10-Q: Quarterly report pursuant to Section 13 or 15(d)
Published on May 11, 2022
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form
For the quarterly period ended
Or
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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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.
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).
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.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
Number of shares of common stock, $0.001 par value, of registrant outstanding at May 9, 2022:
TABLE OF CONTENTS
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
TTM TECHNOLOGIES, INC.
Consolidated Condensed Balance Sheets
As of April 4, 2022 and January 3, 2022
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As of |
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April 4, |
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January 3, |
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2022 |
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2022 |
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(Unaudited) |
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(In thousands, except par value) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net |
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Contract assets |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Operating lease right-of-use assets |
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Goodwill |
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Definite-lived intangibles, net |
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Deposits and other non-current assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Contract liabilities |
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Accrued salaries, wages and benefits |
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Other current liabilities |
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Total current liabilities |
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Long-term debt, net of discount and issuance costs |
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Operating lease liabilities |
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Other long-term liabilities |
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Total long-term liabilities |
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Commitments and contingencies (Note 14) |
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Equity: |
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Common stock, $ shares issued as of April 4, 2022 and January 3, 2022, respectively; January 3, 2022, respectively |
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Treasury stock – common stock at cost; and January 3, 2022, respectively |
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( |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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Total stockholders’ equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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See accompanying notes to consolidated condensed financial statements.
3
TTM TECHNOLOGIES, INC.
Consolidated Condensed Statements of Operations
For the Quarters Ended April 4, 2022 and March 29, 2021
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Quarter Ended |
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April 4, |
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March 29, |
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2022 |
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2021 |
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(Unaudited) |
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(In thousands, except per share data) |
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Net sales |
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$ |
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$ |
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Cost of goods sold |
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Gross profit |
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Operating expenses: |
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Selling and marketing |
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General and administrative |
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Research and development |
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Amortization of definite-lived intangibles |
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Total operating expenses |
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Operating income |
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Other (expense) income: |
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Interest expense |
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( |
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Loss on extinguishment of debt |
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— |
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Other, net |
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Total other expense, net |
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( |
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Income (loss) before income taxes |
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Income tax benefit |
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Net income (loss) |
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$ |
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$ |
( |
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Earnings (loss) per share: |
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Basic earnings (loss) per share |
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$ |
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$ |
( |
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Diluted earnings (loss) per share |
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$ |
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$ |
( |
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See accompanying notes to consolidated condensed financial statements.
4
TTM TECHNOLOGIES, INC.
Consolidated Condensed Statements of Comprehensive Income (Loss)
For the Quarters Ended April 4, 2022 and March 29, 2021
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Quarter Ended |
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April 4, |
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March 29, |
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2022 |
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2021 |
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(Unaudited) |
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(In thousands) |
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Net income (loss) |
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$ |
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$ |
( |
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Other comprehensive income, net of tax: |
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Foreign currency translation adjustments, net |
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( |
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( |
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Net unrealized gain on cash flow hedges: |
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Unrealized gain (loss) on effective cash flow hedges during the period, net |
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( |
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Loss realized in the statement of operations, net |
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Net |
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Other comprehensive income, net of tax |
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Comprehensive income (loss), net of tax |
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$ |
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$ |
( |
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See accompanying notes to consolidated condensed financial statements.
5
TTM TECHNOLOGIES, INC.
Consolidated Condensed Statements of Stockholders’ Equity
For the Quarters Ended April 4, 2022 and March 29, 2021
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Common Stock |
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Treasury Stock |
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Additional Paid-In |
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Retained |
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Accumulated Other Comprehensive |
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Total Stockholders' |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Earnings |
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(Loss) Income |
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Equity |
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(Unaudited) |
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(In thousands) |
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Balance, January 3, 2022 |
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$ |
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( |
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$ |
( |
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$ |
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$ |
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$ |
( |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock for performance-based restricted stock units |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock for restricted stock units |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Repurchases of common stock |
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— |
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— |
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( |
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( |
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— |
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— |
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— |
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( |
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Fair value of warrants reclassified to warrant liabilities |
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— |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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Issuance of stock from warrant exercises |
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— |
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— |
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( |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance, April 4, 2022 |
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$ |
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( |
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$ |
( |
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$ |
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$ |
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$ |
( |
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$ |
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Common Stock |
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Additional Paid-In |
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Retained |
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Accumulated Other Comprehensive |
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Total Stockholders' |
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Shares |
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Amount |
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Capital |
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Earnings |
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(Loss) Income |
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Equity |
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Balance, December 28, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Net loss |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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Issuance of common stock for performance-based restricted stock units |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock for restricted stock units |
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— |
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— |
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— |
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— |
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— |
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Fair value of warrants reclassified to warrant liabilities |
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— |
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— |
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( |
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— |
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— |
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( |
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Issuance of common stock from warrant exercises |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Balance, March 29, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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See accompanying notes to consolidated condensed financial statements.
6
TTM TECHNOLOGIES, INC.
Consolidated Condensed Statements of Cash Flows
For the Quarters Ended April 4, 2022 and March 29, 2021
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Quarter Ended |
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April 4, 2022 |
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March 29, 2021 |
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(Unaudited) |
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(In thousands) |
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Cash flows from operating activities: |
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Net income (loss) |
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$ |
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$ |
( |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation of property, plant and equipment |
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Amortization of definite-lived intangible assets |
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Amortization of debt discount and issuance costs |
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Loss on extinguishment of debt |
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— |
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Deferred income taxes |
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( |
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Stock-based compensation |
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Other |
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( |
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( |
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Changes in operating assets and liabilities: |
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Accounts receivable, net |
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( |
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Contract assets |
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Inventories |
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( |
) |
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( |
) |
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Prepaid expenses and other current assets |
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( |
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( |
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Accounts payable |
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Contract liabilities |
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( |
) |
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Accrued salaries, wages and benefits |
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( |
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( |
) |
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Other current liabilities |
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( |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Purchase of property, plant and equipment and other assets |
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( |
) |
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( |
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Proceeds from sale of property, plant and equipment and other assets |
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Net cash used in investing activities |
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( |
) |
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( |
) |
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Cash flows from financing activities: |
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Repurchases of common stock |
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( |
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— |
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Cash used to settle warrants |
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( |
) |
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— |
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Proceeds from long-term debt borrowing |
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— |
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Repayment of long-term debt borrowings |
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— |
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( |
) |
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Payment of debt issuance costs |
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— |
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( |
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Other |
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— |
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( |
) |
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Net cash (used in) provided by financing activities |
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( |
) |
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Effect of foreign currency exchange rates on cash and cash equivalents |
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( |
) |
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( |
) |
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Net (decrease) increase in cash and cash equivalents |
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( |
) |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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Supplemental cash flow information: |
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Cash paid, net for interest |
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$ |
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$ |
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Cash paid, net for income taxes |
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Supplemental disclosure of noncash investing and financing activities: |
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Property, plant and equipment recorded in accounts payable |
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$ |
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$ |
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Issuance of common stock for warrant settlement |
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See accompanying notes to consolidated condensed financial statements.
7
TTM TECHNOLOGIES, INC.
Notes to Consolidated Condensed Financial Statements
(Unaudited)
(Dollars and shares in thousands, except per share data)
(1) Nature of Operations and Basis of Presentation
TTM Technologies, Inc. (the Company or TTM) is a leading global printed circuit board (PCB) 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/microelectronics components and assemblies. The Company provides time-to-market and volume production of advanced technology products and offers a one-stop design, engineering, and manufacturing solution to customers. This one-stop design, engineering, and manufacturing solution allows the Company to align technology developments with the diverse needs of the Company’s customers and to enable them to reduce the time required to develop new products and bring them to market.
The Company serves a diversified customer base in various markets throughout the world, including aerospace and defense, data center computing, automotive components, medical, industrial and instrumentation related products, as well as networking/communications infrastructure products. The Company’s customers include both original equipment manufacturers (OEMs) and electronic manufacturing services (EMS) providers.
The accompanying consolidated condensed financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. It is suggested that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s most recent Annual Report on Form 10-K. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated condensed financial statements and accompanying notes. Due, in part, to the on-going coronavirus (COVID-19) global pandemic, the global economy and financial markets have been volatile, and the pandemic has contributed to disruptions in global supply chains and labor shortages and high inflation, and there is a significant amount of uncertainty about the length and severity of the consequences caused by the ongoing pandemic. The Company has considered information available to it as of the date of issuance of these financial statements and is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or a revision to the carrying value of its assets or liabilities. Actual results could differ materially from those estimates. The Company uses a 52/53 week fiscal calendar with the fourth quarter ending on the Monday nearest December 31.
Recently Adopted and Issued Accounting Standards
Recently Adopted Accounting Standards
In October 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, as if it had originated the contracts. Prior to this ASU, an acquirer generally recognizes contract assets acquired and contract liabilities assumed that arose from contracts with customers at fair value on the acquisition date. The ASU is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The ASU is to be applied prospectively to business combinations occurring on or after the effective date of the amendment (or if adopted early as of an interim period, as of the beginning of the fiscal year that includes the interim period of early application). The Company early adopted ASU 2021-08 on
Recently Issued Accounting Standards Not Yet Adopted
In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, which provides guidance on disclosures for transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The guidance is effective for annual periods beginning after December 15, 2021. Early adoption is permitted. The Company does not anticipate the adoption will have a material impact on the consolidated financial statements and related disclosures.
8
(2) Share Repurchase Program
On February 3, 2021, the Company’s Board of Directors authorized and approved a share repurchase program. Under the program, the Company may repurchase up to $
During the quarter ended April 4, 2022, the Company repurchased
(3) Leases
The Company leases some of its manufacturing and assembly plants, sales offices and equipment under non-cancellable operating leases and finance leases that expire at
The components of lease expense were as follows:
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Quarter Ended |
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April 4, 2022 |
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March 29, 2021 |
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Operating lease cost |
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$ |
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$ |
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Variable lease cost |
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Short-term lease cost |
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Finance lease costs: |
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Amortization of right-of-use assets |
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— |
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Interest on lease liabilities |
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— |
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Supplemental cash flow information related to leases was as follows:
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Quarter Ended |
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April 4, 2022 |
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March 29, 2021 |
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(In thousands) |
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Cash paid for amounts included in the measurement of lease liabilities: |
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Operating cash flows for operating leases |
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$ |
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$ |
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Right-of-use assets obtained in exchange for new lease obligations: |
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Operating leases |
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9
Supplemental balance sheet information related to leases was as follows:
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As of |
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Balance Sheet Location |
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April 4, 2022 |
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January 3, 2022 |
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(In thousands) |
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Assets: |
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