Form: 8-K

Current report filing

May 6, 2010

EXHIBIT 99.2
Global Presence / Local Knowledge
2010 First Quarter Earnings Call & Update
May 6, 2010
 
 

 
2
2
Safe Harbor
During the course of this call, the company will make forward-looking statements subject
to known and unknown risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements. Such risks and
uncertainties include, but are not limited to, fluctuations in quarterly and annual operating
results, the volatility and cyclicality of various industries that the company serves and the
impact of the current economic crisis and other risks described in TTM’s most recent
SEC filings. The company assumes no obligation to update the information provided in
this conference call.
The company also will present non-GAAP financial information in this call. For a
reconciliation of TTM’s non-GAAP financial information to the equivalent measures under
GAAP, please refer to the company’s press release, which was filed with the SEC and
which is posted on TTM’s website.
 
 

 
Global Presence / Local Knowledge
3
Q1 Overview
Kent Alder, CEO & President
 
 

 
4
Strategic Overview
4
 A stronger, world-class PCB
 manufacturer with the scale,
 production capabilities,
 market breadth and
 expanded customer service
 ability to lead in today’s
 competitive global PCB
 marketplace.
Restructuring
largely complete
Combination with
Meadville complete
 
 

 
5
5
Q1 2010 Highlights
1) Gross margin improved from 18.5 percent to 19.5 percent
  Revenue of $138.2 million came in at the upper end of guidance range
  2009 strategic restructuring working as planned
2) Cash generation of $7.2 million in the quarter
  Cash and cash equivalents, restricted cash and short term investments
 increased from $215.7 million in the fourth quarter to $222.9 million in
 the first quarter
3) Improved market conditions
  Commercial market supported firmer pricing especially in quick-turn
  Aerospace & Defense pricing higher due to product mix
 
 

 
6
$ in millions
Q1 2010 Segment Results
 
 

 
7
7
Q1 2010 End Market Update
 Aerospace & Defense
  Broad base of diverse programs provide stability
 and growth
  Second quarter forecast stable
 Networking/Communications
  Percentages down due to increased orders
 shipped at the end of Q4
  Second quarter forecast up due to more normal
 ordering patterns and end market strength
End Market
4Q09
1Q10
Aerospace & Defense
42%
42%
Networking /
Communications
38%
33%
Computing / Storage /
Peripherals
10%
13%
Medical / Industrial /
Instrument / Other
10%
12%
End Markets
 Medical / Industrial / Instrumentation / Other
  Increased on overall segment strength led by Medical and Instrumentation
  Second quarter up on continued broad based strength
 Computing / Storage / Peripherals
  Improvement due to increased orders from a large server and storage customer
  Sustain first quarter revenue level in the second quarter
 
 

 
 
8
8
Q1 2010 Customer & Order Update
Top 5
1Q10
31%
BAE, Cisco, Hamilton Sundstrand,
Huawei, Raytheon
Top 5
4Q09
34%
Cisco, Huawei, Juniper Networks,
Northrop Grumman, Raytheon
Top 5 OEM Customers
alphabetical order
Commercial
5 - 10
weeks
6 - 10
weeks
Stable
Aerospace &
Defense
5 - 8
weeks*
5 - 8
weeks*
Stable
Lead Times
4Q09
1Q10
* Some A&D products require 14-20 weeks lead time
TTM and IPC Book to Bill
Status
No single customer represented 10 percent or more
 of sales during 4Q09 and 1Q10
TTM
1.05
1.08
1.12
IPC
1.06
1.09
1.10
4Q09
1Q10
3Q09
Stable to slightly longer lead time at commercial
 plants
Lead time unchanged for Aerospace & Defense plants
Strong book to bill reflects improving market
 conditions
 
 

 
Global Presence / Local Knowledge
9
Financial Overview
Steve Richards, CFO
 
 

 
10
10
Income Statement - Q1 vs. Q4
 
 

 
11
11
Non-GAAP Results - Q1 vs. Q4
1 Non-GAAP net income & EPS, EDITDA and adjusted EBITDA in this slide are defined in our 1Q 2010 press release
 
 

 
Global Presence / Local Knowledge
12
Meadville Update
 
 

 
13
Aerospace /
Defense
 No. 1 North American
 supplier
 Rigid Flex and specialty
 PCB products
 Backplane and
 subassembly
Time
 Dedicated ultra-short
 lead time capability
 (<24 hours available)
 Dedicated, highly
 flexible, ramp-to-
 volume production in
 <10 days
 High-mix complex
 technology production
 with standard
 delivery
Financial Strength
 Focus on operational
 excellence
 Superior asset management
 and strong balance sheet
 Strong cash flow generation
 Successful integration of
 strategic acquisitions
Technology
 High performance,
 technologically complex
 PCBs
 Advanced manufacturing
 processes & technology
 expertise
 Industry-leading average
 layer count of 20+ at
 Chippewa Falls facility
Industry-Leading
Execution and
Financial Results
Global Presence -
Asian Capacity
 High volume capability
 Capture incremental business
 from existing customers
 Seamless transition of prototype
 to volume production
 Footprint to supply growing
 Asian demand
  Established financial model with
 leading growth and margin profile
  Excellent management team with
 extensive China manufacturing
 expertise
  Strong cultural fit - with similar
 business philosophies
  Advanced technology capabilities -
 best fit with TTM
  Specialized facility strategy
  Complementary customer base
 consisting of Tier 1 OEMs
  Diversified end-market mix
  Cost effective platform with
 significant China manufacturing
 capacity
TTM’s Asian M&A Criteria
Meadville
PCB Position
TTM Strategy
 
 

 
14
R&D
Growth
Maturity
NPI
Total Solution Capabilities
Engineering support
Prototype
Low volume / High mix
Medium volume / Ramp
Volume production
Product Life Cycle
Advanced
Technology &
Service Excellence
Total Customer Solution
 
 

 
15
Organization Structure
TTM Corporate
Headquarters
Santa Ana, CA U.S.A.
U.S. / Shanghai
Assembly Business
(1 plant in U.S.,
1 plant in China)
U.S. PCB
Business
(6 plants in U.S.)
Asian PCB
Business
(7 plants in China,
1 plant in Hong Kong)
Existing TTM
management team
Existing Meadville
management team
 
 

 
16
Revenue
by
 End-Market
TTM
Pro Forma
Meadville PCB
TTM
Pro Forma
Meadville PCB
Source: Company filings. Revenue for the calendar year 2009 period
The combination creates a leading global manufacturer with a highly diversified revenue mix
Notes:
 Americas includes United States, Canada, Central and South America. Greater China includes China, Hong Kong and Taiwan. Asia includes Asian countries excluding Greater China
 EMEA includes Europe, Middle East and Africa
Diversifying Revenue Base
 Revenue
 by
 Geography
 
 

 
17
17
Accretion and Synergies
 Accretion estimate
  Transaction expected to be accretive in the third quarter of 2010
 Revenue synergies
  Qualification process varies by customer
  Asian facilities ran at 75 to 95 percent of capacity in the first quarter
  Expanding capacity to accommodate growth
  2010 potential from “simple qualification” customers
  Targeting “comprehensive qualification” customers for late 2010 and 2011
 Cost synergies
  Minimal duplicative public company costs
  Better negotiations on direct materials due to larger scale of combined
 operations
  Transfer of best practices
 
 

 
18
Update on Board & Stockholders
 Ownership of shares
  36.3 million shares issued: 26.2 million to Tang family and 10.1 million to
 minority shareholders
  Meadville’s minority investors request to sell approximately 1.3 million
 shares of TTM stock
  Tang family, TTM’s largest minority shareholder, to retain 33 to 35
 percent stake in TTM
 Trading restrictions
  Tang family agreement prohibits sale of shares for 18 months; credit
 agreement requires Tangs to hold 20 percent stake in TTM
 Expansion of board
  Addition of Tom Tang, Managing Director of Asia Pacific Region
  Three new Government Security Committee members
 
 

 
19
19
2009 Pro Forma Combined Income Statement
1 Pro forma adjustments are disclosed in the Form 8-K/A filed with the SEC on April 26, 2010
 
 

 
20
Transaction Summary
 Final purchase price
  $114 million in cash
  36.3 million shares of TTM stock
  Closing market value of $329 million assuming closing market price of $9.06
 per share on April 8, 2010
  Assumed $433 million of Meadville debt
  Total: $876 million
 EBITDA multiple
  $876 million / $114.6 million adjusted EBITDA = 7.6 implied multiple
 Leverage ratio
  Including TTM’s convertible debt of $175 million, initial leverage ratio is
 about 3.3 times combined 2009 EBITDA
  Goal is to be under 3 times EBITDA within first year following deal close
 
 

 
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21
First Quarter Review - Meadville
 Performance updates
  Revenue was $159 million in the first quarter. Forecasting higher
 revenue in the second quarter
  Material costs increasing - negotiating price increases with customers to
 offset
  Book to bill for the first quarter was strong at 1.2
 End markets
  In general, end markets remained steady with fourth quarter 2009 as a
 percent of sales
  The Computing end market benefited from a new product launch by a
 major customer
 Capacity expansion
  Planned enhancements to physical plant capacity are in progress and
 should be production ready by third quarter 2010
  This increase in overall capacity is anticipated to raise quarterly revenue
 by 10 to 14 percent by first quarter 2011
 
 

 
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22
Q2 2010 Guidance
Revenue
$290 - $310
GAAP EPS
$0.03 - $0.12
Non-GAAP EPS
$0.16 - $0.25
($millions)
EPS based on approximately 76.5 million shares
 U.S. revenue expected to rise by 5 percent at plants with commercial focus and remain
 steady at Aerospace/Defense plants; Backplane Assembly revenue expected to decrease
 by about 10 percent due to Hayward facility closure
 Asian operations should experience revenue growth in computing, cell phones
 Purchase accounting will raise COGS by about $4.5 million for inventory mark-up
 Forecast reflects $7.7 million in transaction costs, primarily payments to advisor