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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

Form 10-Q

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 29, 2021

Or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                           to                          

Commission File Number: 0-31285

 

TTM TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

 

DELAWARE

 

91-1033443

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

200 East Sandpointe, Suite 400, Santa Ana, California 92707

(Address of principal executive offices)

(714) 327-3000

(Registrant’s telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value

TTMI

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

  

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

Number of shares of common stock, $0.001 par value, of registrant outstanding at May 3, 2021: 107,189,462

 

 

 

 

 


 

TABLE OF CONTENTS

 

 

 

Page

PART I: FINANCIAL INFORMATION

 

3

Item 1. Financial Statements (unaudited)

 

3

Consolidated Condensed Balance Sheets as of March 29, 2021 and December 28, 2020

 

3

Consolidated Condensed Statements of Operations for the quarters ended March 29, 2021 and March 30, 2020

 

4

Consolidated Condensed Statements of Comprehensive Loss for the quarters ended March 29, 2021 and
March 30, 2020

 

5

Consolidated Condensed Statements of Stockholders' Equity for the quarters ended March 29, 2021 and
March 30, 2020

 

6

Consolidated Condensed Statements of Cash Flows for the quarters ended March 29, 2021 and March 30, 2020

 

7

Notes to Consolidated Condensed Financial Statements

 

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

23

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

28

Item 4. Controls and Procedures

 

30

PART II: OTHER INFORMATION

 

31

Item 1. Legal Proceedings

 

31

Item 1A. Risk Factors

 

31

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

45

Item 6. Exhibits

 

46

SIGNATURES

 

47

 

2


 

 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

TTM TECHNOLOGIES, INC.

Consolidated Condensed Balance Sheets

As of March 29, 2021 and December 28, 2020

 

 

 

As of

 

 

 

March 29,

 

 

December 28,

 

 

 

2021

 

 

2020

 

 

 

(Unaudited)

 

 

 

(In thousands, except par value)

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

539,648

 

 

$

451,565

 

Accounts receivable, net

 

 

366,768

 

 

 

381,105

 

Contract assets

 

 

271,702

 

 

 

273,256

 

Inventories

 

 

121,124

 

 

 

115,651

 

Prepaid expenses and other current assets

 

 

33,397

 

 

 

27,181

 

Total current assets

 

 

1,332,639

 

 

 

1,248,758

 

Property, plant and equipment, net

 

 

651,194

 

 

 

650,435

 

Operating lease right-of-use assets

 

 

21,383

 

 

 

24,340

 

Goodwill

 

 

637,324

 

 

 

637,324

 

Definite-lived intangibles, net

 

 

270,402

 

 

 

281,307

 

Deposits and other non-current assets

 

 

52,886

 

 

 

53,780

 

Total assets

 

$

2,965,828

 

 

$

2,895,944

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

336,739

 

 

$

327,102

 

Contract liabilities

 

 

3,486

 

 

 

4,254

 

Accrued salaries, wages and benefits

 

 

82,201

 

 

 

97,268

 

Other current liabilities

 

 

86,728

 

 

 

89,422

 

Total current liabilities

 

 

509,154

 

 

 

518,046

 

Long-term debt, net of discount and issuance costs

 

 

926,128

 

 

 

842,853

 

Operating lease liabilities

 

 

15,658

 

 

 

17,211

 

Other long-term liabilities

 

 

72,421

 

 

 

73,825

 

Total long-term liabilities

 

 

1,014,207

 

 

 

933,889

 

Commitments and contingencies (Note 14)

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Common stock, $0.001 par value; 300,000 shares authorized, 107,113 and 106,770

   shares issued and outstanding as of March 29, 2021 and December 28, 2020,

   respectively

 

 

107

 

 

 

107

 

Additional paid-in capital

 

 

830,835

 

 

 

830,971

 

Retained earnings

 

 

648,652

 

 

 

651,844

 

Accumulated other comprehensive loss

 

 

(37,127

)

 

 

(38,913

)

Total stockholders’ equity

 

 

1,442,467

 

 

 

1,444,009

 

Total liabilities and stockholders' equity

 

$

2,965,828

 

 

$

2,895,944

 

 

See accompanying notes to consolidated condensed financial statements.

3


 

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Operations

For the Quarters Ended March 29, 2021 and March 30, 2020

 

 

 

Quarter Ended

 

 

 

March 29,

 

 

March 30,

 

 

 

2021

 

 

2020

 

 

 

(Unaudited)

 

 

 

(In thousands, except per share data)

 

Net sales

 

$

526,432

 

 

$

497,646

 

Cost of goods sold

 

 

444,832

 

 

 

416,304

 

Gross profit

 

 

81,600

 

 

 

81,342

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling and marketing

 

 

16,282

 

 

 

16,169

 

General and administrative

 

 

31,527

 

 

 

34,667

 

Research and development

 

 

4,470

 

 

 

4,762

 

Amortization of definite-lived intangibles

 

 

9,521

 

 

 

9,562

 

Total operating expenses

 

 

61,800

 

 

 

65,160

 

Operating income

 

 

19,800

 

 

 

16,182

 

Other (expense) income:

 

 

 

 

 

 

 

 

Interest expense

 

 

(11,389

)

 

 

(19,781

)

Loss on extinguishment of debt

 

 

(15,217

)

 

 

 

Other, net

 

 

2,507

 

 

 

2,502

 

Total other expense, net

 

 

(24,099

)

 

 

(17,279

)

Loss from continuing operations before income taxes

 

 

(4,299

)

 

 

(1,097

)

Income tax benefit (provision)

 

 

1,107

 

 

 

(2,123

)

Net loss from continuing operations

 

 

(3,192

)

 

 

(3,220

)

Income from discontinued operations, net of income taxes

 

 

 

 

 

2,046

 

Net loss

 

$

(3,192

)

 

$

(1,174

)

 

 

 

 

 

 

 

 

 

(Loss) earnings per share:

 

 

 

 

 

 

 

 

Basic loss per share from continuing operations

 

$

(0.03

)

 

$

(0.03

)

Basic earnings per share from discontinued operations

 

 

 

 

 

0.02

 

Basic loss per share

 

$

(0.03

)

 

$

(0.01

)

 

 

 

 

 

 

 

 

 

Diluted loss per share from continuing operations

 

$

(0.03

)

 

$

(0.03

)

Diluted earnings per share from discontinued operations

 

 

 

 

 

0.02

 

Diluted loss per share

 

$

(0.03

)

 

$

(0.01

)

 

See accompanying notes to consolidated condensed financial statements.

 

4


 

 

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Comprehensive Loss

For the Quarters Ended March 29, 2021 and March 30, 2020

 

 

 

Quarter Ended

 

 

 

March 29,

 

 

March 30,

 

 

 

2021

 

 

2020

 

 

 

(Unaudited)

 

 

 

(In thousands)

 

Net loss

 

$

(3,192

)

 

$

(1,174

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

Pension obligation adjustments, net

 

 

 

 

 

27

 

Foreign currency translation adjustments, net

 

 

(3

)

 

 

(367

)

Net unrealized losses on cash flow hedges:

 

 

 

 

 

 

 

 

Unrealized loss on effective cash flow hedges during

     the period, net

 

 

(263

)

 

 

(6,018

)

Loss realized in the statement of operations, net

 

 

2,052

 

 

 

860

 

Net

 

 

1,789

 

 

 

(5,158

)

Other comprehensive income (loss), net of tax

 

 

1,786

 

 

 

(5,498

)

Comprehensive loss, net of tax

 

$

(1,406

)

 

$

(6,672

)

 

See accompanying notes to consolidated condensed financial statements.

5


 

 

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Stockholders’ Equity

For the Quarters Ended March 29, 2021 and March 30, 2020

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Retained

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Loss

 

 

Equity

 

 

 

(Unaudited)

 

 

 

(In thousands)

 

Balance, December 28, 2020

 

 

106,770

 

 

$

107

 

 

$

830,971

 

 

$

651,844

 

 

$

(38,913

)

 

$

1,444,009

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(3,192

)

 

 

 

 

 

(3,192

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,786

 

 

 

1,786

 

Issuance of common stock for

   performance-based

   restricted stock units

 

 

135

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for

   restricted stock units

 

 

203

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value of warrants

   reclassified to

   warrant liabilities

 

 

 

 

 

 

 

 

(4,345

)

 

 

 

 

 

 

 

 

(4,345

)

Issuance of common stock from

   warrant exercises

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

4,209

 

 

 

 

 

 

 

 

 

4,209

 

Balance, March 29, 2021

 

 

107,113

 

 

$

107

 

 

$

830,835

 

 

$

648,652

 

 

$

(37,127

)

 

$

1,442,467

 

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Retained

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Loss

 

 

Equity

 

 

 

(Unaudited)

 

 

 

(In thousands)

 

Balance, December 30, 2019

 

 

105,510

 

 

$

106

 

 

$

814,708

 

 

$

474,309

 

 

$

(10,086

)

 

$

1,279,037

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(1,174

)

 

 

 

 

 

(1,174

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,498

)

 

 

(5,498

)

Issuance of common stock for

   performance-based

   restricted stock units

 

 

187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for

   restricted stock units

 

 

520

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

4,835

 

 

 

 

 

 

 

 

 

4,835

 

Balance, March 30, 2020

 

 

106,217

 

 

$

106

 

 

$

819,543

 

 

$

473,135

 

 

$

(15,584

)

 

$

1,277,200

 

 

See accompanying notes to consolidated condensed financial statements.

6


 

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Cash Flows

For the Quarters Ended March 29, 2021 and March 30, 2020

 

 

 

 

Quarter Ended

 

 

March 29, 2021

 

 

March 30, 2020

 

 

 

 

(Unaudited)

 

 

(In thousands)

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net loss

 

$

(3,192

)

 

$

(1,174

)

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation of property, plant and equipment

 

 

21,476

 

 

 

42,632

 

 

Amortization of definite-lived intangible assets

 

 

10,905

 

 

 

11,620

 

 

Amortization of debt discount and issuance costs

 

 

537

 

 

 

3,552

 

 

Loss on extinguishment of debt

 

 

15,217

 

 

 

 

 

Deferred income taxes

 

 

683

 

 

 

(353

)

 

Stock-based compensation

 

 

4,209

 

 

 

4,835

 

 

Other

 

 

(534

)

 

 

876

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

14,337

 

 

 

45,019

 

 

Contract assets

 

 

1,554

 

 

 

1,572

 

 

Inventories

 

 

(5,473

)

 

 

(7,573

)

 

Prepaid expenses and other current assets

 

 

(6,495

)

 

 

(5,959

)

 

Accounts payable

 

 

10,885

 

 

 

(52,791

)

 

Contract liabilities

 

 

(768

)

 

 

(262

)

 

Accrued salaries, wages and benefits

 

 

(15,067

)

 

 

(16,382

)

 

Other current liabilities

 

 

(7,129

)

 

 

2,301

 

 

Net cash provided by operating activities

 

 

41,145

 

 

 

27,913

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Refundable deposit related to sale of the Mobility business unit

 

 

 

 

 

35,342

 

 

Purchase of property, plant and equipment and other assets

 

 

(21,797

)

 

 

(32,451

)

 

Proceeds from sale of property, plant and equipment and other assets

 

 

831

 

 

 

 

 

Net cash (used in) provided by investing activities

 

 

(20,966

)

 

 

2,891

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Proceeds from long-term debt borrowing

 

 

500,000

 

 

 

 

 

Repayment of long-term debt borrowings

 

 

(425,838

)

 

 

 

 

Payment of debt issuance costs

 

 

(4,773

)

 

 

 

 

Other

 

 

(1,309

)

 

 

 

 

Net cash provided by financing activities

 

 

68,080

 

 

 

 

 

Effect of foreign currency exchange rates on cash and cash equivalents

 

 

(176

)

 

 

(521

)

 

Net increase in cash and cash equivalents

 

 

88,083

 

 

 

30,283

 

 

Cash and cash equivalents at beginning of period

 

 

451,565

 

 

 

400,154

 

 

Cash and cash equivalents at end of period

 

 

539,648

 

 

 

430,437

 

 

Cash and cash equivalents in assets held for sale

 

 

 

 

 

(68,445

)

 

Cash and cash equivalents as presented on the consolidated condensed balance sheet

 

$

539,648

 

 

$

361,992

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

Cash paid, net for interest

 

$

15,244

 

 

$

10,455

 

 

Cash paid, net for income taxes

 

 

713

 

 

 

4,367

 

 

Net cash provided by operating activities from discontinued operations

 

 

 

 

 

21,286

 

 

Net cash provided by investing activities from discontinued operations

 

 

 

 

 

26,823

 

 

Net cash used in financing activities from discontinued operations

 

 

 

 

 

 

 

Supplemental disclosure of noncash investing and financing activities:

 

 

 

 

 

 

 

 

 

Property, plant and equipment recorded in accounts payable

 

$

28,960

 

 

$

46,784

 

 

Issuance of common stock for warrant settlement

 

 

68

 

 

 

 

 

Supplemental disclosure of noncash investing activities from discontinued operations:

 

 

 

 

 

 

 

 

 

Property, plant and equipment recorded in accounts payable

 

$

 

 

$

6,673

 

 

 

See accompanying notes to consolidated condensed financial statements.

 

7


 

TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

(Dollars and shares in thousands, except per share data)

(1) Nature of Operations and Basis of Presentation

TTM Technologies, Inc. (the Company or TTM) is a leading global printed circuit board (PCB) 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. The Company provides time-to-market and volume production of advanced technology products and offers a one-stop design, engineering and manufacturing solution to customers. This one-stop design, engineering and manufacturing solution allows the Company to align technology developments with the diverse needs of the Company’s customers and to enable them to reduce the time required to develop new products and bring them to market.

The Company serves a diversified customer base in various markets throughout the world, including aerospace and defense, data center computing, automotive components, medical, industrial and instrumentation related products, as well as networking/communications infrastructure products. The Company’s customers include both original equipment manufacturers (OEMs) and electronic manufacturing services (EMS) providers.

The accompanying consolidated condensed financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. It is suggested that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s most recent Annual Report on Form 10-K. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated condensed financial statements and accompanying notes. Due to the coronavirus (COVID-19) global pandemic, the global economy and financial markets have been disrupted and there is a significant amount of uncertainty about the length and severity of the consequences caused by the pandemic. The Company has considered information available to it as of the date of issuance of these financial statements and is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or a revision to the carrying value of its assets or liabilities. Actual results could differ materially from those estimates. The Company uses a 13-week fiscal quarter accounting period with the fourth quarter ending on the Monday nearest December 31.

On January 19, 2020, the Company entered into a definitive equity interests purchase agreement with AKMMeadville Electronics (Xiamen) Co., Ltd (the Purchaser) for the sale of the Company’s following subsidiaries, which was completed on April 17, 2020: Shanghai Kaiser Electronics Co., Ltd. (SKE), Shanghai Meadville Electronics Co., Ltd. (SME), Shanghai Meadville Science & Technology Co., Ltd. (SP) and Guangzhou Meadville Electronics Co., Ltd. (GME) (collectively, the Mobility business unit). For all periods presented in the consolidated condensed statements of operations, all sales, costs, expenses, income taxes and gain on sale attributable to the Mobility business unit have been aggregated under the caption “Income (loss) from discontinued operations, net of income taxes”. Refer to Note 2, Discontinued Operations, for additional information.

Unless otherwise noted, amounts and disclosures throughout these notes to consolidated condensed financial statements relate to continuing operations. These consolidated condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial position, the results of operations and cash flows of the Company for the periods presented. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.

Reclassifications

The Company currently has two reportable segments: PCB and RF and Specialty Components (RF&S Components). In fiscal 2020, subsequent to the quarter ended March 30, 2020, RF&S Components was added as a reportable segment. As a result, the Company had three reportable segments as of December 28, 2020: PCB, RF&S Components, and E-M Solutions. On April 29, 2020, the Company announced the restructuring of its E-M Solutions business unit. In prior periods, the Company’s E-M Solutions business unit consisted of three Chinese manufacturing facilities with two being in Shanghai (SH BPA and SH E-MS) and one in Shenzhen (SZ). The Company closed the SH E-MS and SZ facilities at the end of 2020 and integrated the SH BPA facility into its PCB operations. As of March 29, 2021, E-M Solutions no longer meets the criteria for segment reporting. As a result of the addition of the RF&S Components reportable segment and the restructuring of the E-M Solutions business unit, certain prior year amounts have been reclassified to conform to this new presentation.

Recently Adopted and Issued Accounting Standards

Recently Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board (FASB) issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes.

8


TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements—(Continued)

 

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted this ASU as of December 29, 2020 and it did not have a material impact on its consolidated condensed financial statements and related disclosures.

 

(2) Discontinued Operations

On January 19, 2020, the Company entered into a definitive equity interests purchase agreement for the sale of the Company’s Mobility business unit. The sale was completed on April 17, 2020 for a base purchase price of $550,000, subject to customary purchase price adjustments. The base purchase price does not include certain accounts receivable of the divested business, which were estimated to total approximately $95,000. Subsequently, the final purchase price was $569,246 after customary purchase price adjustments, which did not include approximately $83,000 accounts receivable of the divested business.

On April 18, 2020, the Company entered into a Transition Services Agreement (TSA) with the Purchaser pursuant to which the Purchaser is receiving certain services (the Services) to enable it to operate the Mobility business unit after the closing of the sale of the Mobility business unit. The Services include finance and accounting, human resources, legal and compliance, sales, information technology, and other corporate support services. Under the TSA, the Services are being provided at cost for a period of up to 24 months. In addition, the Company entered into a Manufacturing Supply Agreement with the Purchaser pursuant to which the Purchaser will supply products to a few customers of the Company. There was no material impact on the Company’s consolidated condensed financial statements.

Further, on June 29, 2020, the Company entered into a Sales Force Agreement with the Purchaser pursuant to which the Company’s sales representatives assist the Purchaser in selling PCBs manufactured by the Purchaser to certain customers for a commission for a period up to April 17, 2021. There was no material impact on the Company’s consolidated condensed financial statements.

As the sale of the Company’s Mobility business unit represents a strategic shift that will have a major effect on the Company’s operations and financial results, in accordance with the provisions of FASB authoritative guidance on the presentation of financial statements, Mobility business unit results are classified as discontinued operations in the consolidated condensed statements of operations for all periods presented.

9


TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements—(Continued)

 

The following table summarizes the results of Mobility operations for the quarter ended March 30, 2020 prior to sale:

 

 

 

Quarter Ended

 

 

 

March 30,

 

 

 

2020

 

 

 

(In thousands)

 

Net sales

 

$

113,174

 

Cost of goods sold

 

 

108,425

 

Gross profit

 

 

4,749

 

Operating expenses:

 

 

 

 

Selling and marketing

 

 

1,176

 

General and administrative

 

 

1,310

 

Research and development

 

 

147

 

Amortization of definite-lived intangibles

 

 

675

 

Total operating expenses

 

 

3,308

 

Operating income

 

 

1,441

 

Other (expense) income:

 

 

 

 

Interest expense

 

 

(223

)

Other, net

 

 

1,571

 

Total other income, net

 

 

1,348

 

Income from discontinued operations

     before income taxes

 

 

2,789

 

Income tax provision

 

 

(743

)

Income from discontinued operations,

     net of income taxes

 

$

2,046

 

 

 

 

 

 

Earnings per share from discontinued operations:

 

 

 

 

Basic earnings per share

 

$

0.02

 

Diluted earnings per share

 

$

0.02

 

 

Depreciation expense related to the discontinued operations for the quarter ended March 30, 2020 was $18,265.

(3) Leases

The Company leases some of its manufacturing and assembly plants, sales offices and equipment under non-cancellable operating leases that expire at various dates through 2049. The majority of the Company’s lease arrangements are comprised of fixed payments and certain leases consist of variable payments based on equipment usage. These variable payments are not included in the measurement of the right-of-use (ROU) asset or lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. Certain leases contain renewal provisions at the Company’s option. Most of the leases require the Company to pay for certain other costs such as property taxes and maintenance. Certain leases also contain rent escalation clauses (step rents) that require additional rental amounts in the later years of the term. Rent expense for leases with step rents is recognized on a straight-line basis over the minimum lease term. The lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of lease expense were as follows:

 

 

 

Quarter Ended

 

 

 

March 29, 2021

 

 

March 30, 2020

 

 

 

(In thousands)

 

Operating lease cost

 

$

2,208

 

 

$

2,481

 

Variable lease cost

 

 

234

 

 

 

106

 

Short-term lease cost

 

 

54

 

 

 

229

 

10


TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements—(Continued)

 

 

Supplemental cash flow information related to leases was as follows:

 

 

 

Quarter Ended

 

 

 

March 29, 2021

 

 

March 30, 2020

 

 

 

(In thousands)

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

2,159

 

 

$

2,171

 

Right-of-use assets obtained in exchange for new lease obligations:

 

 

 

 

 

 

 

 

Operating leases

 

 

284

 

 

 

1,876

 

 

Supplemental balance sheet information related to leases was as follows:

 

 

 

As of

 

 

 

March 29, 2021

 

 

December 28, 2020

 

 

 

(In thousands)

 

Operating lease right-of-use assets

 

$

21,383

 

 

$

24,340

 

Other current liabilities

 

 

6,609

 

 

 

8,144

 

Operating lease liabilities

 

 

15,658

 

 

 

17,211

 

Total operating lease liabilities

 

$

22,267

 

 

$

25,355

 

 

 

 

As of

 

 

 

March 29, 2021

 

 

December 28, 2020

 

Weighted average remaining lease term

 

4.4 years

 

 

4.2 years

 

Weighted average discount rate

 

 

3.29

%

 

 

3.31

%

 

Maturities of operating lease liabilities were as follows (1):

 

 

 

(In thousands)

 

Less than one year

 

$

7,214

 

1 - 2 years

 

 

5,015

 

2 - 3 years

 

 

4,309

 

3 - 4 years

 

 

3,370

 

4 - 5 years

 

 

2,123

 

Thereafter

 

 

1,902

 

Total lease payments

 

 

23,933

 

Less imputed interest

 

 

(1,666

)

Total

 

$

22,267

 

 

 

(1)

Excludes $851 of legally binding minimum lease payments for leases signed but not yet commenced.

 

(4) Revenues

As of March 29, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations for long-term contracts was $12,850. The Company expects to recognize revenue on approximately 100% of the remaining performance obligations for the Company’s long-term contracts over the next twelve months.

Revenue from products and services transferred to customers over time and at a point in time accounted for 98% and 2%, respectively, of the Company’s revenue for the both the quarters ended March 29, 2021 and March 30, 2020.

11


TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements—(Continued)

 

The following tables represent a disaggregation of revenue by principal end markets with the reportable segments:

 

 

 

Quarter Ended March 29, 2021

 

 

 

 

PCB

 

 

RF&S Components

 

 

Other (1)

 

 

Total

 

 

End Markets

 

(In thousands)

 

 

Aerospace and Defense

 

$

186,539

 

 

$

6

 

 

$

 

 

$

186,545

 

 

Automotive

 

 

91,792

 

 

 

 

 

 

3,642

 

 

 

95,434

 

 

Data Center Computing (2)

 

 

71,759

 

 

 

432

 

 

 

 

 

 

72,191

 

 

Medical/Industrial/Instrumentation

 

 

90,770

 

 

 

1,081

 

 

 

25

 

 

 

91,876

 

 

Networking/Communications

 

 

66,938

 

 

 

10,653

 

 

 

1

 

 

 

77,592

 

 

Other

 

 

2,688

 

 

 

518

 

 

 

(412

)

 

 

2,794

 

 

Total

 

$

510,486

 

 

$

12,690

 

 

$

3,256

 

 

$

526,432

 

 

 

 

 

Quarter Ended March 30, 2020

 

 

 

 

PCB

 

 

RF&S Components

 

 

Other (1)

 

 

Total

 

 

End Markets

 

(In thousands)

 

 

Aerospace and Defense

 

$

184,414

 

 

$

 

 

$

 

 

$

184,414

 

 

Automotive

 

 

61,858