Form: 8-K

Current report filing

May 12, 2005

Exhibit 99.1

 

 

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[GRAPHIC]

 

TTM Technologies, Inc

 

THE 7TH ANNUAL TECHNOLOGY CONFERENCE

 

[LOGO]

 



 

[GRAPHIC]

 

Safe Harbor Provision

 

[LOGO]

 

During the course of this presentation, we will make projections or other forward-looking statements regarding future events or the future financial performance of the Company.  We wish to caution you that such statements reflect only our current expectations, and that actual events or results may differ materially.

 

We refer you to the risk factors and cautionary language contained in the documents that the Company files from time to time with the Securities and Exchange Commission, specifically the Company’s most recent S-3 Registration Statement and Form 10-K.  Such documents contain and identify important factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.  We undertake no obligation to update such projections or such forward-looking statements in the future.

 

2



 

Kent Alder

 

President

and

Chief Executive Officer

 

3



 

Company Overview

 

TTM is a leading provider of time-critical and technologically complex printed circuit boards to the world’s leading electronic equipment designers and manufacturers

 

[GRAPHIC]

 

•                  “Pure Play” printed circuit board (PCB) manufacturer

 

•                  Focused on time (24 hrs to 10 days) & technology service segments

 

•                  Three integrated, mission-focused production facilities:

 

•                  Santa Ana, CA

•                  Redmond, WA

•                  Chippewa Falls, WI

 

•                  $58.9 million in 1Q 2005 sales

 

•                  1,736 employees

 

4



 

Investment Highlights

 

Focused Strategy & Leading Market Position

 

•                  Leader in most attractive PCB segments –  time & technology

•                  Mission-focused facilities – speed, flexibility and technology

 

Demonstrated Execution Excellence

 

•                  Strong relationships with leading OEM and EMS customers

•                  Proven ability to integrate acquisitions

•                  Cross-selling efforts leading to success

 

Industry Leading Financial Performance

 

•                  Profitable business model across cycle

•                  Strong balance sheet

 

Market Leadership. . .Focus. . . Execution. . . Performance

 

5



 

Attractiveness of
Time & Technology Strategy

 

Growth

 

•                  Early access to new customers with high-growth potential

•                  Key supplier to high-growth programs within market leaders

•                  Critical service for new product introduction across multiple industries

 

Limited Competition

 

•                  Difficult business model to replicate

•                  Significant technology expertise and investment required

•                  Quick-turn, high-mix production subject to less competition

 

Performance

 

•                  Time & technology focus allows premium pricing

•                  Leads to superior margins and profitability

 

Consistent Strategic Focus Driving Growth and Profitability

 

6



 

Industry Overview

 

7



 

Industry Dynamics and
Key Success Factors

 

Current Industry Dynamics

 

Key Success Factors

 

 

 

•     Continued outlook for relatively stable industry conditions

 

•     Capacity in place for complex products and short lead times

 

 

 

•                  High volume, low-mix, low-technology production transitioning to Asia

 

•     Focus on quick-turn, high-mix and technology limits foreign competition

 

 

 

•     Significant consolidation of North American capacity

 

•                  Well-capitalized firms with targeted strategy gaining share

 

TTM is Positioned to Capitalize on Industry Trends

 

8



 

PCB Competitive Landscape

 

 

 

•

Asian focus

 

 

 

 

 

 

•

Competitive markets

 

Panel Volume (lots)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High (> 1,000)

 

•  PCs

•  Computer peripherals

•  Automotive

•  Consumer electronics

 

•  Cell phones

•  Advanced PDAs

•  Power supplies

 

•  Limited product application

 

 

 

 

 

 

 

 

 

Medium (100 < 1,000)

 

•  PCs

•  Computer peripherals

 

•  Low-end servers

•  High-end computers

 

•  High-end servers

•  Telecom infrastructure

•  High-end networking

TTM
focus

 

 

 

 

 

 

 

 

Low (< 100)

 

•  Misc. industrial equipment

•  Low-end aerospace/defense

 

•  Semicap equipment

•  Medical equipment

•  Aerospace/defense

•  Instrumentation

•  Industrial equipment

 

•  Specialized communications

•  High-end aerospace/defense

 

 

 

 

 

 

 

 

Quick-Turn

 

 

 

 

 

 

 

0-8 layers,

 

9-15 layers,

 

16+ layers,

 

 

 

standard materials

 

standard materials

 

exotic materials

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology Level

 

 

 

 

9



 

North American
PCB Market Overview

 

•                  $5.7 billion North American PCB market in 2004

 

•                  Total number of PCB manufacturers has been reduced by approximately 50%

 

•                  950 companies in 1992 to fewer than 500 in 2004

 

•                  30 – 40% of PCB capacity has been removed since 2000 peak

 

•                  Only 7 PCB fabricators with greater than $100 million in 2004 revenue

 

“Pure Play”
Independent

 

Conglomerates

 

Integrated EMS

 

•                  TTM

 

•                  Tyco

 

•                  DDi

 

•                  Merix

 

 

 

•                  EIT

 

•                  Photocircuits

 

 

 

•                  Sanmina-SCI

 

 

TTM Benefiting from Ongoing Industry Consolidation

 


Source:   Henderson Ventures; N.T. Information Ltd. (Dr. Hayao Nakahara).  Excludes companies focused on flex circuits.

 

10



 

TTM’s Strategy

 

11



 

TTM’s Strategy

 

 

Customers / End Markets

 

•     Diverse base of industry leading customers

 

•     Early access to emerging customers and niche end-markets

 

•     Global sales reach

 

 

 

 

Technology

 

•     High performance, technologically complex PCBs

 

•     Advanced manufacturing processes & technology expertise

 

Industry Leading
Execution and
Financial Results

Time

 

•     Dedicated ultra-short lead time capability (<24 hours available)

 

•     Dedicated, highly flexible, ramp-to-volume production in <10 days

 

•                  Industry leading avg. layer count of 20+ at Chippewa Falls facility

Strong Long-Term
Outlook

•                  High-mix complex technology production with standard delivery

 

 

 

 

Financial Strength

 

•     Focus on operational excellence

 

•     Superior asset management and strong balance sheet

 

•     Successful integration of opportunistic acquisitions

 

 

12



 

Facility Specialization Strategy

 

[CHART]

 

Mission-Focused Facilities – Speed, Flexibility and Technology

 

13



 

Price by Delivery Time

 

[CHART]

 

Quick-Turn Revenue (10 days or less)

•                  ~20% 2004

•                  ~21% 1Q 2005

 

Quick-Turn Service Allows Premium Pricing

 

14



 

Revenue By Layer Count

 

Percentage of Revenue

 

[CHART]

 

Avg. Layer Count

 

1Q 2005 = 16.1

 

2000 =   8.3

 

Continuing to Upgrade Technological Capabilities

 

15



 

Global Sales Reach

 

 

 

TTM Shipments

 

 

 

 

 

 

 

 

 

by Geography

 

 

 

Technical

 

Inventory

 

 

 

1Q 2005

 

Sales

 

Support

 

Hub

 

 

 

 

 

 

 

 

 

 

 

Europe

 

12

%

3

 

1

 

1

 

 

 

 

 

 

 

 

 

 

 

Asia & ROW

 

18

%

5

 

1

 

2

 

 

 

 

 

 

 

 

 

 

 

North America

 

70

%

83

 

11

 

4

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

91

 

13

 

7

 

 

Integrated Direct and Rep Network Driving Incremental Sales

 

16



 

Customer Concentration

 

Percentage of Revenue

 

[CHART]

 

Increased Exposure to End Market Leaders

 


*Pro forma for the acquisition of Power Circuits, which occurred in July 1999.

 

17



 

Revenue Chain

 

1Q 2005 - % of total production revenues

 

End Markets

 

Enterprise I/T

 

High-End
Computing
26%

 

Networking /
Comms
49%

 

52%

 

 

 

 

 

 

 

Telecom Service Provider

 

 

 

23%

 

 

 

 

 

 

 

 

 

Other End Markets

 

Indust./Med. - 14%
Peripherals - 5%
Handheld/Other - 6%

 

25%

 

 

 

Customers

 

Top OEM
Customers

 

• Cisco

• General Electric

• Hewlett-Packard

• IBM

• Juniper

 

Top 5

=

59%

Top 10

=

68%

 

 

EMS
Providers - 70%

 

• Benchmark

• Celestica

• Jabil

• Plexus

• Solectron

• Others

 

Shipped OEM-direct

30%

 

TTM Technologies

 

Enterprise IT Spending Primary End Market Driver

 

18



 

Key Customers by
End Market

 

Percentage of Revenue by End Market – 1Q 2005

 

 

Networking & Communications

 

49

%

[LOGO]

 

 

 

 

 

 

 

High-End Computing

 

26

%

[LOGO]

 

 

 

 

 

 

 

Industrial & Medical

 

14

%

[LOGO]

 

 

 

 

 

 

 

Computer Peripherals

 

5

%

[LOGO]

 

 

 

 

 

 

 

Handheld & Other

 

6

%

[LOGO]

 

 

Leading Positions with Industry Leaders. . .
Approximately 550 Active Customers

 

19



 

Compelling
Growth Opportunities

 

•                  One-stop manufacturing solution with numerous cross-selling opportunities

 

•                  Quick-turn capabilities for attracting emerging high-growth customers

 

•                  Leadership in technology and advanced manufacturing processes

 

•                  Capacity available through low risk, low cost expansion plan

 

•                  Successful track record of completing and integrating acquisitions

 

20



 

Stacey Peterson

 

Chief Financial Officer

 

21



 

Annual Sales

 

Sales ($mm)

 

[CHART]

 

 

22



 

Quarterly Sales

 

Sales ($mm)

 

[CHART]

 

23



 

Annual EBITDA* and
EBITDA* Margin

 

[CHART]

 


*                 Please see Appendix for EBITDA reconciliation. EBITDA means earnings before interest expense (including amortization of debt issuance costs), income taxes, depreciation and amortization.

 

24



 

Quarterly EBITDA* and
EBITDA* Margin

 

[CHART]

 


*                 Please see Appendix for EBITDA reconciliation. EBITDA means earnings before interest expense (including amortization of debt issuance costs), income taxes, depreciation and amortization.

 

25



 

Quarterly Results and
Estimates

 

($mm, except per share data)

 

 

 

2004

 

2005

 

 

 

1Q

 

2Q

 

3Q

 

4Q

 

1Q

 

2QE

 

Sales

 

$

57.7

 

$

61.6

 

$

62.2

 

$

59.2

 

$

58.9

 

$

58.0-$61.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

17.3

 

19.1

 

17.6

 

14.6

 

13.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Margin

 

30

%

31

%

28

%

25

%

23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income*

 

10.7

 

11.4

 

12.1

 

8.9

 

7.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Diluted EPS

 

$

0.15

 

$

0.17

 

$

0.19

 

$

0.16

**

$

0.11

 

$

0.10-$0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Cash Flow

 

$

7.5

 

$

14.1

 

$

17.8

 

$

9.4

 

$

5.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory Turns

 

17

x

17

x

21

x

21

x

19

x

 

 

 

Guidance Remains Solid

 


*Earnings before interest expense (including amortization of debt issuance costs), income taxes and amortization.

**Excluding reversal of deferred tax asset, diluted EPS would have been $0.14

 

26



 

Capitalization

 

($mm)

 

 

 

12/31/03

 

12/31/04

 

04/04/05

 

 

 

 

 

 

 

 

 

Cash & ST Investments

 

$

31.7

 

$

58.5

 

$

61.9

 

 

 

 

 

 

 

 

 

Net Cash

 

23.9

 

58.5

 

61.9

 

 

 

 

 

 

 

 

 

Total Shareholders’ Equity

 

178.3

 

211.6

 

217.1

 

 

 

 

 

 

 

 

 

Total Capitalization

 

186.1

 

211.6

 

217.1

 

 

Well-Capitalized for Future Growth

 

27



 

Conclusion

 

•                  Solid industry fundamentals

 

•                  Focused strategy and strong market position

 

•                  Demonstrated execution excellence

 

•                  Industry leading financial performance

 

28



 

[GRAPHIC]

 

[LOGO]

 



 

Appendix

 

Appendix

 

30



 

Annual EBITDA
Reconciliation

 

 

 

1998

 

1999

 

2000

 

2001

 

2002

 

2003

 

2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (loss)

 

$

8.4

 

$

 (0.2

)

$

28.1

 

$

11.0

 

$

1.6

 

$

7.4

 

$

28.3

 

Add back items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

—

 

—

 

(5.0

)

6.2

 

(2.3

)

3.9

 

13.2

 

Interest expense

 

0.9

 

10.4

 

12.2

 

2.6

 

1.1

 

0.6

 

0.4

 

Amortization of debt issuance costs

 

0.1

 

0.8

 

0.7

 

0.1

 

0.1

 

0.1

 

0.2

 

Depreciation of property, plant, and equipment

 

3.0

 

3.6

 

5.5

 

8.3

 

8.8

 

7.8

 

8.2

 

Amortization of intangibles

 

—

 

2.2

 

4.8

 

4.8

 

1.2

 

1.3

 

1.3

 

Total Add back items

 

4.0

 

17.1

 

18.2

 

22.0

 

8.9

 

13.7

 

23.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

12.4

 

16.8

 

46.3

 

33.0

 

10.5

 

21.1

 

51.6

 

 

31



 

Quarterly EBITDA
Reconciliation

 

 

 

2003

 

2004

 

2005

 

 

 

1 Q

 

2 Q

 

3 Q

 

4 Q

 

1 Q

 

2 Q

 

3 Q

 

4 Q

 

1 Q

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (loss)

 

$

(0.2

)

$

0.4

 

$

2.5

 

$

4.7

 

$

6.5

 

$

6.9

 

$

8.0

 

$

6.9

 

$

4.5

 

Add back items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

(0.4

)

0.2

 

1.4

 

2.8

 

3.9

 

4.1

 

3.6

 

1.6

 

2.7

 

Interest expense

 

0.2

 

0.2

 

0.1

 

0.1

 

0.1

 

0.1

 

0.1

 

0.1

 

0.1

 

Amortization of debt issuance costs

 

0.0

 

0.0

 

0.0

 

0.0

 

0.0

 

0.0

 

0.1

 

0.0

 

0.0

 

Depreciation of property, plant, and  equipment

 

1.9

 

2.0

 

1.9

 

2.0

 

2.0

 

2.1

 

2.1

 

2.1

 

2.1

 

Amortization of intangibles

 

0.3

 

0.3

 

0.3

 

0.3

 

0.3

 

0.3

 

0.3

 

0.3

 

0.3

 

Total Add back items

 

2.0

 

2.7

 

3.7

 

5.2

 

6.3

 

6.6

 

6.2

 

4.1

 

5.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

1.8

 

3.1

 

6.2

 

9.9

 

12.8

 

13.5

 

14.2

 

11.0

 

9.7

 

 

32