TTM Technologies, Inc. Reports Fourth Quarter and Fiscal Year

TTM Technologies, Inc. Reports Fourth Quarter and Fiscal Year 2015 Results


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


				Fourth Quarter						Third Quarter			Full Year
					2015			2014			2015			2015			2014

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

	Net sales			$	668,874		$	390,912		$	652,005		$	2,095,488		$	1,325,717
	Cost of goods sold				560,604			322,437			562,887			1,785,351			1,131,028

	Gross profit				108,270			68,475			89,118			310,137			194,689

	Operating expenses:
		Selling and marketing			17,963			9,926			17,642			57,361			36,919
		General and administrative			41,654			30,046			39,456			167,109			100,944
		Amortization of definite-lived intangibles			6,683			1,935			6,421			18,888			8,387
		Restructuring charges			5,429			(7	)		2,003			7,941			55
		Impairment of long-lived assets			-			-			-			-			1,845
		Gain on sale of asset			-			-			-			(2,504	)		-
			Total operating expenses		71,729			41,900			65,522			248,795			148,150

	Operating income (loss)				36,541			26,575			23,596			61,342			46,539

	Interest expense				(20,208	)		(5,691	)		(21,002	)		(59,753	)		(23,830	)
	Loss on extinguishment of debt				-			-			-			(802	)		(506	)
	Other, net				3,925			1,620			3,998			8,189			88

	Income (loss) before income taxes				20,258			22,504			6,592			8,976			22,291
	Income tax (provision) benefit				(10,601	)		(8,566	)		(8,730	)		(34,594	)		(7,598	)

	Net income (loss)			$	9,657		$	13,938		$	(2,138	)	$	(25,618	)	$	14,693

	Net income attributable to noncontrolling interest				(136	)		-			(99	)		(264	)		-
	Net income (loss) attributable to stockholders			$	9,521		$	13,938		$	(2,237	)	$	(25,882	)	$	14,693

	Earnings (loss) per share attributable to stockholders:
		Basic		$	0.10		$	0.17		$	(0.02	)	$	(0.28	)	$	0.18
		Diluted		$	0.09		$	0.17		$	(0.02	)	$	(0.28	)	$	0.18

	Weighted-average shares used in computing per share amounts:
		Basic			99,134			83,345			99,128			92,675			83,238
		Diluted			126,329			84,205			99,128			92,675			83,941


	Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share for the quarter ended Q4 2015

	Net income attributable to stockholders			$	9,521
		Add back items: interest expense, net of tax			2,009
	Adjusted net income attributable to stockholders			$	11,530
	Weighted-average shares outstanding				99,134
	Dilutive effect of convertible debt				25,940
	Dilutive effect of performance-based stock units, restricted stock units and stock options				1,255
	Diluted shares				126,329
	Earnings per share attributable to stockholders:
		Basic		$	0.10
		Diluted		$	0.09


SELECTED BALANCE SHEET DATA
				December 28, 2015			December 29, 2014
	Cash and cash equivalents, including restricted cash			$	262,630		$	279,042
	Accounts and notes receivable, net				454,001			307,933
	Inventories				268,923			145,187
	Total current assets				1,022,520			798,123
	Property, plant and equipment, net				1,103,067			754,718
	Other non-current assets				545,717			48,448
	Total assets				2,671,304			1,601,289

	Short-term debt, including current portion of long-term debt			$	157,375		$	128,045
	Accounts payable				347,916			217,326
	Total current liabilities				744,994			496,012
	Debt, net of discount				1,044,582			374,642
	Total long-term liabilities				1,099,641			389,813
	Total equity				826,669			715,464
	Total liabilities and equity				2,671,304			1,601,289

SUPPLEMENTAL DATA
				Fourth Quarter						Third Quarter			Full Year
					2015			2014			2015			2015			2014
	Gross margin				16.2	%		17.5	%		13.7	%		14.8	%		14.7	%
	Operating margin				5.5	%		6.8	%		3.6	%		2.9	%		3.5	%

	End Market Breakdown:
				Fourth Quarter						Third Quarter
					2015			2014			2015

		Aerospace/Defense			13	%		14	%		14	%
		Automotive			18	%		3	%		17	%
		Cellular Phone			18	%		35	%		16	%
		Computing/Storage/Peripherals			12	%		10	%		12	%
		Medical/Industrial/Instrumentation			13	%		8	%		14	%
		Networking/Communications			23	%		27	%		25	%
		Other			3	%		3	%		2	%

	Stock-based Compensation:
				Fourth Quarter						Third Quarter
					2015			2014			2015
		Amount included in:
			Cost of goods sold	$	327		$	197		$	322
			Selling and marketing		301			263			294
			General and administrative		2,007			1,287			2,056
			Total stock-based compensation expense	$	2,635		$	1,747		$	2,672


	Operating Segment Data:
				Fourth Quarter						Third Quarter
		Net sales:			2015			2014			2015
		PCB		$	611,045		$	372,465		$	604,771
		E-M Solutions			61,021			19,073			49,658
		Corporate			-			-			-
			Total sales		672,066			391,538			654,429
		Inter-segment sales			(3,192	)		(626	)		(2,424	)
			Total net sales	$	668,874		$	390,912		$	652,005

		Operating segment income:
		PCB		$	66,320		$	37,236		$	52,191
		E-M Solutions			2,612			744			(1,729	)
		Corporate			(25,708	)		(9,470	)		(20,445	)
			Total operating segment income		43,224			28,510			30,017
		Amortization of definite-lived intangibles			(6,683	)		(1,935	)		(6,421	)
			Total operating income		36,541			26,575			23,596
		Total other expense			(16,283	)		(4,071	)		(17,004	)
		Income before income taxes		$	20,258		$	22,504		$	6,592

RECONCILIATIONS ¹
				Fourth Quarter						Third Quarter			Full Year
					2015			2014			2015			2015			2014
	Non-GAAP gross profit reconciliation ² :
		GAAP gross profit		$	108,270		$	68,475		$	89,118		$	310,137		$	194,689
		Add back item:
			Inventory markup and PP&E step up		598			-			8,214			16,220			-
			Stock-based compensation		327			197			322			1,117			866
		Non-GAAP gross profit		$	109,195		$	68,672		$	97,654		$	327,474		$	195,555
		Non-GAAP gross margin			16.3	%		17.6	%		15.0	%		15.6	%		14.8	%

	Non-GAAP operating income reconciliation ³ :
		GAAP operating income (loss)		$	36,541		$	26,575		$	23,596		$	61,342		$	46,539
		Add back items:
			Amortization of definite-lived intangibles		6,683			1,935			6,421			18,888			8,387
			Stock-based compensation		2,635			1,747			2,672			9,661			7,800
			Gain on sale of asset		-			-			-			(2,504	)		-
			Acquisition-related costs		1,521			4,349			2,065			34,448			5,981
			Inventory markup and PP&E step up		598			-			8,214			16,220			-
			Impairments and restructuring charges		5,429			(7	)		2,003			7,941			1,900
		Non-GAAP operating income		$	53,407		$	34,599		$	44,971		$	145,996		$	70,607
		Non-GAAP operating margin			8.0	%		8.9	%		6.9	%		7.0	%		5.3	%

	Non-GAAP net income and EPS attributable to stockholders reconciliation ⁴ :
		GAAP net income (loss) attributable to stockholders		$	9,521		$	13,938		$	(2,237	)	$	(25,882	)	$	14,693
		Add back items:
			Amortization of definite-lived intangibles		6,683			1,935			6,421			18,888			8,387
			Stock-based compensation		2,635			1,747			2,672			9,661			7,800
			Non-cash interest expense		4,893			2,585			4,819			15,626			10,165
			Gain on sale of asset		-			-			-			(2,504	)		-
			Acquisition-related costs		1,521			4,349			2,065			34,448			5,981
			Inventory markup and PP&E step up		598			-			8,214			16,220			-
			Impairments, restructuring and other charges		5,429			(7	)		2,003			8,743			2,406
			Income taxes		247			(1,332	)		(122	)		5,869			(10,121	)
		Non-GAAP net income attributable to stockholders		$	31,527		$	23,215		$	23,835		$	81,069		$	39,311
		Non-GAAP earnings per diluted share attributable to stockholders		$	0.31		$	0.28		$	0.24		$	0.87		$	0.47

	Non-GAAP diluted number of shares ⁵ :
		Diluted shares			126,329			84,205			100,035			93,640			83,941
		Dilutive effect of convertible debt			(25,940	)		-			-			-			-
		Non-GAAP diluted number of shares			100,389			84,205			100,035			93,640			83,941

	Adjusted EBITDA reconciliation ⁶ :
		GAAP net income (loss)		$	9,657		$	13,938		$	(2,138	)	$	(25,618	)	$	14,693
		Add back items:
			Income tax provision (benefit)		10,601			8,566			8,730			34,594			7,598
			Interest expense		20,208			5,691			21,002			59,753			23,830
			Amortization of definite-lived intangibles		6,683			1,935			6,421			18,888			8,387
			Depreciation expense		39,105			24,318			40,091			133,508			95,349
			Stock-based compensation		2,635			1,747			2,672			9,661			7,800
			Gain on sale of asset		-			-			-			(2,504	)		-
			Acquisition-related costs		1,521			4,349			2,065			34,448			5,981
			Inventory markup		-			-			6,792			14,200			-
			Impairments, restructuring and other charges		5,429			(7	)		2,003			8,743			2,406
		Adjusted EBITDA		$	95,839		$	60,537		$	87,638		$	285,673		$	166,044
		Adjusted EBITDA margin			14.3	%		15.5	%		13.4	%		13.6	%		12.5	%

	Free cash flow reconciliation:
		Operating cash flow			139,829			52,407			14,735			237,462			129,810
		Add back items:
			Payment of accreted interest on convertible sr. notes		-			-			-			8,730			1,324
			Payment of acquisition-related costs		1,522			2,123			6,610			36,210			2,123
		Adjusted operating cash flow			141,351			54,530			21,345			282,402			133,257
		Capital expenditures, net			(22,967	)		(26,262	)		(30,345	)		(99,718	)		(108,571	)
		Free cash flow		$	118,384		$	28,268		$	(9,000	)	$	182,684		$	24,686

	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, inventory markup and PP&E step up.

	³ Non-GAAP operating income and operating margin measures exclude amortization of intangibles, stock-based compensation expense, gain on sale of assets, inventory markup, 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, inventory markup, 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 Non-GAAP diluted number of shares used in computing non-GAAP earnings per share attributable to stockholders excludes the dilutive effect of convertible debt.

	⁶ Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, inventory markup, 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.

 Contact:
Todd  Schull,  CFO
714-327-3000

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