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TTM Technologies, Inc. Reports Fiscal Second Quarter 2021 Results

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SANTA ANA, Calif., July 28, 2021 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) and radio frequency (“RF”) components and assemblies manufacturer, today reported results for the second quarter of fiscal 2021, which ended on June 28, 2021.

Second Quarter 2021 Highlights

  • Net sales were $567.4 million

  • GAAP net income of $28.3 million, or $0.26 per diluted share

  • Non-GAAP net income was $40.0 million, or $0.36 per diluted share

  • Cash flow from operations was $56.9 million, or 10% of revenues

Second Quarter 2021 Financial Results
Net sales for the second quarter of 2021 were $567.4 million, compared to $570.3 million from continuing operations in the second quarter of 2020.

GAAP operating income for the second quarter of 2021 was $40.9 million. This compares to GAAP operating income of $23.0 million from continuing operations in the second quarter of 2020.

GAAP net income for the second quarter of 2021 was $28.3 million, or $0.26 per diluted share, compared to net income of $9.3 million, or $0.09 per diluted share from continuing operations in the second quarter of 2020.

On a non-GAAP basis, net income for the second quarter of 2021 was $40.0 million, or $0.36 per diluted share. This compares to non-GAAP net income of $33.0 million, or $0.31 per diluted share from continuing operations in the second quarter of 2020.

Adjusted EBITDA in the second quarter of 2021 was $75.6 million, or 13.3 percent of net sales, compared to adjusted EBITDA of $76.8 million, or 13.5 percent of net sales, from continuing operations, in the second quarter of 2020.

“In the second quarter, TTM delivered revenue and non-GAAP earnings above the high end of the previously guided range despite significant challenges from COVID-19 and tight supply conditions for certain raw materials. The solid performance was driven by better than expected sales in our commercial end markets led by strong year on year growth from the automotive and data center computing end markets,” said Tom Edman, CEO of TTM. “Additionally, strict financial discipline drove strong and consistent operating cash flow in the quarter. These achievements reflect the strategic changes made to strengthen TTM, particularly the divestiture of the volatile mobility business which historically caused weak seasonal results in the first half of the year.”

Business Outlook
The stronger than expected revenues in Q2 pulled forward some demand from Q3 and the tight raw material supply conditions will have a greater impact in our third quarter. As a result, TTM estimates that revenue for the third quarter of 2021 will be in the range of $530 million to $570 million, and non-GAAP net income will be in the range of $0.31 to $0.37 per diluted share.

Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss second quarter 2021 results and the third quarter 2021 outlook on Wednesday, July 28th, 2021 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 800-367-2403 or international 334-777-6978 (ID 3384553). 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 printed circuit board manufacturer, focusing on quick-turn and volume production of technologically advanced PCBs and backplane assemblies as well as a global designer and manufacturer of high-frequency radio frequency (RF) and microwave components and assemblies. 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-Q 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 and raw materials used in 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)

Second Quarter

First Two Quarters

2021

2020*

2021

2020*

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

Net sales

$

567,383

$

570,298

$

1,093,815

$

1,067,944

Cost of goods sold

467,473

469,868

912,305

886,172

Gross profit

99,910

100,430

181,510

181,772

Operating expenses:

Selling and marketing

14,605

15,969

30,887

32,138

General and administrative

30,634

33,309

58,929

67,648

Research and development

4,182

5,181

8,652

9,943

Amortization of definite-lived intangibles

9,042

9,561

18,563

19,123

Restructuring charges

559

13,414

3,791

13,742

Total operating expenses

59,022

77,434

120,822

142,594

Operating income

40,888

22,996

60,688

39,178

Interest expense

(11,079

)

(18,572

)

(22,468

)

(38,353

)

Loss on extinguishment of debt

-

-

(15,217

)

-

Other, net

306

455

2,813

2,957

Income from continuing operations before income taxes

30,115

4,879

25,816

3,782

Income tax (provision) benefit

(1,854

)

4,467

(747

)

2,344

Net income from continuing operations

28,261

9,346

25,069

6,126

Income from discontinued operations, net of income taxes

-

172,421

-

174,467

Net income

$

28,261

$

181,767

$

25,069

$

180,593

Earnings per share:

Basic earnings per share from continuing operations

$

0.26

$

0.09

$

0.23

$

0.06

Basic earnings per share from discontinued operations

-

1.62

-

1.64

Basic earnings per share

$

0.26

$

1.71

$

0.23

$

1.70

Diluted earnings per share from continuing operations

$

0.26

$

0.09

$

0.23

$

0.06

Diluted earnings per share from discontinued operations

-

1.60

-

1.62

Diluted earnings per share

$

0.26

$

1.69

$

0.23

$

1.68

*Prior period amounts have been revised to correct an immaterial error to income from discontinued operations, net of income taxes, net income, basic earnings per share from discontinued operations, basic earnings per share, diluted earnings per share from discontinued operations and diluted earnings per share.

Weighted-average shares used in computing per share amounts:

Basic

107,148

106,295

106,987

105,990

Diluted

109,795

107,485

109,250

107,431

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

Weighted-average shares outstanding

107,148

106,295

106,987

105,990

Dilutive effect of warrants

802

-

401

-

Dilutive effect of performance-based stock units, restricted stock units & stock options

1,845

1,190

1,862

1,441

Diluted shares

109,795

107,485

109,250

107,431

SELECTED BALANCE SHEET DATA

June 28, 2021

December 28, 2020

Cash and cash equivalents, including restricted cash

$

558,291

$

451,565

Accounts and notes receivable, net

378,762

381,105

Contract assets

300,697

273,256

Inventories

126,355

115,651

Total current assets

1,404,515

1,248,758

Property, plant and equipment, net

650,764

650,435

Operating lease right of use asset

20,134

24,340

Other non-current assets

950,323

972,411

Total assets

3,025,736

2,895,944

Accounts payable

$

364,005

$

327,102

Total current liabilities

554,750

518,046

Debt, net of discount

926,523

842,853

Total long-term liabilities

1,000,615

933,889

Total equity

1,470,371

1,444,009

Total liabilities and equity

3,025,736

2,895,944

SUPPLEMENTAL DATA

Second Quarter

First Two Quarters

2021

2020

2021

2020

Gross margin

17.6

%

17.6

%

16.6

%

17.0

%

Operating margin

7.2

%

4.0

%

5.5

%

3.7

%

End Market Breakdown, excludes Mobility:

Second Quarter

2021

2020

Aerospace/Defense

33

%

33

%

Automotive

18

%

12

%

Data Center Computing

14

%

13

%

Medical/Industrial/Instrumentation

19

%

21

%

Networking/Communications

15

%

20

%

Other

1

%

1

%

Stock-based Compensation:

Second Quarter

2021

2020

Amount included in:

Cost of goods sold

$

861

$

620

Selling and marketing

442

291

General and administrative

2,015

1,690

Research and development

32

46

Total stock-based compensation expense

$

3,350

$

2,647

Operating Segment Data:

Second Quarter

Net sales:

2021

2020

PCB

$

553,480

$

536,843

RF&S Components

13,903

12,091

Other1

-

21,364

Total net sales

$

567,383

$

570,298

Operating segment income:

PCB

$

73,055

$

77,714

RF&S Components

4,730

4,310

Corporate & Other1

(26,472

)

(48,083

)

Total operating segment income

51,313

33,941

Amortization of definite-lived intangibles

(10,425

)

(10,945

)

Total operating income

40,888

22,996

Total other expense

(10,773

)

(18,117

)

Income from continuing operations before income taxes

$

30,115

$

4,879

RECONCILIATIONS2

Second Quarter

First Two Quarters

2021

2020

2021

2020

Non-GAAP gross profit reconciliation3:

GAAP gross profit from continuing operations

$

99,910

$

100,430

$

181,510

$

181,772

Add back item:

Amortization of definite-lived intangibles

1,383

1,384

2,767

2,767

Accelerated depreciation

-

2,397

-

2,397

Stock-based compensation

861

620

2,026

1,470

Unrealized gain on commodity hedge

(99

)

-

(99

)

-

Restructuring and other charges

-

-

254

-

Non-GAAP gross profit

$

102,055

$

104,831

$

186,458

$

188,406

Non-GAAP gross margin

18.0

%

18.4

%

17.0

%

17.6

%

Non-GAAP operating income reconciliation4:

GAAP operating income from continuing operations

$

40,888

$

22,996

$

60,688

$

39,178

Add back items:

Amortization of definite-lived intangibles

10,425

10,945

21,330

21,890

Accelerated depreciation

-

2,754

-

2,754

Stock-based compensation

3,350

2,647

7,559

7,482

(Gain) on sale of assets

(11

)

-

(421

)

-

Unrealized gain on commodity hedge

(99

)

-

(99

)

-

Restructuring, acquisition-related, and other charges

566

14,273

3,851

15,869

Non-GAAP operating income

$

55,119

$

53,615

$

92,908

$

87,173

Non-GAAP operating margin

9.7

%

9.4

%

8.5

%

8.2

%

Non-GAAP net income and EPS reconciliation5:

GAAP net income from continuing operations

$

28,261

$

9,346

$

25,069

$

6,126

Add back items:

Amortization of definite-lived intangibles

10,425

10,945

21,330

21,890

Accelerated depreciation

-

2,754

-

2,754

Stock-based compensation

3,350

2,647

7,559

7,482

Non-cash interest expense

536

3,604

1,073

7,157

(Gain) on sale of assets

(11

)

(274

)

(991

)

(507

)

Change in fair value of warrant liabilities

(1,027

)

-

(1,199

)

-

Loss on extinguishment of debt

-

-

15,217

-

Unrealized gain on commodity hedge

(99

)

-

(99

)

-

Restructuring, acquisition-related, and other charges

566

14,273

3,851

15,869

Income taxes6

(1,958

)

(10,292

)

(6,509

)

(11,107

)

Non-GAAP net income

$

40,043

$

33,003

$

65,301

$

49,664

Non-GAAP earnings per diluted share

$

0.36

$

0.31

$

0.60

$

0.46

Adjusted EBITDA reconciliation7:

GAAP net income from continuing operations

$

28,261

$

9,346

$

25,069

$

6,126

Add back items:

Income tax provision (benefit)

1,854

(4,467

)

747

(2,344

)

Interest expense

11,079

18,572

22,468

38,353

Amortization of definite-lived intangibles

10,425

10,945

21,330

21,890

Depreciation expense

21,241

25,756

42,717

50,128

Stock-based compensation

3,350

2,647

7,559

7,482

(Gain) on sale of assets

(11

)

(274

)

(991

)

(507

)

Change in fair value of warrant liabilities

(1,027

)

-

(1,199

)

-

Loss on extinguishment of debt

-

-

15,217

-

Unrealized gain on commodity hedge

(99

)

-

(99

)

-

Restructuring, acquisition-related, and other charges

566

14,273

3,851

15,869

Adjusted EBITDA

$

75,639

$

76,798

$

136,669

$

136,997

Adjusted EBITDA margin

13.3

%

13.5

%

12.5

%

12.8

%

Free cash flow reconciliation8:

Operating cash flow

$

56,909

$

100,820

$

98,054

$

107,447

Capital expenditures, net

(22,727

)

(21,339

)

(43,693

)

(45,271

)

Free cash flow

$

34,182

$

79,481

$

54,361

$

62,176

1Other represents the SH E-MS and SZ results.

2This 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 gain on commodity hedge, 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 gain on commodity hedge, 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 gain on commodity hedge, 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.

7Adjusted 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 gain on commodity hedge, 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.

8 Free Cash Flow in 2020 has been restated to exclude the Mobility business which was sold in Q2 of 2020.

Contact:
Sameer Desai,
Vice President, Corporate Development & Investor Relations
Sameer.desai@ttmtech.com
714-327-3050