TTM Technologies, Inc. Reports Fiscal First Quarter 2020 Results

Sameer Desai
Senior Director, Corporate Development
TTM Technologies, Inc.
+1 714 327 3050
sameer.desai@ttmtech.com

- Tables Follow -

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


	First Quarter						Fourth Quarter
	2020			2019*			2019*

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

Net sales	$	497,646		$	536,445		$	535,715
Cost of goods sold		416,304			437,619			435,470

Gross profit		81,342			98,826			100,245

Operating expenses:
Selling and marketing		16,169			17,560			17,560
General and administrative		34,339			29,850			37,192
Research and development		4,762			4,716			4,368
Amortization of definite-lived intangibles		9,562			16,152			9,531
Restructuring charges		328			432			2,204
Total operating expenses		65,160			68,710			70,855

Operating income		16,182			30,116			29,390

Interest expense		(19,781	)		(21,135	)		(19,975	)
Other, net		2,502			(357	)		(1,742	)

(Loss) income from continuing operations before income taxes		(1,097	)		8,624			7,673
Income tax provision		(2,123	)		(2,386	)		(394	)

Net (loss) income from continuing operations		(3,220	)		6,238			7,279
Income (loss) from discontinued operations, net of income taxes		2,046			(9,490	)		17,980
Net (loss) income	$	(1,174	)	$	(3,252	)	$	25,259

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

(Loss) earnings per share:
Basic (loss) earnings per share from continuing operations	$	(0.03	)	$	0.06		$	0.07
Basic earnings (loss) per share from discontinued operations		0.02			(0.09	)		0.17
Basic (loss) earnings per share	$	(0.01	)	$	(0.03	)	$	0.24

Diluted (loss) earnings per share from continuing operations	$	(0.03	)	$	0.06		$	0.07
Diluted earnings (loss) per share from discontinued operations		0.02			(0.09	)		0.17
Diluted (loss) earnings per share	$	(0.01	)	$	(0.03	)	$	0.24


Weighted-average shares used in computing per share amounts:
Basic		105,686			104,315			105,502
Diluted		105,686			105,614			107,135


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

Weighted-average shares outstanding					104,315			105,502
Dilutive effect of convertible debt					-			-
Dilutive effect of warrants					-			-
Dilutive effect of performance-based stock units, restricted stock units & stock options					1,299			1,633
Diluted shares					105,614			107,135
(Loss) earnings per share:
Basic earnings per share from continuing operations				$	0.06		$	0.07
Basic (loss) earnings per share from discontinued operations					(0.09	)		0.17
Basic (loss) earnings per share				$	(0.03	)	$	0.24

Diluted earnings per share from continuing operations				$	0.06		$	0.07
Diluted (loss) earnings per share from discontinued operations					(0.09	)		0.17
Diluted (loss) earnings per share				$	(0.03	)	$	0.24

SELECTED BALANCE SHEET DATA
	March 30, 2020			December 30, 2019
Cash and cash equivalents, including restricted cash	$	361,992		$	379,818
Accounts and notes receivable, net		458,639			503,598
Contract assets		256,482			254,600
Inventories		120,949			113,753
Current assets held for sale		522,974			67,572
Total current assets		1,751,787			1,342,684
Property, plant and equipment, net		666,611			678,201
Operating lease right of use asset		21,724			22,173
Non-current assets held for sale		-			425,597
Other non-current assets		1,083,996			1,092,278
Total assets		3,524,118			3,560,933

Short-term debt, including current portion of long-term debt	$	249,975		$	249,975
Accounts payable		309,580			329,866
Current liabilities held for sale		170,735			185,391
Total current liabilities		904,363			946,666
Debt, net of discount		1,229,372			1,225,962
Non-current liabilities held for sale		-			1,530
Total long-term liabilities		1,342,555			1,335,230
Total equity		1,277,200			1,279,037
Total liabilities and equity		3,524,118			3,560,933


SUPPLEMENTAL DATA
	First Quarter						Fourth Quarter
		2020			2019			2019
Gross margin		16.3	%		18.4	%		18.7	%
Operating margin		3.3	%		5.6	%		5.5	%

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

Aerospace/Defense		30	%		27	%		26	%
Automotive		12	%		17	%		14	%
Cellular Phone		11	%		7	%		16	%
Computing/Storage/Peripherals		14	%		13	%		14	%
Medical/Industrial/Instrumentation		16	%		15	%		13	%
Networking/Communications		14	%		18	%		15	%
Other		3	%		3	%		2	%


Stock-based Compensation, including Mobility:
	First Quarter						Fourth Quarter
		2020			2019			2019
Amount included in:
Cost of goods sold	$	854		$	705		$	942
Selling and marketing		469			466			518
General and administrative		3,512			2,755			3,166
Total stock-based compensation expense	$	4,835		$	3,926		$	4,626


Operating Segment Data:
	First Quarter						Fourth Quarter
Net sales:		2020			2019			2019
PCB	$	467,430		$	485,067		$	488,390
E-M Solutions		30,216			51,378			47,325
Total net sales	$	497,646		$	536,445		$	535,715

Operating segment income:
PCB	$	61,626		$	70,494		$	72,736
E-M Solutions		(4,329	)		1,179			1,841
Corporate		(30,170	)		(24,226	)		(34,373	)
Total operating segment income		27,127			47,447			40,204
Amortization of definite-lived intangibles		(10,945	)		(17,331	)		(10,814	)
Total operating income		16,182			30,116			29,390
Total other expense		(17,279	)		(21,492	)		(21,717	)
(Loss) income from continuing operations before income taxes	$	(1,097	)	$	8,624		$	7,673

RECONCILIATIONS ¹
	GAAP March 30, 2020			Mobility balances March 30, 2020 ²			Combined March 30, 2020
Cash and cash equivalents, including restricted cash	$	361,992		$	68,445		$	430,437
Accounts and notes receivable, net		458,639			6			458,645
Contract assets		256,482			30,181			286,663
Inventories		120,949			8,643			129,592
Current assets held for sale		522,974			(522,974	)		-
Total current assets		1,751,787			(411,721	)		1,340,066
Property, plant and equipment, net		666,611			330,312			996,923
Operating lease right of use asset		21,724			1,593			23,317
Non-current assets held for sale		-			-			-
Other non-current assets		1,083,996			79,816			1,163,812
Total assets		3,524,118			-			3,524,118

Short-term debt, including current portion of long-term debt	$	249,975		$	-		$	249,975
Accounts payable		309,580			144,715			454,295
Current liabilities held for sale		170,735			(170,735	)		-
Total current liabilities		904,363			(1,243	)		903,120
Debt, net of discount		1,229,372			-			1,229,372
Non-current liabilities held for sale		-			-			-
Total long-term liabilities		1,342,555			1,243			1,343,798
Total equity		1,277,200			-			1,277,200
Total liabilities and equity		3,524,118			-			3,524,118

	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


	First Quarter						Fourth Quarter
		2020			2019			2019
Non-GAAP revenue reconciliation ³ :
GAAP revenue	$	497,646		$	536,445		$	535,715
Revenue from discontinued operations		113,174			83,755			183,538
Non-GAAP revenue	$	610,820		$	620,200		$	719,253

Non-GAAP gross profit reconciliation ⁴ :
GAAP gross profit	$	81,342		$	98,826		$	100,245
Gross profit from discontinued operations		4,749			(10,141	)		24,304
Add back item:
Amortization of definite-lived intangibles		1,383			1,179			1,283
Stock-based compensation		854			705			942
Non-GAAP gross profit	$	88,328		$	90,569		$	126,774
Non-GAAP gross margin		14.5	%		14.6	%		17.6	%

Non-GAAP operating income reconciliation ⁵ :
GAAP operating income	$	16,182		$	30,116		$	29,390
Operating income (loss) from discontinued operations		1,441			(12,626	)		20,036
Add back items:
Amortization of definite-lived intangibles		11,620			18,005			11,489
Stock-based compensation		4,835			3,926			4,626
(Gain) on sale of assets		-			-			(66	)
Restructuring, acquisition-related, and other charges		1,596			1,103			6,856
Non-GAAP operating income	$	35,674		$	40,524		$	72,331
Non-GAAP operating margin		5.8	%		6.5	%		10.1	%

Non-GAAP net income and EPS reconciliation ⁶ :
GAAP net (loss) income	$	(3,220	)	$	6,238		$	7,279
Net income (loss) from discontinued operations		2,046			(9,490	)		17,980
Add back items:
Amortization of definite-lived intangibles		11,620			18,005			11,489
Stock-based compensation		4,835			3,926			4,626
Non-cash interest expense		3,553			3,868			3,501
(Gain) on sale of assets		(233	)		(3,071	)		(186	)
Restructuring, acquisition-related, and other charges		1,596			1,103			6,856
Income taxes ⁷		(593	)		(4,150	)		(7,623	)
Non-GAAP net income	$	19,604		$	16,429		$	43,922
Non-GAAP earnings per diluted share	$	0.18		$	0.16		$	0.41

Non-GAAP diluted number of shares ⁸ :
Diluted shares		107,378			105,614			107,135
Dilutive effect of convertible debt		-			-			-
Non-GAAP diluted number of shares		107,378			105,614			107,135

Adjusted EBITDA reconciliation ⁹ :
GAAP net (loss) income	$	(3,220	)	$	6,238		$	7,279
Net income (loss) from discontinued operations		2,046			(9,490	)		17,980
Add back items:
Income tax provision (benefit)		2,865			(1,476	)		1,140
Interest expense		20,004			21,688			20,107
Amortization of definite-lived intangibles		11,620			18,005			11,489
Depreciation expense		42,632			41,602			42,018
Stock-based compensation		4,835			3,926			4,626
(Gain) on sale of assets		(233	)		(3,071	)		(186	)
Restructuring, acquisition-related, and other charges		1,596			1,103			6,856
Adjusted EBITDA	$	82,145		$	78,525		$	111,309
Adjusted EBITDA margin		13.4	%		12.7	%		15.5	%

Free cash flow reconciliation, including Mobility:
Operating cash flow		27,913			36,924			130,148
Capital expenditures, net		(32,451	)		(28,446	)		(46,982	)
Free cash flow	$	(4,538	)	$	8,478		$	83,166

¹ This information provides a reconciliation of non-GAAP balance sheet data to the financial information in our consolidated condensed balance sheets and non-GAAP revenue, 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 Excludes the estimated gain on sale of Mobility.

³ Non-GAAP revenue includes revenue from discontinued operations.

⁴ Non-GAAP gross profit and gross margin measures include discontinued operations and exclude amortization of intangibles and stock-based compensation expense.

⁵ Non-GAAP operating income and operating margin measures include discontinued operations and exclude amortization of intangibles, stock-based compensation expense, gain on sale of assets, acquisition-related costs, restructuring and other charges.

⁶ This information provides non-GAAP net income and non-GAAP EPS, which are non-GAAP financial measures. Management believes that both measures -- which include discontinued operations and 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, acquisition-related costs, 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.

⁷ Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate.

⁸ Non-GAAP diluted number of shares used in computing non-GAAP earnings per share excludes the dilutive effect of convertible debt.

⁹ Adjusted EBITDA is defined as earnings, including discontinued operations, before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, acquisition-related costs, 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.

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