net		709,577			724,204
Operating lease right-of-use assets		14,041			18,862
Goodwill		746,835			760,437
Definite-lived intangibles, net		264,240			288,037
Deposits and other non-current assets		77,744			39,008
Total assets	$	3,148,491		$	3,323,604

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt, including current portion of long-term debt	$	3,500		$	50,000
Accounts payable		306,298			361,788
Contract liabilities		115,246			103,981
Accrued salaries, wages and benefits		74,097			115,524
Other current liabilities		103,243			130,032
Total current liabilities		602,384			761,325
Long-term debt, net of discount and issuance costs		864,413			879,407
Operating lease liabilities		8,804			12,249
Other long-term liabilities		128,581			135,044
Total long-term liabilities		1,001,798			1,026,700
Commitments and contingencies (Note 14)
Equity:
Common stock, $0.001 par value; 300,000 shares authorized; 111,240 and 109,598 shares issued as of July 3, 2023 and January 2, 2023, respectively; 103,870 and 102,228 shares outstanding as of July 3, 2023 and January 2, 2023, respectively		111			110
Treasury stock – common stock at cost; 7,370 shares as of July 3, 2023 and January 2, 2023		(98,659	)		(98,659	)
Additional paid-in capital		868,437			858,077
Retained earnings		801,851			800,841
Accumulated other comprehensive loss		(27,431	)		(24,790	)
Total stockholders’ equity		1,544,309			1,535,579
Total liabilities and stockholders' equity	$	3,148,491		$	3,323,604

See accompanying notes to consolidated condensed financial statements.

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Operations

For the Quarter and Two Quarters Ended July 3, 2023 and July 4, 2022


	Quarter Ended						Two Quarters Ended
	July 3,			July 4,			July 3,			July 4,
	2023			2022			2023			2022
	(Unaudited)
	(In thousands, except per share data)
Net sales	$	546,509		$	625,550		$	1,090,946		$	1,206,810
Cost of goods sold		448,002			508,477			906,316			998,814
Gross profit		98,507			117,073			184,630			207,996
Operating expenses:
Selling and marketing		18,180			17,557			39,482			35,829
General and administrative		37,840			48,350			72,913			81,120
Research and development		6,424			5,233			13,509			10,788
Amortization of definite-lived intangibles		3,852			8,275			25,816			16,549
Restructuring charges		10,803			456			14,970			640
Total operating expenses		77,099			79,871			166,690			144,926
Operating income		21,408			37,202			17,940			63,070
Other (expense) income:
Interest expense		(11,843	)		(10,711	)		(24,650	)		(22,072	)
Loss on extinguishment of debt		(1,154	)		—			(1,154	)		—
(Loss) gain on sale of subsidiary		(69	)		—			1,270			—
Other, net		5,068			7,638			6,266			9,608
Total other expense, net		(7,998	)		(3,073	)		(18,268	)		(12,464	)
Income (loss) before income taxes		13,410			34,129			(328	)		50,606
Income tax (provision) benefit		(6,586	)		(6,337	)		1,338			(5,568	)
Net income	$	6,824		$	27,792		$	1,010		$	45,038

Earnings per share:
Basic earnings per share	$	0.07		$	0.27		$	0.01		$	0.44
Diluted earnings per share	$	0.07		$	0.27		$	0.01		$	0.43

See accompanying notes to consolidated condensed financial statements.

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Comprehensive Income (Loss)

For the Quarter and Two Quarters Ended July 3, 2023 and July 4, 2022


	Quarter Ended						Two Quarters Ended
	July 3,			July 4,			July 3,			July 4,
	2023			2022			2023			2022
	(Unaudited)
	(In thousands)
Net income	$	6,824		$	27,792		$	1,010		$	45,038
Other comprehensive income (loss), net of tax:
Pension obligation adjustments, net		(1	)		—			—			—
Foreign currency translation adjustments		(463	)		(1,700	)		(433	)		(1,736	)
Derecognition of foreign currency translation adjustments due to sale of subsidiary		—			—			(6,627	)		—
Net unrealized gain (loss) on cash flow hedges:
Unrealized gain (loss) on effective cash flow hedges during the period, net		5,820			(129	)		5,140			24
(Loss) gain realized in the statement of operations, net		(726	)		1,053			(721	)		3,087
Net		5,094			924			4,419			3,111
Other comprehensive income (loss), net of tax		4,630			(776	)		(2,641	)		1,375
Comprehensive income (loss), net of tax	$	11,454		$	27,016		$	(1,631	)	$	46,413

See accompanying notes to consolidated condensed financial statements.

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Stockholders’ Equity

For the Two Quarters Ended July 3, 2023 and July 4, 2022


	Common Stock				Treasury Stock						Additional Paid-In			Retained			Accumulated Other Comprehensive			Total Stockholders'
	Shares		Amount		Shares			Amount			Capital			Earnings			(Loss) Income			Equity
	(Unaudited)
	(In thousands)
Balance, January 2, 2023		109,598	$	110		(7,370	)	$	(98,659	)	$	858,077		$	800,841		$	(24,790	)	$	1,535,579
Net loss		—		—		—			—			—			(5,814	)		—			(5,814	)
Other comprehensive loss		—		—		—			—			—			—			(7,271	)		(7,271	)
Issuance of common stock for performance-based restricted stock units		337		—		—			—			—			—			—			—
Issuance of common stock for restricted stock units		21		—		—			—			—			—			—			—
Stock-based compensation		—		—		—			—			5,240			—			—			5,240
Balance, April 3, 2023		109,956	$	110		(7,370	)	$	(98,659	)	$	863,317		$	795,027		$	(32,061	)	$	1,527,734
Net income		—		—		—			—			—			6,824			—			6,824
Other comprehensive income		—		—		—			—			—			—			4,630			4,630
Issuance of common stock for restricted stock units		1,284		1		—			—			(1	)		—			—			—
Stock-based compensation		—		—		—			—			5,121			—			—			5,121
Balance, July 3, 2023		111,240	$	111		(7,370	)	$	(98,659	)	$	868,437		$	801,851		$	(27,431	)	$	1,544,309


	Common Stock				Treasury Stock						Additional Paid-In		Retained		Accumulated Other Comprehensive			Total Stockholders'
	Shares		Amount		Shares			Amount			Capital		Earnings		(Loss) Income			Equity
	(Unaudited)
	(In thousands)
Balance, January 3, 2022		108,194	$	108		(4,661	)	$	(63,807	)	$	840,113	$	706,258	$	(27,255	)	$	1,455,417
Net income		—		—		—			—			—		17,246		—			17,246
Other comprehensive income		—		—

Form: 10-Q

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TTM TECHNOLOGIES, INC.