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TTM Technologies, Inc. Reports Second Quarter 2015 Results

20:00 EDT 4 Aug 2015 | Globe Newswire

COSTA MESA, Calif., Aug. 5, 2015 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (Nasdaq:TTMI), a major global printed circuit board ("PCB") manufacturer, today reported results for the second quarter 2015, which ended June 29, 2015. Results for the period reflect approximately one month of consolidated results from the acquisition of Viasystems Group, Inc. ("Viasystems"), completed on June 1, 2015.

Second Quarter 2015 Highlights

-  Completed the acquisition of Viasystems on June 1, 2015

-  Net sales were $445.4 million

-  GAAP net loss was $36.6 million, or $0.41 per share

-  Non-GAAP net income was $14.9 million, or $0.17 per diluted share

Second Quarter 2015 Financial Results

Net sales for the second quarter of 2015 were $445.4 million compared to $329.2 million in the first quarter of 2015 and $297.6 million in the second quarter of 2014.

GAAP operating income for the second quarter of 2015 was a loss of $7.1 million compared to GAAP operating income of $8.3 million in the first quarter of 2015 and $3.2 million in the second quarter of 2014.

GAAP net loss for the second quarter of 2015 was $36.6 million, or $0.41 per share. This compares to GAAP net income of $3.4 million, or $0.04 per diluted share, in the first quarter of 2015 and a GAAP net loss of $3.1 million, or $0.04 per share, in the second quarter of 2014. The GAAP results were significantly impacted by approximately $46 million of expenses related to the acquisition of Viasystems.

On a non-GAAP basis, net income for the second quarter of 2015 was $14.9 million, or $0.17 per diluted share. This compares to non-GAAP net income of $10.8 million, or $0.13 per diluted share, for the first quarter of 2015 and $3.9 million, or $0.05 per diluted share, for the second quarter of 2014.

Adjusted EBITDA for the second quarter of 2015 was $59.7 million, or 13.4 percent of net sales, compared to adjusted EBITDA of $42.5 million, or 12.9 percent of net sales, for the first quarter of 2015 and $32.8 million, or 11 percent of net sales, for the second quarter of 2014.

"The second quarter results reflect the dramatic repositioning of the company as we successfully completed the Viasystems acquisition, which added $93 million of revenue in the quarter," said Tom Edman, CEO of TTM. "In addition, we delivered strong year-over-year organic revenue growth of 18% driven by continued robust demand in the cellular phone and networking end markets. Integration of Viasystems is progressing on plan as our combined TTM focuses on operational execution for our global customer base."

Mr. Edman continued, "We enter the third quarter excited about our significantly expanded position in the automotive market and continued strength in the aerospace and defense, medical, industrial and instrumentation, cellular phone and networking/telecom end markets. As one of the world's leading PCB manufacturers, we now have greater scale and diversity in our end markets and customer base."

Business Outlook

For the third quarter of 2015, TTM estimates that revenue will be in the range of $640 million to $680 million, and non-GAAP net income will be in the range of $0.14 to $0.20 per diluted share.

To Access the Live Webcast/Conference Call

TTM will host a conference call and webcast to discuss second quarter 2015 results and third quarter 2015 outlook on Wednesday, August 5, 2015, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call may include forward-looking statements.

Telephone access is available by dialing domestic 1-888-503-8175 or international 1-719-325-2458 (ID 5927975). 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 major global printed circuit board manufacturer, focusing on quick-turn and 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, the successful integration of Viasystems, 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 "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.

Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, asset impairments, restructuring, costs related to acquisitions, and other charges. Management believes that the non-GAAP financial information – which adds back amortization of intangibles, stock-based compensation expense, non-cash interest expense on debt, acquisition-related costs, asset impairments, restructuring and other unusual or infrequent items as well as the associated tax impact of these charges and discrete tax items – provides additional useful information to investors regarding TTM's ongoing financial condition and results of operations.

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.

- Tables Follow -

TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
 
 
  Second Quarter First Quarter First Two Quarters
  2015 2014 2015 2015 2014
           
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS          
           
Net sales  $ 445,445  $ 297,635  $ 329,164  $ 774,609  $ 589,530
Cost of goods sold  384,255  259,035  277,605  661,860  512,424
           
Gross profit  61,190  38,600  51,559  112,749  77,106
           
Operating expenses:          
Selling and marketing  12,301  8,637  9,455  21,756  17,960
General and administrative  52,009  22,647  33,990  85,999  45,165
Amortization of definite-lived intangibles  3,910  2,236  1,874  5,784  4,472
Restructuring charges  30  37  479  509  13
Impairment of long-lived assets  --   1,845  --   --   1,845
Gain on sale of asset  --   --   (2,504)  (2,504)  -- 
Total operating expenses  68,250  35,402  43,294  111,544  69,455
           
Operating income (loss)  (7,060)  3,198  8,265  1,205  7,651
           
Interest expense  (12,778)  (5,915)  (5,765)  (18,543)  (12,121)
Loss on extinguishment of debt  (802)  --   --   (802)  (506)
Other, net  681  121  (415)  266  (3,274)
           
Income (loss) before income taxes  (19,959)  (2,596)  2,085  (17,874)  (8,250)
Income tax (provision) benefit   (16,624)  (508)  1,361  (15,263)  1,347
           
Net income (loss)  $ (36,583)  $ (3,104)  $ 3,446  $ (33,137)  $ (6,903)
           
Net income attributable to noncontrolling interest  (29)  --   --   (29)  -- 
Net income (loss) attributable to stockholders  $ (36,612)  $ (3,104)  $ 3,446  $ (33,166)  $ (6,903)
           
Earnings (loss) per share attributable to stockholders:          
Basic  $ (0.41)  $ (0.04)  $ 0.04  $ (0.38)  $ (0.08)
Diluted  $ (0.41)  $ (0.04)  $ 0.04  $ (0.38)  $ (0.08)
           
Weighted-average shares used in computing per share amounts:          
Basic  88,834  83,336  83,603  86,218  83,130
Diluted  88,834  83,336  84,465  86,218  83,130
           
           
           
SELECTED BALANCE SHEET DATA           
  June 29, 2015 December 29, 2014      
Cash and cash equivalents, including restricted cash  $ 170,969  $ 279,042      
Accounts and notes receivable, net  461,483  307,933      
Inventories  295,340  145,187      
Total current assets  982,609  798,123      
Property, plant and equipment, net  1,181,434  754,718      
Other non-current assets  515,793  48,448      
Total assets  2,679,836  1,601,289      
           
Short-term debt, including current portion of long-term debt  $ 87,126  $ 128,045      
Accounts payable  378,490  217,326      
Total current liabilities  671,565  496,012      
Debt, net of discount  1,110,795  374,642      
Total long-term liabilities  1,168,007  389,813      
Total stockholders' equity  840,264  715,464      
Total liabilities and stockholders' equity  2,679,836  1,601,289      
           
SUPPLEMENTAL DATA
  Second Quarter First Quarter First Two Quarters
  2015 2014 2015 2015 2014
Gross margin 13.7% 13.0% 15.7% 14.6% 13.1%
Operating margin (1.6)% 1.1% 2.5% 0.2% 1.3%
           
End Market Breakdown:          
  Second Quarter First Quarter    
  2015 2014 2015    
           
Aerospace/Defense 15% 18% 15%    
Automotive 7% 2% 2%    
Cellular Phone 24% 12% 30%    
Computing/Storage/Peripherals 11% 14% 11%    
Medical/Industrial/Instrumentation 12% 11% 9%    
Networking/Communications 26% 40% 29%    
Other 5% 3% 4%    
           
Stock-based Compensation:          
  Second Quarter First Quarter    
  2015 2014 2015    
Amount included in:          
Cost of goods sold  $ 243  $ 199  $ 225    
Selling and marketing  269  253  271    
General and administrative  1,802  1,479  1,544    
Total stock-based compensation expense  $ 2,314  $ 1,931  $ 2,040    
           
           
Operating Segment Data:          
  Second Quarter First Quarter    
Net sales: 2015 2014 2015    
Asia Pacific   $ 218,650  $ 166,699  $ 205,365    
North America  133,794  131,594  124,321    
Viasystems  93,194  --   --     
Total sales  445,638  298,293  329,686    
Inter-segment sales  (193)  (658)  (522)    
Total net sales  $ 445,445  $ 297,635  $ 329,164    
           
Operating segment income:          
Asia Pacific   $ 13,654  $ (1,925)  $ 14,441    
North America  (13,514)  7,359  (4,302)    
Viasystems  (3,290)  --   --     
Total operating segment income (loss)  (3,150)  5,434  10,139    
Amortization of definite-lived intangibles  (3,910)  (2,236)  (1,874)    
Total operating income (loss)  (7,060)  3,198  8,265    
Total other expense  (12,899)  (5,794)  (6,180)    
Income (loss) before income taxes  $ (19,959)  $ (2,596)  $ 2,085    
           
RECONCILIATIONS1
  Second Quarter First Quarter First Two Quarters
  2015 2014 2015 2015 2014
Non-GAAP gross profit reconciliation2:          
GAAP gross profit  $ 61,190  $ 38,600  $ 51,559  $ 112,749  $ 77,106
Add back item:          
Inventory markup and PP&E step up  7,408  --   --   7,408  -- 
Stock-based compensation  243  199  225  468  462
Non-GAAP gross profit  $ 68,841  $ 38,799  $ 51,784  $ 120,625  $ 77,568
Non-GAAP gross margin 15.5% 13.0% 15.7% 15.6% 13.2%
           
Non-GAAP operating income reconciliation3:          
GAAP operating income (loss)  $ (7,060)  $ 3,198  $ 8,265  $ 1,205  $ 7,651
Add back items:          
Amortization of definite-lived intangibles  3,910  2,236  1,874  5,784  4,472
Stock-based compensation  2,314  1,931  2,040  4,354  4,099
Gain on sale of asset  --   --   (2,504)  (2,504)  -- 
Acquisition-related costs  22,627  --   8,235  30,862  -- 
Inventory markup and PP&E step up  7,408  --   --   7,408  -- 
Impairments and restructuring charges  30  1,882  479  509  1,858
Non-GAAP operating income  $ 29,229  $ 9,247  $ 18,389  $ 47,618  $ 18,080
Non-GAAP operating margin 6.6% 3.1% 5.6% 6.1% 3.1%
           
Non-GAAP net income and EPS attributable to stockholders reconciliation4:          
GAAP net income (loss) attributable to stockholders  $ (36,612)  $ (3,104)  $ 3,446  $ (33,166)  $ (6,903)
Add back items:          
Amortization of definite-lived intangibles  3,910  2,236  1,874  5,784  4,472
Stock-based compensation  2,314  1,931  2,040  4,354  4,099
Non-cash interest expense  3,289  2,509  2,625  5,914  5,032
Gain on sale of asset  --   --   (2,504)  (2,504)  -- 
Acquisition-related costs  22,627  --   8,235  30,862  -- 
Inventory markup and PP&E step up  7,408  --   --   7,408  -- 
Impairments, restructuring and other charges  832  1,882  479  1,311  2,364
Income taxes  11,110  (1,587)  (5,366)  5,744  (3,980)
Non-GAAP net income attributable to stockholders  $ 14,878  $ 3,867  $ 10,829  $ 25,707  $ 5,084
Non-GAAP earnings per diluted share attributable to stockholders  $ 0.17  $ 0.05  $ 0.13  $ 0.29  $ 0.06
           
Adjusted EBITDA reconciliation5:          
GAAP net income (loss)  $ (36,583)  $ (3,104)  $ 3,446  $ (33,137)  $ (6,903)
Add back items:          
Income tax provision (benefit)  16,624  508  (1,361)  15,263  (1,347)
Interest expense  12,778  5,915  5,765  18,543  12,121
Amortization of definite-lived intangibles  3,910  2,236  1,874  5,784  4,472
Depreciation expense  29,776  23,437  24,536  54,312  47,144
Stock-based compensation  2,314  1,931  2,040  4,354  4,099
Gain on sale of asset  --   --   (2,504)  (2,504)  -- 
Acquisition-related costs  22,627  --   8,235  30,862  -- 
Inventory markup and PP&E step up  7,408  --   --   7,408  -- 
Impairments, restructuring and other charges  832  1,882  479  1,311  2,364
Adjusted EBITDA  $ 59,686  $ 32,805  $ 42,510  $ 102,196  $ 61,950
Adjusted EBITDA margin 13.4% 11.0% 12.9% 13.2% 10.5%
           
           
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 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

TTM Technologies

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