TTM Technologies, Inc. Reports Fiscal First Quarter 2018 Results

COSTA MESA, Calif., May 02, 2018 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) manufacturer, today reported results for the first quarter of fiscal 2018, which ended April 2nd, 2018. The financial results provided below for the first quarter do not include any contribution from the acquisition of Anaren, Inc. (“Anaren”), which was completed on April 18^th, 2018.

First Quarter 2018 Highlights

Net sales were $663.6 million
GAAP net income was $10.1 million, or $0.09 per diluted share
Non-GAAP net income was $28.0 million, or $0.26 per diluted share
Completed the acquisition of Anaren, Inc.

First Quarter 2018 Financial Results
Net sales for the first quarter of 2018 were $663.6 million, compared to $625.2 million in the first quarter of 2017 and $739.3 million in the fourth quarter of 2017.

GAAP operating income for the first quarter of 2018 was $30.0 million, compared to $52.6 million in the first quarter of 2017 and $71.0 million in the fourth quarter of 2017.

GAAP net income for the first quarter of 2018 was $10.1 million, or $0.09 per diluted share. This compares to $33.0 million, or $0.28 per diluted share, in the first quarter of 2017 and $49.2 million, or $0.40 per diluted share, in the fourth quarter of 2017.

On a non-GAAP basis, net income for the first quarter of 2018 was $28.0 million, or $0.26 per diluted share. This compares to non-GAAP net income of $39.2 million, or $0.37 per diluted share, for the first quarter of 2017 and $61.2 million, or $0.57 per diluted share, in the fourth quarter of 2017.

Adjusted EBITDA for the first quarter of 2018 was $83.2 million, or 12.5 percent of net sales, compared to adjusted EBITDA of $95.6 million, or 15.3 percent of net sales, for the first quarter of 2017 and $121.7 million, or 16.5 percent of net sales, for the fourth quarter of 2017.

“As anticipated, we faced seasonal challenges in our consumer related cellular and computing markets in the first quarter resulting in expected short term pressure on margins,” said Tom Edman, CEO of TTM. “We were pleased to see solid growth from the aerospace and defense and automotive end markets that more than offset weakness in our computing and networking markets. We also closed the acquisition of Anaren in the second quarter, which we expect will further increase our exposure to the growing aerospace and defense end market and strengthen our ability to deliver value added solutions to our customers across all of the markets we serve.”

Business Outlook
For the second quarter of 2018, including the expected contribution from Anaren post acquisition, TTM estimates that revenue will be in the range of $700 million to $750 million, and non-GAAP net income will be in the range of $0.34 to $0.40 per diluted share.

To Access the Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss first quarter 2018 results and second quarter 2018 outlook on Wednesday, May 2nd, 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 800-289-0438 or international 323-794-2423 (ID 2803345). 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 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 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 such 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						Fourth Quarter
		2018			2017			2017

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

Net sales	$	663,582		$	625,247		$	739,349
Cost of goods sold		574,904			520,228			607,488

Gross profit		88,678			105,019			131,861

Operating expenses:
Selling and marketing		17,628			16,655			17,081
General and administrative		34,127			30,822			37,764
Amortization of definite-lived intangibles		5,861			5,912			5,907
Restructuring charges		1,061			609			65
(Gain)/loss on sale of assets		-			(1,549	)		-
Total operating expenses		58,677			52,449			60,817

Operating income		30,001			52,570			71,044

Interest expense		(13,747	)		(13,596	)		(13,782	)
Other, net		(1,107	)		(1,710	)		(3,617	)

Income before income taxes		15,147			37,264			53,645
Income tax provision		(5,050	)		(4,139	)		(4,329	)

Net income	$	10,097		$	33,125		$	49,316

Net income attributable to noncontrolling interest		-			(166	)		(105	)
Net income attributable to stockholders	$	10,097		$	32,959		$	49,211

Earnings per share attributable to stockholders:
Basic	$	0.10		$	0.33		$	0.48
Diluted	$	0.09		$	0.28		$	0.40

Weighted-average shares used in computing per share amounts:
Basic		102,508			100,932			101,817
Diluted		107,517			130,922			133,170


Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share:

Net income attributable to stockholders				$	32,959		$	49,211
Add back items: interest expense, net of tax					3,394			3,508
Adjusted net income attributable to stockholders				$	36,353		$	52,719
Weighted-average shares outstanding					100,932			101,817
Dilutive effect of convertible debt					25,940			25,939
Dilutive effect of warrants					2,183			2,938
Dilutive effect of performance-based stock units, restricted stock units & stock options					1,867			2,476
Diluted shares					130,922			133,170
Earnings per share attributable to stockholders:
Basic				$	0.33		$	0.48
Diluted				$	0.28		$	0.40


SELECTED BALANCE SHEET DATA
	April 2, 2018			January 1, 2018
Cash and cash equivalents, including restricted cash	$	352,576		$	409,326
Accounts and notes receivable, net		504,914			483,903
Contract assets		275,022			-
Inventories		82,116			294,588
Total current assets		1,247,594			1,221,307
Property, plant and equipment, net		1,039,751			1,056,845
Other non-current assets		499,004			503,730
Total assets		2,786,349			2,781,882

Short-term debt, including current portion of long-term debt	$	4,616		$	4,578
Accounts payable		487,818			497,455
Total current liabilities		677,528			720,356
Debt, net of discount		977,413			975,479
Total long-term liabilities		1,054,491			1,050,146
Total equity		1,054,330			1,011,380
Total liabilities and equity		2,786,349			2,781,882

SUPPLEMENTAL DATA
	First Quarter						Fourth Quarter
		2018			2017			2017
Gross margin		13.4	%		16.8	%		17.8	%
Operating margin		4.5	%		8.4	%		9.6	%

End Market Breakdown:
	First Quarter						Fourth Quarter
		2018			2017			2017

Aerospace/Defense		18	%		15	%		15	%
Automotive		20	%		20	%		18	%
Cellular Phone		15	%		14	%		27	%
Computing/Storage/Peripherals		12	%		15	%		10	%
Medical/Industrial/Instrumentation		15	%		15	%		12	%
Networking/Communications		16	%		20	%		17	%
Other		4	%		1	%		1	%

Stock-based Compensation:
	First Quarter						Fourth Quarter
		2018			2017			2017
Amount included in:
Cost of goods sold	$	529		$	394		$	613
Selling and marketing		374			253			450
General and administrative		2,719			2,981			3,921
Total stock-based compensation expense	$	3,622		$	3,628		$	4,984


Operating Segment Data:
	First Quarter						Fourth Quarter
Net sales:		2018			2017			2017
PCB	$	619,329		$	586,695		$	688,572
E-M Solutions		47,151			41,669			54,899
Corporate		-			-			-
Total sales		666,480			628,364			743,471
Inter-segment sales		(2,898	)		(3,117	)		(4,122	)
Total net sales	$	663,582		$	625,247		$	739,349

Operating segment income:
PCB	$	63,464		$	82,256		$	100,352
E-M Solutions		40			(1,642	)		2,799
Corporate		(27,642	)		(22,132	)		(26,200	)
Total operating segment income		35,862			58,482			76,951
Amortization of definite-lived intangibles		(5,861	)		(5,912	)		(5,907	)
Total operating income		30,001			52,570			71,044
Total other expense		(14,854	)		(15,306	)		(17,399	)
Income before income taxes	$	15,147		$	37,264		$	53,645

RECONCILIATIONS ¹
	First Quarter						Fourth Quarter
		2018			2017			2017
Non-GAAP gross profit reconciliation ² :
GAAP gross profit	$	88,678		$	105,019		$	131,861
Add back item:
Stock-based compensation		529			394			613
Non-GAAP gross profit	$	89,207		$	105,413		$	132,474
Non-GAAP gross margin		13.4	%		16.9	%		17.9	%

Non-GAAP operating income reconciliation ³ :
GAAP operating income	$	30,001		$	52,570		$	71,044
Add back items:
Amortization of definite-lived intangibles		5,861			5,912			5,907
Stock-based compensation		3,622			3,628			4,984
(Gain)/loss on sale of assets		-			(1,549	)		-
Impairments, restructuring, acquisition-related, and other charges		5,034			709			2,331
Non-GAAP operating income	$	44,518		$	61,270		$	84,266
Non-GAAP operating margin		6.7	%		9.8	%		11.4	%

Non-GAAP net income and EPS attributable to stockholders reconciliation ⁴ :
GAAP net income attributable to stockholders	$	10,097		$	32,959		$	49,211
Add back items:
Amortization of definite-lived intangibles		5,861			5,912			5,907
Stock-based compensation		3,622			3,628			4,984
Non-cash interest expense		3,054			2,627			3,017
(Gain)/loss on sale of assets		-			(1,549	)		-
Impairments, restructuring, acquisition-related, and other charges		5,263			709			2,331
Income taxes ⁵		108			(5,093	)		(4,204	)
Non-GAAP net income attributable to stockholders	$	28,005		$	39,193		$	61,246
Non-GAAP earnings per diluted share attributable to stockholders	$	0.26		$	0.37		$	0.57

Non-GAAP diluted number of shares ⁶ :
Diluted shares		107,517			130,922			133,170
Dilutive effect of convertible debt		-			(25,940	)		(25,939	)
Non-GAAP diluted number of shares		107,517			104,982			107,231

Adjusted EBITDA reconciliation ⁷ :
GAAP net income	$	10,097		$	33,125		$	49,316
Add back items:
Income tax provision (benefit)		5,050			4,139			4,329
Interest expense		13,747			13,596			13,782
Amortization of definite-lived intangibles		5,861			5,912			5,907
Depreciation expense		39,775			36,077			41,090
Stock-based compensation		3,622			3,628			4,984
(Gain)/loss on sale of assets		-			(1,549	)		-
Impairments, restructuring, acquisition-related, and other charges		5,034			709			2,331
Adjusted EBITDA	$	83,186		$	95,637		$	121,739
Adjusted EBITDA margin		12.5	%		15.3	%		16.5	%

Free cash flow reconciliation:
Operating cash flow		(14,261	)		49,584			152,691
Capital expenditures, net		(42,139	)		(23,378	)		(32,209	)
Free cash flow	$	(56,400	)	$	26,206		$	120,482

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.

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