TTM Technologies, Inc. Reports Fiscal Second Quarter 2020 Results

- Tables Follow -

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


			Second Quarter						First Quarter			First Two Quarters
				2020		2019*				2020			2020		2019*

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

	Net sales		$	570,298		$	526,877		$	497,646		$	1,067,944		$	1,063,322
	Cost of goods sold			469,868			434,029			416,304			886,172			871,648

	Gross profit			100,430			92,848			81,342			181,772			191,674

	Operating expenses:
		Selling and marketing		15,969			16,898			16,169			32,138			34,458
		General and administrative		33,309			29,137			34,339			67,648			58,987
		Research and development		5,181			4,496			4,762			9,943			9,212
		Amortization of definite-lived intangibles		9,561			10,593			9,562			19,123			26,745
		Restructuring charges		13,414			2,732			328			13,742			3,164
		Total operating expenses		77,434			63,856			65,160			142,594			132,566

	Operating income			22,996			28,992			16,182			39,178			59,108

	Interest expense			(18,572	)		(20,553	)		(19,781	)		(38,353	)		(41,688	)
	Other, net			455			3,007			2,502			2,957			2,650

	Income (Loss) from continuing operations before income taxes			4,879			11,446			(1,097	)		3,782			20,070
	Income tax benefit (provision)			4,467			1,047			(2,123	)		2,344			(1,339	)

	Net income (loss) from continuing operations			9,346			12,493			(3,220	)		6,126			18,731
	Income (loss) from discontinued operations, net of income taxes			183,464			(9,069	)		2,046			185,510			(18,559	)
	Net income (loss)		$	192,810		$	3,424		$	(1,174	)	$	191,636		$	172

	* Reclassified Research and development expenses as a separate line item from General and administrative expenses

	Earnings (loss) per share:
		Basic earnings (loss) per share from continuing operations	$	0.09		$	0.12		$	(0.03	)	$	0.06		$	0.18
		Basic earnings (loss) per share from discontinued operations		1.72			(0.09	)		0.02			1.75			(0.18	)
		Basic earnings (loss) per share	$	1.81		$	0.03		$	(0.01	)	$	1.81		$	0.00

		Diluted earnings (loss) per share from continuing operations	$	0.09		$	0.12		$	(0.03	)	$	0.06		$	0.18
		Diluted earnings (loss) per share from discontinued operations		1.70			(0.09	)		0.02			1.72			(0.18	)
		Diluted earnings (loss) per share	$	1.79		$	0.03		$	(0.01	)	$	1.78		$	0.00


	Weighted-average shares used in computing per share amounts:
		Basic		106,295			105,470			105,686			105,990			104,893
		Diluted		107,485			132,045			105,686			107,431			105,860


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

	Net income			9,346			12,493						6,126			18,731
		Add back items: interest expense, net of tax		-			2,780						-			-
	Adjusted net income			9,346			15,273						6,126			18,731
	Weighted-average shares outstanding			106,295			105,470						105,990			104,893
	Dilutive effect of convertible debt			-			25,938						-			-
	Dilutive effect of warrants			-			-						-			-
	Dilutive effect of performance-based stock units, restricted stock units & stock options			1,190			637						1,441			967
	Diluted shares			107,485			132,045						107,431			105,860
	Earnings per share:
		Basic earnings per share from continuing operations	$	0.09		$	0.12					$	0.06		$	0.18
		Basic earnings (loss) per share from discontinued operations		1.72			(0.09	)					1.75			(0.18	)
		Basic earnings per share	$	1.81		$	0.03					$	1.81		$	0.00

		Diluted earnings per share from continuing operations	$	0.09		$	0.12					$	0.06		$	0.18
		Diluted earnings (loss) per share from discontinued operations		1.70			(0.09	)					1.72			(0.18	)
		Diluted earnings per share	$	1.79		$	0.03					$	1.78		$	0.00

SELECTED BALANCE SHEET DATA
			June 29, 2020			December 30, 2019
	Cash and cash equivalents, including restricted cash		$	694,668		$	379,818
	Accounts and notes receivable, net			414,329			503,598
	Contract assets			287,281			254,600
	Inventories			122,847			113,753
	Current assets held for sale			-			67,572
	Total current assets			1,871,912			1,342,684
	Property, plant and equipment, net			660,866			678,201
	Operating lease right of use asset			21,993			22,173
	Non-current assets held for sale			-			425,597
	Other non-current assets			1,039,900			1,092,278
	Total assets			3,594,671			3,560,933

	Short-term debt, including current portion of long-term debt		$	649,975		$	249,975
	Accounts payable			351,819			329,866
	Current liabilities held for sale			-			185,391
	Total current liabilities			1,197,457			946,666
	Debt, net of discount			832,834			1,225,962
	Non-current liabilities held for sale			-			1,530
	Total long-term liabilities			951,649			1,335,230
	Total equity			1,445,565			1,279,037
	Total liabilities and equity			3,594,671			3,560,933


SUPPLEMENTAL DATA
			Second Quarter						First Quarter			First Two Quarters
				2020			2019			2020			2020		2019*
	Gross margin			17.6	%		17.6	%		16.3	%		17.0	%		18.0	%
	Operating margin			4.0	%		5.5	%		3.3	%		3.7	%		5.6	%

	End Market Breakdown, including Mobility:
			Second Quarter						First Quarter
				2020			2019			2020

		Aerospace/Defense		31	%		28	%		30	%
		Automotive		12	%		16	%		12	%
		Cellular Phone		3	%		6	%		11	%
		Computing/Storage/Peripherals		13	%		15	%		14	%
		Medical/Industrial/Instrumentation		20	%		15	%		16	%
		Networking/Communications		19	%		17	%		14	%
		Other		2	%		3	%		3	%





	Stock-based Compensation, including Mobility:
			Second Quarter						First Quarter
				2020			2019			2020
		Amount included in:
		Cost of goods sold	$	620		$	569		$	850
		Selling and marketing		291			383			451
		General and administrative		1,690			2,611			3,477
		Research & Development		46			39			57
		Total stock-based compensation expense	$	2,647		$	3,602		$	4,835


	Operating Segment Data:
			Second Quarter						First Quarter
		Net sales:		2020			2019			2020
		PCB	$	520,067		$	466,960		$	467,430
		E-M Solutions		50,231			59,917			30,216
		Total net sales	$	570,298		$	526,877		$	497,646

		Operating segment income:
		PCB	$	80,056		$	62,463		$	61,626
		E-M Solutions		(15,577	)		863			(4,329	)
		Corporate		(30,538	)		(22,561	)		(30,170	)
		Total operating segment income		33,941			40,765			27,127
		Amortization of definite-lived intangibles		(10,945	)		(11,773	)		(10,945	)
		Total operating income		22,996			28,992			16,182
		Total other expense		(18,117	)		(17,546	)		(17,279	)
		Income (Loss) from continuing operations before income taxes	$	4,879		$	11,446		$	(1,097	)

RECONCILIATIONS ¹

			GAAP December 30, 2019			Mobility balances December 30, 2019 ²			Combined December 30, 2019
	Cash and cash equivalents, including restricted cash		$	379,818		$	20,336		$	400,154
	Accounts and notes receivable, net			503,598			66			503,664
	Contract assets			254,600			33,635			288,235
	Inventories			113,753			8,266			122,019
	Current assets held for sale			67,572			(67,572	)		-
	Total current assets			1,342,684			-			1,342,684
	Property, plant and equipment, net			678,201			344,728			1,022,929
	Operating lease right of use asset			22,173			1,983			24,156
	Non-current assets held for sale			425,597			(425,597	)		-
	Other non-current assets			1,092,278			78,886			1,171,164
	Total assets			3,560,933			-			3,560,933

	Short-term debt, including current portion of long-term debt		$	249,975		$	-		$	249,975
	Accounts payable			329,866			153,700			483,566
	Current liabilities held for sale			185,391			(185,391	)		-
	Total current liabilities			946,666			-			946,666
	Debt, net of discount			1,225,962			-			1,225,962
	Non-current liabilities held for sale			1,530			(1,530	)		-
	Total long-term liabilities			1,335,230			-			1,335,230
	Total equity			1,279,037			-			1,279,037
	Total liabilities and equity			3,560,933			-			3,560,933


			Second Quarter						First Quarter			First Two Quarters
				2020			2019			2020			2020		2019*
	Non-GAAP revenue reconciliation ³ :
		GAAP revenue	$	570,298		$	526,877		$	497,646		$	1,067,944		$	1,063,322
		Revenue from discontinued operations		30,777			106,161			113,174			143,951			189,916
		Non-GAAP revenue	$	601,075		$	633,038		$	610,820		$	1,211,895		$	1,253,238

	Non-GAAP gross profit reconciliation ⁴ :
		GAAP gross profit	$	100,430		$	92,848		$	81,342		$	181,772		$	191,674
		Gross profit from discontinued operations		2,402			(8,233	)		4,749			7,151			(18,374	)
		Add back item:
		Amortization of definite-lived intangibles		1,384			1,180			1,383			2,767			2,359
		Accelerated Depreciation		2,397			-			-			2,397			-
		Stock-based compensation		620			569			850			1,470			1,275
		Non-GAAP gross profit	$	107,233		$	86,364		$	88,324		$	195,557		$	176,934
		Non-GAAP gross margin		17.8	%		13.6	%		14.5	%		16.1	%		14.1	%

	Non-GAAP operating income reconciliation ⁵ :
		GAAP operating income	$	22,996		$	28,992		$	16,182		$	39,178		$	59,108
		Operating income (loss) from discontinued operations		976			(12,148	)		1,441			2,417			(24,774	)
		Add back items:
		Amortization of definite-lived intangibles		11,079			12,447			11,620			22,699			30,452
		Accelerated Depreciation		2,754			-			-			2,754			-
		Stock-based compensation		2,647			3,602			4,835			7,482			7,528
		Restructuring, acquisition-related, and other charges		14,273			4,351			1,596			15,869			5,454
		Non-GAAP operating income	$	54,725		$	37,244		$	35,674		$	90,399		$	77,768
		Non-GAAP operating margin		9.1	%		5.9	%		5.8	%		7.5	%		6.2	%

	Non-GAAP net income and EPS reconciliation ⁶ :
		GAAP net income (loss)	$	9,346		$	12,493			(3,220	)	$	6,126		$	18,731
		Net income (loss) from discontinued operations		183,464			(9,069	)		2,046			185,510			(18,559	)
		Add back items:
		Amortization of definite-lived intangibles		11,079			12,447			11,620			22,699			30,452
		Accelerated Depreciation		2,754			-			-			2,754			-
		Gain on sales of the Mobility business unit		(248,863	)		-			-			(248,863	)		-
		Stock-based compensation		2,647			3,602			4,835			7,482			7,528
		Non-cash interest expense		3,604			3,467			3,553			7,157			7,335
		(Gain) on sale of assets		(274	)		(235	)		(233	)		(507	)		(3,306	)
		Restructuring, acquisition-related, and other charges		13,969			4,351			1,596			15,565			5,454
		Income taxes ⁷		55,613			(5,789	)		(593	)		55,020			(9,939	)
		Non-GAAP net income	$	33,339		$	21,267		$	19,604		$	52,943		$	37,696
		Non-GAAP earnings per diluted share	$	0.31		$	0.20		$	0.18		$	0.49		$	0.36

	Non-GAAP diluted number of shares ⁸ :
		Diluted shares		107,485			132,045			107,378			107,431			105,860
		Dilutive effect of convertible debt		-			(25,938	)		-			-			-
		Non-GAAP diluted number of shares		107,485			106,107			107,378			107,431			105,860

	Adjusted EBITDA reconciliation ⁹ :
		GAAP net income (loss)	$	9,346		$	12,493		$	(3,220	)	$	6,126		$	18,731
		Net income (loss) from discontinued operations		183,464			(9,069	)		2,046		$	185,510		$	(18,559	)
		Add back items:
		Income tax provision (benefit)		61,498			(2,829	)		2,865			64,363			(4,306	)
		Interest expense		18,572			20,871			20,004			38,576			42,559
		Amortization of definite-lived intangibles		11,079			12,447			11,620			22,699			30,452
		Gain on sales of the Mobility business unit		(248,863	)		-			-			(248,863	)		-
		Depreciation expense		28,871			41,235			42,632			71,503			82,837
		Stock-based compensation		2,647			3,602			4,835			7,482			7,528
		(Gain) on sale of assets		(274	)		(235	)		(233	)		(507	)		(3,306	)
		Restructuring, acquisition-related, and other charges		13,969			4,351			1,596			15,565			5,454
		Adjusted EBITDA	$	80,309		$	82,866		$	82,145		$	162,454		$	161,390
		Adjusted EBITDA margin		13.4	%		13.1	%		13.4	%		13.4	%		12.9	%

	Free cash flow reconciliation, including Mobility:
		Operating cash flow		118,996			86,123			27,913			146,909			123,047
		Capital expenditures, net		(22,370	)		(34,741	)		(32,451	)		(54,821	)		(63,187	)
		Free cash flow	$	96,626		$	51,382		$	(4,538	)	$	92,088		$	59,860

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