November 2, 2021 - 10-Q: Quarterly report pursuant to Section 13 or 15(d)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

☑QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 27, 2021

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-31285

TTM TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

DELAWARE

91-1033443

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

200 East Sandpointe, Suite 400, Santa Ana, California 92707

(Address of principal executive offices)

(714) 327-3000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	TTMI	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Number of shares of common stock, $0.001 par value, of registrant outstanding at October 29, 2021: 104,358,560

TABLE OF CONTENTS

		Page
PART I: FINANCIAL INFORMATION		3
Item 1. Financial Statements (unaudited)		3
Consolidated Condensed Balance Sheets as of September 27, 2021 and December 28, 2020		3
Consolidated Condensed Statements of Operations for the quarter and three quarters ended September 27, 2021 and September 28, 2020		4
Consolidated Condensed Statements of Comprehensive Income (Loss) for the quarter and three quarters ended September 27, 2021 and September 28, 2020		5
Consolidated Condensed Statements of Stockholders' Equity for the three quarters ended September 27, 2021 and September 28, 2020		6
Consolidated Condensed Statements of Cash Flows for the three quarters ended September 27, 2021 and September 28, 2020		8
Notes to Consolidated Condensed Financial Statements		9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
Item 3. Quantitative and Qualitative Disclosures About Market Risk		31
Item 4. Controls and Procedures		33
PART II: OTHER INFORMATION		34
Item 1. Legal Proceedings		34
Item 1A. Risk Factors		34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		50
Item 6. Exhibits		51
SIGNATURES		52

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

TTM TECHNOLOGIES, INC.

Consolidated Condensed Balance Sheets

As of September 27, 2021 and December 28, 2020

	As of
	September 27,			December 28,
	2021			2020
	(Unaudited)
	(In thousands, except par value)
ASSETS
Current assets:
Cash and cash equivalents	$	529,816		$	451,565
Accounts receivable, net		388,233			381,105
Contract assets		325,774			273,256
Inventories		140,055			115,651
Prepaid expenses and other current assets		39,470			27,181
Total current assets		1,423,348			1,248,758
Property, plant and equipment, net		669,736			650,435
Operating lease right-of-use assets		16,794			24,340
Goodwill		637,324			637,324
Definite-lived intangibles, net		250,319			281,307
Deposits and other non-current assets		50,110			53,780
Total assets	$	3,047,631		$	2,895,944

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	386,705		$	327,102
Contract liabilities		2,376			4,254
Accrued salaries, wages and benefits		85,104			97,268
Other current liabilities		93,257			89,422
Total current liabilities		567,442			518,046
Long-term debt, net of discount and issuance costs		926,922			842,853
Operating lease liabilities		12,077			17,211
Other long-term liabilities		74,601			73,825
Total long-term liabilities		1,013,600			933,889
Commitments and contingencies (Note 14)
Equity:
Common stock, $0.001 par value; 300,000 shares authorized; 108,165 and 106,770 shares issued as of September 27, 2021 and December 28, 2020, respectively; 105,692 and 106,770 shares outstanding as of September 27, 2021 and December 28, 2020, respectively		108			107
Treasury stock – common stock at cost; 2,473 shares as of September 27, 2021		(34,349	)		—
Additional paid-in capital		835,662			830,971
Retained earnings		697,871			651,844
Accumulated other comprehensive loss		(32,703	)		(38,913	)
Total stockholders’ equity		1,466,589			1,444,009
Total liabilities and stockholders' equity	$	3,047,631		$	2,895,944

See accompanying notes to consolidated condensed financial statements.

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Operations

For the Quarter and Three Quarters Ended September 27, 2021 and September 28, 2020

	Quarter Ended						Three Quarters Ended
	September 27,			September 28,			September 27,			September 28,
	2021			2020			2021			2020
	(Unaudited)
	(In thousands, except per share data)
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		32,389			29,086			95,109			110,476
Research and development		4,423			5,223			13,075			15,166
Amortization of definite-lived intangibles		8,274			10,126			26,837			29,249
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	)
Other (expense) income:
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
Total other expense, net		(8,622	)		(22,520	)		(43,494	)		(57,916	)
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

See accompanying notes to consolidated condensed financial statements.

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Comprehensive Income (Loss)

For the Quarter and Three Quarters Ended September 27, 2021 and September 28, 2020

	Quarter Ended						Three Quarters Ended
	September 27,			September 28,			September 27,			September 28,
	2021			2020			2021			2020
	(Unaudited)
	(In thousands)
Net income (loss)	$	20,958		$	(41,451	)	$	46,027		$	138,575
Other comprehensive income (loss), net of tax:
Pension obligation adjustments, net		30			(17	)		59			4
Reclassification adjustment for foreign currency translation		—			(346	)		—			(346	)
Derecognition of foreign currency translation adjustments due to sale of Mobility business unit		—			—			—			(27,341	)
Foreign currency translation adjustments, net		(51	)		1,049			363			778
Derecognition of unrealized losses on cash flow hedge due to sale of Mobility business unit		—			—			—			384
Net unrealized gain (loss) on cash flow hedges:
Unrealized gain (loss) on effective cash flow hedges during the period, net		116			(655	)		(87	)		(8,667	)
Loss realized in the statement of operations, net		1,891			2,098			5,875			4,727
Net		2,007			1,443			5,788			(3,940	)
Other comprehensive income (loss), net of tax		1,986			2,129			6,210			(30,461	)
Comprehensive income (loss), net of tax	$	22,944		$	(39,322	)	$	52,237		$	108,114

See accompanying notes to consolidated condensed financial statements.

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Stockholders’ Equity

For the Three Quarters Ended September 27, 2021

	Common Stock				Treasury Stock						Additional Paid-In			Retained			Accumulated Other Comprehensive			Total Stockholders'
	Shares		Amount		Shares			Amount			Capital			Earnings			Loss			Equity
	(Unaudited)
	(In thousands)
Balance, December 28, 2020		106,770	$	107		—		$	—		$	830,971		$	651,844		$	(38,913	)	$	1,444,009
Net loss		—		—		—			—			—			(3,192	)		—			(3,192	)
Other comprehensive income		—		—		—			—			—			—			1,786			1,786
Issuance of common stock for performance-based restricted stock units		135		—		—			—			—			—			—			—
Issuance of common stock for restricted stock units		203		—		—			—			—			—			—			—
Fair value of warrants reclassified to warrant liabilities		—		—		—			—			(4,345	)		—			—			(4,345	)
Issuance of common stock from warrant exercises		5		—		—			—			—			—			—			—
Stock-based compensation		—		—		—			—			4,209			—			—			4,209
Balance, March 29, 2021		107,113	$	107		—		$	—		$	830,835		$	648,652		$	(37,127	)	$	1,442,467
Net income		—		—		—			—			—			28,261			—			28,261
Other comprehensive income		—		—		—			—			—			—			2,438			2,438
Issuance of common stock for restricted stock units		947		1		—			—			(1	)		—			—			—
Repurchases of common stock		—		—		(411	)		(6,145	)		—			—			—			(6,145	)
Issuance of stock from warrant exercises		86		—		50			745			(745	)		—			—			—
Stock-based compensation		—		—

Form: 10-Q

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