TTM Technologies, Inc. (Nasdaq:TTMI), a major global printed
circuit board ("PCB") manufacturer, today reported results for the
fourth quarter and fiscal year 2014, which ended December 29, 2014.
Fourth Quarter 2014 Highlights
- Net sales were $390.9 million
- GAAP net income was $13.9
million, or $0.17 per diluted share
- Non-GAAP net income was
$23.2 million, or $0.28 per diluted share
Fiscal Year 2014 Highlights
- Net sales were $1.33
billion
- GAAP net income was $14.7
million, or $0.18 per diluted share
- Non-GAAP net income was
$39.3 million, or $0.47 per diluted share
- Announced agreement to acquire
Viasystems Group, Inc. ("Viasystems").
Fourth Quarter 2014 Financial Results
Net sales for the fourth quarter of 2014 were $390.9 million
compared to $345.3 million in the third quarter of 2014 and $366.1
million in the fourth quarter of 2013.
GAAP operating income for the fourth quarter of 2014 was $26.6
million compared to GAAP operating income of $12.3 million in the
third quarter of 2014 and $29.3 million in the fourth quarter of
2013.
GAAP net income for the fourth quarter of 2014 was $13.9
million, or $0.17 per diluted share. This compares to GAAP net
income of $7.7 million, or $0.09 per diluted share, in the third
quarter of 2014 and $11.3 million, or $0.14 per diluted share, in
the fourth quarter of 2013.
On a non-GAAP basis, net income for the fourth quarter of 2014
was $23.2 million, or $0.28 per diluted share. This compares
to non-GAAP net income of $11.0 million, or $0.13 per diluted
share, for the third quarter of 2014 and $22.1 million, or $0.27
per diluted share, for the fourth quarter of 2013.
Adjusted EBITDA for the fourth quarter of 2014 was $60.5
million, or 15.5 percent of net sales, compared to adjusted EBITDA
of $43.6 million, or 12.6 percent of net sales, for the third
quarter of 2014 and $58.4 million, or 16.0 percent of net sales,
for the fourth quarter of 2013.
"We were pleased with our execution during the seasonally robust
fourth quarter as our operating performance was on plan and
resulted in significant sequential increases in revenue and
operating profit," said Tom Edman, CEO of TTM. "Revenue was
slightly above and non-GAAP earnings were at the high end of our
guidance ranges for the quarter. Demand for our advanced HDI
and rigid-flex PCB products used in smartphones was notably strong
and drove our product shift toward advanced technology PCBs,
resulting in strong utilization rates in our Asia Pacific
manufacturing facilities. We are also encouraged to see
bookings in the cellular phone end market remain solid as we enter
the seasonally weaker first quarter."
Mr. Edman continued, "During the quarter, we received all
necessary shareholder and foreign approvals required to complete
the acquisition of Viasystems. While the proposed acquisition
remains subject to review by the United States Federal Trade
Commission and approval of the Committee on Foreign Investment in
the United States, we continue to expect to close the acquisition
in the first half of 2015. The combination with Viasystems
will create a leading global PCB manufacturer and enhance the
company's end market and customer diversification."
Full Year 2014 Financial Results
Net sales for fiscal year 2014 decreased to $1.33 billion from
$1.37 billion in fiscal year 2013.
GAAP operating income for fiscal year 2014 was $46.5 million, a
decrease from GAAP operating income of $69.1 million in fiscal year
2013.
GAAP net income for fiscal year 2014 was $14.7 million, or $0.18
per diluted share, compared to GAAP net income of $21.9 million, or
$0.26 per diluted share, for fiscal year 2013.
On a non-GAAP basis, net income for fiscal year 2014 was $39.3
million, or $0.47 per diluted share. This compares to fiscal
year 2013 non-GAAP net income of $51.3 million, or $0.62 per
diluted share.
Adjusted EBITDA for fiscal year 2014 was $166.0 million, or 12.5
percent of net sales, compared to $181.3 million, or 13.3 percent
of net sales, for fiscal year 2013.
Business Outlook
For the first quarter of 2015, TTM estimates that revenue will
be in the range of $310 million to $330 million, and non-GAAP net
income will be in the range of $0.06 to $0.12 per diluted
share.
The Acquisition of Viasystems
As previously announced, TTM entered into a definitive agreement
under which TTM will acquire all outstanding shares of Viasystems
for a combined consideration of $11.33 in cash and 0.706 shares of
TTM common stock per Viasystems' share of common stock. The
parties currently expect to close the transaction in the first half
of 2015. The transaction is subject to customary closing
conditions, including United States regulatory approvals.
To Access the Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss fourth
quarter and fiscal year 2014 results and first quarter 2015 outlook
on Wednesday, February 4, 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 1-888-417-8465
or international 1-719-457-2727 (ID 9222207). The conference
call also will be webcast on TTM's website at www.ttmtech.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.ttmtech.com.
About TTM
TTM Technologies, Inc. is a major global PCB manufacturer,
focusing on quick-turn and technologically advanced PCBs and the
backplane and sub-system assembly business. 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.ttmtech.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 timing and
consummation of the proposed acquisition, the ability of the
parties to consummate the proposed acquisition and the satisfaction
of the conditions precedent to consummation of the proposed
acquisition, including the ability to secure regulatory approvals
in a timely manner or at all, 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" set forth in TTM's most recent SEC
filings.
About Our Non-GAAP Financial Measures
This release includes information about TTM's adjusted EBITDA,
non-GAAP net income attributable to stockholders and non-GAAP
earnings per share attributable to stockholders, 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) |
|
|
|
Fourth Quarter |
Third Quarter |
Full Year |
|
2014 |
2013 |
2014 |
2014 |
2013 |
|
|
|
|
|
|
CONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ 390,912 |
$ 366,111 |
$ 345,275 |
$ 1,325,717 |
$ 1,368,215 |
Cost of goods sold |
322,437 |
295,894 |
296,167 |
1,131,028 |
1,150,372 |
|
|
|
|
|
|
Gross profit |
68,475 |
70,217 |
49,108 |
194,689 |
217,843 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Selling and marketing |
9,926 |
9,535 |
9,033 |
36,919 |
37,149 |
General and administrative |
30,046 |
28,932 |
25,733 |
100,944 |
105,924 |
Amortization of definite-lived
intangibles |
1,935 |
2,348 |
1,980 |
8,387 |
9,332 |
Restructuring charges |
(7) |
88 |
49 |
55 |
3,445 |
Impairment of long-lived assets |
-- |
-- |
-- |
1,845 |
10,782 |
Gain on sale of assets |
-- |
-- |
-- |
-- |
(17,917) |
Total operating expenses |
41,900 |
40,903 |
36,795 |
148,150 |
148,715 |
|
|
|
|
|
|
Operating income |
26,575 |
29,314 |
12,313 |
46,539 |
69,128 |
|
|
|
|
|
|
Interest expense |
(5,691) |
(5,982) |
(6,018) |
(23,830) |
(24,031) |
Loss on extinguishment of debt |
-- |
(10,743) |
-- |
(506) |
(10,743) |
Other, net |
1,620 |
1,092 |
1,742 |
88 |
5,418 |
|
|
|
|
|
|
Income before income taxes |
22,504 |
13,681 |
8,037 |
22,291 |
39,772 |
Income tax provision |
(8,566) |
(2,385) |
(379) |
(7,598) |
(15,879) |
|
|
|
|
|
|
Net income |
13,938 |
11,296 |
7,658 |
14,693 |
23,893 |
|
|
|
|
|
|
Net income attributable to noncontrolling
interest |
-- |
-- |
-- |
-- |
(2,016) |
Net income attributable to
stockholders |
$ 13,938 |
$ 11,296 |
$ 7,658 |
$ 14,693 |
$ 21,877 |
|
|
|
|
|
|
Earnings per share attributable to
stockholders: |
|
|
|
|
|
Basic |
$ 0.17 |
$ 0.14 |
$ 0.09 |
$ 0.18 |
$ 0.27 |
Diluted |
$ 0.17 |
$ 0.14 |
$ 0.09 |
$ 0.18 |
$ 0.26 |
|
|
|
|
|
|
Weighted-average shares used in computing
per share amounts: |
|
|
|
|
|
Basic |
83,345 |
82,649 |
83,345 |
83,238 |
82,506 |
Diluted |
84,205 |
83,451 |
84,039 |
83,941 |
83,132 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED BALANCE SHEET
DATA |
|
|
|
|
|
|
December 29, 2014 |
December 30, 2013 |
|
|
|
Cash and cash equivalents |
$ 279,042 |
$ 330,554 |
|
|
|
Accounts and notes receivable, net |
307,933 |
277,070 |
|
|
|
Inventories |
145,187 |
138,145 |
|
|
|
Total current assets |
798,123 |
804,991 |
|
|
|
Property, plant and equipment, net |
754,718 |
810,672 |
|
|
|
Other non-current assets |
48,448 |
57,912 |
|
|
|
Total assets |
1,601,289 |
1,673,575 |
|
|
|
|
|
|
|
|
|
Short-term debt, including current
portion long-term debt |
$ 128,045 |
$ 96,204 |
|
|
|
Accounts payable |
217,326 |
192,357 |
|
|
|
Total current liabilities |
496,012 |
458,003 |
|
|
|
Debt, net of discount |
374,642 |
477,539 |
|
|
|
Total long-term liabilities |
389,813 |
510,277 |
|
|
|
Total stockholders' equity |
715,464 |
705,295 |
|
|
|
Total liabilities and stockholders'
equity |
1,601,289 |
1,673,575 |
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DATA |
|
|
|
|
|
|
Fourth Quarter |
Third Quarter |
Full Year |
|
2014 |
2013 |
2014 |
2014 |
2013 |
Gross margin |
17.5% |
19.2% |
14.2% |
14.7% |
15.9% |
Operating margin |
6.8% |
8.0% |
3.6% |
3.5% |
5.1% |
|
|
|
|
|
|
End Market Breakdown: |
|
|
|
|
|
|
Fourth Quarter |
Third Quarter |
|
|
|
2014 |
2013 |
2014 |
|
|
|
|
|
|
|
|
Aerospace/Defense |
14% |
14% |
15% |
|
|
Cellular Phone |
35% |
24% |
25% |
|
|
Computing/Storage/Peripherals |
10% |
23% |
13% |
|
|
Medical/Industrial/Instrumentation |
8% |
8% |
9% |
|
|
Networking/Communications |
27% |
27% |
32% |
|
|
Other |
6% |
4% |
6% |
|
|
|
|
|
|
|
|
Stock-based Compensation: |
|
|
|
|
|
|
Fourth Quarter |
Third Quarter |
|
|
|
2014 |
2013 |
2014 |
|
|
Amount included in: |
|
|
|
|
|
Cost of goods sold |
$ 197 |
$ 250 |
$ 207 |
|
|
Selling and marketing |
263 |
308 |
257 |
|
|
General and administrative |
1,287 |
1,684 |
1,490 |
|
|
Total stock-based compensation
expense |
$ 1,747 |
$ 2,241 |
$ 1,954 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment Data: |
|
|
|
|
|
|
Fourth Quarter |
Third Quarter |
|
|
Net sales: |
2014 |
2013 |
2014 |
|
|
Asia Pacific |
$ 264,015 |
$ 231,648 |
$ 214,727 |
|
|
North America |
127,433 |
134,936 |
131,054 |
|
|
Total sales |
391,448 |
366,584 |
345,781 |
|
|
Inter-segment sales |
(536) |
(473) |
(506) |
|
|
Total net sales |
$ 390,912 |
$ 366,111 |
$ 345,275 |
|
|
|
|
|
|
|
|
Operating segment income: |
|
|
|
|
|
Asia Pacific |
$ 27,263 |
$ 25,863 |
$ 10,034 |
|
|
North America |
1,247 |
5,799 |
4,259 |
|
|
Total operating segment income |
28,510 |
31,662 |
14,293 |
|
|
Amortization of definite-lived
intangibles |
(1,935) |
(2,348) |
(1,980) |
|
|
Total operating income |
26,575 |
29,314 |
12,313 |
|
|
Total other expense |
(4,071) |
(15,633) |
(4,276) |
|
|
Income before income taxes |
$ 22,504 |
$ 13,681 |
$ 8,037 |
|
|
|
|
|
|
|
|
RECONCILIATIONS1 |
|
|
|
|
|
|
Fourth Quarter |
Third Quarter |
Full Year |
|
2014 |
2013 |
2014 |
2014 |
2013 |
Non-GAAP gross profit
reconciliation2: |
|
|
|
|
|
GAAP gross profit |
$ 68,475 |
$ 70,217 |
$ 49,108 |
$ 194,689 |
$ 217,843 |
Add back item: |
|
|
|
|
|
Stock-based compensation |
197 |
250 |
207 |
866 |
1,059 |
Non-GAAP gross profit |
$ 68,672 |
$ 70,467 |
$ 49,315 |
$ 195,555 |
$ 218,902 |
Non-GAAP gross margin |
17.6% |
19.2% |
14.3% |
14.8% |
16.0% |
|
|
|
|
|
|
Non-GAAP operating income
reconciliation3: |
|
|
|
|
|
GAAP operating income |
$ 26,575 |
$ 29,314 |
$ 12,313 |
$ 46,539 |
$ 69,128 |
Add back items: |
|
|
|
|
|
Amortization of definite-lived
intangibles |
1,935 |
2,348 |
1,980 |
8,387 |
9,332 |
Stock-based compensation |
1,747 |
2,241 |
1,954 |
7,800 |
8,985 |
Gain on sale of assets |
-- |
-- |
-- |
-- |
(17,917) |
Acquisition-related costs |
4,349 |
-- |
1,632 |
5,981 |
-- |
Impairments and restructuring
charges |
(7) |
88 |
49 |
1,900 |
14,227 |
Non-GAAP operating income |
$ 34,599 |
$ 33,991 |
$ 17,928 |
$ 70,607 |
$ 83,755 |
Non-GAAP operating margin |
8.9% |
9.3% |
5.2% |
5.3% |
6.1% |
|
|
|
|
|
|
Non-GAAP net income and EPS attributable
to stockholders reconciliation4: |
|
|
|
|
|
GAAP net income attributable to
stockholders |
$ 13,938 |
$ 11,296 |
$ 7,658 |
$ 14,693 |
$ 21,877 |
Add back items: |
|
|
|
|
|
Amortization of definite-lived
intangibles |
1,935 |
2,348 |
1,980 |
8,387 |
9,332 |
Stock-based compensation |
1,747 |
2,241 |
1,954 |
7,800 |
8,985 |
Non-cash interest expense |
2,585 |
2,183 |
2,548 |
10,165 |
8,466 |
Gain on sale of assets |
-- |
-- |
-- |
-- |
(17,917) |
Acquisition-related costs |
4,349 |
-- |
1,632 |
5,981 |
-- |
Impairments, restructuring and other
charges |
(7) |
10,831 |
49 |
2,406 |
24,970 |
Income taxes |
(1,332) |
(6,765) |
(4,810) |
(10,121) |
(4,444) |
Non-GAAP net income attributable to
stockholders |
$ 23,215 |
$ 22,134 |
$ 11,011 |
$ 39,311 |
$ 51,269 |
Non-GAAP earnings per diluted share
attributable to stockholders |
$ 0.28 |
$ 0.27 |
$ 0.13 |
$ 0.47 |
$ 0.62 |
|
|
|
|
|
|
Adjusted EBITDA reconciliation5: |
|
|
|
|
|
GAAP net income |
$ 13,938 |
$ 11,296 |
$ 7,658 |
$ 14,693 |
$ 23,893 |
Add back items: |
|
|
|
|
|
Income tax provision |
8,566 |
2,385 |
379 |
7,598 |
15,879 |
Interest expense |
5,691 |
5,982 |
6,018 |
23,830 |
24,031 |
Amortization of definite-lived
intangibles |
1,935 |
2,348 |
1,980 |
8,387 |
9,332 |
Depreciation expense |
24,318 |
23,338 |
23,887 |
95,349 |
92,120 |
Stock-based compensation |
1,747 |
2,241 |
1,954 |
7,800 |
8,985 |
Gain on sale of assets |
-- |
-- |
-- |
-- |
(17,917) |
Acquisition-related costs |
4,349 |
-- |
1,632 |
5,981 |
-- |
Impairments, restructuring and other
charges |
(7) |
10,831 |
49 |
2,406 |
24,970 |
Adjusted EBITDA |
$ 60,537 |
$ 58,421 |
$ 43,557 |
$ 166,044 |
$ 181,293 |
Adjusted EBITDA margin |
15.5% |
16.0% |
12.6% |
12.5% |
13.3% |
|
|
|
|
|
|
|
|
|
|
|
|
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. |
|
3 Non-GAAP operating income
and operating margin measures exclude amortization of intangibles,
stock-based compensation expense, gain on sale of assets,
acquisition-related costs and restructuring and impairment
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, 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, 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
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