Form: 8-K

Current report filing

February 7, 2024

EXHIBIT 99.1

 

  

Contact:

 

Sameer Desai,

Vice President, Corporate

Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

TTM Technologies, Inc. Reports Fourth Quarter and Full Year 2023 Results

Santa Ana, CA – February 7, 2024 – 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 quick-turn and technologically advanced printed circuit boards (“PCB”), today reported results for the fourth quarter and full year 2023, which ended on January 1, 2024.

Fourth Quarter 2023 Highlights

 

   

Net sales were $569.0 million

 

   

GAAP net income of $17.3 million, or $0.17 per diluted share

 

   

Non-GAAP net income was $43.0 million, or $0.41 per diluted share

 

   

Cash flow from operations was $47.5 million

 

   

Repurchased 784 thousand shares of common stock for $9.8 million at an average price of $12.52 per share

Fourth Quarter 2023 GAAP Financial Results

Net sales for the fourth quarter of 2023 were $569.0 million, compared to $617.2 million in the fourth quarter of 2022.

GAAP operating income for the fourth quarter of 2023 was $34.6 million. GAAP operating income for the fourth quarter of 2022 was $97.6 million and included a gain of $51.8 million in December 2022 from the sale of the property occupied by our former Shanghai E-MS entity.

GAAP net income for the fourth quarter of 2023 was $17.3 million, or $0.17 per diluted share, compared to GAAP net income of $6.0 million, or $0.06 per diluted share in the fourth quarter of 2022.

Fourth Quarter 2023 Non-GAAP Financial Results

On a non-GAAP basis, net income for the fourth quarter of 2023 was $43.0 million, or $0.41 per diluted share. This compares to non-GAAP net income of $42.7 million, or $0.41 per diluted share, for the fourth quarter of 2022.

Adjusted EBITDA in the fourth quarter of 2023 was $80.9 million, or 14.2% of sales compared to adjusted EBITDA of $81.6 million, or 13.2% of sales for the fourth quarter of 2022.

“TTM executed a strong finish to the year registering a Non-GAAP EPS that was above the high end of the guided range due to excellent operating performance and favorable product mix. Revenues were within the guided range as upside in our Aerospace and Defense and Data Center Computing end markets was offset by demand softness in our Automotive and Medical, Industrial and Instrumentation end markets,” said Tom Edman, CEO of TTM. “In addition, cash flow from operations was a healthy 8.3% of revenue enabling us to repurchase stock while maintaining a solid balance sheet with a net leverage ratio of 1.6x. Finally, our Penang facility has all major processes running and we are currently sampling product to customers,” concluded Mr. Edman.

Full Year 2023 Results

Net sales for 2023 decreased to $2.2 billion from $2.5 billion in 2022, an 11% decrease.


  

Contact:

 

Sameer Desai,

Vice President, Corporate

Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

 

GAAP operating income for 2023 was $42.3 million, inclusive of a $44.1 million goodwill impairment charge related to the RF&S Components segment. This is a decrease from GAAP operating income of $210.4 million in 2022.

GAAP net loss for 2023 was $18.7 million, or ($0.18) per diluted share, compared to GAAP net income of $94.6 million, or $0.91 per diluted share, in 2022.

On a non-GAAP basis, net income for 2023 was $139.5 million, or $1.33 per diluted share. This compares to 2022 non-GAAP net income of $181.2 million, or $1.74 per diluted share.

Adjusted EBITDA for 2023 was $298.2 million, or 13.4% of net sales, compared to $343.1 million, or 13.8% of net sales, for 2022.

“We delivered solid results in 2023 despite a challenging year. Declines in our commercial end markets were partially offset with growth in our Aerospace and Defense end market. Better product mix and execution in North America and Asia Pacific helped to mitigate margin declines,” continued Edman. “We refinanced our Term Loan and ABL, improving tenor, resulting in no maturities until 2028. Finally, in 2023, we generated $187.3 million in operating cash flow which enabled us to strengthen our balance sheet, while returning $24.4 million of capital to our shareholders.”

Business Outlook

For the first quarter of 2024, TTM estimates that revenues will be in the range of $530 million to $570 million, and non-GAAP net income will be in the range of $0.24 to $0.30 per diluted share.

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 fourth quarter 2023 results and the first quarter 2024 outlook on Wednesday, February 7, 2024, at 11:00 a.m. Eastern Time (8:00 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. fourth quarter and full 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. fourth quarter and full year 2023 webcast. The webcast will remain accessible for one week following the live event.


  

Contact:

 

Sameer Desai,

Vice President, Corporate

Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

 

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. fourth quarter and full 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-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

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.


  

Contact:

 

Sameer Desai,

Vice President, 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)

 

     Fourth Quarter     Full Year  
     2023     2022     2023     2022  

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

        

Net sales

   $ 569,039     $ 617,156     $ 2,232,567     $ 2,495,046  

Cost of goods sold

     453,671       495,754       1,819,299       2,037,081  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     115,368       121,402       413,268       457,965  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Selling and marketing

     18,677       19,529       76,922       75,182  

General and administrative

     37,802       36,317       149,631       158,180  

Research and development

     7,590       6,698       27,272       24,808  

Amortization of definite-lived intangibles

     11,430       10,275       48,675       37,097  

Impairment of goodwill

     —        —        44,100       —   

Restructuring charges

     5,291       2,827       24,352       4,094  

Gain on sale of SH E-MS property

     —        (51,804     —        (51,804
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     80,790       23,842       370,952       247,557  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     34,578       97,560       42,316       210,408  

Interest expense

     (13,373     (12,506     (48,124     (45,517

Loss on extinguishment of debt

     —        —        (1,154     —   

Gain on sale of subsidiary

     —        —        1,270       —   

Other, net

     (3,321     (1,960     5,989       17,972  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     17,884       83,094       297       182,863  

Income tax provision

     (546     (77,077     (19,015     (88,280
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 17,338     $ 6,017     $ (18,718   $ 94,583  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings (loss) per share:

        

Basic

   $ 0.17     $ 0.06     $ (0.18   $ 0.93  

Diluted

     0.17       0.06       (0.18     0.91  

Weighted-average shares used in computing per share amounts:

        

Basic

     102,327       102,217       102,744       102,074  

Diluted

     104,302       104,220       102,744       103,866  

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

 

     

Weighted-average shares outstanding

     102,327       102,217       102,744       102,074  

Dilutive effect of warrants

     —        —        —        1  

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

     1,975       2,003       —        1,791  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted shares

     104,302       104,220       102,744       103,866  
  

 

 

   

 

 

   

 

 

   

 

 

 


     January 1, 2024      January 2, 2023  

SELECTED BALANCE SHEET DATA

     

Cash and cash equivalents, including restricted cash

   $ 450,208      $ 402,749  

Accounts and notes receivable, net

     413,557        473,225  

Receivable from sale of SH E-MS property

     6,737        69,240  

Contract assets

     292,050        335,788  

Inventories

     213,075        170,639  

Total current assets

     1,429,687        1,493,056  

Property, plant and equipment, net

     807,667        724,204  

Operating lease right of use asset

     86,286        18,862  

Other non-current assets

     1,000,023        1,087,482  

Total assets

     3,323,663        3,323,604  

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

   $ 3,500      $ 50,000  

Accounts payable

     334,609        361,788  

Total current liabilities

     703,984        761,325  

Debt, net of discount

     914,336        879,407  

Total long-term liabilities

     1,108,640        1,026,700  

Total equity

     1,511,039        1,535,579  

Total liabilities and equity

     3,323,663        3,323,604  


     Fourth Quarter     Full Year  
     2023     2022     2023     2022  

SUPPLEMENTAL DATA

        

Gross margin

     20.3     19.7     18.5     18.4

Operating margin

     6.1     15.8     1.9     8.4

End Market Breakdown:

        
     Fourth Quarter        
     2023     2022  

Aerospace and Defense

     46     40

Automotive

     15     16

Data Center Computing

     17     14

Medical/Industrial/Instrumentation

     16     17

Networking

     6     13

Stock-based Compensation:

    
     Fourth Quarter  
     2023     2022  

Amount included in:

    

Cost of goods sold

   $ 2,084     $ 1,699  

Selling and marketing

     878       717  

General and administrative

     2,891       2,674  

Research and development

     306       304  
  

 

 

   

 

 

 

Total stock-based compensation expense

   $ 6,159     $ 5,394  
  

 

 

   

 

 

 

Operating Segment Data:

    
     Fourth Quarter  
     2023     2022  

Net sales:

    

PCB

   $ 559,728     $ 605,268  

RF&S Components

     9,311       11,888  
  

 

 

   

 

 

 

Total net sales

   $ 569,039     $ 617,156  
  

 

 

   

 

 

 

Operating segment income:

    

PCB

   $ 78,117     $ 79,573  

RF&S Components

     2,913       5,122  

Corporate & Other

     (32,687     24,523  
  

 

 

   

 

 

 

Total operating segment income

     48,343       109,218  

Amortization of definite-lived intangibles

     (13,765     (11,658
  

 

 

   

 

 

 

Total operating income

     34,578       97,560  

Total other expense

     (16,694     (14,466
  

 

 

   

 

 

 

Income before income taxes

   $ 17,884     $ 83,094  
  

 

 

   

 

 

 


     Fourth Quarter     Full Year  
     2023     2022     2023     2022  

RECONCILIATIONS1

        

Non-GAAP gross profit reconciliation2:

        

GAAP gross profit

   $ 115,368     $ 121,402     $ 413,268     $ 457,965  

Add back item:

        

Amortization of definite-lived intangibles

     2,335       1,383       12,901       5,534  

Accelerated depreciation associated with plant closures/restructuring

     1,950       —        5,324       124  

Stock-based compensation

     2,084       1,699       7,455       5,846  

Unrealized (gain) loss on commodity hedge

     (701     (2,407     (1,192     1,785  

Purchase accounting related inventory markup

     —        79       327       327  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit

   $ 121,036     $ 122,156     $ 438,083     $ 471,581  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross margin

     21.3     19.8     19.6     18.9

Non-GAAP operating income reconciliation3:

        

GAAP operating income

   $ 34,578     $ 97,560     $ 42,316     $ 210,408  

Add back items:

        

Amortization of definite-lived intangibles

     13,765       11,658       61,576       42,631  

Accelerated depreciation associated with plant closures/restructuring

     1,950       —        5,324       124  

Stock-based compensation

     6,159       5,394       22,887       19,525  

Gain on sale of assets

     —        (55,979     (104     (55,979

Unrealized (gain) loss on commodity hedge

     (701     (2,407     (1,192     1,785  

Purchase accounting related inventory markup

     —        79       327       327  

Impairment, restructuring, acquisition-related and other charges

     5,291       3,261       67,239       16,066  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income

   $ 61,042     $ 59,566     $ 198,373     $ 234,887  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating margin

     10.7     9.7     8.9     9.4

Non-GAAP net income and EPS reconciliation4:

        

GAAP net income (loss)

   $ 17,338     $ 6,017     $ (18,718   $ 94,583  

Add back items:

        

Amortization of definite-lived intangibles

     13,765       11,658       61,576       42,631  

Accelerated depreciation associated with plant closures/restructuring

     1,950       —        5,324       124  

Stock-based compensation

     6,159       5,394       22,887       19,525  

Non-cash interest expense

     478       543       2,204       2,152  

Gain on sale of assets

     —        (55,979     (104     (56,806

Change in fair value of warrant liabilities

     —        —        —        (99

Loss on extinguishment of debt

     —        —        1,154       —   

Gain on sale of subsidiary

     —        —        (1,270     —   

Unrealized (gain) loss on commodity hedge

     (701     (2,407     (1,192     1,785  

Purchase accounting related inventory markup

     —        79       327       327  

Impairment, restructuring, acquisition-related and other charges

     5,291       3,261       67,239       16,066  

Income taxes5

     (1,314     74,131       113       60,895  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

   $ 42,966     $ 42,697     $ 139,540     $ 181,183  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP earnings per diluted share

   $ 0.41     $ 0.41     $ 1.33     $ 1.74  

Non-GAAP diluted number of shares:

        

GAAP diluted number of shares

     104,302       104,220       102,744       103,866  

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

     —        —        1,851       —   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP diluted number of shares

     104,302       104,220       104,595       103,866  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA reconciliation6:

        

GAAP net income (loss)

   $ 17,338     $ 6,017     $ (18,718   $ 94,583  

Add back items:

        

Income tax provision

     546       77,077       19,015       88,280  

Interest expense

     13,373       12,506       48,124       45,517  

Amortization of definite-lived intangibles

     13,765       11,658       61,576       42,631  

Depreciation expense

     25,095       23,970       99,155       91,276  

Stock-based compensation

     6,159       5,394       22,887       19,525  

Gain on sale of assets

     —        (55,979     (104     (56,806

Change in fair value of warrant liabilities

     —        —        —        (99

Loss on extinguishment of debt

     —        —        1,154       —   

Gain on sale of subsidiary

     —        —        (1,270     —   

Unrealized (gain) loss on commodity hedge

     (701     (2,407     (1,192     1,785  

Purchase accounting related inventory markup

     —        79       327       327  

Impairment, restructuring, acquisition-related and other charges

     5,291       3,261       67,239       16,066  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 80,866     $ 81,576     $ 298,193     $ 343,085  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     14.2     13.2     13.4     13.8

Free cash flow reconciliation:

        

Operating cash flow

   $ 47,470     $ 77,559     $ 187,284     $ 272,873  

Capital expenditures, net

     (45,954     (20,779     (159,737     (96,874
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $ 1,516     $ 56,780     $ 27,547     $ 175,999  
  

 

 

   

 

 

   

 

 

   

 

 

 


1 

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.

2 

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

3 

Non-GAAP operating income and operating margin measures exclude amortization of intangibles, accelerated depreciation associated with plant closures/restructuring, stock-based compensation expense, gain on sale of assets, unrealized (gain) loss 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/restructuring, 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, gain on sale of subsidiary, unrealized (gain) loss 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, gain on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, gain on sale of subsidiary, unrealized (gain) loss 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.