October 27, 2021 - EX-99.1 - 8-K: Current report filing

TTM Technologies, Inc., Q321

Contact:

Sameer Desai,

Vice President, Corporate

Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

TTM Technologies, Inc. Reports Fiscal Third Quarter 2021 Results

Santa Ana, CA October 27, 2021 TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (PCB) and radio frequency (RF) components and assemblies manufacturer, today reported results for the third quarter of fiscal 2021, which ended on September 27, 2021.

Third Quarter 2021 Highlights

Net sales were $556.8 million

GAAP net income of $21.0 million, or $0.19 per diluted share

Non-GAAP net income was $36.5 million, or $0.34 per diluted share

Repurchased 2.11 million shares of common stock for $28.9 million at an average price of $13.71 per share

Third Quarter 2021 Financial Results

Net sales for the third quarter of 2021 were $556.8 million, compared to $513.6 million from continuing operations in the third quarter of 2020.

GAAP operating income for the third quarter of 2021 was $32.2 million. This compares to GAAP operating loss of $40.3 million from continuing operations in the third quarter of 2020, inclusive of a goodwill impairment charge of $69.2 million.

GAAP net income for the third quarter of 2021 was $21.0 million, or $0.19 per diluted share, compared to net loss of $61.5 million, or ($0.58) per diluted share from continuing operations in the third quarter of 2020.

On a non-GAAP basis, net income for the third quarter of 2021 was $36.5 million, or $0.34 per diluted share. This compares to non-GAAP net income of $26.8 million, or $0.25 per diluted share from continuing operations in the third quarter of 2020.

Adjusted EBITDA in the third quarter of 2021 was $68.6 million, or 12.3 percent of net sales, compared to adjusted EBITDA of $67.2 million, or 13.1 percent of net sales, from continuing operations, in the third quarter of 2020.

In the third quarter, TTM delivered revenue and non-GAAP earnings within the previously guided range despite labor and production inefficiencies in North America and tight supply conditions globally for certain raw materials. Results were led by strong year on year growth from the automotive and data center computing end markets and strength from the medical, industrial and instrumentation end market, said Tom Edman, CEO of TTM.

Business Outlook

In the fourth quarter, further increases in labor and raw materials costs, along with potential power rationing in China, are expected to negatively affect profitability. As a result, TTM estimates that revenue for the fourth quarter of 2021 will be in the range of $530 million to $570 million, and non-GAAP net income will be in the range of $0.28 to $0.34 per diluted share.

TTM Technologies, Inc., Q321

Contact:

Sameer Desai,

Vice President, Corporate

Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

Live Webcast/Conference Call

TTM will host a conference call and webcast to discuss third quarter 2021 results and the fourth quarter 2021 outlook on Wednesday, October 27th, 2021 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 800-263-0877 or international 323-794-2094 (ID 8701149). 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 and backplane assemblies as well as a global designer and manufacturer of high-frequency radio frequency (RF) and microwave components and assemblies. 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

The preliminary financial results included in this press release represent the most current information available to management. The companys actual results when disclosed in its Form 10-Q may differ from these preliminary results as a result of the completion of the companys financial closing procedures; final adjustments; completion of the review by the companys independent registered accounting firm; and other developments that may arise between now and the disclosure of the final results. 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, the impact of COVID-19, 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 and raw materials used in 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.

TTM Technologies, Inc., Q321

Contact:

Sameer Desai,

Vice President, Corporate

Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

With respect to the Companys outlook for non-GAAP net income per diluted share, we are unable to predict with reasonable certainty or without unreasonable effort certain items that may affect a comparable measure calculated and presented in accordance with GAAP. Our expected non-GAAP net income per diluted share excludes primarily the future impact of 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 per diluted share calculated and presented in accordance with GAAP. Accordingly, a reconciliation of non-GAAP net income per diluted share to a comparable 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						First Three Quarters
	2021			2020			2021			2020
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Net sales	$	556,784		$	513,576		$	1,650,599		$	1,581,520
Cost of goods sold		463,605			424,298			1,375,910			1,310,470

Gross profit		93,179			89,278			274,689			271,050

Operating expenses:
Selling and marketing		15,858			15,895			46,745			48,033
General and administrative		32,146			27,998			91,075			95,646
Research and development		4,423			5,223			13,075			15,166
Amortization of definite-lived intangibles		8,274			10,126			26,837			29,249
Restructuring charges		243			1,088			4,034			14,830
Impairment of goodwill					69,200						69,200

Total operating expenses		60,944			129,530			181,766			272,124

Operating income (loss)		32,235			(40,252	)		92,923			(1,074	)
Interest expense		(11,147	)		(20,204	)		(33,615	)		(58,557	)
Loss on extinguishment of debt								(15,217	)
Other, net		2,525			(2,316	)		5,338			641
Income (loss) from continuing operations before income taxes		23,613			(62,772	)		49,429			(58,990	)
Income tax (provision) benefit		(2,655	)		1,300			(3,402	)		3,644

Net income (loss) from continuing operations		20,958			(61,472	)		46,027			(55,346	)
Income from discontinued operations, net of income taxes					20,021						193,921

Net income (loss)	$	20,958		$	(41,451	)	$	46,027		$	138,575

Earnings (loss) per share:
Basic earnings (loss) per share from continuing operations	$	0.20		$	(0.58	)	$	0.43		$	(0.52	)
Basic earnings per share from discontinued operations					0.19						1.83

Basic earnings (loss) per share	$	0.20		$	(0.39	)	$	0.43		$	1.31

Diluted earnings (loss) per share from continuing operations	$	0.19		$	(0.58	)	$	0.42		$	(0.52	)
Diluted earnings per share from discontinued operations					0.19						1.83

Diluted earnings (loss) per share	$	0.19		$	(0.39	)	$	0.42		$	1.31

Weighted-average shares used in computing per share amounts:
Basic		107,098			106,729			106,917			106,130
Diluted		108,345			106,729			108,839			106,130
Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:
Weighted-average shares outstanding		107,098			106,729			106,917			106,130
Dilutive effect of warrants								267
Dilutive effect of performance-based stock units, restricted stock units & stock options		1,247						1,655

Diluted shares		108,345			106,729			108,839			106,130

SELECTED BALANCE SHEET DATA


	September 27, 2021		December 28, 2020
Cash and cash equivalents, including restricted cash	$	529,816	$	451,565
Accounts and notes receivable, net		388,233		381,105
Contract assets		325,774		273,256
Inventories		140,055		115,651
Total current assets		1,423,348		1,248,758
Property, plant and equipment, net		669,736		650,435
Operating lease right of use asset		16,794		24,340
Other non-current assets		937,753		972,411
Total assets		3,047,631		2,895,944
Accounts payable	$	386,705	$	327,102
Total current liabilities		567,442		518,046
Debt, net of discount		926,922		842,853
Total long-term liabilities		1,013,600		933,889
Total equity		1,466,589		1,444,009
Total liabilities and equity		3,047,631		2,895,944

SUPPLEMENTAL DATA


	Third Quarter						First Three Quarters
	2021			2020			2021			2020
Gross margin		16.7	%		17.4	%		16.6	%		17.1	%
Operating margin		5.8	%		(7.8	)%		5.6	%		(0.1	)%
End Market Breakdown, excludes Mobility:
	Third Quarter
	2021			2020
Aerospace/Defense		31	%		36	%
Automotive		18	%		14	%
Data Center Computing		14	%		12	%
Medical/Industrial/Instrumentation		20	%		19	%
Networking/Communications		16	%		18	%
Other		1	%		1	%
Stock-based Compensation:
	Third Quarter
	2021			2020
Amount included in:
Cost of goods sold	$	1,284		$	1,173
Selling and marketing		731			557
General and administrative		2,542			2,705
Research and development		387			44

Total stock-based compensation expense	$	4,944		$	4,479

Operating Segment Data:
	Third Quarter
Net sales:		2021			2020
PCB	$	541,118		$	481,311
RF&S Components		15,666			11,742
Other¹					20,523

Total net sales	$	556,784		$	513,576

Operating segment income:
PCB	$	61,424		$	65,179
RF&S Components		6,537			(66,098	)
Corporate & Other¹		(26,068	)		(27,823	)

Total operating segment income (loss)		41,893			(28,742	)
Amortization of definite-lived intangibles		(9,658	)		(11,510	)

Total operating income (loss)		32,235			(40,252	)
Total other expense		(8,622	)		(22,520	)

Income (loss) from continuing operations before income taxes	$	23,613		$	(62,772	)

RECONCILIATIONS²


	Third Quarter						First Three Quarters
	2021			2020			2021			2020

Non-GAAP gross profit reconciliation³:
GAAP gross profit from continuing operations	$	93,179		$	89,278		$	274,689		$	271,050
Add back item:
Amortization of definite-lived intangibles		1,384			1,384			4,151			4,151
Accelerated depreciation					2,539						4,936
Stock-based compensation		1,284			1,173			3,310			2,643
Unrealized loss on commodity hedge		164						65
Restructuring and other charges								254

Non-GAAP gross profit	$	96,011		$	94,374		$	282,469		$	282,780

Non-GAAP gross margin		17.2	%		18.4	%		17.1	%		17.9	%
Non-GAAP operating income reconciliation⁴:
GAAP operating income (loss) from continuing operations	$	32,235		$	(40,252	)	$	92,923		$	(1,074	)
Add back items:
Amortization of definite-lived intangibles		9,658			11,510			30,988			33,400
Accelerated depreciation					2,940						5,694
Stock-based compensation		4,944			4,479			12,503			11,961
(Gain) on sale of assets								(421	)
Unrealized loss on commodity hedge		164						65
Impairments, restructuring, acquisition-related and other charges		699			68,270			4,550			84,139

Non-GAAP operating income	$	47,700		$	46,947		$	140,608		$	134,120

Non-GAAP operating margin		8.6	%		9.1	%		8.5	%		8.5	%
Non-GAAP net income and EPS reconciliation⁵:
GAAP net income (loss) from continuing operations	$	20,958		$	(61,472	)	$	46,027		$	(55,346	)
Add back items:
Amortization of definite-lived intangibles		9,658			11,510			30,988			33,400
Accelerated depreciation					2,940						5,694
Stock-based compensation		4,944			4,479			12,503			11,961
Non-cash interest expense		540			7,332			1,613			14,489
(Gain) on sale of assets					(199	)		(991	)		(706	)
Change in fair value of warrant liabilities		(2,669	)					(3,868	)
Loss on extinguishment of debt								15,217
Unrealized loss on commodity hedge		164						65
Impairments, restructuring, acquisition-related and other charges		699			68,270			4,550			84,139
Income taxes⁶		2,246			(6,081	)		(4,263	)		(17,188	)

Non-GAAP net income	$	36,540		$	26,779		$	101,841		$	76,443

Non-GAAP earnings per diluted share	$	0.34		$	0.25		$	0.94		$	0.72


Adjusted EBITDA reconciliation⁷:
GAAP net income (loss) from continuing operations	$	20,958		$	(61,472	)	$	46,027		$	(55,346	)
Add back items:
Income tax provision (benefit)		2,655			(1,300	)		3,402			(3,644	)
Interest expense		11,147			20,204			33,615			58,557
Amortization of definite-lived intangibles		9,658			11,510			30,988			33,400
Depreciation expense		20,994			25,669			63,711			75,797
Stock-based compensation		4,944			4,479			12,503			11,961
(Gain) on sale of assets					(199	)		(991	)		(706	)
Change in fair value of warrant liabilities		(2,669	)					(3,868	)
Loss on extinguishment of debt								15,217
Unrealized loss on commodity hedge		164						65
Impairments, restructuring, acquisition-related and other charges		699			68,270			4,550			84,139

Adjusted EBITDA	$	68,550		$	67,161		$	205,219		$	204,158

Adjusted EBITDA margin		12.3	%		13.1	%		12.4	%		12.9	%

Free cash flow reconciliation⁸:
Operating cash flow	$	18,599		$	84,776		$	114,263		$	192,223
Capital expenditures, net		(19,766	)		(29,067	)		(61,069	)		(74,338	)

Free cash flow	$	(1,167	)	$	55,709		$	53,194		$	117,885

¹	Other represents the SH E-MS and SZ results.

²	This information provides a reconciliation of non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP EPS, and adjusted EBITDA to the financial information in our consolidated condensed statements of operations.

³	Non-GAAP gross profit and gross margin measures exclude amortization of intangibles, accelerated depreciation, stock-based compensation expense, unrealized loss on commodity hedge, restructuring and other charges.

⁴	Non-GAAP operating income and operating margin measures exclude amortization of intangibles, accelerated depreciation, stock-based compensation expense, gain on sale of assets, unrealized loss on commodity hedge, impairment of goodwill, restructuring, acquisition-related costs, and other charges.

⁵

This information provides non-GAAP net income and non-GAAP EPS, which are non-GAAP financial measures. Management believes that both measures which add back amortization of intangibles, accelerated depreciation, stock-based compensation expense, non-cash interest expense on debt (before consideration of capitalized interest), gain on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, unrealized loss on commodity hedge, impairment of goodwill, restructuring, acquisition-related costs, 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 Companys ongoing financial condition and results of operations.

⁶	Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate.

⁷

Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, unrealized loss on commodity hedge, impairment of goodwill, restructuring, acquisition-related costs, 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.

⁸	Free Cash Flow in 2020 has been restated to exclude the Mobility business which was sold in Q2 of 2020.

Form: 8-K

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