Form: 8-K

Current report filing

August 2, 2017

Exhibit 99.1

 

TTM Technologies, Inc., Q2’17   

Contact:

Sameer Desai,

Senior Director, Corporate

Development & Investor Relations

sameer.desai@ttmtech.com

714-327-3050

TTM Technologies, Inc. Reports Fiscal Second Quarter 2017 Results

Results in line with Guidance

COSTA MESA, CA – August 2nd, 2017 – TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) manufacturer, today reported results for the second quarter of fiscal 2017, which ended July 2nd, 2017.

Second Quarter 2017 Highlights

 

  •   Net sales were $627.2 million

 

  •   GAAP net income attributable to stockholders was $20.6 million, or $0.18 per diluted share

 

  •   Non-GAAP net income attributable to stockholders was $33.3 million, or $0.31 per diluted share

 

  •   Excluding a $6.5 million foreign exchange loss, non-GAAP earnings per diluted share would have been $0.36

 

  •   Adjusted EBITDA was $85.5 million

Second Quarter 2017 Financial Results

Net sales for the second quarter of 2017 were $627.2 million, compared to $601.8 million in the second quarter of 2016 and $625.2 million in the first quarter of 2017.

GAAP operating income for the second quarter of 2017 was $45.1 million, compared to $34.7 million in the second quarter of 2016 and $52.6 million in the first quarter of 2017.

GAAP net income attributable to stockholders for the second quarter of 2017 was $20.6 million, or $0.18 per diluted share. This compares to a GAAP net income attributable to stockholders of $18.5 million, or $0.17 per diluted share, in the second quarter of 2016 and a GAAP net income of $33 million, or $0.28 per diluted share, in the first quarter of 2017.

On a non-GAAP basis, net income attributable to stockholders for the second quarter of 2017 was $33.3 million, or $0.31 per diluted share. This compares to non-GAAP net income attributable to stockholders of $28.4 million, or $0.28 per diluted share, for the second quarter of 2016 and $39.2 million, or $0.37 per diluted share, in the first quarter of 2017.

Adjusted EBITDA for the second quarter of 2017 was $85.5 million, or 13.6 percent of net sales, compared to adjusted EBITDA of $90.2 million, or 15.0 percent of net sales, for the second quarter of 2016 and $95.6 million, or 15.3 percent of net sales, for the first quarter of 2017.

“TTM delivered the third consecutive quarter of year on year organic growth at 4 percent and our operating performance was in line with our expectations” said Tom Edman, CEO of TTM. “On a year over year basis, most end markets grew, with the fastest growth coming from the cellular, computing, automotive and the aerospace and defense end markets. Absent a foreign exchange loss due to the weakening dollar, operating results were towards the high end of guidance.”

Business Outlook

For the third quarter of 2017, TTM estimates that revenue will be in the range of $625 million to $675 million, and non-GAAP net income attributable to stockholders will be in the range of $0.29 to $0.35 per diluted share. “Our third quarter is being impacted by a slower start in the normal seasonal ramp of cellular products. We expect this ramp to accelerate in the coming quarters” concluded Tom Edman.


TTM Technologies, Inc., Q2’17   

Contact:

Sameer Desai,

Senior Director, Corporate

Development & Investor Relations

sameer.desai@ttmtech.com

714-327-3050

 

To Access the Live Webcast/Conference Call

TTM will host a conference call and webcast to discuss second quarter 2017 results and third quarter 2017 outlook on Wednesday, August 2nd, 2017, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call will include forward-looking statements.

Telephone access is available by dialing domestic 877-397-0272 or international 719-325-2322 (ID 5738422). The conference call also will be webcast on TTM’s website at www.ttm.com.

To Access a Replay of the Webcast

The replay of the webcast will remain accessible for one week following the live event on TTM’s website at www.ttm.com.

About TTM

TTM Technologies, Inc. is a leading global printed circuit board manufacturer, focusing on quick-turn and volume production of technologically advanced PCBs, backplane assemblies and electro-mechanical solutions. TTM stands for time-to-market, representing how TTM’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.ttm.com.

Forward-Looking Statements

This release contains forward-looking statements that relate to future events or performance. TTM cautions you that such statements are simply predictions and actual events or results may differ materially. These statements reflect TTM’s current expectations, and TTM 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 TTM statements will not be realized. Further, these statements involve risks and uncertainties, many of which are beyond TTM’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, general market and economic conditions, including interest rates, currency exchange rates and consumer spending, demand for TTM’s products, market pressures on prices of TTM’s products, warranty claims, changes in product mix, contemplated significant capital expenditures and related financing requirements, TTM’s dependence upon a small number of customers and other factors set forth in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC.

About Our Non-GAAP Financial Measures

This release includes information about TTM’s adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share, all of which are non-GAAP financial measures. TTM presents non-GAAP financial information to enable investors to see TTM through the eyes of management and to provide better insight into TTM’s ongoing financial performance.

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. TTM 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.


TTM Technologies, Inc., Q2’17   

Contact:

Sameer Desai,

Senior Director, Corporate

Development & Investor Relations

sameer.desai@ttmtech.com

714-327-3050

 

- Tables Follow -


TTM TECHNOLOGIES, INC.

Selected Unaudited Financial Information

(In thousands, except per share data)

 

     Second Quarter     First Quarter     First Two Quarters  
     2017     2016     2017     2017     2016  

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

          

Net sales

   $ 627,182     $ 601,847     $ 625,247     $ 1,252,429     $ 1,185,105  

Cost of goods sold

     531,315       504,202       520,228       1,051,543       1,003,897  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     95,867       97,645       105,019       200,886       181,208  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

          

Selling and marketing

     15,851       16,569       16,655       32,506       33,875  

General and administrative

     29,885       37,931       30,822       60,707       74,080  

Amortization of definite-lived intangibles

     5,910       5,949       5,912       11,822       11,896  

Restructuring charges

     416       3,989       609       1,025       5,902  

Impairment of long-lived assets

     —         —         —         —         3,346  

Gain on sale of assets

     (1,251     (1,472     (1,549     (2,800     (1,472
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     50,811       62,966       52,449       103,260       127,627  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     45,056       34,679       52,570       97,626       53,581  

Interest expense

     (12,922     (20,084     (13,596     (26,518     (41,868

Other, net

     (5,825     3,191       (1,710     (7,535     4,400  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     26,309       17,786       37,264       63,573       16,113  

Income tax provision

     (5,558     979       (4,139     (9,697     (4,498
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 20,751     $ 18,765     $ 33,125     $ 53,876     $ 11,615  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to noncontrolling interest

     (160     (217     (166     (326     (331
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to stockholders

   $ 20,591     $ 18,548     $ 32,959     $ 53,550     $ 11,284  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings (loss) per share attributable to stockholders:

          

Basic

   $ 0.20     $ 0.19     $ 0.33     $ 0.53     $ 0.11  

Diluted

   $ 0.18     $ 0.17     $ 0.28     $ 0.46     $ 0.11  

Weighted-average shares used in computing per share amounts:

          

Basic

     101,756       100,170       100,932       101,344       99,883  

Diluted

     133,224       126,950       130,922       132,073       100,789  

Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share:

          

Net income attributable to stockholders

   $ 20,591     $ 18,548     $ 32,959     $ 53,550    

Add back items: interest expense, net of tax

     3,432       3,285       3,394       6,826    
  

 

 

   

 

 

   

 

 

   

 

 

   

Adjusted net income attributable to stockholders

   $ 24,023     $ 21,833     $ 36,353     $ 60,376    
  

 

 

   

 

 

   

 

 

   

 

 

   

Weighted-average shares outstanding

     101,756       100,170       100,932       101,344    

Dilutive effect of convertible debt

     25,940       25,940       25,940       25,940    

Dilutive effect of warrants

     3,924       —         2,183       3,054    

Dilutive effect of performance-based stock units, restricted stock units & stock options

     1,604       840       1,867       1,735    
  

 

 

   

 

 

   

 

 

   

 

 

   

Diluted shares

     133,224       126,950       130,922       132,073    
  

 

 

   

 

 

   

 

 

   

 

 

   

Earnings per share attributable to stockholders:

          

Basic

   $ 0.20     $ 0.19     $ 0.33     $ 0.53    

Diluted

   $ 0.18     $ 0.17     $ 0.28     $ 0.46    
SELECTED BALANCE SHEET DATA           
     July 3, 2017     January 2, 2017                    

Cash and cash equivalents, including restricted cash

   $ 246,947     $ 256,277        

Accounts and notes receivable, net

     452,796       432,596        

Inventories

     282,485       269,212        

Total current assets

     1,025,261       1,012,841        

Property, plant and equipment, net

     1,034,385       966,638        

Other non-current assets

     512,304       520,597        

Total assets

     2,571,950       2,500,076        

Short-term debt, including current portion of long-term debt

   $ 110,669     $ 110,652        

Accounts payable

     365,254       355,774        

Total current liabilities

     722,675       689,065        

Debt, net of discount

     863,847       909,030        

Total long-term liabilities

     938,684       981,886        

Total equity

     910,591       829,125        

Total liabilities and equity

     2,571,950       2,500,076        


SUPPLEMENTAL DATA

 

     Second
Quarter
    First
Quarter
    First Two
Quarters
 
     2017     2016     2017     2017     2016  

Gross margin

     15.3     16.2     16.8     16.0     15.3

Operating margin

     7.2     5.8     8.4     7.8     4.5

End Market Breakdown:

 

     Second
Quarter
    First
Quarter
 
     2017     2016     2017  

Aerospace/Defense

     17     16     15

Automotive

     20     19     20

Cellular Phone

     13     10     14

Computing/Storage/Peripherals

     14     13     15

Medical/Industrial/Instrumentation

     15     16     15

Networking/Communications

     20     25     20

Other

     1     1     1

Stock-based Compensation:

 

     Second
Quarter
     First
Quarter
 
     2017      2016      2017  

Amount included in:

        

Cost of goods sold

   $ 639      $ 429      $ 394  

Selling and marketing

   $ 386        271        253  

General and administrative

     3,975        2,145        2,981  
  

 

 

    

 

 

    

 

 

 

Total stock-based compensation expense

   $ 5,000      $ 2,845      $ 3,628  
  

 

 

    

 

 

    

 

 

 

Operating Segment Data:

 

     Second
Quarter
     First
Quarter
 
     2017      2016      2017  

Net sales:

        

PCB

   $ 576,566      $ 563,574      $ 586,695  

E-M Solutions

     52,898        40,427        41,669  

Corporate

     —          —          —    
  

 

 

    

 

 

    

 

 

 

Total sales

     629,464        604,001        628,364  

Inter-segment sales

     (2,282      (2,154      (3,117
  

 

 

    

 

 

    

 

 

 

Total net sales

   $ 627,182      $ 601,847      $ 625,247  
  

 

 

    

 

 

    

 

 

 

Operating segment income:

        

PCB

   $ 69,435      $ 64,970      $ 82,256  

E-M Solutions

     2,689        (153      (1,642

Corporate

     (21,158      (24,189      (22,132
  

 

 

    

 

 

    

 

 

 

Total operating segment income

     50,966        40,628        58,482  

Amortization of definite-lived intangibles

     (5,910      (5,949      (5,912
  

 

 

    

 

 

    

 

 

 

Total operating income

     45,056        34,679        52,570  

Total other expense

     (18,747      (16,893      (15,306
  

 

 

    

 

 

    

 

 

 

Income before income taxes

   $ 26,309      $ 17,786      $ 37,264  
  

 

 

    

 

 

    

 

 

 


RECONCILIATIONS1

 

     Second
Quarter
    First
Quarter
    First Two
Quarters
 
     2017     2016     2017     2017     2016  

Non-GAAP gross profit reconciliation2:

          

GAAP gross profit

   $ 95,867     $ 97,645     $ 105,019     $ 200,886     $ 181,208  

Add back item:

          

Stock-based compensation

     639       429       394       1,033       749  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit

   $ 96,506     $ 98,074     $ 105,413     $ 201,919     $ 181,957  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross margin

     15.4     16.3     16.9     16.1     15.4

Non-GAAP operating income reconciliation3:

          

GAAP operating income

   $ 45,056     $ 34,679     $ 52,570     $ 97,626     $ 53,581  

Add back items:

          

Amortization of definite-lived intangibles

     5,910       5,949       5,912       11,822       11,896  

Stock-based compensation

     5,000       2,845       3,628       8,628       5,091  

Gain on sale of assets

     (1,251     (1,472     (1,549     (2,800     (1,472

Impairments, restructuring, acquisition-related, and other charges

     417       4,594       709       1,126       10,544  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income

   $ 55,132     $ 46,595     $ 61,270     $ 116,402     $ 79,640  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating margin

     8.8     7.7     9.8     9.3     6.7

Non-GAAP net income and EPS attributable to stockholders reconciliation4:

          

GAAP net income (loss) attributable to stockholders

   $ 20,591     $ 18,548     $ 32,959     $ 53,550     $ 11,284  

Add back items:

          

Amortization of definite-lived intangibles

     5,910       5,949       5,912       11,822       11,896  

Stock-based compensation

     5,000       2,845       3,628       8,628       5,091  

Non-cash interest expense

     2,726       5,608       2,627       5,353       11,762  

Gain on sale of assets

     (1,251     (1,472     (1,549     (2,800     (1,472

Impairments, restructuring, acquisition-related, and other charges

     417       4,594       709       1,126       10,544  

Income taxes

     (119     (7,649     (5,093     (5,212     (6,828
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income attributable to stockholders

   $ 33,274     $ 28,423     $ 39,193     $ 72,467     $ 42,277  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP earnings per diluted share attributable to stockholders

   $ 0.31     $ 0.28     $ 0.37     $ 0.68     $ 0.42  

Non-GAAP diluted number of shares5:

          

Diluted shares

     133,224       126,950       130,922       132,073       126,730  

Dilutive effect of convertible debt

     (25,940     (25,940     (25,940     (25,940     (25,940
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP diluted number of shares

     107,284       101,010       104,982       106,133       100,790  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA reconciliation6:

          

GAAP net income (loss)

   $ 20,751     $ 18,765     $ 33,125     $ 53,876     $ 11,615  

Add back items:

          

Income tax provision (benefit)

     5,558       (979     4,139       9,697       4,498  

Interest expense

     12,922       20,084       13,596       26,518       41,868  

Amortization of definite-lived intangibles

     5,910       5,949       5,912       11,822       11,896  

Depreciation expense

     36,146       40,457       36,077       72,223       80,684  

Stock-based compensation

     5,000       2,845       3,628       8,628       5,091  

Gain on sale of assets

     (1,251     (1,472     (1,549     (2,800     (1,472

Impairments, restructuring, acquisition-related, and other charges

     417       4,594       709       1,126       10,544  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 85,453     $ 90,243     $ 95,637     $ 181,090     $ 164,724  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     13.6     15.0     15.3     14.5     13.9

Free cash flow reconciliation:

          

Operating cash flow

     59,114       80,057       49,584       108,698       97,949  

Add back items:

          

Payment of acquisition-related costs

     —         691       153       153       3,015  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating cash flow

     59,114       80,748       49,737       108,851       100,964  

Capital expenditures, net

     (45,626     (15,329     (23,378     (69,004     (35,445
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $ 13,488     $ 65,419     $ 26,359     $ 39,847     $ 65,519  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

1 This information provides a reconciliation of non-GAAP gross profit, non-GAAP operating income, non-GAAP net income attributable to stockholders, non-GAAP EPS attributable to stockholders, and adjusted EBITDA to the financial information in our consolidated condensed statements of operations.
2 Non-GAAP gross profit and gross margin measures exclude stock-based compensation expense.
3 Non-GAAP operating income and operating margin measures exclude amortization of intangibles, stock-based compensation expense, gain on sale of assets, acquisition-related costs, asset impairments, restructuring and other charges.
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), gain on sale of assets, acquisition-related costs, asset impairments, restructuring and other charges as well as the associated tax impact of these charges and discrete tax items – provide additional useful information to investors regarding the Company’s ongoing financial condition and results of operations.
5  Non-GAAP diluted number of shares used in computing non-GAAP earnings per share attributable to stockholders excludes the dilutive effect of convertible debt.
6  Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, acquisition-related costs, asset impairments, restructuring and other charges. 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.