TTM Technologies, Inc. Reports Fiscal Fourth Quarter and Fiscal 2017 Results
[ Back ]   [ More News ]   [ Home ]
TTM Technologies, Inc. Reports Fiscal Fourth Quarter and Fiscal 2017 Results

COSTA MESA, Calif., Feb. 07, 2018 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) manufacturer, today reported results for the fourth quarter of fiscal 2017, which ended January 1st, 2018. 

Fourth Quarter 2017 Highlights

Fourth Quarter 2017 Financial Results
Net sales for the fourth quarter of 2017 were $739.3 million, compared to $706.5 million in the fourth quarter of 2016 and $668.8 million in the third quarter of 2017.

GAAP operating income for the fourth quarter of 2017 was $71.0 million, compared to $69.6 million in the fourth quarter of 2016 and $44.1 million in the third quarter of 2017. 

GAAP net income attributable to stockholders for the fourth quarter of 2017 was $49.2 million, or $0.40 per diluted share.  This compares to a GAAP net loss attributable to stockholders of $2.0 million, or $0.02 per share, in the fourth quarter of 2016 and a GAAP net income of $21.5 million, or $0.19 per diluted share, in the third quarter of 2017. 

On a non-GAAP basis, net income attributable to stockholders for the fourth quarter of 2017 was $61.2 million, or $0.57 per diluted share. This compares to non-GAAP net income attributable to stockholders of $59.8 million, or $0.58 per diluted share, for the fourth quarter of 2016 and $33.4 million, or $0.32 per diluted share, in the third quarter of 2017.

Adjusted EBITDA for the fourth quarter of 2017 was $121.7 million, or 16.5 percent of net sales, compared to adjusted EBITDA of $128.5 million, or 18.2 percent of net sales, for the fourth quarter of 2016 and $85.7 million, or 12.9 percent of net sales, for the third quarter of 2017.

“TTM delivered the fifth consecutive quarter of year on year organic growth with revenues and operating performance that significantly exceeded expectations” said Tom Edman, CEO of TTM.  “On a year over year basis, the fastest growth in the fourth quarter came from the cellular and the aerospace and defense end markets.  This drove cash flow from operations to a record high of $152.7 million in the quarter.”

Full Year 2017 Financial Results
Net sales for fiscal year 2017 increased to $2.7 billion from $2.5 billion in fiscal year 2016, a 4.9% increase year over year.

GAAP operating income for fiscal year 2017 was $212.8 million, an increase from GAAP operating income of $173.5 million in fiscal year 2016.

GAAP net income attributable to stockholders for fiscal year 2017 was $124.2 million, or $1.04 per diluted share, compared to GAAP net income attributable to stockholders of $34.9 million, or $0.34 per diluted share, for fiscal year 2016. 

On a non-GAAP basis, net income attributable to stockholders for fiscal year 2017 was $167.1 million, or $1.57 per diluted share. This compares to fiscal year 2016 non-GAAP net income attributable to stockholders of $142.3 million, or $1.40 per diluted share.

Adjusted EBITDA for fiscal year 2017 was $388.6 million, or 14.6 percent of net sales, compared to $395.4 million, or 15.6 percent of net sales, for fiscal year 2016.  

"2017 continued to validate TTM’s strategy of diversification, differentiation and discipline.  We saw solid organic growth in the aerospace and defense, cellular and computing end markets that more than offset the decline in the networking and communications end markets," continued Edman.  “I would like to thank our employees for their tremendous efforts to achieve these results for the year 2017.”

“In the first quarter of 2018, we face short term seasonal challenges in our consumer oriented cellular and computing end markets, but remain optimistic for full year growth in nearly all of our end markets driven by megatrends such as growing automotive electronic content, increased aerospace and defense procurement, and upgrades in cellular phones.”

Business Outlook
For the first quarter of 2018, TTM estimates that revenue will be in the range of $610 million to $660 million, and non-GAAP net income attributable to stockholders will be in the range of $0.22 to $0.28 per diluted share. 

To Access the Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss fourth quarter 2017 results and first quarter 2018 outlook on Wednesday, February 7th, 2018, 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 800-239-9838 or international 323-794-2551 (ID 5818058).  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.

With respect to the Company’s outlook for non-GAAP net income attributable to stockholders per diluted share, we are unable to predict with reasonable certainty or without unreasonable effort certain items that may affect such measure calculated and presented in accordance with GAAP. Our expected non-GAAP net income attributable to stockholders 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 attributable to stockholders per diluted share calculated and presented in accordance with GAAP.  Accordingly, a reconciliation of non-GAAP net income attributable to stockholders per diluted share to such measure calculated and presented in accordance with GAAP is not available without unreasonable effort and has not been provided.

Contact:
Sameer Desai,
Senior Director, Corporate Development & Investor Relations
Sameer.desai@ttmtech.com
714-327-3050

- Tables Follow -

TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
              
              
     Fourth Quarter Third Quarter Full Year
     2017 2016 2017 2017 2016
              
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS          
              
Net sales
 $739,349  $706,534  $666,814  $2,658,592  $2,533,359 
Cost of goods sold  607,488   573,689   569,980   2,229,011   2,109,744 
              
Gross profit  131,861   132,845   96,834   429,581   423,615 
              
Operating expenses:          
Selling and marketing  17,081   16,848   16,269   65,856   66,366 
General and administrative  37,764   38,998   30,018   128,489   148,719 
Amortization of definite-lived intangibles  5,907   6,407   5,905   23,634   24,252 
Restructuring charges  65   946   100   1,190   8,951 
Impairment of long-lived assets  -   -   -   -   3,346 
(Gain)/loss on sale of assets  -   -   452   (2,348)  (1,472)
Total operating expenses  60,817   63,199   52,744   216,821   250,162 
              
Operating income  71,044   69,646   44,090   212,760   173,453 
              
Interest expense  (13,782)  (15,267)  (13,598)  (53,898)  (76,008)
Loss on extinguishment of debt  -   (47,767)  (768)  (769)  (47,767)
Other, net
  (3,617)  8,994   (6,984)  (18,135)  17,324 
              
Income before income taxes  53,645   15,606   22,740   139,958   67,002 
Income tax provision  (4,329)  (17,416)  (1,205)  (15,231)  (31,427)
              
Net income (loss) $49,316  $(1,810) $21,535  $124,727  $35,575 
              
Net income attributable to noncontrolling interest  (105)  (195)  (82)  (513)  (714)
Net income (loss) attributable to stockholders $49,211  $(2,005) $21,453  $124,214  $34,861 
              
Earnings (loss) per share attributable to stockholders:          
Basic
 $0.48  $(0.02) $0.21  $1.22  $0.35 
Diluted
 $0.40  $(0.02) $0.19  $1.04  $0.34 
              
Weighted-average shares used in computing per share amounts:          
Basic
  101,817   100,365   101,814   101,580   100,099 
Diluted
  133,170   100,365   131,596   132,476   101,482 
              
              
Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share:      
              
Net income attributable to stockholders $49,211    $21,453  $124,214   
Add back items: interest expense, net of tax  3,508     3,469   13,803   
Adjusted net income attributable to stockholders $52,719    $24,922  $138,017   
Weighted-average shares outstanding  101,817     101,814   101,580   
Dilutive effect of convertible debt  25,939     25,939   25,940   
Dilutive effect of warrants  2,938     2,151   2,799   
Dilutive effect of performance-based stock units, restricted stock units & stock options  2,476     1,692   2,157   
Diluted shares  133,170     131,596   132,476   
Earnings per share attributable to stockholders:          
Basic
 $0.48    $0.21  $1.22   
Diluted
 $0.40    $0.19  $1.04   
              
              
SELECTED BALANCE SHEET DATA           
     January 1, 2018 January 2, 2017      
Cash and cash equivalents, including restricted cash $409,326  $256,277       
Accounts and notes receivable, net  483,903   432,788       
Inventories
  294,588   269,212       
Total current assets  1,221,307   1,012,841       
Property, plant and equipment, net  1,056,845   966,638       
Other non-current assets  503,730   520,597       
Total assets  2,781,882   2,500,076       
              
Short-term debt, including current portion of long-term debt $4,578  $110,652       
Accounts payable  438,990   371,610       
Total current liabilities  720,356   689,065       
Debt, net of discount  975,479   909,030       
Total long-term liabilities  1,050,146   981,886       
Total equity  1,011,380   829,125       
Total liabilities and equity  2,781,882   2,500,076       
              
SUPPLEMENTAL DATA          
     Fourth Quarter Third Quarter Full Year
     2017 2016 2017 2017 2016
Gross margin  17.8%  18.8%  14.5%  16.2%  16.7%
Operating margin  9.6%  9.9%  6.6%  8.0%  6.8%
              
End Market Breakdown:          
     Fourth Quarter Third Quarter    
     2017 2016 2017    
              
Aerospace/Defense  15%  14%  16%    
Automotive  18%  19%  20%    
Cellular Phone  27%  19%  17%    
Computing/Storage/Peripherals  10%  12%  14%    
Medical/Industrial/Instrumentation  12%  13%  14%    
Networking/Communications  17%  21%  17%    
Other
  1%  2%  2%    
              
Stock-based Compensation:          
     Fourth Quarter Third Quarter    
     2017
 2016
 2017
    
Amount included in:          
Cost of goods sold $613  $469  $606     
Selling and marketing $450   305   369     
General and administrative  3,921   2,426   3,703     
Total stock-based compensation expense $4,984  $3,200  $4,678     
              
              
Operating Segment Data:          
     Fourth Quarter Third Quarter    
Net sales: 2017
 2016
 2017
    
PCB
 $688,572  $654,379  $609,742     
E-M Solutions  54,899   55,332   60,620     
Corporate    -      -      -      
Total sales  743,471   709,711   670,362     
Inter-segment sales    (4,122)    (3,177)    (3,548)    
Total net sales $  739,349  $  706,534  $  666,814     
              
Operating segment income:          
PCB
 $100,352  $95,208  $70,443     
E-M Solutions  2,799   3,029   2,870     
Corporate    (26,200)    (22,184)    (23,318)    
Total operating segment income  76,951   76,053   49,995     
Amortization of definite-lived intangibles    (5,907)    (6,407)    (5,905)    
Total operating income  71,044   69,646   44,090     
Total other expense    (17,399)    (54,040)    (21,350)    
Income before income taxes $  53,645  $  15,606  $  22,740     
              
RECONCILIATIONS1          
     Fourth Quarter Third Quarter Full Year
     2017
 2016
 2017
 2017
 2016
Non-GAAP gross profit reconciliation2:          
GAAP gross profit $131,861  $132,845  $96,834  $429,581  $423,615 
Add back item:          
Stock-based compensation  613   469   606   2,252   1,630 
Non-GAAP gross profit $132,474  $133,314  $97,440  $431,833  $425,245 
Non-GAAP gross margin  17.9%  18.9%  14.6%  16.2%  16.8%
              
Non-GAAP operating income reconciliation3:          
GAAP operating income $71,044  $69,646  $44,090  $212,760  $173,453 
Add back items:          
Amortization of definite-lived intangibles  5,907   6,407   5,905   23,634   24,252 
Stock-based compensation  4,984   3,200   4,678   18,290   11,090 
(Gain)/loss on sale of assets  -   -   452   (2,348)  (1,472)
Impairments, restructuring, acquisition-related, and other charges  2,331   1,725   100   3,556   14,569 
Non-GAAP operating income $84,266  $80,978  $55,225  $255,892  $221,892 
Non-GAAP operating margin  11.4%  11.5%  8.3%  9.6%  8.8%
              
Non-GAAP net income and EPS attributable to stockholders reconciliation4:          
GAAP net income (loss) attributable to stockholders $49,211  $(2,005) $21,453  $124,214  $34,861 
Add back items:          
Amortization of definite-lived intangibles  5,907   6,407   5,905   23,634   24,252 
Stock-based compensation  4,984   3,200   4,678   18,290   11,090 
Non-cash interest expense  3,017   2,697   2,699   11,069   19,180 
(Gain)/loss on sale of assets  -   -   452   (2,348)  (1,472)
Loss on extinguishment of debt  -   47,767   768   769   47,767 
Impairments, restructuring, acquisition-related, and other charges  2,331   1,725   100   3,556   14,569 
Income taxes5  (4,204)  49   (2,643)  (12,059)  (7,987)
Non-GAAP net income attributable to stockholders $61,246  $59,840  $33,412  $167,125  $142,260 
Non-GAAP earnings per diluted share attributable to stockholders $0.57  $0.58  $0.32  $1.57  $1.40 
              
Non-GAAP diluted number of shares6:          
Diluted shares  133,170   102,563   131,596   132,476   101,482 
Dilutive effect of convertible debt  (25,939)  -   (25,939)  (25,940)  - 
Non-GAAP diluted number of shares  107,231   102,563   105,657   106,536   101,482 
              
Adjusted EBITDA reconciliation7:          
GAAP net income (loss) $49,316  $(1,810) $21,535  $124,727  $35,575 
Add back items:          
Income tax provision (benefit)  4,329   17,416   1,205   15,231   31,427 
Interest expense  13,782   15,267   13,598   53,898   76,008 
Amortization of definite-lived intangibles  5,907   6,407   5,905   23,634   24,252 
Depreciation expense  41,090   38,539   37,496   150,809   156,229 
Stock-based compensation  4,984   3,200   4,678   18,290   11,090 
(Gain)/loss on sale of assets  -   -   452   (2,348)  (1,472)
Loss on extinguishment of debt  -   47,767   768   769   47,767 
Impairments, restructuring, acquisition-related, and other charges  2,331   1,725   100   3,556   14,569 
Adjusted EBITDA $121,739  $128,511  $85,737  $388,566  $395,445 
Adjusted EBITDA margin  16.5%  18.2%  12.9%  14.6%  15.6%
              
Free cash flow reconciliation:          
Operating cash flow  152,691   97,650   71,366   332,755   298,336 
Capital expenditures, net  (32,209)  (20,501)  (22,877)  (124,090)  (81,498)
Free cash flow $120,482  $77,149  $48,489  $208,665  $216,838 
              
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 Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate.
              
6 Non-GAAP diluted number of shares used in computing non-GAAP earnings per share attributable to stockholders excludes the dilutive effect of convertible debt.
              
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, 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.
              

Primary Logo