November 1, 2023 - EX-99.1 - 8-K: Current report filing

Exhibit 99.1

Contact:

Sameer Desai,

Vice President, Corporate

Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

TTM Technologies, Inc. Reports Fiscal Third Quarter 2023 Results

Santa Ana, CA – November 1, 2023– TTM Technologies, Inc. (NASDAQ: TTMI), a leading global manufacturer of technology solutions including mission systems, radio frequency (“RF”) components and RF microwave/microelectronic assemblies, and printed circuit boards (“PCB”), today reported results for the third quarter fiscal 2023, which ended on October 2, 2023.

Third Quarter 2023 Highlights

•

Net sales were $572.6 million

•

GAAP net loss of $37.1 million, or ($0.36) per diluted share, inclusive of a goodwill impairment charge of $44.1 million

•

Non-GAAP net income was $44.9 million, or $0.43 per diluted share

•

Cash flow from operations was $58.9 million

•

Repurchased 1 million shares of common stock for $14.6 million at an average price of $14.33 per share

Third Quarter 2023 GAAP Financial Results

Net sales for the third quarter of 2023 were $572.6 million, compared to $671.1 million in the third quarter of 2022.

GAAP operating loss for the third quarter of 2023 was $10.2 million, inclusive of a $44.1 million goodwill impairment charge related to the RF&S Components segment. This compares to GAAP operating income of $49.8 million in the third quarter of 2022.

GAAP net loss for the third quarter of 2023 was $37.1 million, or ($0.36) per diluted share, compared to GAAP net income of $43.5 million, or $0.42 per diluted share in the third quarter of 2022.

Third Quarter 2023 Non-GAAP Financial Results

On a non-GAAP basis, net income for the third quarter of 2023 was $44.9 million, or $0.43 per diluted share. This compares to non-GAAP net income of $57.9 million, or $0.56 per diluted share, for the third quarter of 2022.

Adjusted EBITDA in the third quarter of 2023 was $84.1 million, or 14.7% of sales compared to adjusted EBITDA of $102.5 million, or 15.3% of sales for the third quarter of 2022.

“Our Non-GAAP EPS was well above the guided range as a result of improved execution, particularly in our North America region and strength in our Data Center Computing end market,” said Tom Edman, CEO of TTM. “In addition, cash flow from operations was a healthy 10.3% of revenue enabling us to repurchase stock while maintaining a solid balance sheet with a net leverage ratio of 1.5x,” concluded Mr. Edman.

Business Outlook

For the fourth quarter of 2023, TTM estimates that revenues will be in the range of $550 million to $590 million, and non-GAAP net income will be in the range of $0.34 to $0.40 per diluted share.

Contact:

Sameer Desai,

Vice President, Corporate

Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

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 has not been provided because the Company is unable to provide such reconciliation without unreasonable effort. For the same reasons, TTM is unable to address the probable significance of the information.

Live Webcast/Conference Call

TTM will host a conference call and webcast to discuss third quarter 2023 results and the fourth quarter 2023 outlook on Wednesday, November 1st, 2023, at 10:00 a.m. Eastern Time (7:00 a.m. Pacific Time). The conference call will include forward-looking statements.

Access to the conference call is available by clicking on the registration link TTM Technologies, Inc. third quarter fiscal year 2023 conference call. Registering participants will receive dial in information and a unique PIN to join the call. Participants can register at any time up to the start of the conference call. The conference call will also be simulcast on the company’s website, and can be accessed by clicking on the link TTM Technologies, Inc. third quarter fiscal year 2023 webcast. The webcast will remain accessible for one week following the live event.

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 TTM Technologies, Inc. third quarter fiscal year 2023 webcast.

About TTM

TTM Technologies, Inc. is a leading global manufacturer of technology solutions including mission systems, RF components/RF microwave/microelectronic assemblies, quick-turn and technologically advanced PCBs. 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

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-Q 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.

Contact:

Sameer Desai,

Vice President, Corporate

Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

About Our Non-GAAP Financial Measures

To supplement our consolidated condensed financial statements presented on a GAAP basis, 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 reconciliations below 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.

- Tables Follow -

TTM TECHNOLOGIES, INC.

Selected Unaudited Financial Information

(In thousands, except per share data)


	Third Quarter						First Three Quarters
	2023			2022			2023			2022
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Net sales	$	572,582		$	671,080		$	1,663,528		$	1,877,890
Cost of goods sold		459,312			542,513			1,365,628			1,541,327

Gross profit		113,270			128,567			297,900			336,563

Operating expenses:
Selling and marketing		18,763			19,824			58,245			55,653
General and administrative		38,916			40,743			111,829			121,863
Research and development		6,173			7,322			19,682			18,110
Amortization of definite-lived intangibles		11,429			10,273			37,245			26,822
Restructuring charges		4,091			627			19,061			1,267
Impairment of goodwill		44,100			—			44,100			—

Total operating expenses		123,472			78,789			290,162			223,715

Operating (loss) income		minus(10,202	)		49,778			7,738			112,848
Interest expense		minus(10,101	)		minus(10,939	)		minus(34,751	)		minus(33,011	)
Loss on extinguishment of debt		—			—			minus(1,154	)		—
Gain on sale of subsidiary		—			—			1,270			—
Other, net		3,044			10,324			9,310			19,932

(Loss) income before income taxes		minus(17,259	)		49,163			minus(17,587	)		99,769
Income tax provision		minus(19,807	)		minus(5,635	)		minus(18,469	)		minus(11,203	)

Net (loss) income	$	minus(37,066	)	$	43,528		$	minus(36,056	)	$	88,566

(Loss) earnings per share:
Basic	$	minus(0.36	)	$	0.43		$	minus(0.35	)	$	0.87
Diluted		minus(0.36	)		0.42			minus(0.35	)		0.85
Weighted-average shares used in computing per share amounts:
Basic		103,510			102,196			102,873			102,016
Diluted		103,510			103,720			102,873			103,738
Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:
Weighted-average shares outstanding		103,510			102,196			102,873			102,016
Dilutive effect of warrants		—			—			—			2
Dilutive effect of performance-based stock units, restricted stock units & stock options		—			1,524			—			1,720

Diluted shares		103,510			103,720			102,873			103,738


SELECTED BALANCE SHEET DATA	October 2, 2023		January 2, 2023
Cash and cash equivalents, including restricted cash	$	408,331	$	402,749
Accounts and notes receivable, net		390,902		473,225
Receivable from sale of SH E-MS property		6,554		69,240
Contract assets		304,279		335,788
Inventories		206,176		170,639
Total current assets		1,353,236		1,493,056
Property, plant and equipment, net		808,371		724,204
Operating lease right of use asset		89,290		18,862
Other non-current assets		1,015,605		1,087,482
Total assets		3,266,502		3,323,604
Short-term debt, including current portion of long-term debt	$	2,625	$	50,000
Accounts payable		336,070		361,788
Total current liabilities		688,286		761,325
Debt, net of discount		864,824		879,407
Total long-term liabilities		1,077,102		1,026,700
Total equity		1,501,114		1,535,579
Total liabilities and equity		3,266,502		3,323,604


SUPPLEMENTAL DATA	Third Quarter						First Three Quarters
	2023			2022			2023			2022
Gross margin		19.8	%		19.2	%		17.9	%		17.9	%
Operating margin		minus(1.8	)%		7.4	%		0.5	%		6.0	%

End Market Breakdown:
	Third Quarter
	2023			2022
Aerospace and Defense		45	%		38	%
Automotive		15	%		15	%
Data Center Computing		17	%		14	%
Medical/Industrial/Instrumentation		16	%		19	%
Networking		7	%		14	%

Stock-based Compensation:
	Third Quarter
	2023			2022
Amount included in:
Cost of goods sold	$	2,212		$	1,699
Selling and marketing		888			762
General and administrative		2,958			2,685
Research and development		309			324

Total stock-based compensation expense	$	6,367		$	5,470


Operating Segment Data:
	Third Quarter
	2023			2022
Net sales:
PCB*	$	563,676		$	657,175
RF&S Components		8,906			13,905

Total net sales	$	572,582		$	671,080

Operating segment income:
PCB*	$	82,868		$	89,868
RF&S Components		minus(41,441	)		5,984
Corporate & Other*		minus(37,865	)		minus(34,417	)

Total operating segment income		3,562			61,435
Amortization of definite-lived intangibles		minus(13,764	)		minus(11,657	)

Total operating (loss) income		minus(10,202	)		49,778
Total other expense		minus(7,057	)		minus(615	)

(Loss) income before income taxes	$	minus(17,259	)	$	49,163

Amended for Telephonics integration


RECONCILIATIONS¹	Third Quarter						First Three Quarters
	2023			2022			2023			2022
Non-GAAP gross profit reconciliation²:
GAAP gross profit	$	113,270		$	128,567		$	297,900		$	336,563
Add back item:
Amortization of definite-lived intangibles		2,335			1,384			10,566			4,151
Accelerated depreciation associated with plant closures		725			19			3,374			124
Stock-based compensation		2,212			1,699			5,371			4,147
Unrealized loss (gain) on commodity hedge		770			385			minus(491	)		4,192
Purchase accounting related inventory markup		—			248			327			248

Non-GAAP gross profit	$	119,312		$	132,302		$	317,047		$	349,425

Non-GAAP gross margin		20.8	%		19.7	%		19.1	%		18.6	%
Non-GAAP operating income reconciliation³:
GAAP operating (loss) income	$	minus (10,202	)	$	49,778		$	7,738		$	112,848
Add back items:
Amortization of definite-lived intangibles		13,764			11,657			47,811			30,973
Accelerated depreciation associated with plant closures		725			19			3,374			124
Stock-based compensation		6,367			5,470			16,728			14,131
Loss (gain) on sale of assets		111			—			minus(104	)		—
Unrealized loss (gain) on commodity hedge		770			385			minus(491	)		4,192
Purchase accounting related inventory markup		—			248			327			248
Impairment, restructuring, acquisition-related and other charges		46,356			655			61,948			12,805

Non-GAAP operating income	$	57,891		$	68,212		$	137,331		$	175,321

Non-GAAP operating margin		10.1	%		10.2	%		8.3	%		9.3	%
Non-GAAP net income and EPS reconciliation⁴:
GAAP net (loss) income	$	minus (37,066	)	$	43,528		$	minus (36,056	)	$	88,566
Add back items:
Amortization of definite-lived intangibles		13,764			11,657			47,811			30,973
Accelerated depreciation associated with plant closures		725			19			3,374			124
Stock-based compensation		6,367			5,470			16,728			14,131
Non-cash interest expense		502			540			1,726			1,609
Loss (gain) on sale of assets		111			—			minus(104	)		minus(827	)
Change in fair value of warrant liabilities		—			—			—			minus(99	)
Loss on extinguishment of debt		—			—			1,154			—
Gain on sale of subsidiary		—			—			minus(1,270	)		—
Unrealized loss (gain) on commodity hedge		770			385			minus(491	)		4,192
Purchase accounting related inventory markup		—			248			327			248
Impairment, restructuring, acquisition-related and other charges		46,356			655			61,948			12,805
Income taxes⁵		13,353			minus(4,586	)		1,427			minus(13,236	)

Non-GAAP net income	$	44,882		$	57,916		$	96,574		$	138,486

Non-GAAP earnings per diluted share	$	0.43		$	0.56		$	0.92		$	1.33
Non-GAAP diluted number of shares:
GAAP diluted number of shares		103,510			103,720			102,873			103,738
Dilutive effect of performance-based stock units, restricted stock units & stock options		1,419			—			1,809			—

Non-GAAP diluted number of shares		104,929			103,720			104,682			103,738

Adjusted EBITDA reconciliation⁶:
GAAP net (loss) income	$	minus (37,066	)	$	43,528		$	minus (36,056	)	$	88,566
Add back items:
Income tax provision		19,807			5,635			18,469			11,203
Interest expense		10,101			10,939			34,751			33,011
Amortization of definite-lived intangibles		13,764			11,657			47,811			30,973
Depreciation expense		23,870			24,017			74,060			67,306
Stock-based compensation		6,367			5,470			16,728			14,131
Loss (gain) on sale of assets		111			—			minus(104	)		minus(827	)
Change in fair value of warrant liabilities		—			—			—			minus(99	)
Loss on extinguishment of debt		—			—			1,154			—
Gain on sale of subsidiary		—			—			minus(1,270	)		—
Unrealized loss (gain) on commodity hedge		770			385			minus(491	)		4,192
Purchase accounting related inventory markup		—			248			327			248
Impairment, restructuring, acquisition-related and other charges		46,356			655			61,948			12,805

Adjusted EBITDA	$	84,080		$	102,534		$	217,327		$	261,509

Adjusted EBITDA margin		14.7	%		15.3	%		13.1	%		13.9	%
Free cash flow reconciliation:
Operating cash flow	$	58,852		$	80,006		$	139,814		$	195,314
Capital expenditures, net		minus(33,659	)		minus(26,281	)		minus(113,783	)		minus(76,095	)

Free cash flow	$	25,193		$	53,725		$	26,031		$	119,219

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.

Non-GAAP gross profit and gross margin measures exclude amortization of intangibles, accelerated depreciation associated with plant closures, stock-based compensation expense, unrealized loss (gain) on commodity hedge, and purchase accounting related inventory markup.

Non-GAAP operating income and operating margin measures exclude amortization of intangibles, accelerated depreciation associated with plant closures, stock-based compensation expense, loss (gain) on sale of assets, unrealized loss (gain) on commodity hedge, purchase accounting related inventory markup, impairment of goodwill, restructuring, acquisition-related costs, and other charges.

⁴

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 associated with plant closures, stock-based compensation expense, non-cash interest expense on debt (before consideration of capitalized interest), loss (gain) on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, gain on sale of subsidiary, unrealized loss (gain) on commodity hedge, purchase accounting related inventory markup, 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.

⁵

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

⁶

Adjusted EBITDA is defined as earnings before income taxes, interest expense, amortization of intangibles, depreciation, stock-based compensation expense, loss (gain) on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, gain on sale of subsidiary, unrealized loss (gain) on commodity hedge, purchase accounting related inventory markup, 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.

Form: 8-K

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