• TTM Technologies, Inc. Reports Fiscal First Quarter 2023 Results

    Source: Nasdaq GlobeNewswire / 03 May 2023 04:05:00   America/New_York

    SANTA ANA, Calif., May 03, 2023 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ: TTMI), a leading global manufacturer of technology solutions including engineered systems, radio frequency (“RF”) components and RF microwave/microelectronic assemblies, and printed circuit boards (“PCB”), today reported results for the first quarter fiscal 2023, which ended on April 3, 2023.  

    First Quarter 2023 Highlights

    • Net sales were $544.4 million
    • GAAP net loss of $5.8 million, or ($0.06) per diluted share
    • Non-GAAP net income was $18.6 million, or $0.18 per diluted share
    • Operating cash flow of $55.1 million; free cash flow of $24.4 million
    • Paid $50 million of Term Loan B
    • Completed sale of Shanghai BPA facility

    First Quarter 2023 GAAP Financial Results

    Net sales for the first quarter of 2023 were $544.4 million, compared to $581.3 million in the first quarter of 2022.

    GAAP operating loss for the first quarter of 2023 was $3.5 million compared to GAAP operating income of $25.9 million in the first quarter of 2022.

    GAAP net loss for the first quarter of 2023 was $5.8 million, or ($0.06) per diluted share, compared to GAAP net income of $17.2 million, or $0.17 per diluted share in the first quarter of 2022.

    First Quarter 2023 Non-GAAP Financial Results
            
    On a non-GAAP basis, net income for the first quarter of 2023 was $18.6 million, or $0.18 per diluted share. This compares to non-GAAP net income of $25.3 million, or $0.24 per diluted share, for the first quarter of 2022.

    Adjusted EBITDA in the first quarter of 2023 was $58.5 million, or 10.7% of sales compared to adjusted EBITDA of $62.0 million, or 10.7% of sales for the first quarter of 2022.

    “Revenues were below the guided range due to demand weakness in our commercial end markets and continued supply chain related challenges in North America which resulted in reduced shipments to our Aerospace and Defense customers,” said Tom Edman, CEO of TTM.   “However, due to favorable mix and cost controls, non-GAAP EPS was within our guided range. In addition, cash flow from operations remained strong at 10.1% of revenues which enabled our Board of Directors to authorize a new $100 million stock repurchase program,” concluded Mr. Edman.

    Business Outlook
    While demand in the Aerospace and Defense market remains strong, bookings in our commercial end markets have stabilized at a low level given continued customer inventory reductions and weaker end market demand. As a result, TTM estimates that revenue for the second quarter of 2023 will be in the range of $530 million to $570 million, and non-GAAP net income will be in the range of $0.17 to $0.23 per diluted share.

    Separately, as a result of the Term Loan B that is maturing in the third quarter of 2024, the company is evaluating options for its refinancing.

    Live Webcast/Conference Call
    TTM will host a conference call and webcast to discuss first quarter and 2023 results and the second quarter 2023 outlook on Wednesday, May 3rd, 2023 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call will include forward-looking statements.

    Access to the conference call is available by clicking on the registration link TTM Technologies, Inc. first quarter fiscal year 2023 conference call. Registering participants will receive dial in information and a unique PIN to join the call. Participants can register at any time up to the start of the conference call.   The conference call also will be webcast on TTM’s website at TTM Technologies, Inc. first quarter fiscal year 2023 webcast.

    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 TTM Technologies, Inc. first quarter fiscal year 2023 webcast.

    About TTM
    TTM Technologies, Inc. is a leading global manufacturer of technology solutions including engineered systems, RF components and RF microwave/microelectronic assemblies, and quick-turn and technologically advanced PCBs. 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
    The preliminary financial results included in this press release represent the most current information available to management. The company’s actual results when disclosed in its Form 10-K may differ from these preliminary results as a result of the completion of the company’s financial closing procedures; final adjustments; completion of the review by the company’s independent registered accounting firm; and other developments that may arise between now and the disclosure of the final results. 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 impact of COVID-19, 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 a comparable 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 a comparable 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)
             
    CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS First Quarter
           2023   2022 
             
     Net sales  $544,437  $581,260 
     Cost of goods sold  458,314   490,337 
             
     Gross profit     86,123   90,923 
             
     Operating expenses:    
     Selling and marketing   21,302   18,272 
     General and administrative   35,073   32,770 
     Research and development   7,085   5,555 
     Amortization of definite-lived intangibles   21,964   8,274 
     Restructuring charges   4,167   184 
     Total operating expenses    89,591   65,055 
             
     Operating (loss) income     (3,468)  25,868 
             
     Interest expense  (12,807)  (11,361)
     Gain on sale of subsidiary  1,339   - 
     Other, net   1,198   1,970 
             
     (Loss) income before income taxes  (13,738)  16,477 
     Income tax benefit  7,924   769 
             
     Net (loss) income    $(5,814) $17,246 
             
             
     (Loss) earnings per share:       
     Basic   $(0.06) $0.17 
     Diluted   (0.06)  0.17 
             
                 
             
     Weighted-average shares used in computing per share amounts:    
     Basic    102,381   102,613 
     Diluted   102,381   104,304 
             
             
     Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:  
             
     Weighted-average shares outstanding  102,381   102,613 
     Dilutive effect of warrants  -   6 
     Dilutive effect of performance-based stock units, restricted stock units & stock options  -   1,685 
     Diluted shares  102,381   104,304 
             



                
    SELECTED BALANCE SHEET DATA        
          April 3, 2023 January 2, 2023 
     Cash and cash equivalents, including restricted cash $417,452 $402,749 
     Accounts and notes receivable, net  398,898  473,225 
     Receivable from sale of SH E-MS property  34,746  69,240 
     Contract assets  316,048  335,788 
     Inventories  176,728  170,639 
     Total current assets  1,378,103  1,493,056 
     Property, plant and equipment, net  714,147  724,204 
     Operating lease right of use asset  15,622  18,862 
     Other non-current assets  1,068,163  1,087,482 
     Total assets  3,176,035  3,323,604 
              
     Short-term debt, including current portion of long-term debt $- $50,000 
     Accounts payable  312,823  361,788 
     Total current liabilities  627,751  761,325 
     Debt, net of discount  879,993  879,407 
     Total long-term liabilities  1,020,550  1,026,700 
     Total equity  1,527,734  1,535,579 
     Total liabilities and equity  3,176,035  3,323,604 
              



    SUPPLEMENTAL DATA     
          First Quarter 
           2023   2022  
     Gross margin  15.8%  15.6% 
     Operating margin  (0.6)%  4.5% 
              
     End Market Breakdown:     
          First Quarter 
           2023   2022  
              
      Aerospace and Defense  43%  30% 
      Automotive  17%  20% 
      Data Center Computing  10%  16% 
      Medical/Industrial/Instrumentation  19%  21% 
      Networking  11%  13% 
              
     Stock-based Compensation:     
          First Quarter 
           2023   2022  
      Amount included in:     
      Cost of goods sold  $1,662  $1,276  
      Selling and marketing   741   650  
      General and administrative   2,562   2,053  
      Research and development   275   255  
      Total stock-based compensation expense  $5,240  $4,234  
              
              
     Operating Segment Data:     
          First Quarter 
      Net sales:  2023   2022  
      PCB  $534,111  $566,070  
      RF&S Components  10,326   15,190  
      Total net sales  $544,437  $581,260  
              
      Operating segment income:     
      PCB  $51,634  $56,540  
      RF&S Components  2,168   5,750  
      Corporate & Other  (29,498)  (26,764) 
      Total operating segment income   24,304   35,526  
      Amortization of definite-lived intangibles  (27,772)  (9,658) 
      Total operating (loss) income   (3,468)  25,868  
      Total other expense   (10,270)  (9,391) 
      (Loss) income before income taxes   $(13,738) $16,477  
              
              



              
              
    RECONCILIATIONS1 First Quarter 
           2023   2022  
              
     Non-GAAP gross profit reconciliation2:     
      GAAP gross profit $86,123  $90,923  
      Add back item:     
      Amortization of definite-lived intangibles   5,808   1,384  
      Accelerated depreciation associated with plant closures   1,233   -  
      Stock-based compensation   1,662   1,276  
      Unrealized gain on commodity hedge    (2,128)  (1,403) 
      Purchase accounting related inventory markup   163   -  
      Non-GAAP gross profit $92,861  $92,180  
      Non-GAAP gross margin  17.1%  15.9% 
              
     Non-GAAP operating income reconciliation3:     
      GAAP operating (loss) income   $(3,468) $25,868  
      Add back items:     
      Amortization of definite-lived intangibles   27,772   9,658  
      Accelerated depreciation associated with plant closures   1,276   -  
      Stock-based compensation   5,240   4,234  
      Gain on sale of assets    (173)  -  
      Unrealized gain on commodity hedge    (2,128)  (1,403) 
      Purchase accounting related inventory markup   163   -  
      Restructuring, acquisition-related and other charges   4,668   1,138  
      Non-GAAP operating income   $33,350  $39,495  
      Non-GAAP operating margin  6.1%  6.8% 
              
     Non-GAAP net income and EPS reconciliation4:     
      GAAP net (loss) income   $(5,814) $17,246  
      Add back items:     
      Amortization of definite-lived intangibles   27,772   9,658  
      Accelerated depreciation associated with plant closures   1,276   -  
      Stock-based compensation   5,240   4,234  
      Non-cash interest expense   727   532  
      Gain on sale of assets    (173)  (827) 
      Change in fair value of warrant liabilities   -   (99) 
      Gain on sale of subsidiary   (1,339)  -  
      Unrealized gain on commodity hedge    (2,128)  (1,403) 
      Purchase accounting related inventory markup   163   -  
      Restructuring, acquisition-related and other charges   4,668   1,138  
      Income taxes5   (11,744)  (5,226) 
      Non-GAAP net income   $18,648  $25,253  
      Non-GAAP earnings per diluted share $0.18  $0.24  
              
     Non-GAAP diluted number of shares:     
      GAAP diluted number of shares  102,381   104,304  
      Dilutive effect of performance-based stock units, restricted stock units & stock options 1,949   -  
      Non-GAAP diluted number of shares  104,330   104,304  
              
     Adjusted EBITDA reconciliation6:     
      GAAP net (loss) income   $(5,814) $17,246  
      Add back items:     
      Income tax benefit    (7,924)  (769) 
      Interest expense   12,807   11,361  
      Amortization of definite-lived intangibles   27,772   9,658  
      Depreciation expense   25,253   21,500  
      Stock-based compensation   5,240   4,234  
      Gain on sale of assets    (173)  (827) 
      Change in fair value of warrant liabilities   -   (99) 
      Gain on sale of subsidiary   (1,339)  -  
      Unrealized gain on commodity hedge    (2,128)  (1,403) 
      Purchase accounting related inventory markup   163   -  
      Restructuring, acquisition-related and other charges   4,668   1,138  
      Adjusted EBITDA $58,525  $62,039  
      Adjusted EBITDA margin  10.7%  10.7% 
              
     Free cash flow reconciliation:     
      Operating cash flow $55,078  $35,991  
      Capital expenditures, net  (30,707)  (23,420) 
      Free cash flow $24,371  $12,571  
              


     1 This information provides a reconciliation of non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP EPS, and adjusted EBITDA to the financial information in our consolidated condensed statements of operations.
      
     2 Non-GAAP gross profit and gross margin measures exclude amortization of intangibles, accelerated depreciation associated with plant closures, stock-based compensation expense, unrealized gain on commodity hedge, and purchase accounting related inventory markup.
      
     3 Non-GAAP operating income and operating margin measures exclude amortization of intangibles, accelerated depreciation associated with plant closures, stock-based compensation expense, gain on sale of assets, unrealized gain on commodity hedge, purchase accounting related inventory markup, restructuring, acquisition-related costs, and other charges.
      
     4 This information provides non-GAAP net income and non-GAAP EPS, which are non-GAAP financial measures. Management believes that both measures -- which add back amortization of intangibles, accelerated depreciation associated with plant closures, stock-based compensation expense, non-cash interest expense on debt (before consideration of capitalized interest), gain on sale of assets, change in fair value of warrant liabilities, gain on sale of subsidiary, unrealized gain on commodity hedge, purchase accounting related inventory markup, restructuring, acquisition-related costs, 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 Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, change in fair value of warrant liabilities, gain on sale of subsidiary, unrealized gain on commodity hedge, purchase accounting related inventory markup, restructuring, acquisition-related costs, 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: 
    Sameer Desai,
    Vice President, Corporate Development & Investor Relations
    Sameer.desai@ttmtech.com 
    714-327-3050


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