• TTM Technologies, Inc. Reports Fiscal Third Quarter 2022 Results

    ソース: Nasdaq GlobeNewswire / 02 11 2022 16:05:02   America/New_York

    SANTA ANA, Calif., Nov. 02, 2022 (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 third quarter fiscal 2022, which ended on October 3, 2022 and includes a full quarter’s contribution from the acquisition of Telephonics, which closed at the end of the second quarter of 2022.  

    Third Quarter 2022 Highlights

    • Net sales were $671.1 million
    • GAAP net income of $43.5 million, or $0.42 per diluted share
    • Non-GAAP net income was $57.9 million, or $0.56 per diluted share
    • Operating cash flow of $80.0 million; free cash flow of $53.7 million
    • Net leverage (net debt divided by last twelve months EBITDA) of 1.8x.

    Third Quarter 2022 GAAP Financial Results

    Net sales for the third quarter of 2022 were $671.1 million, compared to $556.8 million in the third quarter of 2021.

    GAAP operating income for the third quarter of 2022 was $49.8 million. This compares to GAAP operating income of $32.2 million in the third quarter of 2021.

    GAAP net income for the third quarter of 2022 was $43.5 million, or $0.42 per diluted share, compared to GAAP net income of $21.0 million, or $0.19 per diluted share in the third quarter of 2021.     

    Third Quarter 2022 Non-GAAP Financial Results

    On a non-GAAP basis, net income for the third quarter of 2022 was $57.9 million, or $0.56 per diluted share. This compares to non-GAAP net income of $36.5 million, or $0.34 per diluted share, for the third quarter of 2021.

    Adjusted EBITDA in the third quarter of 2022 was $102.5 million compared to adjusted EBITDA of $68.6 million for the third quarter of 2021.

    “In the third quarter, TTM delivered solid growth in revenues in-line with the guided range and up significantly year on year as we saw growth across all of our end markets. Our non-GAAP earnings were also up significantly and were well above the high end of the guided range. On a year on year basis, we also saw meaningful improvement in operating margins. Of particular note, we saw strong cash flow in the last quarter and for the last year as we generated $162.1 million in free cash flow over the last twelve months, and reduced our net leverage to 1.8x, below our 2x target,” said Tom Edman, CEO of TTM. “We also saw record bookings of $319.4 million in the Aerospace and Defense end market excluding Telephonics, and $387.8 million including Telephonics. Post acquisition, approximately 40% of our revenues are now from the Aerospace and Defense end market, which positions the company well for any softening that may occur in our commercial markets,” concluded Mr. Edman.

    Business Outlook
    TTM estimates that revenue for the fourth quarter of 2022 will be in the range of $630 million to $670 million, and non-GAAP net income will be in the range of $0.36 to $0.42 per diluted share.

    Live Webcast/Conference Call
    TTM will host a conference call and webcast to discuss third quarter 2022 results and the fourth quarter 2022 outlook on Wednesday, November 2nd, 2022 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 800-263-0877 or international 323-794-2094 (ID 2956820). 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 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)
                
                
        Third Quarter First Three Quarters 
        2022 2021 2022 2021 
                
    CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS         
                
     Net sales  $671,080  $556,784  $1,877,890  $1,650,599  
     Cost of goods sold  542,513   463,605   1,541,327   1,375,910  
                
     Gross profit   128,567   93,179   336,563   274,689  
                
     Operating expenses:         
     Selling and marketing  19,824   15,858   55,653   46,745  
     General and administrative  40,743   32,146   121,863   91,075  
     Research and development  7,322   4,423   18,110   13,075  
     Amortization of definite-lived intangibles  10,273   8,274   26,822   26,837  
     Restructuring charges  627   243   1,267   4,034  
     Total operating expenses  78,789   60,944   223,715   181,766  
                
     Operating income  49,778   32,235   112,848   92,923  
                
     Interest expense  (10,939)  (11,147)  (33,011)  (33,615) 
     Loss on extinguishment of debt   -   -   -   (15,217) 
     Other, net   10,324   2,525   19,932   5,338  
                
     Income before income taxes  49,163   23,613   99,769   49,429  
     Income tax provision   (5,635)  (2,655)  (11,203)  (3,402) 
                
     Net income  $43,528  $20,958  $88,566  $46,027  
                
                
     Earnings per share          
     Basic  $0.43  $0.20  $0.87  $0.43  
     Diluted  0.42   0.19   0.85   0.42  
                
       
                
     Weighted-average shares used in computing per share amounts:         
     Basic   102,196   107,098   102,016   106,917  
     Diluted  103,720   108,345   103,738   108,839  
                
                
     Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:           
                
     Weighted-average shares outstanding  102,196   107,098   102,016   106,917  
     Dilutive effect of warrants  -   -   2   267  
     Dilutive effect of performance-based stock units, restricted stock units & stock options  1,524   1,247   1,720   1,655  
     Diluted shares  103,720   108,345   103,738   108,839  
                
    SELECTED BALANCE SHEET DATA          
        October 3, 2022 January 3, 2022     
     Cash and cash equivalents, including restricted cash $335,625  $537,678      
     Accounts and notes receivable, net  480,838   386,347      
     Contract assets  363,604   324,862      
     Inventories  205,370   127,612      
     Total current assets  1,439,228   1,407,413      
     Property, plant and equipment, net  745,992   665,755      
     Operating lease right of use asset  20,464   20,802      
     Other non-current assets  1,087,206   931,577      
     Total assets  3,292,890   3,025,547      
                
     Accounts payable $406,816  $361,484      
     Total current liabilities  742,890   558,148      
     Debt, net of discount  929,004   927,818      
     Total long-term liabilities  1,027,531   1,011,982      
     Total equity  1,522,469   1,455,417      
     Total liabilities and equity  3,292,890   3,025,547      
                
    SUPPLEMENTAL DATA         
        Third Quarter First Three Quarters 
        2022 2021 2022 2021 
     Gross margin  19.2%  16.7%  17.9%  16.6% 
     Operating margin  7.4%  5.8%  6.0%  5.6% 
                
     End Market Breakdown:         
        Third Quarter     
        2022 2021     
                
     Aerospace and Defense  38%  31%     
     Automotive  15%  18%     
     Data Center Computing  14%  14%     
     Medical/Industrial/Instrumentation  19%  20%     
     Networking/Communications  14%  16%     
     Other   0%  1%     
                
     Stock-based Compensation:         
        Third Quarter     
        2022 2021     
     Amount included in:         
     Cost of goods sold $1,699  $1,284      
     Selling and marketing  762   731      
     General and administrative  2,685   2,542      
     Research and development  324   387      
     Total stock-based compensation expense $5,470  $4,944      
                
                
     Operating Segment Data:         
        Third Quarter     
     Net sales: 2022 2021     
     PCB  $588,920  $541,118      
     RF&S Components  13,905   15,666      
     Other1  68,255   -      
     Total net sales $671,080  $556,784      
                
     Operating segment income:         
     PCB  $82,770  $61,424      
     RF&S Components  5,984   6,537      
     Corporate & Other1  (27,319)  (26,068)     
     Total operating segment income  61,435   41,893      
     Amortization of definite-lived intangibles  (11,657)  (9,658)     
     Total operating income  49,778   32,235      
     Total other expense  (615)  (8,622)     
     Income before income taxes  $49,163  $23,613      
                
    RECONCILIATIONS2         
                
        Third Quarter First Three Quarters 
        2022 2021 2022 2021 
     Non-GAAP gross profit reconciliation3:         
     GAAP gross profit  $128,567  $93,179  $336,563  $274,689  
     Add back item:         
     Amortization of definite-lived intangibles  1,384   1,384   4,151   4,151  
     Accelerated depreciation  19   -   124   -  
     Stock-based compensation  1,699   1,284   4,147   3,310  
     Unrealized loss on commodity hedge   385   164   4,192   65  
     Purchase accounting related inventory markup  248   -   248   -  
     Restructuring and other charges  -   -   -   254  
     Non-GAAP gross profit $132,302  $96,011  $349,425  $282,469  
     Non-GAAP gross margin  19.7%  17.2%  18.6%  17.1% 
                
     Non-GAAP operating income reconciliation4:         
     GAAP operating income  $49,778  $32,235  $112,848  $92,923  
     Add back items:         
     Amortization of definite-lived intangibles  11,657   9,658   30,973   30,988  
     Accelerated depreciation  19   -   124   -  
     Stock-based compensation  5,470   4,944   14,131   12,503  
     Gain on sale of assets   -   -   -   (421) 
     Unrealized loss on commodity hedge   385   164   4,192   65  
     Purchase accounting related inventory markup  248   -   248   -  
     Restructuring, acquisition-related and other charges  655   699   12,805   4,550  
     Non-GAAP operating income  $68,212  $47,700  $175,321  $140,608  
     Non-GAAP operating margin  10.2%  8.6%  9.3%  8.5% 
                
     Non-GAAP net income and EPS reconciliation5:         
     GAAP net income  $43,528  $20,958  $88,566  $46,027  
     Add back items:         
     Amortization of definite-lived intangibles  11,657   9,658   30,973   30,988  
     Accelerated depreciation  19   -   124   -  
     Stock-based compensation  5,470   4,944   14,131   12,503  
     Non-cash interest expense  540   540   1,609   1,613  
     Gain on sale of assets   -   -   (827)  (991) 
     Change in fair value of warrant liabilities  -   (2,669)  (99)  (3,868) 
     Loss on extinguishment of debt   -   -   -   15,217  
     Unrealized loss on commodity hedge   385   164   4,192   65  
     Purchase accounting related inventory markup  248   -   248   -  
     Restructuring, acquisition-related and other charges  655   699   12,805   4,550  
     Income taxes6  (4,586)  2,246   (13,236)  (4,263) 
     Non-GAAP net income  $57,916  $36,540  $138,486  $101,841  
     Non-GAAP earnings per diluted share $0.56  $0.34  $1.33  $0.94  
                
     Adjusted EBITDA reconciliation7:         
     GAAP net income  $43,528  $20,958  $88,566  $46,027  
     Add back items:         
     Income tax provision   5,635   2,655   11,203   3,402  
     Interest expense  10,939   11,147   33,011   33,615  
     Amortization of definite-lived intangibles  11,657   9,658   30,973   30,988  
     Depreciation expense  24,017   20,994   67,306   63,711  
     Stock-based compensation  5,470   4,944   14,131   12,503  
     Gain on sale of assets   -   -   (827)  (991) 
     Change in fair value of warrant liabilities  -   (2,669)  (99)  (3,868) 
     Loss on extinguishment of debt   -   -   -   15,217  
     Unrealized loss on commodity hedge   385   164   4,192   65  
     Purchase accounting related inventory markup  248   -   248   -  
     Restructuring, acquisition-related and other charges  655   699   12,805   4,550  
     Adjusted EBITDA $102,534  $68,550  $261,509  $205,219  
     Adjusted EBITDA margin  15.3%  12.3%  13.9%  12.4% 
                
     Free cash flow reconciliation:         
     Operating cash flow $80,006  $18,599  $195,314  $114,263  
     Capital expenditures, net  (26,281)  (19,766)  (76,095)  (61,069) 
     Free cash flow $53,725  $(1,167) $119,219  $53,194  
                
                
     1 Other represents results from Telephonics and the now closed Shanghai E-MS and Shenzhen facilities. 
                
     2 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. 
      
                
     3 Non-GAAP gross profit and gross margin measures exclude amortization of intangibles, accelerated depreciation, stock-based compensation expense, unrealized loss on commodity hedge, purchase accounting related inventory markup, restructuring and other charges. 
      
                  
     4 Non-GAAP operating income and operating margin measures exclude amortization of intangibles, accelerated depreciation, stock-based compensation expense, gain on sale of assets, unrealized loss on commodity hedge, purchase accounting related inventory markup, restructuring, acquisition-related costs, and other charges. 
      
                  
     5 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, 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, loss on extinguishment of debt, unrealized loss 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. 
      
      
      
      
                  
     6 Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate. 
                  
     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, change in fair value of warrant liabilities, loss on extinguishment of debt, unrealized loss 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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