Earnings Release
TTM Technologies, Inc. Reports Fiscal Second Quarter 2017 Results
TTM Technologies, Inc. (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 -
Selected Unaudited Financial Information
(In thousands, except per share data)
Second Quarter
First Quarter
First Two Quarters
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
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
Second Quarter
First Quarter
First Two Quarters
Gross margin
15.3
%
16.2
%
16.8
%
16.0
%
15.3
%
Operating margin
7.2
%
5.8
%
8.4
%
7.8
%
4.5
%
Second Quarter
First Quarter
Aerospace/Defense
17
%
16
%
15
%
Computing/Storage/Peripherals
14
%
13
%
15
%
Medical/Industrial/Instrumentation
15
%
16
%
15
%
Networking/Communications
20
%
25
%
20
%
Stock-based Compensation:
Second Quarter
First Quarter
Senior Director, Corporate Development & Investor Relations
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