Form: 8-K

Current report filing

February 7, 2012

Documents

EXHIBIT 99.1

TTM Technologies, Inc. Reports Fourth Quarter and Fiscal Year 2011 Results

SANTA ANA, Calif., Feb. 7, 2012 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (Nasdaq:TTMI), a major global printed circuit board (PCB) manufacturer, today reported results for the fourth quarter and fiscal year 2011, which ended December 31, 2011.

Fourth Quarter 2011 Highlights

  • Net sales were $361.5 million
  • GAAP net income attributable to stockholders was $8.4 million, or $0.10 per diluted share
  • Excluding a goodwill impairment charge recorded in the fourth quarter, GAAP net income attributable to stockholders was $21.0 million, or $0.26 per diluted share
  • Non-GAAP net income attributable to stockholders was $27.7 million, or $0.34 per diluted share
  • Gross margin was 19.7 percent

Fiscal Year 2011 Highlights

  • Net sales increased to $1.4 billion from $1.2 billion in fiscal year 2010
  • GAAP net income attributable to stockholders was $39.1 million, or $0.48 per diluted share
  • Excluding the goodwill and asset impairment charges recorded in 2011, GAAP net income attributable to stockholders was $99.1 million, or $1.21 per diluted share
  • Non-GAAP net income attributable to stockholders was $124.8 million, or $1.52 per diluted share
  • Gross margin was 21.1 percent

Financial Results

Net sales for the fourth quarter increased to $361.5 million from $358.3 million in the third quarter.

Operating income for the fourth quarter decreased to $17.6 million compared to operating income of $36.3 million in the third quarter.   

Included in operating results for the fourth quarter of 2011 was a non-cash goodwill impairment charge of $15.2 million at the company's backplane assembly plant in Shanghai, China.

GAAP net income attributable to stockholders for the fourth quarter was $8.4 million, or $0.10 per diluted share, compared to net income attributable to stockholders of $24.5 million, or $0.30 per diluted share, for the third quarter. 

On a non-GAAP basis, net income attributable to stockholders for the fourth quarter was $27.7 million, or $0.34 per diluted share. This compares to non-GAAP net income attributable to stockholders of $31.0 million, or $0.38 per diluted share, in the third quarter.

Adjusted EBITDA, which adds back asset impairments, for the fourth quarter was $60.2 million, or 16.6 percent of net sales, compared to adjusted EBITDA of $59.3 million, or 16.5 percent of net sales, for the third quarter. 

"Our fourth quarter financial results were in line with our outlook with revenue towards the high end of our guidance range.  Performance in each of our end markets was generally consistent with expectations," said Kent Alder, President and CEO of TTM.  "We experienced continued solid demand for advanced HDI PCBs, which are used in the production of high-growth products such as touchpad tablets, smartphones and, more recently, e-readers.  Advanced HDI products continued to represent a growing part of our overall product mix, and we expect this trend to continue.  The shift in product mix helped offset the softer demand environment the industry experienced for conventional multilayer PCBs during the second half of the year." 

"We remain confident that we are targeting the right, diverse group of customers and end markets. We are also increasing our product diversification with key customers. Our global footprint is expanding our customer engagements and helping us grow market share," continued Alder.

Net sales for fiscal year 2011 increased to $1.4 billion from $1.2 billion in fiscal year 2010.

Operating income for fiscal year 2011 decreased to $91.1 million from $125.6 million in fiscal year 2010. Included in operating results for 2011 were non-cash goodwill and asset impairment charges of $63.3 million. Excluding these charges, operating income for fiscal year 2011 was $154.4 million.

GAAP net income attributable to stockholders for fiscal year 2011 was $39.1 million, or $0.48 per diluted share, compared to $71.5 million, or $1.01 per diluted share, for fiscal year 2010.

On a non-GAAP basis, net income attributable to stockholders for fiscal year 2011 was $124.8 million, or $1.52 per diluted share. This compares to fiscal year 2010 non-GAAP net income attributable to stockholders of $105.5 million, or $1.49 per diluted share.

Adjusted EBITDA for fiscal year 2011 was $250.2 million, or 17.5 percent of net sales, compared to $194.2 million, or 16.5 percent of net sales, for fiscal year 2010.

Please refer to the tables below for a reconciliation of GAAP and non-GAAP net income attributable to stockholders as well as adjusted EBITDA.

"We were pleased to achieve record revenue in 2011 despite an increasingly challenging macroeconomic environment. We remain confident that the underlying long-term drivers for advanced technology PCBs – including the proliferation of converged mobile and media devices and the surge of networking applications – will continue to propel the industry forward. We are well positioned to capitalize on these growth opportunities. Based on customer input, prospects for the second half of 2012 remain strong," concluded Alder.

Temporary Plant Closure

The Company also today announced that it will temporarily close its SYE plant located in Dongguan, China for repairs and upgrades to the facility. TTM expects to transfer the majority of SYE's production and many of the employees to other facilities located in South China and expects to provide continuous support to its customers with minimal interruption.

The Company expects to spend approximately $6 million for the maintenance and repair work and expects the project to be completed by the end of the second quarter of 2012. TTM anticipates a reduction of revenue of about $3 million to $6 million for each of the first two quarters of 2012 due to the transition of production to other facilities. Costs associated with this project are expected to have a slight impact on margins in the first half of 2012. The Company anticipates production at the SYE facility to resume during the third quarter of 2012.

Business Outlook

The Company's guidance for the first quarter of 2012 primarily reflects normal seasonality and lower utilization of the Company's conventional PCB facilities in Asia. For the first quarter, TTM estimates revenue will be in the range of $310 million to $330 million, GAAP earnings attributable to stockholders in a range from $0.11 to $0.20 per diluted share and non-GAAP earnings attributable to stockholders in a range from $0.19 to $0.28 per diluted share. 

To Access the Live Webcast/Conference Call

The company will host a conference call and webcast to discuss the fourth quarter and fiscal year 2011 results and the first quarter outlook on Tuesday, February 7, 2012, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time).

Telephone access is available by dialing domestic 1-888-549-7880 or international 1-480-629-9644. The conference also will be webcast on TTM Technologies' website at www.ttmtech.com.

To Access a Replay of the Webcast

The webcast will be available for replay until February 14, 2012, on TTM Technologies' website at www.ttmtech.com.

About Our Non-GAAP Financial Measures

This release includes information about the Company's non-GAAP net income attributable to stockholders and non-GAAP earnings per share attributable to stockholders, which are non-GAAP financial measures. Management believes that both measures -- which add back amortization of intangibles, stock-based compensation expense, non-cash interest expense on debt, asset impairments, restructuring and other charges as well as the associated tax impact of these charges -- provide additional useful information to investors regarding the Company's ongoing financial condition and results of operations.

A material limitation associated with the use of the above non-GAAP financial measures is that they have no standardized measurement prescribed by GAAP and may not be comparable to similar non-GAAP financial measures used by other companies. The Company compensates for these limitations by providing full disclosure of each non-GAAP financial measure and reconciliation to the most directly comparable GAAP financial measure. However, the non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Safe Harbor Statement

This release contains forward-looking statements that relate to future events or performance. These statements reflect the company's 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 company's 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 company's dependence upon the electronics industry, contemplated significant capital expenditures and related financing requirements, the Company's ability to integrate and manage its Asia Pacific operations, the company's dependence upon a small number of customers, the unpredictability of and potential fluctuation in future revenues and operating results and other "Risk Factors" set forth in the company's most recent SEC filings.

About TTM

TTM Technologies, Inc. is a major global printed circuit board manufacturer, focusing on quick-turn and technologically advanced PCBs and the backplane and sub-system assembly business. TTM stands for time-to-market, representing how the company's time-critical, one-stop manufacturing services enable customers to shorten the time required to develop new products and bring them to market. Additional information can be found at www.ttmtech.com.

The TTM Technologies logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5691

 

TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
                   
                 
          Fourth Quarter Third Quarter Full Year
          2011 2010 2011 2011 2010
                   
CONSOLIDATED STATEMENTS OF OPERATIONS          
                   
  Net sales    $ 361,460  $ 373,391  $ 358,261  $ 1,428,639  $ 1,179,671
  Cost of goods sold  290,082  283,388  287,587  1,127,326  925,266
                   
  Gross profit  71,378  90,003  70,674  301,313  254,405
                   
  Operating expenses:          
    Selling and marketing  9,867  9,460  8,668  36,891  34,345
    General and administrative  24,178  23,360  21,342  92,682  79,668
    Amortization of definite-lived intangibles  4,517  4,613  4,315  17,311  13,678
    Restructuring charges  --   (60)  --   --   389
    Impairment of goodwill  15,184  --   --   15,184  -- 
    Impairment of long-lived assets  --   --   --   48,125  766
      Total operating expenses      53,746  37,373  34,325  210,193  128,846
                   
  Operating income  17,632  52,630  36,349  91,120  125,559
                   
  Interest expense  (6,795)  (6,373)  (6,734)  (26,504)  (22,255)
  Interest income  159  145  139  661  505
  Other, net    2,692  2,446  1,214  7,955  4,828
                   
  Income before income taxes  13,688  48,848  30,968  73,232  108,637
  Income tax provision  (4,122)  (12,319)  (4,921)  (28,799)  (28,738)
                   
  Net income  9,566  36,529  26,047  44,433  79,899
                   
  Net income attributable to noncontrolling interest  (1,190)  (3,503)  (1,569)  (5,359)  (8,368)
  Net income attributable to stockholders  $ 8,376  $ 33,026  $ 24,478  $ 39,074  $ 71,531
                   
  Earnings per share attributable to stockholders:          
    Basic    $ 0.10  $ 0.41  $ 0.30  $ 0.48  $ 1.02
    Diluted    $ 0.10  $ 0.41  $ 0.30  $ 0.48  $ 1.01
                   
  Weighted average common shares:          
    Basic    81,336  80,139  81,332  81,176  70,220
    Diluted    81,988  80,962  81,934  81,944  70,819
                   
                   
                   
SELECTED BALANCE SHEET DATA           
          December 31, 2011 December 31, 2010      
  Cash and cash equivalents  $ 196,052  $ 216,078      
  Accounts and notes receivable, net  316,568  287,703      
  Inventories    129,430  135,385      
  Total current assets  671,534  676,499      
  Property, plant and equipment, net  766,800  740,630      
  Other non-current assets  307,941  344,823      
  Total assets  $ 1,746,275  $ 1,761,952      
                   
  Short-term debt, including current portion long-term debt      $ 120,882  $ 67,123      
  Accounts payable  185,906  204,974      
  Total current liabilities  437,140  418,200      
  Debt, net of discount  368,518  458,278      
  Total long-term liabilities  389,259  510,894      
  Noncontrolling interest  113,753  104,603      
  Total stockholders' equity  919,876  832,858      
  Total liabilities and stockholders' equity  $ 1,746,275  $ 1,761,952      
                   
           
           
           
SUPPLEMENTAL DATA          
          Fourth Quarter Third Quarter Full Year
          2011 2010 2011 2011 2010
  Gross margin  19.7%  24.1%  19.7%            21.1%             21.6%
  Adjusted EBITDA margin  16.6  20.5  16.5  17.5  16.5
  Operating margin  4.9  14.1  10.1  6.4  10.6
                   
  End Market Breakdown:          
          Fourth Quarter Third Quarter    
          2011 2010 2011    
                   
    Aerospace/Defense  15%  16%  16%    
    Cellular Phone  14  12  10    
    Computing/Storage/Peripherals  20  22  21    
    Medical/Industrial/Instrumentation  8  8  7    
    Networking/Communications  33  37  38    
    Other    10  5  8    
                   
  Stock-based Compensation:          
          Fourth Quarter Third Quarter    
          2011 2010 2011    
    Amount included in:          
      Cost of goods sold  $ 251  $ 308  $ 219    
      Selling and marketing  106  107  100    
      General and administrative  1,786  1,838  1,735    
      Total stock-based compensation expense        $ 2,143  $ 2,253  $ 2,054    
                   
                   
  Operating Segment Data:          
          Fourth Quarter Third Quarter    
     Net sales:  2011 2010 2011    
     Asia Pacific   $ 218,448  $ 220,212  $ 222,284    
     North America   144,079  156,421  137,355    
       Total sales   362,527  376,633  359,639    
     Inter-segment sales   (1,067)  (3,242)  (1,378)    
       Total net sales   $ 361,460  $ 373,391  $ 358,261    
                   
     Operating segment income:           
     Asia Pacific   $ 20,094  $ 38,257  $ 27,855    
     North America   2,055  18,986  12,809    
       Total operating segment income   22,149  57,243  40,664    
     Amortization of definite-lived intangibles   (4,517)  (4,613)  (4,315)    
       Total operating income   17,632  52,630  36,349    
     Total other expense   (3,944)  (3,782)  (5,381)    
     Income before income taxes   $ 13,688  $ 48,848  $ 30,968    
           
           
           
RECONCILIATIONS1          
          Fourth Quarter Third Quarter Full Year
          2011 2010 2011 2011 2010
  Adjusted EBITDA reconciliation2:          
    Net income  $ 9,566  $ 36,529  $ 26,047  $ 44,433  $ 79,899
    Add back items:          
      Income tax provision  4,122  12,319  4,921  28,799  28,738
      Interest expense  6,795  6,373  6,734  26,504  22,255
      Amortization of definite-lived intangibles  4,546  4,643  4,343  17,427  13,795
      Depreciation expense  19,946  16,634  17,231  69,698  48,747
    EBITDA  $ 44,975  $ 76,498  $ 59,276  $ 186,861  $ 193,434
                   
    Add back: Asset impairments  15,184  --   --   63,309  766
    Adjusted EBITDA  $ 60,159  $ 76,498  $ 59,276  $ 250,170  $ 194,200
                   
  GAAP EPS excluding impairments reconciliation3:          
    GAAP net income attributable to stockholders  $ 8,376  $ 33,026  $ 24,478  $ 39,074  $ 71,531
    Add back items:          
      Asset impairments  15,184  --   --   63,309  766
      Income tax effects  (2,592)  --   --   (3,298)  (203)
    GAAP net income, excluding impairments, attributable to stockholders  $ 20,968  $ 33,026  $ 24,478  $ 99,085  $ 72,094
                   
    GAAP earnings per diluted share, excluding impairments, attributable to stockholders  $ 0.26  $ 0.41  $ 0.30  $ 1.21  $ 1.02
                   
  Non-GAAP EPS reconciliation4:          
    GAAP net income attributable to stockholders  $ 8,376  $ 33,026  $ 24,478  $ 39,074  $ 71,531
    Add back items:          
      Amortization of definite-lived intangibles  4,546  4,643  4,343  17,427  13,795
      Stock-based compensation  2,143  2,253  2,054  8,075  6,913
      Non-cash interest expense  1,947  2,189  1,909  8,163  7,744
      Impairments, restructuring and other charges  15,184  (54)  --   63,309  17,749
      Income tax effects  (4,527)  (2,391)  (1,826)  (11,240)  (12,222)
    Non-GAAP net income attributable to stockholders  $ 27,669  $ 39,666  $ 30,958  $ 124,808  $ 105,510
                   
    Non-GAAP earnings per diluted share attributable to stockholders  $ 0.34  $ 0.49  $ 0.38  $ 1.52  $ 1.49
                   
                   
  1 This information provides a reconciliation of EBITDA, adjusted EBITDA, GAAP net income (excluding impairments) attributable to stockholders, GAAP EPS (excluding
impairments) attributable to stockholders, non-GAAP net income attributable to stockholders and non-GAAP EPS attributable to stockholders to the financial information in our
consolidated statements of operations.
                   
  2 Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization and asset impairments. We present adjusted EBITDA to enhance the
understanding of our operating results, and it is a key measure we use to evaluate our operations. In addition, we provide our adjusted EBITDA because we believe that investors
and securities analysts will find adjusted EBITDA to be a useful measure for evaluating our operating performance and comparing our operating performance with that of similar
companies that have different capital structures and for evaluating our ability to meet our future debt service, capital expenditures, and working capital requirements. However,
adjusted EBITDA should not be considered as an alternative to cash flows from operating activities as a measure of liquidity or as an alternative to net income as a measure of
operating results in accordance with accounting principles generally accepted in the United States of America.
                   
  3 This information provides GAAP net income attribututable to stockholders and GAAP EPS attributable to stockholders excluding asset impairments and related income tax effects.
                   
  4 This information provides non-GAAP net income attributable to stockholders and non-GAAP EPS attributable to stockholders, which are non-GAAP financial measures.
Management believes that both measures --- which add back amortization of intangibles, stock-based compensation expense, non-cash interest expense on debt (before
consideration of capitalized interest), asset impairments, restructuring and other charges as well as the associated tax impact of these charges --- provide additional useful
information to investors regarding the Company's ongoing financial condition and results of operations.		 
CONTACT: Steve Richards, CFO
         714-327-3000