November 1, 2017 - EX-99.1 - 8-K: Current report filing

Exhibit 99.1

TTM Technologies, Inc., Q317

Contact:

Sameer Desai,

Senior Director, Corporate Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

TTM Technologies, Inc. Reports Fiscal Third Quarter 2017 Results

Revenues and Operating Profits Exceed Expectations

COSTA MESA, CA November 1st, 2017 TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (PCB) manufacturer, today reported results for the third quarter of fiscal 2017, which ended October 2nd, 2017.

Third Quarter 2017 Highlights

Net sales were $666.8 million

GAAP net income attributable to stockholders was $21.5 million, or $0.19 per diluted share

Non-GAAP net income attributable to stockholders was $33.4 million, or $0.32 per diluted share

Excluding a $7.4 million (non-cash) foreign exchange loss, non-GAAP earnings per diluted share were $0.38

Adjusted EBITDA was $85.7 million

Third Quarter 2017 Financial Results

Net sales for the third quarter of 2017 were $666.8 million, compared to $641.7 million in the third quarter of 2016 and $627.2 million in the second quarter of 2017.

GAAP operating income for the third quarter of 2017 was $44.1 million, compared to $50.2 million in the third quarter of 2016 and $45.1 million in the second quarter of 2017.

GAAP net income attributable to stockholders for the third quarter of 2017 was $21.5 million, or $0.19 per diluted share. This compares to a GAAP net income attributable to stockholders of $25.6 million, or $0.23 per diluted share, in the third quarter of 2016 and a GAAP net income of $20.6 million, or $0.18 per diluted share, in the second quarter of 2017.

On a non-GAAP basis, net income attributable to stockholders for the third quarter of 2017 was $33.4 million, or $0.32 per diluted share. This compares to non-GAAP net income attributable to stockholders of $40.1 million, or $0.39 per diluted share, for the third quarter of 2016 and $33.3 million, or $0.31 per diluted share, in the second quarter of 2017.

Adjusted EBITDA for the third quarter of 2017 was $85.7 million, or 12.9 percent of net sales, compared to adjusted EBITDA of $102.2 million, or 15.9 percent of net sales, for the third quarter of 2016 and $85.5 million, or 13.6 percent of net sales, for the second quarter of 2017.

TTM delivered the fourth consecutive quarter of year on year organic growth with revenues and operating performance that exceeded our expectations said Tom Edman, CEO of TTM. On a year over year basis, the fastest growth in the third quarter came from the computing, automotive and the aerospace and defense end markets. Absent a foreign exchange loss due to the weakening U.S. dollar, non-GAAP EPS was above the high end of guidance.

Business Outlook

For the fourth quarter of 2017, TTM estimates that revenue will be in the range of $700 million to $750 million, and non-GAAP net income attributable to stockholders will be in the range of $0.49 to $0.55 per diluted share.

TTM Technologies, Inc., Q317

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 third quarter 2017 results and fourth quarter 2017 outlook on Wednesday, November 1st, 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 877-830-2636 or international 785-424-1802 (ID 9611659). The conference call also will be webcast on TTMs 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 TTMs 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 TTMs 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 TTMs 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 TTMs 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 TTMs products, market pressures on prices of TTMs products, warranty claims, changes in product mix, contemplated significant capital expenditures and related financing requirements, TTMs dependence upon a small number of customers and other factors set forth in the Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations sections of the Companys public reports filed with the SEC.

About Our Non-GAAP Financial Measures

This release includes information about TTMs 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 TTMs 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.

With respect to the Companys outlook for non-GAAP net income attributable to stockholders per diluted share, we are unable to predict with reasonable certainty or without unreasonable effort certain items that may affect such measure calculated and presented in accordance with GAAP. Our expected non-GAAP net income attributable to stockholders per diluted share excludes primarily the future impact of

TTM Technologies, Inc., Q317

Contact:

Sameer Desai,

Senior Director, Corporate Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

restructuring actions, impairment charges, unusual gains and losses, and tax adjustments. These reconciling items are highly variable and difficult to predict due to various factors outside of managements control and could have a material impact on our future period net income attributable to stockholders per diluted share calculated and presented in accordance with GAAP. Accordingly, a reconciliation of non-GAAP net income attributable to stockholders per diluted share to such measure calculated and presented in accordance with GAAP is not available without unreasonable effort and has not been provided.

- Tables Follow -

TTM TECHNOLOGIES, INC.

Selected Unaudited Financial Information

(In thousands, except per share data)


	Third Quarter						Second Quarter			First Three Quarters
	2017			2016			2017			2017			2016
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Net sales	$	666,814		$	641,720		$	627,182		$	1,919,243		$	1,826,825
Cost of goods sold		569,980			532,158			531,315			1,621,523			1,536,055

Gross profit		96,834			109,562			95,867			297,720			290,770

Operating expenses:
Selling and marketing		16,269			15,643			15,851			48,775			49,518
General and administrative		30,018			35,641			29,885			90,725			109,721
Amortization of definite-lived intangibles		5,905			5,949			5,910			17,727			17,845
Restructuring charges		100			2,103			416			1,125			8,005
Impairment of long-lived assets														3,346
(Gain)/loss on sale of assets		452						(1,251	)		(2,348	)		(1,472	)

Total operating expenses		52,744			59,336			50,811			156,004			186,963

Operating income		44,090			50,226			45,056			141,716			103,807
Interest expense		(13,598	)		(18,873	)		(12,922	)		(40,116	)		(60,741	)
Loss on extinguishment of debt		(768	)					(1	)		(769	)
Other, net		(6,984	)		3,930			(5,824	)		(14,518	)		8,330

Income before income taxes		22,740			35,283			26,309			86,313			51,396
Income tax provision		(1,205	)		(9,513	)		(5,558	)		(10,902	)		(14,011	)

Net income (loss)	$	21,535		$	25,770		$	20,751		$	75,411		$	37,385

Net income attributable to noncontrolling interest		(82	)		(188	)		(160	)		(408	)		(519	)

Net income (loss) attributable to stockholders	$	21,453		$	25,582		$	20,591		$	75,003		$	36,866

Earnings (loss) per share attributable to stockholders:
Basic	$	0.21		$	0.26		$	0.20		$	0.74		$	0.37
Diluted	$	0.19		$	0.23		$	0.18		$	0.65		$	0.36
Weighted-average shares used in computing per share amounts:
Basic		101,814			100,245			101,756			101,501			100,004
Diluted		131,596			127,645			133,224			131,914			101,094
Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share:
Net income attributable to stockholders	$	21,453		$	25,582		$	20,591		$	75,003
Add back items: interest expense, net of tax		3,469			3,321			3,432			10,296

Adjusted net income attributable to stockholders	$	24,922		$	28,903		$	24,023		$	85,299

Weighted-average shares outstanding		101,814			100,245			101,756			101,501
Dilutive effect of convertible debt		25,939			25,940			25,940			25,939
Dilutive effect of warrants		2,151						3,924			2,753
Dilutive effect of performance-based stock units, restricted stock units & stock options		1,692			1,460			1,604			1,721

Diluted shares		131,596			127,645			133,224			131,914

Earnings per share attributable to stockholders:
Basic	$	0.21		$	0.26		$	0.20		$	0.74
Diluted	$	0.19		$	0.23		$	0.18		$	0.65

SELECTED BALANCE SHEET DATA
	October 2, 2017			January 2, 2017
Cash and cash equivalents, including restricted cash	$	301,934		$	256,277
Accounts and notes receivable, net		475,056			432,788
Inventories		295,279			269,212
Total current assets		1,110,961			1,012,841
Property, plant and equipment, net		1,052,779			966,638
Other non-current assets		510,204			520,597
Total assets		2,673,944			2,500,076

Short-term debt, including current portion of long-term debt	$	4,184		$	110,652
Accounts payable		422,549			371,610
Total current liabilities		672,783			689,065
Debt, net of discount		974,161			909,030
Total long-term liabilities		1,048,614			981,886
Total equity		952,547			829,125
Total liabilities and equity		2,673,944			2,500,076


SUPPLEMENTAL DATA
	Third Quarter						Second Quarter			First Three Quarters
	2017			2016			2017			2017			2016
Gross margin		14.5	%		17.1	%		15.3	%		15.5	%		15.9	%
Operating margin		6.6	%		7.8	%		7.2	%		7.4	%		5.7	%
End Market Breakdown:
	Third Quarter						Second Quarter
	2017			2016			2017
Aerospace/Defense		16	%		15	%		17	%
Automotive		20	%		19	%		20	%
Cellular Phone		17	%		17	%		13	%
Computing/Storage/Peripherals		14	%		12	%		14	%
Medical/Industrial/Instrumentation		14	%		14	%		15	%
Networking/Communications		17	%		21	%		20	%
Other		2	%		2	%		1	%
Stock-based Compensation:
	Third Quarter						Second Quarter
	2017			2016			2017
Amount included in:
Cost of goods sold	$	606		$	412		$	639
Selling and marketing	$	369			268			386
General and administrative		3,703			2,119			3,975

Total stock-based compensation expense	$	4,678		$	2,799		$	5,000

Operating Segment Data:
	Third Quarter						Second Quarter
Net sales:	2017			2016			2017
PCB	$	609,742		$	598,656		$	576,566
E-M Solutions		60,620			46,246			52,898
Corporate

Total sales		670,362			644,902			629,464
Inter-segment sales		(3,548	)		(3,182	)		(2,282	)

Total net sales	$	666,814		$	641,720		$	627,182

Operating segment income:
PCB	$	70,443		$	75,501		$	69,435
E-M Solutions		2,870			1,421			2,689
Corporate		(23,318	)		(20,747	)		(21,158	)

Total operating segment income		49,995			56,175			50,966
Amortization of definite-lived intangibles		(5,905	)		(5,949	)		(5,910	)

Total operating income		44,090			50,226			45,056
Total other expense		(21,350	)		(14,943	)		(18,747	)

Income before income taxes	$	22,740		$	35,283		$	26,309


RECONCILIATIONS¹
	Third Quarter						Second Quarter			First Three Quarters
	2017			2016			2017			2017			2016
Non-GAAP gross profit reconciliation²:
GAAP gross profit	$	96,834		$	109,562		$	95,867		$	297,720		$	290,770
Add back item:
Stock-based compensation		606			412			639			1,639			1,161

Non-GAAP gross profit	$	97,440		$	109,974		$	96,506		$	299,359		$	291,931

Non-GAAP gross margin		14.6	%		17.1	%		15.4	%		15.6	%		16.0	%

Non-GAAP operating income reconciliation³:
GAAP operating income	$	44,090		$	50,226		$	45,056		$	141,716		$	103,807
Add back items:
Amortization of definite-lived intangibles		5,905			5,949			5,910			17,727			17,845
Stock-based compensation		4,678			2,799			5,000			13,306			7,890
(Gain)/loss on sale of assets		452						(1,251	)		(2,348	)		(1,472	)
Impairments, restructuring, acquisition-related, and other charges		100			2,300			416			1,225			12,844

Non-GAAP operating income	$	55,225		$	61,274		$	55,131		$	171,626		$	140,914

Non-GAAP operating margin		8.3	%		9.5	%		8.8	%		8.9	%		7.7	%

Non-GAAP net income and EPS attributable to stockholders reconciliation⁴:
GAAP net income (loss) attributable to stockholders	$	21,453		$	25,582		$	20,591		$	75,003		$	36,866
Add back items:
Amortization of definite-lived intangibles		5,905			5,949			5,910			17,727			17,845
Stock-based compensation		4,678			2,799			5,000			13,306			7,890
Non-cash interest expense		2,699			4,721			2,726			8,052			16,483
(Gain)/loss on sale of assets		452						(1,251	)		(2,348	)		(1,472	)
Loss on extinguishment of debt		768						1			769
Impairments, restructuring, acquisition-related, and other charges		100			2,300			416			1,225			12,844
Income taxes		(2,643	)		(1,208	)		(119	)		(7,855	)		(8,036	)

Non-GAAP net income attributable to stockholders	$	33,412		$	40,143		$	33,274		$	105,879		$	82,420

Non-GAAP earnings per diluted share attributable to stockholders	$	0.32		$	0.39		$	0.31		$	1.00		$	0.82

Non-GAAP diluted number of shares⁵:
Diluted shares		131,596			127,645			133,224			131,914			101,094
Dilutive effect of convertible debt		(25,939	)		(25,940	)		(25,940	)		(25,939	)

Non-GAAP diluted number of shares		105,657			101,705			107,284			105,975			101,094


Adjusted EBITDA reconciliation⁶:
GAAP net income (loss)	$	21,535		$	25,770		$	20,751		$	75,411		$	37,385
Add back items:
Income tax provision (benefit)		1,205			9,513			5,558			10,902			14,011
Interest expense		13,598			18,873			12,922			40,116			60,741
Amortization of definite-lived intangibles		5,905			5,949			5,910			17,727			17,845
Depreciation expense		37,496			37,006			36,146			109,719			117,690
Stock-based compensation		4,678			2,799			5,000			13,306			7,890
(Gain)/loss on sale of assets		452						(1,251	)		(2,348	)		(1,472	)
Loss on extinguishment of debt		768						1			769
Impairments, restructuring, acquisition-related, and other charges		100			2,300			416			1,225			12,844

Adjusted EBITDA	$	85,737		$	102,210		$	85,453		$	266,827		$	266,934

Adjusted EBITDA margin		12.9	%		15.9	%		13.6	%		13.9	%		14.6	%

Free cash flow reconciliation:
Operating cash flow		71,366			102,737			59,114			180,064			200,686
Capital expenditures, net		(22,877	)		(25,552	)		(45,626	)		(91,881	)		(60,997	)

Free cash flow	$	48,489		$	77,185		$	13,488		$	88,183		$	139,689

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.

Non-GAAP gross profit and gross margin measures exclude stock-based compensation expense.

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.

Form: 8-K

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