EX-99.1
Published on October 26, 2004
Exhibit 99.1
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Contact: |
Stacey Peterson |
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Chief Financial Officer |
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714/241-0303 |
TTM TECHNOLOGIES, INC. REPORTS RESULTS FOR THE THIRD QUARTER OF 2004
SANTA ANA, CA October 26, 2004 TTM Technologies, Inc. (Nasdaq: TTMI), a leading manufacturer of time-critical and technologically advanced printed circuit boards, today reported results for the third quarter ended September 27, 2004.
Third-Quarter Results
We maintained solid revenues and profitability in the third quarter of 2004, said Kent Alder, President and CEO of TTM Technologies. Cash flow from operations of $17.8 million represented our seventeenth consecutive quarter of positive cash flow from operations. And we now have a debt-free balance sheet.
Third quarter 2004 revenue increased 37 percent to $62.2 million, compared to $45.3 million for the third quarter of 2003. Sequentially, from the second quarter of 2004, revenues increased $600,000, or 1 percent.
For the third quarter of 2004, quick-turn business represented 22 percent of total revenues, compared to 25 percent for the third quarter of 2003 and 22 percent for the second quarter of 2004. The percentage declined, year-over-year, due to higher growth in standard lead-time products.
Gross margin increased to 28.4 percent for the third quarter of 2004, compared to 20.9 percent for the third quarter of 2003. Sequentially, gross margin declined from 31.0 percent for the second quarter of 2004, primarily due to product mix changes and lower efficiency, particularly at the Redmond division.
TTM posted an operating profit of $11.6 million for the third quarter of 2004, compared to $3.7 million for the third quarter of 2003 and $11.0 million for the second quarter of 2004. Second quarter 2004 operating profit included a pretax restructuring charge of $855,000 to write down the value of the Burlington property, which was closed two years ago and has been sold in the fourth quarter of 2004.
Net income for the third quarter of 2004 was $8.0 million, or $0.19 per diluted share, compared with $6.9 million, or $0.17 per diluted share, for the second quarter of 2004, and $2.5 million, or $0.06 per diluted share, for the third quarter of 2003. A lower tax rate in the third quarter of 2004 added approximately $0.01 to diluted earnings per share. Second quarter 2004 net income included a non-cash restructuring charge that reduced after-tax earnings by $539,000, or $0.01 per diluted share.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2004 was $14.2 million, up from $6.3 million for the third quarter of 2003 and $13.5 million for the second quarter of 2004.
While business conditions were relatively stable overall, we have experienced some variability by customer and end market, stated Alder. Our quick-turn business improved over the course of the third quarter compared to the softness experienced at the end of the second quarter. However, we still have not seen a pick up in the ramp-to-volume portion of our quick-turn business.
Financial Strength
Due to our strong cash flow in the third quarter, we were able to fund net capital expenditures of $5.7 million, pay down the remaining outstanding debt of $6.7 million, and expand our cash and short-term investments by $5.5 million to $52.6 million, said Alder.
Outlook
For the fourth quarter of 2004, TTM is estimating revenues of $58 million to $62 million and earnings of $0.14 to $0.18 per diluted share. While overall business remains relatively healthy, we continue to see mixed demand from individual customers and certain end markets, concluded Alder. We anticipate slight pressure on pricing, and a raw material price increase that took place October 1, 2004, is expected to trim gross margins by one percentage point.
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 companys 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 third-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 November 2, 2004, on the companys Web site, www.ttmtech.com.
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, increased competition from low-cost foreign manufacturers, and other Risk Factors set forth in the companys most recent SEC filings.
- Tables Follow -
TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS
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Third Quarter |
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Second Quarter |
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First Three Fiscal Quarters |
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2004 |
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2003 |
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2004 |
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2004 |
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2003 |
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Net sales |
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$ |
62,195 |
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$ |
45,327 |
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$ |
61,595 |
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$ |
181,486 |
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$ |
126,008 |
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Cost of goods sold |
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44,557 |
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35,871 |
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42,519 |
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127,492 |
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105,580 |
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Gross profit |
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17,638 |
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9,456 |
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19,076 |
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53,994 |
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20,428 |
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Operating expenses: |
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Selling and marketing |
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2,791 |
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2,704 |
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3,118 |
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8,950 |
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7,893 |
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General and administrative |
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2,914 |
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2,740 |
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3,812 |
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10,234 |
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8,320 |
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Amortization of intangibles |
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300 |
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300 |
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301 |
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901 |
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901 |
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Restructuring charges |
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855 |
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855 |
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203 |
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Total operating expenses |
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6,005 |
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5,744 |
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8,086 |
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20,940 |
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17,317 |
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Operating income |
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11,633 |
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3,712 |
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10,990 |
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33,054 |
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3,111 |
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Interest expense |
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(82 |
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(144 |
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(107 |
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(309 |
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(451 |
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Amortization of debt issuance costs |
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(82 |
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(32 |
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(26 |
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(135 |
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(71 |
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Interest income and other, net |
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191 |
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104 |
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116 |
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399 |
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269 |
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Income before income taxes and extraordinary item |
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11,660 |
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3,640 |
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10,973 |
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33,009 |
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2,858 |
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Income tax provision |
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(3,615 |
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(1,353 |
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(4,063 |
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(11,528 |
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(1,113 |
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Net income before extraordinary item |
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8,045 |
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2,287 |
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6,910 |
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21,481 |
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1,745 |
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Extraordinary gain |
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218 |
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1,042 |
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Net income |
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$ |
8,045 |
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$ |
2,505 |
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$ |
6,910 |
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$ |
21,481 |
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$ |
2,787 |
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Earnings per common share before extraordinary item: |
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Basic |
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$ |
0.20 |
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$ |
0.06 |
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$ |
0.17 |
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$ |
0.53 |
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$ |
0.04 |
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Diluted |
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0.19 |
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0.06 |
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0.17 |
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0.51 |
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0.04 |
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Earnings per common share: |
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Basic |
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0.20 |
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0.06 |
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0.17 |
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0.53 |
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0.07 |
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Diluted |
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0.19 |
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0.06 |
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0.17 |
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0.51 |
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0.07 |
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Weighted average common shares: |
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Basic |
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40,851 |
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39,929 |
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40,759 |
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40,740 |
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39,849 |
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Diluted |
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41,769 |
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41,151 |
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41,851 |
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41,932 |
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40,714 |
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SELECTED BALANCE SHEET DATA
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September 27, 2004 |
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December 31, 2003 |
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Cash and short-term investments |
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$ |
52,579 |
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$ |
31,745 |
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Accounts receivable, net |
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37,133 |
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28,519 |
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Inventories, net |
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7,258 |
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8,617 |
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Total current assets |
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101,283 |
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74,887 |
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Net property, plant and equipment |
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47,498 |
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43,536 |
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Other assets |
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78,172 |
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87,434 |
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Total assets |
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226,953 |
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205,857 |
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Current maturities of long-term debt |
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$ |
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$ |
4,444 |
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Other current liabilities |
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25,198 |
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18,091 |
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Long-term liabilities |
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624 |
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4,995 |
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Shareholders equity |
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201,131 |
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178,327 |
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Total liabilities and shareholders equity |
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226,953 |
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205,857 |
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SUPPLEMENTAL DATA
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Third Quarter |
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Second Quarter |
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First Three Fiscal Quarters |
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2004 |
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2003 |
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2004 |
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2004 |
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2003 |
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EBITDA |
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$ |
14,226 |
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$ |
6,265 |
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$ |
13,491 |
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$ |
40,529 |
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$ |
11,147 |
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EBITA |
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$ |
12,153 |
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$ |
4,363 |
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$ |
11,436 |
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$ |
34,441 |
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$ |
5,352 |
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Gross margin |
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28.4 |
% |
20.9 |
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31.0 |
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29.8 |
% |
16.2 |
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EBITDA margin |
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22.9 |
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13.8 |
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21.9 |
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22.3 |
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8.8 |
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Operating margin |
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18.7 |
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8.2 |
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17.8 |
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18.2 |
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2.5 |
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End Market Breakdown: |
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Third Quarter |
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2004 |
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2003 |
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Networking/communications |
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44.4 |
% |
41.7 |
% |
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High-end computing |
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30.8 |
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32.0 |
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Industrial/medical |
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13.7 |
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13.6 |
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Computer peripherals |
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5.0 |
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8.3 |
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Handheld |
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2.4 |
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1.5 |
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Other |
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3.7 |
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2.9 |
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RECONCILIATIONS*
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Third Quarter |
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Second Quarter |
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First Three Fiscal Quarters |
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2004 |
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2003 |
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2004 |
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2004 |
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2003 |
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EBITA/EBITDA reconciliation: |
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Net income |
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$ |
8,045 |
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$ |
2,505 |
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$ |
6,910 |
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$ |
21,481 |
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$ |
2,787 |
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Add back items: |
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Income taxes |
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3,615 |
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1,353 |
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4,063 |
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11,528 |
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1,113 |
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Interest expense |
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82 |
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144 |
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107 |
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309 |
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451 |
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Amortization of debt issuance costs |
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82 |
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32 |
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26 |
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135 |
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71 |
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Amortization of intangibles |
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330 |
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329 |
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330 |
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989 |
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930 |
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EBITA |
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12,154 |
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4,363 |
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11,436 |
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34,442 |
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5,352 |
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Depreciation expense |
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2,073 |
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1,902 |
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2,055 |
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6,088 |
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5,795 |
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EBITDA |
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$ |
14,227 |
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$ |
6,265 |
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$ |
13,491 |
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$ |
40,530 |
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$ |
11,147 |
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* This information provides a reconciliation of EBITA/EBITDA to the financial information in our consolidated statements of operations.