Form: 8-K

Current report filing

February 9, 2022

Exhibit 99.1

 

TTM Technologies, Inc., Q4’21       Contact:
      Sameer Desai,
      Vice President, Corporate
      Development & Investor Relations
      Sameer.desai@ttmtech.com
      714-327-3050

TTM Technologies, Inc. Reports Fiscal Fourth Quarter and 2021 Results

Santa Ana, CA – February 9, 2022– TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) and radio frequency (“RF”) components manufacturer, today reported results for the fourth quarter and fiscal 2021, which ended on January 3, 2022.

Fourth Quarter 2021 Highlights

  •  

Net sales were $598.1 million

 

  •  

GAAP net income of $8.4 million, or $0.08 per diluted share

 

  •  

Non-GAAP net income was $36.2 million, or $0.34 per diluted share

 

  •  

Operating cash flow of $62.4 million

 

  •  

Repurchased 2.2 million shares of common stock for $29.6 million at an average price of $13.47 per share

Fourth Quarter 2021 GAAP Financial Results

Net sales for the fourth quarter of 2021 were $598.1 million, compared to $523.8 million in the fourth quarter of 2020.

GAAP operating income for the fourth quarter of 2021 was $33.1 million. This compares to GAAP operating income of $29.2 million in the fourth quarter of 2020.

GAAP net income for the fourth quarter of 2021 was $8.4 million, or $0.08 per diluted share, compared to net income of $39.0 million, or $0.34 per diluted share in the fourth quarter of 2020.

Fourth Quarter 2021 Non-GAAP Financial Results

On a non-GAAP basis, net income for the fourth quarter of 2021 was $36.2 million, or $0.34 per diluted share. This compares to non-GAAP net income of $40.2 million, or $0.37 per diluted share, for the fourth quarter of 2020.

Adjusted EBITDA in the fourth quarter of 2021 was $70.4 million, or 11.8 percent of net sales, compared to adjusted EBITDA of $68.2 million, or 13.0% percent of net sales, for the fourth quarter of 2020.

“In the fourth quarter, TTM achieved revenues above the high end of guidance and non-GAAP earnings at the high end of the guided range. This outperformance was driven by strength in all of our commercial end markets, despite labor and production challenges in North America and tight supply conditions globally for certain raw materials,” said Tom Edman, CEO of TTM.

Full Year 2021 Financial Results1

Net sales for fiscal year 2021 increased to $2.25 billion from $2.11 billion from continuing operations in fiscal year 2020, a 6.8% increase. Excluding the two E-MS facilities that were closed at the end of 2020, our revenues grew 10.9% for the year.

GAAP operating income for fiscal year 2021 was $126.0 million, an increase from GAAP operating income of $28.1 million from continuing operations in fiscal year 2020.

 

1 

In 2020, we completed the sale of the Mobility business so we are comparing 2021 results to 2020 continuing operations, which excludes the Mobility business. The E-MS business is still included in 2020 continuing operations.


TTM Technologies, Inc., Q4’21       Contact:
      Sameer Desai,
      Vice President, Corporate
      Development & Investor Relations
      Sameer.desai@ttmtech.com
      714-327-3050

GAAP net income for fiscal year 2021 was $54.4 million, or $0.50 per diluted share, compared to GAAP net loss of $16.4 million from continuing operations, or ($0.15) per diluted share, for fiscal year 2020.

On a non-GAAP basis, net income for fiscal year 2021 was $138.0 million, or $1.28 per diluted share. This compares to fiscal year 2020 non-GAAP net income of $116.7 million from continuing operations, or $1.10 per diluted share.

Adjusted EBITDA for fiscal year 2021 was $275.6 million, or 12.3 percent of net sales, compared to $272.3 million from continuing operations, or 12.9 percent of net sales, for fiscal year 2020. Cash flow from operations for fiscal year 2021 was $176.6 million.

“Despite the headwinds from materials and labor inflation and availability, COVID-19 and the strengthening Chinese currency, we delivered solid results in 2021 with revenues growing 10.9% year on year excluding divested businesses,” continued Edman. “Also in 2021, we generated $176.6 million in operating cash flow which enabled us to strengthen our balance sheet and return capital to our shareholders. For the year we repurchased 4.7 million shares for $64.6 million on our $100 million stock buyback program.”

Business Outlook

In the first quarter, we are seeing continued labor challenges along with normal seasonality associated with Chinese New Year and one less week in the quarter compared to the fourth quarter.

Taking these factors into consideration, TTM estimates that revenue for the first quarter of 2022 will be in the range of $540 million to $580 million, and non-GAAP net income will be in the range of $0.20 to $0.26 per diluted share.

Live Webcast/Conference Call

TTM will host a conference call and webcast to discuss fourth quarter 2021 results and the first quarter 2022 outlook on Wednesday, February 9th, 2022 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 888-394-8218 or international 323-794-2588 (ID 1667874). 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 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 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.


TTM Technologies, Inc., Q4’21       Contact:
      Sameer Desai,
      Vice President, Corporate
      Development & Investor Relations
      Sameer.desai@ttmtech.com
      714-327-3050

Forward-Looking Statements

The preliminary financial results included in this press release represent the most current information available to management. The company’s actual results when disclosed in its Form 10-K may differ from these preliminary results as a result of the completion of the company’s financial closing procedures; final adjustments; completion of the review by the company’s 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 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, the impact of COVID-19, 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.

With respect to the Company’s 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 management’s 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)

 

 
     Fourth Quarter      Full Year  
     2021      2020      2021      2020  

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

           

Net sales

   $ 598,141      $ 523,802      $ 2,248,740      $ 2,105,322  

Cost of goods sold

     500,819        435,829        1,876,729        1,746,299  
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

     97,322        87,973        372,011        359,023  
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating expenses:

           

Selling and marketing

     16,271        15,849        63,016        63,882  

General and administrative

     33,790        26,831        124,865        122,477  

Research and development

     5,071        4,604        18,146        19,770  

Amortization of definite-lived intangibles

     8,911        9,589        35,748        38,838  

Restructuring charges

     211        1,934        4,245        16,764  

Impairment of goodwill

     —          —          —          69,200  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating expenses

     64,254        58,807        246,020        330,931  
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

     33,068        29,166        125,991        28,092  

Interest expense

     (11,860      (14,599      (45,475      (73,156

Loss on extinguishment of debt

     —          —          (15,217      —    

Other, net

     (584      (1,854      4,754        (1,213
  

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) from continuing operations before income taxes

     20,624        12,713        70,053        (46,277

Income tax (provision) benefit

     (12,237      26,247        (15,639      29,891  
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income (loss) from continuing operations

     8,387        38,960        54,414        (16,386

Income from discontinued operations, net of income taxes

     —          —          —          193,921  
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 8,387      $ 38,960      $ 54,414      $ 177,535  
  

 

 

    

 

 

    

 

 

    

 

 

 

Earnings (loss) per share:

           

Basic earnings (loss) per share from continuing operations

   $ 0.08      $ 0.36      $ 0.51      $ (0.15

Basic earnings per share from discontinued operations

     —          —          —          1.82  
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic earnings per share

   $ 0.08      $ 0.36      $ 0.51      $ 1.67  
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings (loss) per share from continuing operations

   $ 0.08      $ 0.34      $ 0.50      $ (0.15

Diluted earnings per share from discontinued operations

     —          —          —          1.82  
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings per share

   $ 0.08      $ 0.34      $ 0.50      $ 1.67  
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted-average shares used in computing per share amounts:

           

Basic

     104,186        106,755        106,314        106,366  

Diluted

     105,769        113,513        108,153        106,366  

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

 

        

Weighted-average shares outstanding

     104,186        106,755        106,314     

Dilutive effect of convertible debt

     —          5,193        —       

Dilutive effect of warrants

     —          —          200     

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

     1,583        1,565        1,639     
  

 

 

    

 

 

    

 

 

    

Diluted shares

     105,769        113,513        108,153     
  

 

 

    

 

 

    

 

 

    

 

SELECTED BALANCE SHEET DATA

           

 

     January 3, 2022      December 28, 2020  

Cash and cash equivalents, including restricted cash

   $ 537,678      $ 451,565  

Accounts and notes receivable, net

     386,347        381,105  

Contract assets

     324,862        273,256  

Inventories

     127,612        115,651  

Total current assets

     1,407,413        1,248,758  

Property, plant and equipment, net

     665,755        650,435  

Operating lease right of use asset

     20,802        24,340  

Other non-current assets

     931,577        972,411  

Total assets

     3,025,547        2,895,944  

Accounts payable

   $ 361,484      $ 327,102  

Total current liabilities

     558,148        518,046  

Debt, net of discount

     927,818        842,853  

Total long-term liabilities

     1,011,982        933,889  

Total equity

     1,455,417        1,444,009  

Total liabilities and equity

     3,025,547        2,895,944  

 


SUPPLEMENTAL DATA

 

     Fourth Quarter     Full Year  
     2021     2020     2021     2020  

Gross margin

     16.3     16.8     16.5     17.1

Operating margin

     5.5     5.6     5.6     1.3

End Market Breakdown, excludes Mobility:

 

     Fourth Quarter  
     2021     2020  

Aerospace/Defense

     30     36

Automotive

     19     21

Data Center Computing

     15     13

Medical/Industrial/Instrumentation

     19     15

Networking/Communications

     16     15

Other

     1     0

Stock-based Compensation:

 

     Fourth Quarter  
     2021      2020  

Amount included in:

     

Cost of goods sold

   $ 1,404      $ 1,246  

Selling and marketing

     721        620  

General and administrative

     2,806        2,211  

Research and development

     277        35  
  

 

 

    

 

 

 

Total stock-based compensation expense

   $ 5,208      $ 4,112  
  

 

 

    

 

 

 

Operating Segment Data:

 

     Fourth Quarter  
Net sales:    2021      2020  

PCB

   $ 581,817      $ 488,762  

RF&S Components

     16,324        11,382  

Other1

     —          23,658  
  

 

 

    

 

 

 

Total net sales

   $ 598,141      $ 523,802  
  

 

 

    

 

 

 

Operating segment income:

     

PCB

   $ 70,731      $ 63,188  

RF&S Components

     6,906        3,209  

Corporate & Other1

     (34,168      (26,258
  

 

 

    

 

 

 

Total operating segment income

     43,469        40,139  

Amortization of definite-lived intangibles

     (10,401      (10,973
  

 

 

    

 

 

 

Total operating income

     33,068        29,166  

Total other expense

     (12,444      (16,453
  

 

 

    

 

 

 

Income from continuing operations before income taxes

   $ 20,624      $ 12,713  
  

 

 

    

 

 

 

RECONCILIATIONS2

 

     Fourth Quarter     Full Year  
     2021     2020     2021     2020  

Non-GAAP gross profit reconciliation3:

        

GAAP gross profit from continuing operations

   $ 97,322     $ 87,973     $ 372,011     $ 359,023  

Add back item:

        

Amortization of definite-lived intangibles

     1,490       1,384       5,641       5,535  

Accelerated depreciation

     —         899       —         5,835  

Stock-based compensation

     1,404       1,246       4,714       3,889  

Unrealized gain on commodity hedge

     (362     —         (297     —    

Restructuring and other charges

     7       —         261       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit

   $ 99,861     $ 91,502     $ 382,330     $ 374,282  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross margin

     16.7     17.5     17.0     17.8

Non-GAAP operating income reconciliation4:

        

GAAP operating income from continuing operations

   $ 33,068     $ 29,166     $ 125,991     $ 28,092  

Add back items:

        

Amortization of definite-lived intangibles

     10,401       10,973       41,389       44,373  

Accelerated depreciation

     —         1,057       —         6,751  

Stock-based compensation

     5,208       4,112       17,711       16,073  

(Gain) on sale of assets

     —         (97     (421     (97

Unrealized gain on commodity hedge

     (362     —         (297     —    

Impairments, restructuring, acquisition-related and other charges

     800       2,098       5,350       86,237  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income

   $ 49,115     $ 47,309     $ 189,723     $ 181,429  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating margin

     8.2     9.0     8.4     8.6

Non-GAAP net income and EPS reconciliation5:

        

GAAP net income (loss) from continuing operations

   $ 8,387     $ 38,960     $ 54,414     $ (16,386

Add back items:

        

Amortization of definite-lived intangibles

     10,401       10,973       41,389       44,373  

Accelerated depreciation

     —         1,057       —         6,751  

Stock-based compensation

     5,208       4,112       17,711       16,073  

Non-cash interest expense

     496       2,962       2,109       17,451  

(Gain) on sale of assets

     —         (119     (991     (825

Change in fair value of warrant liabilities

     (373     —         (4,241     —    

Loss on extinguishment of debt

     —         —         15,217       —    

Unrealized gain on commodity hedge

     (362     —         (297     —    

Impairments, restructuring, acquisition-related and other charges

     800       2,098       5,350       86,237  

Income taxes6

     11,636       (19,800     7,373       (36,988
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

   $ 36,193     $ 40,243     $ 138,034     $ 116,686  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP earnings per diluted share

   $ 0.34     $ 0.37     $ 1.28     $ 1.10  


Non-GAAP diluted number of shares:

        

GAAP diluted number of shares

     105,769       113,513       108,153       106,366  

Dilutive effect of convertible debt

     —         (5,193     —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP diluted number of shares

     105,769       108,320       108,153       106,366  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA reconciliation7:

        

GAAP net income (loss) from continuing operations

   $ 8,387     $ 38,960     $ 54,414     $ (16,386

Add back items:

        

Income tax provision (benefit)

     12,237       (26,247     15,639       (29,891

Interest expense

     11,860       14,599       45,475       73,156  

Amortization of definite-lived intangibles

     10,401       10,973       41,389       44,373  

Depreciation expense

     22,231       23,775       85,942       99,572  

Stock-based compensation

     5,208       4,112       17,711       16,073  

(Gain) on sale of assets

     —         (119     (991     (825

Change in fair value of warrant liabilities

     (373     —         (4,241     —    

Loss on extinguishment of debt

     —         —         15,217       —    

Unrealized gain on commodity hedge

     (362     —         (297     —    

Impairments, restructuring, acquisition-related and other charges

     800       2,098       5,350       86,237  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 70,389     $ 68,151     $ 275,608     $ 272,309  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     11.8     13.0     12.3     12.9

Free cash flow reconciliation8:

        

Operating cash flow

   $ 62,369     $ 55,491     $ 176,632     $ 247,714  

Capital expenditures, net

     (19,455     (18,663     (80,524     (93,001
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $ 42,914     $ 36,828     $ 96,108     $ 154,713  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

1 

Other represents the Shanghai E-MS and Shenzhen plant 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 gain 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 gain 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 gain 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 Company’s 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 gain 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.