August 10, 2022 - 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 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 4, 2022

☐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 August 8, 2022: 102,194,259

TABLE OF CONTENTS

		Page
PART I: FINANCIAL INFORMATION		3
Item 1. Financial Statements (unaudited)		3
Consolidated Condensed Balance Sheets as of July 4, 2022 and January 3, 2022		3
Consolidated Condensed Statements of Operations for the quarter and two quarters ended July 4, 2022 and June 28, 2021		4
Consolidated Condensed Statements of Comprehensive Income for the quarter and two quarters ended July 4, 2022 and June 28, 2021		5
Consolidated Condensed Statements of Stockholders' Equity for the two quarters ended July 4, 2022 and June 28, 2021		6
Consolidated Condensed Statements of Cash Flows for the two quarters ended July 4, 2022 and June 28, 2021		8
Notes to Consolidated Condensed Financial Statements		9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3. Quantitative and Qualitative Disclosures About Market Risk		29
Item 4. Controls and Procedures		31
PART II: OTHER INFORMATION		32
Item 1. Legal Proceedings		32
Item 1A. Risk Factors		32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		48
Item 6. Exhibits		49
SIGNATURES		50

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

TTM TECHNOLOGIES, INC.

Consolidated Condensed Balance Sheets

As of July 4, 2022 and January 3, 2022

	As of
	July 4,			January 3,
	2022			2022
	(Unaudited)
	(In thousands, except par value)
ASSETS
Current assets:
Cash and cash equivalents	$	266,546		$	537,678
Accounts receivable, net		474,829			386,347
Contract assets		376,367			324,862
Inventories		209,960			127,612
Prepaid expenses and other current assets		53,181			30,914
Total current assets		1,380,883			1,407,413
Property, plant and equipment, net		748,439			665,755
Operating lease right-of-use assets		22,618			20,802
Goodwill		715,591			637,324
Definite-lived intangibles, net		311,352			239,918
Deposits and other non-current assets		35,768			54,335
Total assets	$	3,214,651		$	3,025,547

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	425,135		$	361,484
Contract liabilities		83,668			14,189
Accrued salaries, wages and benefits		100,584			89,446
Other current liabilities		112,922			93,029
Total current liabilities		722,309			558,148
Long-term debt, net of discount and issuance costs		928,605			927,818
Operating lease liabilities		15,832			15,252
Other long-term liabilities		73,825			68,912
Total long-term liabilities		1,018,262			1,011,982
Commitments and contingencies (Note 14)
Equity:
Common stock, $0.001 par value; 300,000 shares authorized; 109,555 and 108,194 shares issued as of July 4, 2022 and January 3, 2022, respectively; 102,185 and 103,533 shares outstanding as of July 4, 2022 and January 3, 2022, respectively		109			108
Treasury stock – common stock at cost; 7,370 and 4,661 shares as of July 4, 2022 and January 3, 2022, respectively		(98,659	)		(63,807	)
Additional paid-in capital		847,214			840,113
Retained earnings		751,296			706,258
Accumulated other comprehensive loss		(25,880	)		(27,255	)
Total stockholders’ equity		1,474,080			1,455,417
Total liabilities and stockholders' equity	$	3,214,651		$	3,025,547

See accompanying notes to consolidated condensed financial statements.

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Operations

For the Quarter and Two Quarters Ended July 4, 2022 and June 28, 2021

	Quarter Ended						Two Quarters Ended
	July 4,			June 28,			July 4,			June 28,
	2022			2021			2022			2021
	(Unaudited)
	(In thousands, except per share data)
Net sales	$	625,550		$	567,383		$	1,206,810		$	1,093,815
Cost of goods sold		508,477			467,473			998,814			912,305
Gross profit		117,073			99,910			207,996			181,510
Operating expenses:
Selling and marketing		17,557			14,605			35,829			30,887
General and administrative		48,806			31,193			81,760			62,720
Research and development		5,233			4,182			10,788			8,652
Amortization of definite-lived intangibles		8,275			9,042			16,549			18,563
Total operating expenses		79,871			59,022			144,926			120,822
Operating income		37,202			40,888			63,070			60,688
Other (expense) income:
Interest expense		(10,711	)		(11,079	)		(22,072	)		(22,468	)
Loss on extinguishment of debt		—			—			—			(15,217	)
Other, net		7,638			306			9,608			2,813
Total other expense, net		(3,073	)		(10,773	)		(12,464	)		(34,872	)
Income before income taxes		34,129			30,115			50,606			25,816
Income tax provision		(6,337	)		(1,854	)		(5,568	)		(747	)
Net income	$	27,792		$	28,261		$	45,038		$	25,069

Earnings per share:
Basic earnings per share	$	0.27		$	0.26		$	0.44		$	0.23
Diluted earnings per share	$	0.27		$	0.26		$	0.43		$	0.23

See accompanying notes to consolidated condensed financial statements.

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Comprehensive Income

For the Quarter and Two Quarters Ended July 4, 2022 and June 28, 2021

	Quarter Ended					Two Quarters Ended
	July 4,			June 28,		July 4,			June 28,
	2022			2021		2022			2021
	(Unaudited)
	(In thousands)
Net income	$	27,792		$	28,261	$	45,038		$	25,069
Other comprehensive income (loss), net of tax:
Pension obligation adjustments, net		—			29		—			29
Foreign currency translation adjustments, net		(1,700	)		417		(1,736	)		414
Net unrealized gain on cash flow hedges:
Unrealized (loss) gain on effective cash flow hedges during the period, net		(129	)		60		24			(203	)
Loss realized in the statement of operations, net		1,053			1,932		3,087			3,984
Net		924			1,992		3,111			3,781
Other comprehensive (loss) income, net of tax		(776	)		2,438		1,375			4,224
Comprehensive income, net of tax	$	27,016		$	30,699	$	46,413		$	29,293

See accompanying notes to consolidated condensed financial statements.

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Stockholders’ Equity

For the Two Quarters Ended July 4, 2022

	Common Stock				Treasury Stock						Additional Paid-In			Retained		Accumulated Other Comprehensive			Total Stockholders'
	Shares		Amount		Shares			Amount			Capital			Earnings		(Loss) Income			Equity
	(Unaudited)
	(In thousands)
Balance, January 3, 2022		108,194	$	108		(4,661	)	$	(63,807	)	$	840,113		$	706,258	$	(27,255	)	$	1,455,417
Net income		—		—		—			—			—			17,246		—			17,246
Other comprehensive income		—		—		—			—			—			—		2,151			2,151
Issuance of common stock for performance-based restricted stock units		182		—		—			—			—			—		—			—
Issuance of common stock for restricted stock units		7		—		—			—			—			—		—			—
Repurchases of common stock		—		—		(2,373	)		(30,232	)		—			—		—			(30,232	)
Fair value of warrants reclassified to warrant liabilities		—		—		—			—			(987	)		—		—			(987	)
Issuance of stock from warrant exercises		—		—		38			572			(572	)		—		—			—
Stock-based compensation		—		—		—			—			4,234			—		—			4,234
Balance, April 4, 2022		108,383	$	108		(6,996	)	$	(93,467	)	$	842,788		$	723,504	$	(25,104	)	$	1,447,829
Net income		—		—		—			—			—			27,792		—			27,792
Other comprehensive income		—		—		—			—			—			—		(776	)		(776	)
Issuance of common stock for restricted stock units		1,172		1		—			—			(1	)		—		—			—
Repurchases of common stock		—		—		(374	)		(5,192	)		—			—		—			(5,192	)
Stock-based compensation		—		—		—			—			4,427			—		—			4,427
Balance, July 4, 2022		109,555	$	109		(7,370	)	$	(98,659	)	$	847,214		$	751,296	$	(25,880	)	$	1,474,080

See accompanying notes to consolidated condensed financial statements.

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Stockholders’ Equity

For the Two Quarters Ended June 28, 2021

	Common Stock				Treasury Stock				Additional Paid-In		Retained			Accumulated Other Comprehensive			Total Stockholders'
	Shares		Amount		Shares		Amount		Capital		Earnings			(Loss) Income			Equity


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		—

Form: 10-Q

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