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 CallTTM 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 WebcastThe replay of the webcast will remain accessible for one week following the live event on TTM’s website at www.ttm.com.

About TTMTTM 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 MeasuresThis 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 RelationsSameer.desai@ttmtech.com714-327-3050    

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