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TTM Technologies, Inc. Reports Fourth Quarter and Fiscal Year 2014 Results

COSTA MESA, Calif., Feb. 4, 2015 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (Nasdaq:TTMI), a major global printed circuit board ("PCB") manufacturer, today reported results for the fourth quarter and fiscal year 2014, which ended December 29, 2014.

Fourth Quarter 2014 Highlights

- Net sales were $390.9 million

- GAAP net income was $13.9 million, or $0.17 per diluted share

- Non-GAAP net income was $23.2 million, or $0.28 per diluted share

Fiscal Year 2014 Highlights

- Net sales were $1.33 billion

- GAAP net income was $14.7 million, or $0.18 per diluted share

- Non-GAAP net income was $39.3 million, or $0.47 per diluted share

- Announced agreement to acquire Viasystems Group, Inc. ("Viasystems").

Fourth Quarter 2014 Financial Results

Net sales for the fourth quarter of 2014 were $390.9 million compared to $345.3 million in the third quarter of 2014 and $366.1 million in the fourth quarter of 2013.

GAAP operating income for the fourth quarter of 2014 was $26.6 million compared to GAAP operating income of $12.3 million in the third quarter of 2014 and $29.3 million in the fourth quarter of 2013.

GAAP net income for the fourth quarter of 2014 was $13.9 million, or $0.17 per diluted share. This compares to GAAP net income of $7.7 million, or $0.09 per diluted share, in the third quarter of 2014 and $11.3 million, or $0.14 per diluted share, in the fourth quarter of 2013.

On a non-GAAP basis, net income for the fourth quarter of 2014 was $23.2 million, or $0.28 per diluted share. This compares to non-GAAP net income of $11.0 million, or $0.13 per diluted share, for the third quarter of 2014 and $22.1 million, or $0.27 per diluted share, for the fourth quarter of 2013.

Adjusted EBITDA for the fourth quarter of 2014 was $60.5 million, or 15.5 percent of net sales, compared to adjusted EBITDA of $43.6 million, or 12.6 percent of net sales, for the third quarter of 2014 and $58.4 million, or 16.0 percent of net sales, for the fourth quarter of 2013.

"We were pleased with our execution during the seasonally robust fourth quarter as our operating performance was on plan and resulted in significant sequential increases in revenue and operating profit," said Tom Edman, CEO of TTM. "Revenue was slightly above and non-GAAP earnings were at the high end of our guidance ranges for the quarter. Demand for our advanced HDI and rigid-flex PCB products used in smartphones was notably strong and drove our product shift toward advanced technology PCBs, resulting in strong utilization rates in our Asia Pacific manufacturing facilities. We are also encouraged to see bookings in the cellular phone end market remain solid as we enter the seasonally weaker first quarter."

Mr. Edman continued, "During the quarter, we received all necessary shareholder and foreign approvals required to complete the acquisition of Viasystems. While the proposed acquisition remains subject to review by the United States Federal Trade Commission and approval of the Committee on Foreign Investment in the United States, we continue to expect to close the acquisition in the first half of 2015. The combination with Viasystems will create a leading global PCB manufacturer and enhance the company's end market and customer diversification."

Full Year 2014 Financial Results

Net sales for fiscal year 2014 decreased to $1.33 billion from $1.37 billion in fiscal year 2013.

GAAP operating income for fiscal year 2014 was $46.5 million, a decrease from GAAP operating income of $69.1 million in fiscal year 2013.

GAAP net income for fiscal year 2014 was $14.7 million, or $0.18 per diluted share, compared to GAAP net income of $21.9 million, or $0.26 per diluted share, for fiscal year 2013.

On a non-GAAP basis, net income for fiscal year 2014 was $39.3 million, or $0.47 per diluted share. This compares to fiscal year 2013 non-GAAP net income of $51.3 million, or $0.62 per diluted share.

Adjusted EBITDA for fiscal year 2014 was $166.0 million, or 12.5 percent of net sales, compared to $181.3 million, or 13.3 percent of net sales, for fiscal year 2013.

Business Outlook

For the first quarter of 2015, TTM estimates that revenue will be in the range of $310 million to $330 million, and non-GAAP net income will be in the range of $0.06 to $0.12 per diluted share.

The Acquisition of Viasystems

As previously announced, TTM entered into a definitive agreement under which TTM will acquire all outstanding shares of Viasystems for a combined consideration of $11.33 in cash and 0.706 shares of TTM common stock per Viasystems' share of common stock. The parties currently expect to close the transaction in the first half of 2015. The transaction is subject to customary closing conditions, including United States regulatory approvals.

To Access the Live Webcast/Conference Call

TTM will host a conference call and webcast to discuss fourth quarter and fiscal year 2014 results and first quarter 2015 outlook on Wednesday, February 4, 2015, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call may include forward-looking statements.

Telephone access is available by dialing domestic 1-888-417-8465 or international 1-719-457-2727 (ID 9222207). The conference call also will be webcast on TTM's website at www.ttmtech.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.ttmtech.com.

About TTM

TTM Technologies, Inc. is a major global PCB manufacturer, focusing on quick-turn and technologically advanced PCBs and the backplane and sub-system assembly business. 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.ttmtech.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, the timing and consummation of the proposed acquisition, the ability of the parties to consummate the proposed acquisition and the satisfaction of the conditions precedent to consummation of the proposed acquisition, including the ability to secure regulatory approvals in a timely manner or at all, 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 "Risk Factors" set forth in TTM's most recent SEC filings.

About Our Non-GAAP Financial Measures

This release includes information about TTM's adjusted EBITDA, non-GAAP net income attributable to stockholders and non-GAAP earnings per share attributable to stockholders, 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.

Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, asset impairments, restructuring, costs related to acquisitions, and other charges. Management believes that the non-GAAP financial information – which adds back amortization of intangibles, stock-based compensation expense, non-cash interest expense on debt, acquisition-related costs, asset impairments, restructuring and other unusual or infrequent items as well as the associated tax impact of these charges and discrete tax items – provides additional useful information to investors regarding TTM's ongoing financial condition and results of operations.

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)
Fourth Quarter Third Quarter Full Year
2014 2013 2014 2014 2013
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Net sales $ 390,912 $ 366,111 $ 345,275 $ 1,325,717 $ 1,368,215
Cost of goods sold 322,437 295,894 296,167 1,131,028 1,150,372
Gross profit 68,475 70,217 49,108 194,689 217,843
Operating expenses:
Selling and marketing 9,926 9,535 9,033 36,919 37,149
General and administrative 30,046 28,932 25,733 100,944 105,924
Amortization of definite-lived intangibles 1,935 2,348 1,980 8,387 9,332
Restructuring charges (7) 88 49 55 3,445
Impairment of long-lived assets -- -- -- 1,845 10,782
Gain on sale of assets -- -- -- -- (17,917)
Total operating expenses 41,900 40,903 36,795 148,150 148,715
Operating income 26,575 29,314 12,313 46,539 69,128
Interest expense (5,691) (5,982) (6,018) (23,830) (24,031)
Loss on extinguishment of debt -- (10,743) -- (506) (10,743)
Other, net 1,620 1,092 1,742 88 5,418
Income before income taxes 22,504 13,681 8,037 22,291 39,772
Income tax provision (8,566) (2,385) (379) (7,598) (15,879)
Net income 13,938 11,296 7,658 14,693 23,893
Net income attributable to noncontrolling interest -- -- -- -- (2,016)
Net income attributable to stockholders $ 13,938 $ 11,296 $ 7,658 $ 14,693 $ 21,877
Earnings per share attributable to stockholders:
Basic $ 0.17 $ 0.14 $ 0.09 $ 0.18 $ 0.27
Diluted $ 0.17 $ 0.14 $ 0.09 $ 0.18 $ 0.26
Weighted-average shares used in computing per share amounts:
Basic 83,345 82,649 83,345 83,238 82,506
Diluted 84,205 83,451 84,039 83,941 83,132
SELECTED BALANCE SHEET DATA
December 29, 2014 December 30, 2013
Cash and cash equivalents $ 279,042 $ 330,554
Accounts and notes receivable, net 307,933 277,070
Inventories 145,187 138,145
Total current assets 798,123 804,991
Property, plant and equipment, net 754,718 810,672
Other non-current assets 48,448 57,912
Total assets 1,601,289 1,673,575
Short-term debt, including current portion long-term debt $ 128,045 $ 96,204
Accounts payable 217,326 192,357
Total current liabilities 496,012 458,003
Debt, net of discount 374,642 477,539
Total long-term liabilities 389,813 510,277
Total stockholders' equity 715,464 705,295
Total liabilities and stockholders' equity 1,601,289 1,673,575
SUPPLEMENTAL DATA
Fourth Quarter Third Quarter Full Year
2014 2013 2014 2014 2013
Gross margin 17.5% 19.2% 14.2% 14.7% 15.9%
Operating margin 6.8% 8.0% 3.6% 3.5% 5.1%
End Market Breakdown:
Fourth Quarter Third Quarter
2014 2013 2014
Aerospace/Defense 14% 14% 15%
Cellular Phone 35% 24% 25%
Computing/Storage/Peripherals 10% 23% 13%
Medical/Industrial/Instrumentation 8% 8% 9%
Networking/Communications 27% 27% 32%
Other 6% 4% 6%
Stock-based Compensation:
Fourth Quarter Third Quarter
2014 2013 2014
Amount included in:
Cost of goods sold $ 197 $ 250 $ 207
Selling and marketing 263 308 257
General and administrative 1,287 1,684 1,490
Total stock-based compensation expense $ 1,747 $ 2,241 $ 1,954
Operating Segment Data:
Fourth Quarter Third Quarter
Net sales: 2014 2013 2014
Asia Pacific $ 264,015 $ 231,648 $ 214,727
North America 127,433 134,936 131,054
Total sales 391,448 366,584 345,781
Inter-segment sales (536) (473) (506)
Total net sales $ 390,912 $ 366,111 $ 345,275
Operating segment income:
Asia Pacific $ 27,263 $ 25,863 $ 10,034
North America 1,247 5,799 4,259
Total operating segment income 28,510 31,662 14,293
Amortization of definite-lived intangibles (1,935) (2,348) (1,980)
Total operating income 26,575 29,314 12,313
Total other expense (4,071) (15,633) (4,276)
Income before income taxes $ 22,504 $ 13,681 $ 8,037
RECONCILIATIONS1
Fourth Quarter Third Quarter Full Year
2014 2013 2014 2014 2013
Non-GAAP gross profit reconciliation2:
GAAP gross profit $ 68,475 $ 70,217 $ 49,108 $ 194,689 $ 217,843
Add back item:
Stock-based compensation 197 250 207 866 1,059
Non-GAAP gross profit $ 68,672 $ 70,467 $ 49,315 $ 195,555 $ 218,902
Non-GAAP gross margin 17.6% 19.2% 14.3% 14.8% 16.0%
Non-GAAP operating income reconciliation3:
GAAP operating income $ 26,575 $ 29,314 $ 12,313 $ 46,539 $ 69,128
Add back items:
Amortization of definite-lived intangibles 1,935 2,348 1,980 8,387 9,332
Stock-based compensation 1,747 2,241 1,954 7,800 8,985
Gain on sale of assets -- -- -- -- (17,917)
Acquisition-related costs 4,349 -- 1,632 5,981 --
Impairments and restructuring charges (7) 88 49 1,900 14,227
Non-GAAP operating income $ 34,599 $ 33,991 $ 17,928 $ 70,607 $ 83,755
Non-GAAP operating margin 8.9% 9.3% 5.2% 5.3% 6.1%
Non-GAAP net income and EPS attributable to stockholders reconciliation4:
GAAP net income attributable to stockholders $ 13,938 $ 11,296 $ 7,658 $ 14,693 $ 21,877
Add back items:
Amortization of definite-lived intangibles 1,935 2,348 1,980 8,387 9,332
Stock-based compensation 1,747 2,241 1,954 7,800 8,985
Non-cash interest expense 2,585 2,183 2,548 10,165 8,466
Gain on sale of assets -- -- -- -- (17,917)
Acquisition-related costs 4,349 -- 1,632 5,981 --
Impairments, restructuring and other charges (7) 10,831 49 2,406 24,970
Income taxes (1,332) (6,765) (4,810) (10,121) (4,444)
Non-GAAP net income attributable to stockholders $ 23,215 $ 22,134 $ 11,011 $ 39,311 $ 51,269
Non-GAAP earnings per diluted share attributable to stockholders $ 0.28 $ 0.27 $ 0.13 $ 0.47 $ 0.62
Adjusted EBITDA reconciliation5:
GAAP net income $ 13,938 $ 11,296 $ 7,658 $ 14,693 $ 23,893
Add back items:
Income tax provision 8,566 2,385 379 7,598 15,879
Interest expense 5,691 5,982 6,018 23,830 24,031
Amortization of definite-lived intangibles 1,935 2,348 1,980 8,387 9,332
Depreciation expense 24,318 23,338 23,887 95,349 92,120
Stock-based compensation 1,747 2,241 1,954 7,800 8,985
Gain on sale of assets -- -- -- -- (17,917)
Acquisition-related costs 4,349 -- 1,632 5,981 --
Impairments, restructuring and other charges (7) 10,831 49 2,406 24,970
Adjusted EBITDA $ 60,537 $ 58,421 $ 43,557 $ 166,044 $ 181,293
Adjusted EBITDA margin 15.5% 16.0% 12.6% 12.5% 13.3%
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 and restructuring and impairment 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 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: Todd Schull, CFO 714-327-3000

Source:TTM Technologies