TTM Technologies, Inc. Reports Fiscal First Quarter 2017 Results

Broad Based Growth Drives Results to the High End of Guidance

| Source: TTM Technologies TTM Technologies

COSTA MESA, Calif., May 03, 2017 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) manufacturer, today reported results for the first quarter of fiscal 2017, which ended April 3rd, 2017. 

First Quarter 2017 Highlights

  • Net sales were $625.2 million
  • GAAP net income attributable to stockholders was $33 million, or $0.28 per diluted share
  • Non-GAAP net income attributable to stockholders was $39.2 million, or $0.37 per diluted share
  • Adjusted EBITDA was $95.6 million

First Quarter 2017 Financial Results
Net sales for the first quarter of 2017 were $625.2 million, compared to $583.3 million in the first quarter of 2016 and $706.5 million in the fourth quarter of 2016.

GAAP operating income for the first quarter of 2017 was $52.6 million, compared to $18.9 million in the first quarter of 2016 and $69.6 million in the fourth quarter of 2016. 

GAAP net income attributable to stockholders for the first quarter of 2017 was $33 million, or $0.28 per diluted share.  This compares to a GAAP net loss attributable to stockholders of $7.3 million, or $0.07 per share, in the first quarter of 2016 and a GAAP net loss of $2 million, or $0.02 per share, in the fourth quarter of 2016. 

On a non-GAAP basis, net income attributable to stockholders for the first quarter of 2017 was $39.2 million, or $0.37 per diluted share.  This compares to non-GAAP net income attributable to stockholders of $13.9 million, or $0.14 per diluted share, for the first quarter of 2016 and $59.8 million, or $0.58 per diluted share, in the fourth quarter of 2016.

Adjusted EBITDA for the first quarter of 2017 was $95.6 million, or 15.3 percent of net sales, compared to adjusted EBITDA of $74.5 million, or 12.8 percent of net sales, for the first quarter of 2016 and $128.5 million, or 18.2 percent of net sales, for the fourth quarter of 2016.

“TTM delivered strong organic year on year growth in the first quarter of 7 percent, near the high end of our guidance, and profitability which exceeded our forecast,” said Tom Edman, CEO of TTM.  “On a year over year basis, most end markets grew, with the fastest growth coming from the cellular, computing and aerospace and defense end markets.  This growth, along with strong operational execution, resulted in non-GAAP EPS above the high end of our guidance.  These results represent the highest revenue and EBITDA for a first quarter in the history of the company.”

Business Outlook
For the second quarter of 2017, TTM estimates that revenue will be in the range of $605 million to $645 million, and non-GAAP net income attributable to stockholders will be in the range of $0.31 to $0.37 per diluted share.

To Access the Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss first quarter 2017 results and second quarter 2017 outlook on Wednesday, May 3rd, 2017, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time).  The conference call will include forward-looking statements.

Telephone access is available by dialing domestic 888-206-4824 or international 913-312-1522 (ID 1867334).  The conference call also will be webcast on TTM’s website at www.ttm.com.

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 www.ttm.com.  

About TTM
TTM Technologies, Inc. is a leading global printed circuit board manufacturer, focusing on quick-turn and volume production of technologically advanced PCBs, backplane assemblies and electro-mechanical solutions. 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
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, 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
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 reconciliation 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)
            
      First Quarter Fourth Quarter 
       2017   2016   2016  
            
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS       
            
 Net sales  $  625,247  $  583,258  $  706,534  
 Cost of goods sold    520,228     499,695     573,689  
            
 Gross profit    105,019     83,563     132,845  
            
 Operating expenses:       
  Selling and marketing    16,655     17,306     16,848  
  General and administrative    30,822     36,149     38,998  
  Amortization of definite-lived intangibles    5,912     5,947     6,407  
  Restructuring charges    609     1,913     946  
  Impairment of long-lived assets    -      3,346     -   
  Gain on sale of assets    (1,549)    -      -   
   Total operating expenses    52,449     64,661     63,199  
            
 Operating income    52,570     18,902     69,646  
            
 Interest expense    (13,596)    (21,784)    (15,267) 
 Loss on extinguishment of debt    -      -      (47,767) 
 Other, net     (1,710)    1,209     8,994  
            
 Income before income taxes    37,264     (1,673)    15,606  
 Income tax provision    (4,139)    (5,477)    (17,416) 
            
 Net income (loss) $  33,125  $  (7,150) $  (1,810) 
            
 Net income attributable to noncontrolling interest    (166)    (114)    (195) 
 Net income (loss) attributable to stockholders $  32,959  $  (7,264) $  (2,005) 
            
 Earnings (loss) per share attributable to stockholders:       
  Basic  $  0.33  $  (0.07) $  (0.02) 
  Diluted  $  0.28  $  (0.07) $  (0.02) 
            
 Weighted-average shares used in computing per share amounts:       
  Basic     100,932     99,596     100,365  
  Diluted     130,922     99,596     100,365  
            
            
 Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share:   
            
 Net income attributable to stockholders $  32,959      
  Add back items: interest expense, net of tax    3,394      
 Adjusted net income attributable to stockholders $  36,353      
 Weighted-average shares outstanding    100,932      
 Dilutive effect of convertible debt    25,940      
 Dilutive effect of warrants    2,183      
 Dilutive effect of performance-based stock units, restricted stock units and stock options    1,867      
 Diluted shares    130,922      
 Earnings per share attributable to stockholders:       
  Basic  $  0.33      
  Diluted  $  0.28      
            
            
SELECTED BALANCE SHEET DATA        
      April 3, 2017 January 2, 2017   
 Cash and cash equivalents, including restricted cash $  282,871  $  256,277    
 Accounts and notes receivable, net    419,216     432,596    
 Inventories     275,092     269,212    
 Total current assets    1,027,291     1,012,841    
 Property, plant and equipment, net    976,446     966,638    
 Other non-current assets    526,508     520,597    
 Total assets    2,530,245     2,500,076    
            
 Short-term debt, including current portion of long-term debt $  160,658  $  110,652    
 Accounts payable    344,257     355,774    
 Total current liabilities    721,580     689,065    
 Debt, net of discount    861,391     909,030    
 Total long-term liabilities    935,983     981,886    
 Total equity    872,682     829,125    
 Total liabilities and equity    2,530,245     2,500,076    
            
SUPPLEMENTAL DATA       
      First Quarter Fourth Quarter 
       2017   2016   2016  
 Gross margin  16.8%  14.3%  18.8% 
 Operating margin  8.4%  3.2%  9.9% 
            
 End Market Breakdown:       
      First Quarter Fourth Quarter 
       2017   2016   2016  
            
  Aerospace/Defense  15%  15%  14% 
  Automotive  20%  21%  19% 
  Cellular Phone  14%  9%  19% 
  Computing/Storage/Peripherals  15%  13%  12% 
  Medical/Industrial/Instrumentation  15%  16%  13% 
  Networking/Communications  20%  24%  21% 
  Other   1%  2%  2% 
            
 Stock-based Compensation:       
      First Quarter Fourth Quarter 
       2017   2016   2016  
  Amount included in:       
   Cost of goods sold $  394  $  320  $  469  
   Selling and marketing $  253     210     305  
   General and administrative    2,981     1,716     2,426  
   Total stock-based compensation expense $  3,628  $  2,246  $  3,200  
            
            
 Operating Segment Data:       
      First Quarter Fourth Quarter 
   Net sales:   2017   2016   2016  
   PCB   $  586,695  $  529,945  $  654,379  
   E-M Solutions     41,669     56,478     55,332  
   Corporate     -       -       -    
    Total sales     628,364     586,423     709,711  
   Inter-segment sales     (3,117)    (3,165)    (3,177) 
    Total net sales  $  625,247   $  583,258   $  706,534   
            
   Operating segment income:        
   PCB   $  82,256  $  49,367  $  95,208  
   E-M Solutions     (1,642)    387     3,029  
   Corporate     (22,132)    (24,905)    (22,184) 
    Total operating segment income     58,482     24,849     76,053  
   Amortization of definite-lived intangibles     (5,912)    (5,947)    (6,407) 
    Total operating income     52,570     18,902     69,646  
   Total other expense     (15,306)    (20,575)    (54,040) 
   Income before income taxes  $  37,264   $  (1,673) $  15,606   
            
RECONCILIATIONS1       
      First Quarter Fourth Quarter 
       2017   2016   2016  
 Non-GAAP gross profit reconciliation2:       
  GAAP gross profit $  105,019  $  83,563  $  132,845  
  Add back item:       
   Stock-based compensation    394     320     469  
  Non-GAAP gross profit $  105,413  $  83,883  $  133,314  
  Non-GAAP gross margin  16.9%  14.4%  18.9% 
            
 Non-GAAP operating income reconciliation3:       
  GAAP operating income $  52,570  $  18,902  $  69,646  
  Add back items:       
   Amortization of definite-lived intangibles    5,912     5,947     6,407  
   Stock-based compensation    3,628     2,246     3,200  
   Gain on sale of assets    (1,549)    -      -   
   Impairments, restructuring, acquisition-related, and other charges    709     5,950     1,725  
  Non-GAAP operating income $  61,270  $  33,045  $  80,978  
  Non-GAAP operating margin  9.8%  5.7%  11.5% 
            
 Non-GAAP net income and EPS attributable to stockholders reconciliation4:       
  GAAP net income (loss) attributable to stockholders $  32,959  $  (7,264) $  (2,005) 
  Add back items:       
   Amortization of definite-lived intangibles    5,912     5,947     6,407  
   Stock-based compensation    3,628     2,246     3,200  
   Non-cash interest expense    2,627     6,154     2,697  
   Gain on sale of assets    (1,549)    -      -   
   Loss on extinguishment of debt    -      -      47,767  
   Impairments, restructuring, acquisition-related, and other charges    709     5,950     1,725  
   Income taxes    (5,093)    821     49  
  Non-GAAP net income attributable to stockholders $  39,193  $  13,854  $  59,840  
  Non-GAAP earnings per diluted share attributable to stockholders $  0.37  $  0.14  $  0.58  
            
 Non-GAAP diluted number of shares5:       
  Diluted shares    130,922     99,596     102,563  
  Dilutive effect of convertible debt    (25,940)    -     -  
  Non-GAAP diluted number of shares    104,982     99,596     102,563  
            
 Adjusted EBITDA reconciliation6:       
  GAAP net income (loss) $  33,125  $  (7,150) $  (1,810) 
  Add back items:       
   Income tax provision (benefit)    4,139     5,477     17,416  
   Interest expense    13,596     21,784     15,267  
   Amortization of definite-lived intangibles    5,912     5,947     6,407  
   Depreciation expense    36,077     40,227     38,539  
   Stock-based compensation    3,628     2,246     3,200  
   Gain on sale of assets    (1,549)    -      -   
   Loss on extinguishment of debt    -      -      47,767  
   Impairments, restructuring, acquisition-related, and other charges    709     5,950     1,725  
  Adjusted EBITDA $  95,637  $  74,481  $  128,511  
  Adjusted EBITDA margin  15.3%  12.8%  18.2% 
            
 Free cash flow reconciliation:       
  Operating cash flow    49,584     17,892     97,650  
  Add back items:       
   Payment of acquisition-related costs    153      2,324      869   
  Adjusted operating cash flow    49,737     20,216     98,519  
  Capital expenditures, net    (23,378)    (20,116)    (20,501) 
  Free cash flow $  26,359  $  100  $  78,018  
            
 1 This information provides a reconciliation of non-GAAP gross profit, non-GAAP operating income, non-GAAP net income attributable to stockholders, non-GAAP EPS attributable to stockholders, and adjusted EBITDA to the financial information in our consolidated condensed statements of operations.
            
 2 Non-GAAP gross profit and gross margin measures exclude stock-based compensation expense.
            
 3 Non-GAAP operating income and operating margin measures exclude amortization of intangibles, stock-based compensation expense, gain on sale of assets, acquisition-related costs, asset impairments, restructuring and other charges.
            
 4 This information provides non-GAAP net income attributable to stockholders and non-GAAP EPS attributable to stockholders, which are non-GAAP financial measures. Management believes that both measures -- which add back amortization of intangibles, stock-based compensation expense, non-cash interest expense on debt (before consideration of capitalized interest), gain on sale of assets, acquisition-related costs, asset impairments, restructuring 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 Non-GAAP diluted number of shares used in computing non-GAAP earnings per share attributable to stockholders excludes the dilutive effect of convertible debt.
            
 6 Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, acquisition-related costs, asset impairments, restructuring 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.
            

 


            











    

        

        
Contact Data