EX-99.1
Published on May 17, 2005
Searchable text section of graphics shown above
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 Companys 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
Company Overview
TTM is a leading provider of time-critical and technologically complex printed circuit boards to the worlds 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 Dynamics and
Key Success Factors
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Current Industry Dynamics |
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Key Success Factors |
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Continued outlook for relatively stable industry conditions |
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Capacity in place for complex products and short lead times |
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High volume, low-mix, low-technology production transitioning to Asia |
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Focus on quick-turn, high-mix and technology limits foreign competition |
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Significant consolidation of North American capacity |
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Well-capitalized firms with targeted strategy gaining share |
TTM is Positioned to Capitalize on Industry Trends
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PCB Competitive Landscape
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Asian focus |
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Competitive markets |
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Panel Volume (lots) |
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High (> 1,000) |
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PCs Computer peripherals Automotive Consumer electronics |
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Cell phones Advanced PDAs Power supplies |
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Limited product application |
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Medium (100 < 1,000) |
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PCs Computer peripherals |
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Low-end servers High-end computers |
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High-end servers Telecom infrastructure High-end networking |
TTM |
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Low (< 100) |
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Misc. industrial equipment Low-end aerospace/defense |
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Semicap equipment Medical equipment Aerospace/defense Instrumentation Industrial equipment |
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Specialized communications High-end aerospace/defense |
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Quick-Turn |
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0-8 layers, |
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9-15 layers, |
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16+ layers, |
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standard materials |
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standard materials |
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exotic materials |
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Technology Level |
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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
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Pure
Play |
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Conglomerates |
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Integrated EMS |
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TTM |
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Tyco |
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DDi |
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Merix |
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EIT |
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Photocircuits |
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Sanmina-SCI |
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TTM Benefiting from Ongoing Industry Consolidation
Source: Henderson Ventures; N.T. Information Ltd. (Dr. Hayao Nakahara). Excludes companies focused on flex circuits.
10
TTMs Strategy
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Customers / End Markets
Diverse base of industry leading customers
Early access to emerging customers and niche end-markets
Global sales reach |
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Technology
High performance, technologically complex PCBs
Advanced manufacturing processes & technology expertise
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Industry
Leading |
Time
Dedicated ultra-short lead time capability (<24 hours available)
Dedicated, highly flexible, ramp-to-volume production in <10 days
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Industry leading avg. layer count of 20+ at Chippewa Falls facility |
Strong
Long-Term |
High-mix complex technology production with standard delivery |
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Financial Strength
Focus on operational excellence
Superior asset management and strong balance sheet
Successful integration of opportunistic acquisitions |
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Facility Specialization Strategy
[CHART]
Mission-Focused Facilities Speed, Flexibility and Technology
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Price by Delivery Time
[CHART]
Quick-Turn Revenue (10 days or less)
~20% 2004
~21% 1Q 2005
Quick-Turn Service Allows Premium Pricing
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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
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TTM Shipments |
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by Geography |
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Technical |
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Inventory |
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1Q 2005 |
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Sales |
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Support |
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Hub |
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Europe |
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12 |
% |
3 |
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1 |
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1 |
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Asia & ROW |
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% |
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North America |
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70 |
% |
83 |
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Total |
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91 |
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13 |
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7 |
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Integrated Direct and Rep Network Driving Incremental Sales
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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
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Enterprise I/T |
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High-End |
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Networking / |
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52% |
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Telecom Service Provider |
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23% |
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Other End Markets |
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Indust./Med. - 14% |
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25% |
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Customers
Top OEM
Customers
Cisco
General Electric
Hewlett-Packard
IBM
Juniper
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Top 5 |
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59% |
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Top 10 |
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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
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Networking & Communications |
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49 |
% |
[LOGO] |
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High-End Computing |
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% |
[LOGO] |
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Industrial & Medical |
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% |
[LOGO] |
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Computer Peripherals |
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% |
[LOGO] |
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Handheld & Other |
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% |
[LOGO] |
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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
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)
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2004 |
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2005 |
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1Q |
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2Q |
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3Q |
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4Q |
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1Q |
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2QE |
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Sales |
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$ |
57.7 |
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$ |
61.6 |
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$ |
62.2 |
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$ |
59.2 |
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$ |
58.9 |
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58.0-$61.0 |
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Gross Profit |
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17.3 |
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19.1 |
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17.6 |
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14.6 |
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13.5 |
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% Margin |
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30 |
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28 |
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25 |
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Operating Income* |
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10.7 |
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11.4 |
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12.1 |
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8.9 |
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7.5 |
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GAAP Diluted EPS |
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$ |
0.15 |
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0.17 |
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0.19 |
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0.16 |
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$ |
0.11 |
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0.10-$0.12 |
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Operating Cash Flow |
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$ |
7.5 |
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$ |
14.1 |
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$ |
17.8 |
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$ |
9.4 |
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$ |
5.5 |
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Inventory Turns |
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17 |
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17 |
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21 |
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21 |
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19 |
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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)
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12/31/03 |
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12/31/04 |
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04/04/05 |
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Cash & ST Investments |
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$ |
31.7 |
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$ |
58.5 |
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$ |
61.9 |
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Net Cash |
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23.9 |
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58.5 |
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61.9 |
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Total Shareholders Equity |
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178.3 |
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211.6 |
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217.1 |
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Total Capitalization |
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186.1 |
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211.6 |
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217.1 |
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Well-Capitalized for Future Growth
27
Conclusion
Solid industry fundamentals
Focused strategy and strong market position
Demonstrated execution excellence
Industry leading financial performance
28
Annual EBITDA
Reconciliation
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1998 |
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1999 |
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2000 |
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2001 |
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2002 |
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2003 |
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2004 |
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Net Income (loss) |
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$ |
8.4 |
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$ |
(0.2 |
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28.1 |
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$ |
11.0 |
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$ |
1.6 |
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$ |
7.4 |
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$ |
28.3 |
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Add back items: |
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Income taxes |
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(5.0 |
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6.2 |
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(2.3 |
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3.9 |
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13.2 |
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Interest expense |
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0.9 |
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10.4 |
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12.2 |
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2.6 |
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1.1 |
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0.6 |
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0.4 |
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Amortization of debt issuance costs |
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0.1 |
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0.8 |
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0.7 |
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0.1 |
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0.1 |
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0.1 |
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0.2 |
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Depreciation of property, plant, and equipment |
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3.0 |
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3.6 |
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5.5 |
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8.3 |
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8.8 |
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7.8 |
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8.2 |
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Amortization of intangibles |
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2.2 |
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4.8 |
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4.8 |
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1.2 |
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1.3 |
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1.3 |
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Total Add back items |
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4.0 |
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17.1 |
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18.2 |
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22.0 |
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8.9 |
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13.7 |
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23.3 |
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EBITDA |
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12.4 |
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16.8 |
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46.3 |
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33.0 |
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10.5 |
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21.1 |
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51.6 |
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31
Quarterly EBITDA
Reconciliation
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2003 |
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2004 |
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2005 |
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1 Q |
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2 Q |
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3 Q |
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4 Q |
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1 Q |
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2 Q |
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3 Q |
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4 Q |
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1 Q |
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Net Income (loss) |
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$ |
(0.2 |
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$ |
0.4 |
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$ |
2.5 |
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$ |
4.7 |
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$ |
6.5 |
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$ |
6.9 |
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$ |
8.0 |
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$ |
6.9 |
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$ |
4.5 |
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Add back items: |
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Income taxes |
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(0.4 |
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0.2 |
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1.4 |
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2.8 |
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3.9 |
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4.1 |
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3.6 |
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1.6 |
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2.7 |
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Interest expense |
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0.2 |
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0.2 |
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0.1 |
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0.1 |
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0.1 |
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0.1 |
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0.1 |
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0.1 |
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0.1 |
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Amortization of debt issuance costs |
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0.0 |
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0.0 |
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0.0 |
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0.0 |
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0.0 |
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0.0 |
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0.1 |
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0.0 |
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0.0 |
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Depreciation of property, plant, and equipment |
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1.9 |
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2.0 |
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1.9 |
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2.0 |
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2.0 |
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2.1 |
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2.1 |
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2.1 |
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2.1 |
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Amortization of intangibles |
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0.3 |
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0.3 |
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0.3 |
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0.3 |
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0.3 |
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0.3 |
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0.3 |
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0.3 |
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0.3 |
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Total Add back items |
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2.0 |
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2.7 |
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3.7 |
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5.2 |
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6.3 |
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6.6 |
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6.2 |
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4.1 |
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5.2 |
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EBITDA |
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1.8 |
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3.1 |
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6.2 |
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9.9 |
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12.8 |
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13.5 |
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14.2 |
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11.0 |
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9.7 |
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32