• TTM Technologies, Inc. Reports Fiscal First Quarter 2022 Results

    Source: Nasdaq GlobeNewswire / 04 May 2022 15:05:02   America/Chicago

    SANTA ANA, Calif., May 04, 2022 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ:TTMI), a leading global manufacturer of printed circuit boards (“PCB”), radio frequency (“RF”) components and RF microwave/microelectronic assemblies, today reported results for the first quarter fiscal 2022, which ended on April 4, 2022.  

    First Quarter 2022 Highlights

    • Net sales were $581.3 million
    • GAAP net income of $17.2 million, or $0.17 per diluted share
    • Non-GAAP net income was $25.3 million, or $0.24 per diluted share
    • Operating cash flow of $36.0 million
    • Repurchased 2.4 million shares of common stock for $30.2 million at an average price of $12.74 per share
    • Announced investment in a greenfield production facility in Malaysia

    First Quarter 2022 GAAP Financial Results
    Net sales for the first quarter of 2022 were $581.3 million, compared to $526.4 million in the first quarter of 2021.

    GAAP operating income for the first quarter of 2022 was $25.9 million. This compares to GAAP operating income of $19.8 million in the first quarter of 2021.

    GAAP net income for the first quarter of 2022 was $17.2 million, or $0.17 per diluted share, compared to net loss of $3.2 million, or ($0.03) per diluted share in the first quarter of 2021.     

    First Quarter 2022 Non-GAAP Financial Results        
    On a non-GAAP basis, net income for the first quarter of 2022 was $25.3 million, or $0.24 per diluted share. This compares to non-GAAP net income of $25.3 million, or $0.23 per diluted share, for the first quarter of 2021.

    Adjusted EBITDA in the first quarter of 2022 was $62.0 million compared to adjusted EBITDA of $61.0 million for the first quarter of 2021.

    “In the first quarter, TTM achieved revenues at the high end of guidance and non-GAAP earnings above the mid-point of the guided range. This outperformance was driven by strength in our commercial end markets, despite labor and production challenges in North America and inflationary pressures globally,” said Tom Edman, CEO of TTM. “We also took significant steps to advance our strategy of differentiation with the agreement to acquire Telephonics Corporation which provides engineered system level solutions for the Aerospace and Defense end market and enables TTM to move further up the value chain. In addition, we announced the building of a new manufacturing facility in Malaysia which enables TTM to offer our customers a regional alternative for high volume, high layer count PCBs to meet their supply chain resiliency requirements,” continued Mr. Edman.

    Business Outlook
    TTM estimates that revenue for the second quarter of 2022 will be in the range of $580 million to $620 million, and non-GAAP net income will be in the range of $0.30 to $0.36 per diluted share. This guidance does not include any contribution of the previously announced acquisition of Telephonics as we are awaiting regulatory approvals prior to closing.

    Live Webcast/Conference Call
    TTM will host a conference call and webcast to discuss first quarter 2022 results and the second quarter 2022 outlook on Wednesday, May 4th, 2022 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 888-220-8474 or international 323-794-2588 (ID 5381401). 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 and backplane assemblies as well as a global designer and manufacturer of high-frequency radio frequency (RF) and microwave/microelectronics components and assemblies. 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
    The preliminary financial results included in this press release represent the most current information available to management. The company’s actual results when disclosed in its Form 10-K may differ from these preliminary results as a result of the completion of the company’s financial closing procedures; final adjustments; completion of the review by the company’s independent registered accounting firm; and other developments that may arise between now and the disclosure of the final results. 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 impact of COVID-19, 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.

    With respect to the Company’s outlook for non-GAAP net income per diluted share, we are unable to predict with reasonable certainty or without unreasonable effort certain items that may affect a comparable measure calculated and presented in accordance with GAAP. Our expected non-GAAP net income per diluted share excludes primarily the future impact of restructuring actions, impairment charges, unusual gains and losses, and tax adjustments. These reconciling items are highly variable and difficult to predict due to various factors outside of management’s control and could have a material impact on our future period net income per diluted share calculated and presented in accordance with GAAP. Accordingly, a reconciliation of non-GAAP net income per diluted share to a comparable measure calculated and presented in accordance with GAAP is not available without unreasonable effort and has not been provided.

    - Tables Follow -

    TTM TECHNOLOGIES, INC.
    Selected Unaudited Financial Information
    (In thousands, except per share data)

     First Quarter
     20222021
         
    CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS    
         
    Net sales$                581,260 $               526,432 
    Cost of goods sold490,337 444,832 
         
    Gross profit90,923 81,600 
         
    Operating expenses:    
     Selling and marketing18,272 16,282 
     General and administrative32,954 31,527 
     Research and development5,555 4,470 
     Amortization of definite-lived intangibles8,274 9,521 
      Total operating expenses65,055 61,800 
         
    Operating income25,868 19,800 
         
    Interest expense(11,361)(11,389)
    Loss on extinguishment of debt- (15,217)
    Other, net1,970 2,507 
         
    Income (loss) before income taxes16,477 (4,299)
    Income tax benefit769 1,107 
         
    Net income (loss)$                  17,246 $                 (3,192)
         
         
    Earnings (loss) per share:    
     Basic $                     0.17 $                   (0.03)
     Diluted 0.17 (0.03)
         
    Weighted-average shares used in computing per share amounts:     
     Basic 102,613 106,825  
     Diluted 104,304 106,825  
          
          
    Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:    
          
    Weighted-average shares outstanding                   102,613    
    Dilutive effect of warrants                             6    
    Dilutive effect of performance-based stock units, restricted stock units & stock options                      1,685    
    Diluted shares                   104,304    
          
    SELECTED BALANCE SHEET DATA      
     April 4, 2022 January 3, 2022  
    Cash and cash equivalents, including restricted cash$                 519,079 $                537,678  
    Accounts and notes receivable, net                   412,432                  386,347  
    Contract assets                   318,713                  324,862  
    Inventories                   137,343                  127,612  
    Total current assets                1,434,183                1,407,413  
    Property, plant and equipment, net                   663,394                  665,755  
    Operating lease right of use asset                     19,503                    20,802  
    Other non-current assets                   927,068                  931,577  
    Total assets                3,044,148                3,025,547  
          
    Accounts payable$                 383,929 $                361,484  
    Total current liabilities                   586,566                  558,148  
    Debt, net of discount                   928,210                  927,818  
    Total long-term liabilities                1,009,753                1,011,982  
    Total equity                1,447,829                1,455,417  
    Total liabilities and equity                3,044,148                3,025,547  
          
    SUPPLEMENTAL DATA     
     First Quarter   
     2022 2021  
    Gross margin15.6%15.5% 
    Operating margin4.5%3.8% 
          
    End Market Breakdown:     
     First Quarter   
     2022 2021  
          
      30%  35%
      20% 18%
     Data Center Computing16%14% 
     Medical/Industrial/Instrumentation21%17% 
     Networking/Communications13%15% 
     Other 0%1% 
          
    Stock-based Compensation:     
     First Quarter   
     2022 2021  
     Amount included in:     
      Cost of goods sold$                     1,276 $                   1,165  
      Selling and marketing                         650                         646  
      General and administrative                      2,053                      2,355  
      Research and development                         255                           43  
      Total stock-based compensation expense$                     4,234 $                   4,209  
          
          
    Operating Segment Data:     
     First Quarter   
     Net sales:2022 2021  
     PCB $                 566,070 $                510,486  
     RF&S Components                     15,190                    12,690  
     Other1                            -                      3,256  
      Total net sales$                 581,260 $                526,432  
          
     Operating segment income:     
     PCB $                   56,540 $                 57,232  
     RF&S Components                      5,750                      3,862  
     Corporate & Other1                   (26,764)                  (30,389) 
      Total operating segment income                     35,526                    30,705  
     Amortization of definite-lived intangibles                     (9,658)                  (10,905) 
      Total operating income                     25,868                    19,800  
      Total other expense                     (9,391)                  (24,099) 
     Income (loss) before income taxes$                   16,477 $                  (4,299) 
          
    RECONCILIATIONS2     
          
     First Quarter   
     2022 2021  
    Non-GAAP gross profit reconciliation3:     
     GAAP gross profit$                   90,923 $                 81,600  
     Add back item:     
      Amortization of definite-lived intangibles                      1,384                      1,384  
      Stock-based compensation                      1,276                      1,165  
      Unrealized gain on commodity hedge                     (1,403)                          -  
      Restructuring and other charges                           -                         254  
     Non-GAAP gross profit$                   92,180 $                 84,403  
     Non-GAAP gross margin15.9%16.0% 
          
    Non-GAAP operating income reconciliation4:     
     GAAP operating income$                   25,868 $                 19,800  
     Add back items:     
      Amortization of definite-lived intangibles                      9,658                    10,905  
      Stock-based compensation                      4,234                      4,209  
      Gain on sale of assets                           -                       (410) 
      Unrealized gain on commodity hedge                     (1,403)                          -  
      Restructuring, acquisition-related and other charges                      1,138                      3,285  
     Non-GAAP operating income$                   39,495 $                 37,789  
     Non-GAAP operating margin6.8%7.2% 
          
    Non-GAAP net income and EPS reconciliation5:     
     GAAP net income (loss)$                   17,246 $                  (3,192) 
     Add back items:     
      Amortization of definite-lived intangibles                      9,658                    10,905  
      Stock-based compensation                      4,234                      4,209  
      Non-cash interest expense                         532                         537  
      Gain on sale of assets                        (827)                      (980) 
      Change in fair value of warrant liabilities                          (99)                      (172) 
      Loss on extinguishment of debt                           -                    15,217  
      Unrealized gain on commodity hedge                     (1,403)                          -  
      Restructuring, acquisition-related and other charges                      1,138                      3,285  
      Income taxes6                     (5,226)                    (4,551) 
     Non-GAAP net income$                   25,253 $                 25,258  
     Non-GAAP earnings per diluted share$                      0.24 $                     0.23  
          
    Non-GAAP diluted number of shares:     
     GAAP diluted number of shares                   104,304                  106,825  
     Dilutive effect of performance-based stock units, restricted stock units & stock options                             -                      1,879  
     Non-GAAP diluted number of shares                   104,304                  108,704  
          
    Adjusted EBITDA reconciliation7:     
     GAAP net income (loss)$                   17,246 $                  (3,192) 
     Add back items:     
      Income tax benefit                        (769)                    (1,107) 
      Interest expense                     11,361                    11,389  
      Amortization of definite-lived intangibles                      9,658                    10,905  
      Depreciation expense                     21,500                    21,476  
      Stock-based compensation                      4,234                      4,209  
      Gain on sale of assets                        (827)                      (980) 
      Change in fair value of warrant liabilities                          (99)                      (172) 
      Loss on extinguishment of debt                           -                    15,217  
      Unrealized gain on commodity hedge                     (1,403)                          -  
      Restructuring, acquisition-related and other charges                      1,138                      3,285  
     Adjusted EBITDA$                   62,039 $                 61,030  
     Adjusted EBITDA margin10.7%11.6% 
          
    Free cash flow reconciliation:     
     Operating cash flow$                   35,991 $                 41,145  
     Capital expenditures, net                   (23,420)                  (20,966) 
     Free cash flow$                   12,571 $                 20,179  
          


    1 Other represents the Shanghai E-MS and Shenzhen plant results.
     
    2 This information provides a reconciliation of non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP EPS, and adjusted EBITDA to the financial information in our consolidated condensed statements of operations.
     
    3 Non-GAAP gross profit and gross margin measures exclude amortization of intangibles, stock-based compensation expense, unrealized gain on commodity hedge, restructuring and other charges.
     
    4 Non-GAAP operating income and operating margin measures exclude amortization of intangibles, stock-based compensation expense, gain on sale of assets, unrealized gain on commodity hedge, restructuring, acquisition-related costs, and other charges.
     
    5 This information provides non-GAAP net income and non-GAAP EPS, 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, change in fair value of warrant liabilities, loss on extinguishment of debt, unrealized gain on commodity hedge, restructuring, acquisition-related costs, 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.
     
    6 Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate.
     
    7 Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, unrealized gain on commodity hedge, restructuring, acquisition-related costs, 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,
    Vice President, Corporate Development & Investor Relations
    Sameer.desai@ttmtech.com
    714-327-3050


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