TTM Technologies, Inc. (Nasdaq:TTMI), a major global printed
circuit board ("PCB") manufacturer, today reported results for the
third quarter 2015, which ended September 28, 2015. Results for the
period reflect the first full quarter of consolidated results from
the acquisition of Viasystems Group, Inc. ("Viasystems"), completed
on May 31, 2015.
Third Quarter 2015 Highlights
- Net sales were $652.0 million
- GAAP net loss attributable to stockholders was $2.2 million, or
$0.02 per share
- Non-GAAP net income attributable to stockholders was $23.8
million, or $0.24 per diluted share
Third Quarter 2015 Financial Results
Net sales for the third quarter of 2015 were $652.0 million
compared to $445.4 million in the second quarter of 2015 and $345.3
million in the third quarter of 2014.
GAAP operating income for the third quarter of 2015 was $23.6
million compared to an operating loss of $7.1 million in the second
quarter of 2015 and operating income of $12.3 million in the third
quarter of 2014.
GAAP net loss attributable to stockholders for the third quarter
of 2015 was $2.2 million, or $0.02 per share. This compares to GAAP
net loss of $36.6 million, or $0.41 per share, in the second
quarter of 2015 and GAAP net income of $7.7 million, or $0.09 per
diluted share, in the third quarter of 2014. The GAAP results were
negatively impacted by approximately $12.3 million of expenses
related to the acquisition and integration of Viasystems.
On a non-GAAP basis, net income attributable to stockholders for
the third quarter of 2015 was $23.8 million, or $0.24 per diluted
share. This compares to non-GAAP net income of $14.9 million, or
$0.17 per diluted share, for the second quarter of 2015 and $11.0
million, or $0.13 per diluted share, for the third quarter of
2014.
Adjusted EBITDA for the third quarter of 2015 was $87.6 million,
or 13.4 percent of net sales, compared to adjusted EBITDA of $59.7
million, or 13.4 percent of net sales, for the second quarter of
2015 and $43.6 million, or 12.6 percent of net sales, for the third
quarter of 2014.
"Our strong third quarter operating performance included the
first full quarter of contribution from the Viasystems
acquisition," said Tom Edman, CEO of TTM. "Revenue was within our
guidance range and non-GAAP earnings exceeded expectations. Demand
in the aerospace and defense and mobility end markets, in
particular, remained strong throughout the quarter."
Mr. Edman continued, "We are pleased with both our organic
growth and our continued progress with the integration of
Viasystems during the quarter. Shortly after the quarter ended, we
announced plans to close three facilities as a part of our global
integration plan. We expect the consolidation to improve plant
utilization, operational performance and customer focus, and
project that these actions will drive us closer to realizing our
annualized synergies goal of $55.0 million. We remain focused on
ongoing operational excellence and execution across our newly
expanded diverse set of end markets and customers."
Business Outlook
For the fourth quarter of 2015, TTM estimates that revenue will
be in the range of $640 million to $680 million, and non-GAAP net
income will be in the range of $0.21 to $0.27 per diluted
share.
To Access the Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss third
quarter 2015 results and fourth quarter 2015 outlook on Wednesday,
October 28, 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 1-877-876-9176
or international 1-785-424-1667 (ID 319737). 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 major global printed circuit board
manufacturer, focusing on quick-turn and technologically advanced
PCBs, backplane assemblies and electro-mechanical solutions. 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
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 successful
integration of Viasystems, including, the planned plant
combinations and closure, 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 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.
TTM TECHNOLOGIES,
INC. |
Selected Unaudited
Financial Information |
(In thousands, except
per share data) |
|
|
|
|
|
|
|
Third Quarter |
Second Quarter |
First Three Quarters |
|
2015 |
2014 |
2015 |
2015 |
2014 |
|
|
|
|
|
|
CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS |
|
|
|
|
|
|
|
|
|
Net sales |
$ 652,005 |
$ 345,275 |
$ 445,445 |
$ 1,426,614 |
$ 934,805 |
Cost of goods sold |
562,887 |
296,167 |
384,255 |
1,224,747 |
808,591 |
|
|
|
|
|
|
Gross profit |
89,118 |
49,108 |
61,190 |
201,867 |
126,214 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Selling and marketing |
17,642 |
9,033 |
12,301 |
39,398 |
26,993 |
General and administrative |
39,456 |
25,733 |
52,009 |
125,455 |
70,898 |
Amortization of definite-lived
intangibles |
6,421 |
1,980 |
3,910 |
12,205 |
6,452 |
Restructuring charges |
2,003 |
49 |
30 |
2,512 |
62 |
Impairment of long-lived assets |
-- |
-- |
-- |
-- |
1,845 |
Gain on sale of asset |
-- |
-- |
-- |
(2,504) |
-- |
Total operating
expenses |
65,522 |
36,795 |
68,250 |
177,066 |
106,250 |
|
|
|
|
|
|
Operating income (loss) |
23,596 |
12,313 |
(7,060) |
24,801 |
19,964 |
|
|
|
|
|
|
Interest expense |
(21,002) |
(6,018) |
(12,778) |
(39,545) |
(18,139) |
Loss on extinguishment of debt |
-- |
-- |
(802) |
(802) |
(506) |
Other, net |
3,998 |
1,742 |
681 |
4,264 |
(1,532) |
|
|
|
|
|
|
Income (loss) before income taxes |
6,592 |
8,037 |
(19,959) |
(11,282) |
(213) |
Income tax (provision) benefit |
(8,730) |
(379) |
(16,624) |
(23,993) |
968 |
|
|
|
|
|
|
Net income (loss) |
$ (2,138) |
$ 7,658 |
$ (36,583) |
$ (35,275) |
$ 755 |
|
|
|
|
|
|
Net income attributable to noncontrolling
interest |
(99) |
-- |
(29) |
(128) |
-- |
Net income (loss) attributable to
stockholders |
$ (2,237) |
$ 7,658 |
$ (36,612) |
$ (35,403) |
$ 755 |
|
|
|
|
|
|
Earnings (loss) per share
attributable to stockholders: |
|
|
|
|
Basic |
$ (0.02) |
$ 0.09 |
$ (0.41) |
$ (0.39) |
$ 0.01 |
Diluted |
$ (0.02) |
$ 0.09 |
$ (0.41) |
$ (0.39) |
$ 0.01 |
|
|
|
|
|
|
Weighted-average shares used in
computing per share amounts: |
|
|
|
Basic |
99,128 |
83,345 |
88,834 |
90,522 |
83,202 |
Diluted |
99,128 |
84,039 |
88,834 |
90,522 |
83,853 |
|
|
|
|
|
|
SELECTED BALANCE SHEET
DATA |
|
|
|
|
|
September 28, 2015 |
December 29, 2014 |
|
|
|
Cash and cash equivalents, including
restricted cash |
$ 150,118 |
$ 279,042 |
|
|
|
Accounts and notes receivable, net |
485,996 |
307,933 |
|
|
|
Inventories |
292,831 |
145,187 |
|
|
|
Total current assets |
980,733 |
798,123 |
|
|
|
Property, plant and equipment, net |
1,127,774 |
754,718 |
|
|
|
Other non-current assets |
562,460 |
48,448 |
|
|
|
Total assets |
2,670,967 |
1,601,289 |
|
|
|
|
|
|
|
|
|
Short-term debt, including current portion of
long-term debt |
$ 89,500 |
$ 128,045 |
|
|
|
Accounts payable |
342,233 |
217,326 |
|
|
|
Total current liabilities |
660,018 |
496,012 |
|
|
|
Debt, net of discount |
1,111,600 |
374,642 |
|
|
|
Total long-term liabilities |
1,184,920 |
389,813 |
|
|
|
Total equity |
826,029 |
715,464 |
|
|
|
Total liabilities and equity |
2,670,967 |
1,601,289 |
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DATA |
|
|
|
|
|
|
Third Quarter |
Second Quarter |
First Three Quarters |
|
2015 |
2014 |
2015 |
2015 |
2014 |
Gross margin |
13.7% |
14.2% |
13.7% |
14.2% |
13.5% |
Operating margin |
3.6% |
3.6% |
(1.6)% |
1.7% |
2.1% |
|
|
|
|
|
|
End Market Breakdown: |
|
|
|
|
|
|
Third Quarter |
Second Quarter |
|
|
|
2015 |
2014 |
2015 |
|
|
|
|
|
|
|
|
Aerospace/Defense |
14% |
15% |
15% |
|
|
Automotive |
18% |
3% |
7% |
|
|
Cellular Phone |
16% |
25% |
24% |
|
|
Computing/Storage/Peripherals |
14% |
13% |
11% |
|
|
Medical/Industrial/Instrumentation |
14% |
9% |
12% |
|
|
Networking/Communications |
22% |
32% |
26% |
|
|
Other |
2% |
3% |
5% |
|
|
|
|
|
|
|
|
Stock-based Compensation: |
|
|
|
|
|
|
Third Quarter |
Second Quarter |
|
|
|
2015 |
2014 |
2015 |
|
|
Amount included in: |
|
|
|
|
|
Cost of goods sold |
$ 322 |
$ 207 |
$ 243 |
|
|
Selling and marketing |
294 |
257 |
269 |
|
|
General and
administrative |
2,056 |
1,490 |
1,802 |
|
|
Total stock-based
compensation expense |
$ 2,672 |
$ 1,954 |
$ 2,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment Data: |
|
|
|
|
|
|
Third Quarter |
Second Quarter |
|
|
Net sales: |
2015 |
2014 |
2015 |
|
|
PCB |
$ 604,771 |
$ 328,542 |
$ 417,901 |
|
|
E-M Solutions |
49,658 |
17,368 |
28,514 |
|
|
Corporate |
-- |
-- |
-- |
|
|
Total
sales |
654,429 |
345,910 |
446,415 |
|
|
Inter-segment sales |
(2,424) |
(635) |
(970) |
|
|
Total net
sales |
$ 652,005 |
$ 345,275 |
$ 445,445 |
|
|
|
|
|
|
|
|
Operating segment
income: |
|
|
|
|
|
PCB |
$ 52,191 |
$ 20,457 |
$ 30,456 |
|
|
E-M Solutions |
(1,729) |
642 |
(110) |
|
|
Corporate |
(20,445) |
(6,806) |
(33,496) |
|
|
Total operating
segment income (loss) |
30,017 |
14,293 |
(3,150) |
|
|
Amortization of definite-lived
intangibles |
(6,421) |
(1,980) |
(3,910) |
|
|
Total operating
income (loss) |
23,596 |
12,313 |
(7,060) |
|
|
Total other expense |
(17,004) |
(4,276) |
(12,899) |
|
|
Income (loss) before income
taxes |
$ 6,592 |
$ 8,037 |
$ (19,959) |
|
|
|
|
|
|
|
|
RECONCILIATIONS1 |
|
|
|
|
|
|
Third Quarter |
Second Quarter |
First Three Quarters |
|
2015 |
2014 |
2015 |
2015 |
2014 |
Non-GAAP gross profit
reconciliation2: |
|
|
|
|
GAAP gross profit |
$ 89,118 |
$ 49,108 |
$ 61,190 |
$ 201,867 |
$ 126,214 |
Add back item: |
|
|
|
|
|
Inventory markup and
PP&E step up |
8,214 |
-- |
7,408 |
15,622 |
-- |
Stock-based
compensation |
322 |
207 |
243 |
790 |
669 |
Non-GAAP gross profit |
$ 97,654 |
$ 49,315 |
$ 68,841 |
$ 218,279 |
$ 126,883 |
Non-GAAP gross margin |
15.0% |
14.3% |
15.5% |
15.3% |
13.6% |
|
|
|
|
|
|
Non-GAAP operating income
reconciliation3: |
|
|
|
|
GAAP operating income (loss) |
$ 23,596 |
$ 12,313 |
$ (7,060) |
$ 24,801 |
$ 19,964 |
Add back items: |
|
|
|
|
|
Amortization of
definite-lived intangibles |
6,421 |
1,980 |
3,910 |
12,205 |
6,452 |
Stock-based
compensation |
2,672 |
1,954 |
2,314 |
7,026 |
6,053 |
Gain on sale of asset |
-- |
-- |
-- |
(2,504) |
-- |
Acquisition-related
costs |
2,065 |
1,632 |
22,627 |
32,927 |
1,632 |
Inventory markup and
PP&E step up |
8,214 |
-- |
7,408 |
15,622 |
-- |
Impairments and
restructuring charges |
2,003 |
49 |
30 |
2,512 |
1,907 |
Non-GAAP operating income |
$ 44,971 |
$ 17,928 |
$ 29,229 |
$ 92,589 |
$ 36,008 |
Non-GAAP operating margin |
6.9% |
5.2% |
6.6% |
6.5% |
3.9% |
|
|
|
|
|
|
Non-GAAP net income and EPS attributable to
stockholders reconciliation4: |
|
|
|
|
|
GAAP net income (loss) attributable to
stockholders |
$ (2,237) |
$ 7,658 |
$ (36,612) |
$ (35,403) |
$ 755 |
Add back items: |
|
|
|
|
|
Amortization of
definite-lived intangibles |
6,421 |
1,980 |
3,910 |
12,205 |
6,452 |
Stock-based
compensation |
2,672 |
1,954 |
2,314 |
7,026 |
6,053 |
Non-cash interest
expense |
4,819 |
2,548 |
3,289 |
10,733 |
7,580 |
Gain on sale of asset |
-- |
-- |
-- |
(2,504) |
-- |
Acquisition-related
costs |
2,065 |
1,632 |
22,627 |
32,927 |
1,632 |
Inventory markup and
PP&E step up |
8,214 |
-- |
7,408 |
15,622 |
-- |
Impairments, restructuring
and other charges |
2,003 |
49 |
832 |
3,314 |
2,413 |
Income taxes |
(122) |
(4,810) |
11,110 |
5,622 |
(8,789) |
Non-GAAP net income attributable to
stockholders |
$ 23,835 |
$ 11,011 |
$ 14,878 |
$ 49,542 |
$ 16,096 |
Non-GAAP earnings per diluted share
attributable to stockholders |
$ 0.24 |
$ 0.13 |
$ 0.17 |
$ 0.54 |
$ 0.19 |
|
|
|
|
|
|
Adjusted EBITDA reconciliation5: |
|
|
|
|
|
GAAP net income (loss) |
$ (2,138) |
$ 7,658 |
$ (36,583) |
$ (35,275) |
$ 755 |
Add back items: |
|
|
|
|
|
Income tax provision
(benefit) |
8,730 |
379 |
16,624 |
23,993 |
(968) |
Interest expense |
21,002 |
6,018 |
12,778 |
39,545 |
18,139 |
Amortization of
definite-lived intangibles |
6,421 |
1,980 |
3,910 |
12,205 |
6,452 |
Depreciation expense |
40,091 |
23,887 |
29,776 |
94,403 |
71,031 |
Stock-based
compensation |
2,672 |
1,954 |
2,314 |
7,026 |
6,053 |
Gain on sale of asset |
-- |
-- |
-- |
(2,504) |
-- |
Acquisition-related
costs |
2,065 |
1,632 |
22,627 |
32,927 |
1,632 |
Inventory markup |
6,792 |
-- |
7,408 |
14,200 |
-- |
Impairments, restructuring
and other charges |
2,003 |
49 |
832 |
3,314 |
2,413 |
Adjusted EBITDA |
$ 87,638 |
$ 43,557 |
$ 59,686 |
$ 189,834 |
$ 105,507 |
Adjusted EBITDA margin |
13.4% |
12.6% |
13.4% |
13.3% |
11.3% |
|
|
|
|
|
|
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, inventory
markup and PP&E step up. |
3 Non-GAAP operating income and
operating margin measures exclude amortization of intangibles,
stock-based compensation expense, gain on sale of assets, inventory
markup, acquisition-related costs, asset impairments, restructuring
and other 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, inventory markup,
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, inventory markup, 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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