Earnings Release
TTM Technologies, Inc. Reports Second Quarter 2016 Results
TTM Technologies, Inc. (TTMI), a major global printed circuit board ("PCB") manufacturer, today reported results for the second quarter 2016, which ended June 27, 2016. Our results include the contribution from the Viasystems Group, Inc. ("Viasystems") acquisition, which was completed on May 31, 2015.
Second Quarter 2016 Highlights
-- Net sales were $601.8 million
• GAAP net income attributable to stockholders was $18.5 million, or $0.17 per diluted share
• Non-GAAP net income attributable to stockholders was $28.4 million, or $0.28 per diluted share
-- Adjusted EBITDA was $90.2 million
-- Debt repayment of $30 million
Second Quarter 2016 Financial Results
Net sales for the second quarter of 2016 were $601.8 million, compared to $445.4 million in the second quarter of 2015 and $583.3 million in the first quarter of 2016.
GAAP operating income for the second quarter of 2016 was $34.7 million, compared to an operating loss of $7.1 million in the second quarter of 2015 and operating income of $18.9 million in the first quarter of 2016.
GAAP net income attributable to stockholders for the second quarter of 2016 was $18.5 million, or $0.17 per diluted share. This compares to a GAAP net loss attributable to stockholders of $36.6 million, or $0.41 per share, in the second quarter of 2015 and a GAAP net loss of $7.3 million, or $0.07 per share, in the first quarter of 2016.
On a non-GAAP basis, net income attributable to stockholders for the second quarter of 2016 was $28.4 million, or $0.28 per diluted share. This compares to non-GAAP net income of $14.9 million, or $0.17 per diluted share, for the second quarter of 2015 and $13.9 million, or $0.14 per diluted share, in the first quarter of 2016.
Adjusted EBITDA for the second quarter of 2016 was $90.2 million, or 15 percent of net sales, compared to adjusted EBITDA of $59.7 million, or 13.4 percent of net sales, for the second quarter of 2015 and $74.5 million, or 12.8 percent of net sales, for the first quarter of 2016.
"Our second quarter results reflect continued year on year improvements in revenue and earnings as sales to our customer base in diversified end markets have dampened historical volatility," said Tom Edman, CEO of TTM. "Strong operational execution across all of our business units drove non-GAAP earnings well above the high end of our guidance. A rebound in the cellular and communications end markets more than offset modest declines in the automotive and computing end markets, and our aerospace and defense end market hit a quarterly record in revenues."
Business Outlook
For the third quarter of 2016, TTM estimates that revenue will be in the range of $620 million to $660 million, and non-GAAP net income will be in the range of $0.29 to $0.35 per diluted share.
To Access the Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss second quarter 2016 results and third quarter 2016 outlook on Wednesday, July 27, 2016, 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 888-417-8516 or international 719-325-2491 (ID 7624574). 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 major global printed circuit board manufacturer, focusing on quick-turn and 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, the successful integration of Viasystems, 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
$
601,847
$
445,445
$
583,258
$
1,185,105
$ 774,609
Cost of goods sold
504,202
384,255
499,695
1,003,897
661,860
Gross profit
97,645
61,190
83,563
181,208
112,749
Selling and marketing
16,569
12,301
17,306
33,875
21,756
General and administrative
37,931
52,009
36,149
74,080
85,999
Amortization of definite-lived intangibles
5,949
3,910
5,947
11,896
5,784
Restructuring charges
3,989
30
1,913
5,902
509
Impairment of long-lived assets
-
-
3,346
3,346
-
Gain on sale of assets
(1,472
)
-
-
(1,472
)
(2,504
)
Total operating expenses
62,966
68,250
64,661
127,627
111,544
Operating income (loss)
34,679
(7,060
)
18,902
53,581
1,205
Interest expense
(20,084
)
(12,778
)
(21,784 )
(41,868
)
(18,543 )
Loss on extinguishment of debt
-
(802
)
-
-
(802
)
Other, net
3,191
681
1,209
4,400
266
Income (loss) before income taxes
17,786
(19,959
)
(1,673
)
16,113
(17,874 )
Income tax (provision) benefit
979
(16,624
)
(5,477
)
(4,498
)
(15,263 )
Net income (loss)
$
18,765
$
(36,583
)
$
(7,150
)
$
11,615
$ (33,137 )
Net income attributable to noncontrolling interest
(217
)
(29
)
(114
)
(331
)
(29
)
Net income (loss) attributable to stockholders
$
18,548
$
(36,612
)
$
(7,264
)
$
11,284
$ (33,166 )
Earnings (loss) per share attributable to stockholders:
Basic
$
0.19
$
(0.41
)
$
(0.07
)
$
0.11
$ (0.38
)
Diluted
$
0.17
$
(0.41
)
$
(0.07
)
$
0.11
$ (0.38
)
Weighted-average shares used in computing per share amounts:
Basic
100,170
88,834
99,596
99,883
86,218
Diluted
126,950
88,834
99,596
100,789
86,218
Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share:
Net income attributable to stockholders
$
18,548
Add back items: interest expense, net of tax
3,285
Adjusted net income attributable to stockholders
$
21,833
Weighted-average shares outstanding
100,170
Dilutive effect of convertible debt
25,940
Dilutive effect of performance-based stock units, restricted stock units and stock options
840
Earnings per share attributable to stockholders:
SELECTED BALANCE SHEET DATA
June 27, 2016
December 28, 2015
Cash and cash equivalents, including restricted cash
$
216,151
$
262,630
Accounts and notes receivable, net
424,038
454,001
Inventories
270,790
268,923
Total current assets
941,975
1,022,520
Property, plant and equipment, net
1,047,187
1,103,067
Other non-current assets
532,625
514,546
Total assets
2,521,787
2,640,133
Short-term debt, including current portion of long-term debt
$
80,358
$
157,375
Accounts payable
334,283
347,916
Total current liabilities
622,489
744,994
Debt, net of discount
997,207
1,013,411
Total long-term liabilities
1,069,574
1,068,470
Total equity
829,724
826,669
Total liabilities and equity
2,521,787
2,640,133
Second Quarter
First Quarter
First Two Quarters
Gross margin
16.2
%
13.7
%
14.3
%
15.3
%
14.6
%
Operating margin
5.8
%
(1.6
)%
3.2
%
4.5
%
0.2
%
Second Quarter
First Quarter
Aerospace/Defense
16
%
15
%
15
%
Computing/Storage/Peripherals
13
%
11
%
13
%
Medical/Industrial/Instrumentation
16
%
12
%
16
%
Networking/Communications
25
%
26
%
24
%
Stock-based Compensation:
Second Quarter
First Quarter
Senior Director, Corporate
Development & Investor Relations
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