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TTM Technologies, Inc. Reports Fiscal Second Quarter 2017 Results

COSTA MESA, Calif., Aug. 02, 2017 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) manufacturer, today reported results for the second quarter of fiscal 2017, which ended July 2nd, 2017.

Second Quarter 2017 Highlights

  • Net sales were $627.2 million
  • GAAP net income attributable to stockholders was $20.6 million, or $0.18 per diluted share
  • Non-GAAP net income attributable to stockholders was $33.3 million, or $0.31 per diluted share
  • Excluding a $6.5 million foreign exchange loss, non-GAAP earnings per diluted share would have been $0.36
  • Adjusted EBITDA was $85.5 million

Second Quarter 2017 Financial Results
Net sales for the second quarter of 2017 were $627.2 million, compared to $601.8 million in the second quarter of 2016 and $625.2 million in the first quarter of 2017.

GAAP operating income for the second quarter of 2017 was $45.1 million, compared to $34.7 million in the second quarter of 2016 and $52.6 million in the first quarter of 2017.

GAAP net income attributable to stockholders for the second quarter of 2017 was $20.6 million, or $0.18 per diluted share. This compares to a GAAP net income attributable to stockholders of $18.5 million, or $0.17 per diluted share, in the second quarter of 2016 and a GAAP net income of $33 million, or $0.28 per diluted share, in the first quarter of 2017.

On a non-GAAP basis, net income attributable to stockholders for the second quarter of 2017 was $33.3 million, or $0.31 per diluted share. This compares to non-GAAP net income attributable to stockholders of $28.4 million, or $0.28 per diluted share, for the second quarter of 2016 and $39.2 million, or $0.37 per diluted share, in the first quarter of 2017.

Adjusted EBITDA for the second quarter of 2017 was $85.5 million, or 13.6 percent of net sales, compared to adjusted EBITDA of $90.2 million, or 15.0 percent of net sales, for the second quarter of 2016 and $95.6 million, or 15.3 percent of net sales, for the first quarter of 2017.

“TTM delivered the third consecutive quarter of year on year organic growth at 4 percent and our operating performance was in line with our expectations” 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, automotive and the aerospace and defense end markets. Absent a foreign exchange loss due to the weakening dollar, operating results were towards the high end of guidance.”

Business Outlook
For the third quarter of 2017, TTM estimates that revenue will be in the range of $625 million to $675 million, and non-GAAP net income attributable to stockholders will be in the range of $0.29 to $0.35 per diluted share. “Our third quarter is being impacted by a slower start in the normal seasonal ramp of cellular products. We expect this ramp to accelerate in the coming quarters” concluded Tom Edman.

To Access the Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss second quarter 2017 results and third quarter 2017 outlook on Wednesday, August 2nd, 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 877-397-0272 or international 719-325-2322 (ID 5738422). 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)
Second Quarter First Quarter First Two Quarters
2017 2016 2017 2017 2016
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Net sales $ 627,182 $ 601,847 $ 625,247 $ 1,252,429 $ 1,185,105
Cost of goods sold 531,315 504,202 520,228 1,051,543 1,003,897
Gross profit 95,867 97,645 105,019 200,886 181,208
Operating expenses:
Selling and marketing 15,851 16,569 16,655 32,506 33,875
General and administrative 29,885 37,931 30,822 60,707 74,080
Amortization of definite-lived intangibles 5,910 5,949 5,912 11,822 11,896
Restructuring charges 416 3,989 609 1,025 5,902
Impairment of long-lived assets - - - - 3,346
Gain on sale of assets (1,251) (1,472) (1,549) (2,800) (1,472)
Total operating expenses 50,811 62,966 52,449 103,260 127,627
Operating income 45,056 34,679 52,570 97,626 53,581
Interest expense (12,922) (20,084) (13,596) (26,518) (41,868)
Other, net (5,825) 3,191 (1,710) (7,535) 4,400
Income before income taxes 26,309 17,786 37,264 63,573 16,113
Income tax provision (5,558) 979 (4,139) (9,697) (4,498)
Net income (loss) $ 20,751 $ 18,765 $ 33,125 $ 53,876 $ 11,615
Net income attributable to noncontrolling interest (160) (217) (166) (326) (331)
Net income (loss) attributable to stockholders $ 20,591 $ 18,548 $ 32,959 $ 53,550 $ 11,284
Earnings (loss) per share attributable to stockholders:
Basic $ 0.20 $ 0.19 $ 0.33 $ 0.53 $ 0.11
Diluted $ 0.18 $ 0.17 $ 0.28 $ 0.46 $ 0.11
Weighted-average shares used in computing per share amounts:
Basic 101,756 100,170 100,932 101,344 99,883
Diluted 133,224 126,950 130,922 132,073 100,789
Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share:
Net income attributable to stockholders $ 20,591 $ 18,548 $ 32,959 $ 53,550
Add back items: interest expense, net of tax 3,432 3,285 3,394 6,826
Adjusted net income attributable to stockholders $ 24,023 $ 21,833 $ 36,353 $ 60,376
Weighted-average shares outstanding 101,756 100,170 100,932 101,344
Dilutive effect of convertible debt 25,940 25,940 25,940 25,940
Dilutive effect of warrants 3,924 - 2,183 3,054
Dilutive effect of performance-based stock units, restricted stock units & stock options 1,604 840 1,867 1,735
Diluted shares 133,224 126,950 130,922 132,073
Earnings per share attributable to stockholders:
Basic $ 0.20 $ 0.19 $ 0.33 $ 0.53
Diluted $ 0.18 $ 0.17 $ 0.28 $ 0.46
SELECTED BALANCE SHEET DATA
July 3, 2017 January 2, 2017
Cash and cash equivalents, including restricted cash $ 246,947 $ 256,277
Accounts and notes receivable, net 452,796 432,596
Inventories 282,485 269,212
Total current assets 1,025,261 1,012,841
Property, plant and equipment, net 1,034,385 966,638
Other non-current assets 512,304 520,597
Total assets 2,571,950 2,500,076
Short-term debt, including current portion of long-term debt $ 110,669 $ 110,652
Accounts payable 365,254 355,774
Total current liabilities 722,675 689,065
Debt, net of discount 863,847 909,030
Total long-term liabilities 938,684 981,886
Total equity 910,591 829,125
Total liabilities and equity 2,571,950 2,500,076
SUPPLEMENTAL DATA
Second Quarter First Quarter First Two Quarters
2017 2016 2017 2017 2016
Gross margin 15.3% 16.2% 16.8% 16.0% 15.3%
Operating margin 7.2% 5.8% 8.4% 7.8% 4.5%
End Market Breakdown:
Second Quarter First Quarter
2017 2016 2017
Aerospace/Defense 17% 16% 15%
Automotive 20% 19% 20%
Cellular Phone 13% 10% 14%
Computing/Storage/Peripherals 14% 13% 15%
Medical/Industrial/Instrumentation 15% 16% 15%
Networking/Communications 20% 25% 20%
Other 1% 1% 1%
Stock-based Compensation:
Second Quarter First Quarter
2017 2016 2017
Amount included in:
Cost of goods sold $ 639 $ 429 $ 394
Selling and marketing $ 386 271 253
General and administrative 3,975 2,145 2,981
Total stock-based compensation expense $ 5,000 $ 2,845 $ 3,628
Operating Segment Data:
Second Quarter First Quarter
Net sales: 2017 2016 2017
PCB $ 576,566 $ 563,574 $ 586,695
E-M Solutions 52,898 40,427 41,669
Corporate - - -
Total sales 629,464 604,001 628,364
Inter-segment sales (2,282) (2,154) (3,117)
Total net sales $ 627,182 $ 601,847 $ 625,247
Operating segment income:
PCB $ 69,435 $ 64,970 $ 82,256
E-M Solutions 2,689 (153) (1,642)
Corporate (21,158) (24,189) (22,132)
Total operating segment income 50,966 40,628 58,482
Amortization of definite-lived intangibles (5,910) (5,949) (5,912)
Total operating income 45,056 34,679 52,570
Total other expense (18,747) (16,893) (15,306)
Income before income taxes $ 26,309 $ 17,786 $ 37,264
RECONCILIATIONS1
Second Quarter First Quarter First Two Quarters
2017 2016 2017 2017 2016
Non-GAAP gross profit reconciliation2:
GAAP gross profit $ 95,867 $ 97,645 $ 105,019 $ 200,886 $ 181,208
Add back item:
Stock-based compensation 639 429 394 1,033 749
Non-GAAP gross profit $ 96,506 $ 98,074 $ 105,413 $ 201,919 $ 181,957
Non-GAAP gross margin 15.4% 16.3% 16.9% 16.1% 15.4%
Non-GAAP operating income reconciliation3:
GAAP operating income $ 45,056 $ 34,679 $ 52,570 $ 97,626 $ 53,581
Add back items:
Amortization of definite-lived intangibles 5,910 5,949 5,912 11,822 11,896
Stock-based compensation 5,000 2,845 3,628 8,628 5,091
Gain on sale of assets (1,251) (1,472) (1,549) (2,800) (1,472)
Impairments, restructuring, acquisition-related, and other charges 417 4,594 709 1,126 10,544
Non-GAAP operating income $ 55,132 $ 46,595 $ 61,270 $ 116,402 $ 79,640
Non-GAAP operating margin 8.8% 7.7% 9.8% 9.3% 6.7%
Non-GAAP net income and EPS attributable to stockholders reconciliation4:
GAAP net income (loss) attributable to stockholders $ 20,591 $ 18,548 $ 32,959 $ 53,550 $ 11,284
Add back items:
Amortization of definite-lived intangibles 5,910 5,949 5,912 11,822 11,896
Stock-based compensation 5,000 2,845 3,628 8,628 5,091
Non-cash interest expense 2,726 5,608 2,627 5,353 11,762
Gain on sale of assets (1,251) (1,472) (1,549) (2,800) (1,472)
Impairments, restructuring, acquisition-related, and other charges 417 4,594 709 1,126 10,544
Income taxes (119) (7,649) (5,093) (5,212) (6,828)
Non-GAAP net income attributable to stockholders $ 33,274 $ 28,423 $ 39,193 $ 72,467 $ 42,277
Non-GAAP earnings per diluted share attributable to stockholders $ 0.31 $ 0.28 $ 0.37 $ 0.68 $ 0.42
Non-GAAP diluted number of shares5:
Diluted shares 133,224 126,950 130,922 132,073 126,730
Dilutive effect of convertible debt (25,940) (25,940) (25,940) (25,940) (25,940)
Non-GAAP diluted number of shares 107,284 101,010 104,982 106,133 100,790
Adjusted EBITDA reconciliation6:
GAAP net income (loss) $ 20,751 $ 18,765 $ 33,125 $ 53,876 $ 11,615
Add back items:
Income tax provision (benefit) 5,558 (979) 4,139 9,697 4,498
Interest expense 12,922 20,084 13,596 26,518 41,868
Amortization of definite-lived intangibles 5,910 5,949 5,912 11,822 11,896
Depreciation expense 36,146 40,457 36,077 72,223 80,684
Stock-based compensation 5,000 2,845 3,628 8,628 5,091
Gain on sale of assets (1,251) (1,472) (1,549) (2,800) (1,472)
Impairments, restructuring, acquisition-related, and other charges 417 4,594 709 1,126 10,544
Adjusted EBITDA $ 85,453 $ 90,243 $ 95,637 $ 181,090 $ 164,724
Adjusted EBITDA margin 13.6% 15.0% 15.3% 14.5% 13.9%
Free cash flow reconciliation:
Operating cash flow 59,114 80,057 49,584 108,698 97,949
Add back items:
Payment of acquisition-related costs - 691 153 153 3,015
Adjusted operating cash flow 59,114 80,748 49,737 108,851 100,964
Capital expenditures, net (45,626) (15,329) (23,378) (69,004) (35,445)
Free cash flow $ 13,488 $ 65,419 $ 26,359 $ 39,847 $ 65,519
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: Sameer Desai, Senior Director, Corporate Development & Investor Relations sameer.desai@ttmtech.com 714-327-3050

Source:TTM Technologies