TTM Technologies, Inc. Reports Fiscal Second Quarter 2017 Results
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TTM Technologies, Inc. Reports Fiscal Second Quarter 2017 Results

COSTA MESA, Calif., Aug. 02, 2017 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) manufacturer, today reported results for the second quarter of fiscal 2017, which ended July 2nd, 2017. 

Second Quarter 2017 Highlights

Second Quarter 2017 Financial Results
Net sales for the second quarter of 2017 were $627.2 million, compared to $601.8 million in the second quarter of 2016 and $625.2 million in the first quarter of 2017.

GAAP operating income for the second quarter of 2017 was $45.1 million, compared to $34.7 million in the second quarter of 2016 and $52.6 million in the first quarter of 2017. 

GAAP net income attributable to stockholders for the second quarter of 2017 was $20.6 million, or $0.18 per diluted share.  This compares to a GAAP net income attributable to stockholders of $18.5 million, or $0.17 per diluted share, in the second quarter of 2016 and a GAAP net income of $33 million, or $0.28 per diluted share, in the first quarter of 2017. 

On a non-GAAP basis, net income attributable to stockholders for the second quarter of 2017 was $33.3 million, or $0.31 per diluted share. This compares to non-GAAP net income attributable to stockholders of $28.4 million, or $0.28 per diluted share, for the second quarter of 2016 and $39.2 million, or $0.37 per diluted share, in the first quarter of 2017.

Adjusted EBITDA for the second quarter of 2017 was $85.5 million, or 13.6 percent of net sales, compared to adjusted EBITDA of $90.2 million, or 15.0 percent of net sales, for the second quarter of 2016 and $95.6 million, or 15.3 percent of net sales, for the first quarter of 2017.

“TTM delivered the third consecutive quarter of year on year organic growth at 4 percent and our operating performance was in line with our expectations” said Tom Edman, CEO of TTM.  “On a year over year basis, most end markets grew, with the fastest growth coming from the cellular, computing, automotive and the aerospace and defense end markets.  Absent a foreign exchange loss due to the weakening dollar, operating results were towards the high end of guidance.” 

Business Outlook
For the third quarter of 2017, TTM estimates that revenue will be in the range of $625 million to $675 million, and non-GAAP net income attributable to stockholders will be in the range of $0.29 to $0.35 per diluted share.  “Our third quarter is being impacted by a slower start in the normal seasonal ramp of cellular products.  We expect this ramp to accelerate in the coming quarters” concluded Tom Edman.

To Access the Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss second quarter 2017 results and third quarter 2017 outlook on Wednesday, August 2nd, 2017, 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 877-397-0272 or international 719-325-2322 (ID 5738422).  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 leading global printed circuit board manufacturer, focusing on quick-turn and volume production of 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, 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.

- Tables Follow -

TTM TECHNOLOGIES, INC. 
Selected Unaudited Financial Information 
(In thousands, except per share data) 
                
                
      Second Quarter First Quarter First Two Quarters 
       2017   2016   2017   2017   2016  
                
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS           
                
 Net sales  $  627,182  $  601,847  $  625,247  $  1,252,429  $  1,185,105  
 Cost of goods sold    531,315     504,202     520,228     1,051,543     1,003,897  
                
 Gross profit    95,867     97,645     105,019     200,886     181,208  
                
 Operating expenses:           
  Selling and marketing    15,851     16,569     16,655     32,506     33,875  
  General and administrative    29,885     37,931     30,822     60,707     74,080  
  Amortization of definite-lived intangibles    5,910     5,949     5,912     11,822     11,896  
  Restructuring charges    416     3,989     609     1,025     5,902  
  Impairment of long-lived assets  -   -   -   -     3,346  
  Gain on sale of assets    (1,251)    (1,472)    (1,549)    (2,800)    (1,472) 
   Total operating expenses    50,811     62,966     52,449     103,260     127,627  
                
 Operating income    45,056     34,679     52,570     97,626     53,581  
                
 Interest expense    (12,922)    (20,084)    (13,596)    (26,518)    (41,868) 
 Other, net     (5,825)    3,191     (1,710)    (7,535)    4,400  
                
 Income before income taxes    26,309     17,786     37,264     63,573     16,113  
 Income tax provision    (5,558)    979     (4,139)    (9,697)    (4,498) 
                
 Net income (loss) $  20,751  $  18,765  $  33,125  $  53,876  $  11,615  
                
 Net income attributable to noncontrolling interest    (160)    (217)    (166)    (326)    (331) 
 Net income (loss) attributable to stockholders $  20,591  $  18,548  $  32,959  $  53,550  $  11,284  
                
 Earnings (loss) per share attributable to stockholders:           
  Basic  $  0.20  $  0.19  $  0.33  $  0.53  $  0.11  
  Diluted  $  0.18  $  0.17  $  0.28  $  0.46  $  0.11  
                
 Weighted-average shares used in computing per share amounts:           
  Basic     101,756     100,170     100,932     101,344     99,883  
  Diluted     133,224     126,950     130,922     132,073     100,789  
                
                
 Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share:       
                
 Net income attributable to stockholders $  20,591  $  18,548  $  32,959  $  53,550    
  Add back items: interest expense, net of tax    3,432     3,285     3,394     6,826    
 Adjusted net income attributable to stockholders $  24,023  $  21,833  $  36,353  $  60,376    
 Weighted-average shares outstanding    101,756     100,170     100,932     101,344    
 Dilutive effect of convertible debt    25,940     25,940     25,940     25,940    
 Dilutive effect of warrants    3,924   -     2,183     3,054    
 Dilutive effect of performance-based stock units, restricted stock units & stock options    1,604     840     1,867     1,735    
 Diluted shares    133,224     126,950     130,922     132,073    
 Earnings per share attributable to stockholders:           
  Basic  $  0.20  $  0.19  $  0.33  $  0.53    
  Diluted  $  0.18  $  0.17  $  0.28  $  0.46    
                
                
SELECTED BALANCE SHEET DATA            
      July 3, 2017 January 2, 2017       
 Cash and cash equivalents, including restricted cash $  246,947  $  256,277        
 Accounts and notes receivable, net    452,796     432,596        
 Inventories     282,485     269,212        
 Total current assets    1,025,261     1,012,841        
 Property, plant and equipment, net    1,034,385     966,638        
 Other non-current assets    512,304     520,597        
 Total assets    2,571,950     2,500,076        
                
 Short-term debt, including current portion of long-term debt $  110,669  $  110,652        
 Accounts payable    365,254     355,774        
 Total current liabilities    722,675     689,065        
 Debt, net of discount    863,847     909,030        
 Total long-term liabilities    938,684     981,886        
 Total equity    910,591     829,125        
 Total liabilities and equity    2,571,950     2,500,076        
                
SUPPLEMENTAL DATA           
      Second Quarter First Quarter First Two Quarters 
       2017   2016   2017   2017   2016  
 Gross margin  15.3%  16.2%  16.8%  16.0%  15.3% 
 Operating margin  7.2%  5.8%  8.4%  7.8%  4.5% 
                
 End Market Breakdown:           
      Second Quarter First Quarter     
       2017   2016   2017      
                
  Aerospace/Defense  17%  16%  15%     
  Automotive  20%  19%  20%     
  Cellular Phone  13%  10%  14%     
  Computing/Storage/Peripherals  14%  13%  15%     
  Medical/Industrial/Instrumentation  15%  16%  15%     
  Networking/Communications  20%  25%  20%     
  Other   1%  1%  1%     
                
 Stock-based Compensation:           
      Second Quarter First Quarter     
       2017   2016   2017      
  Amount included in:           
   Cost of goods sold $  639  $  429  $  394      
   Selling and marketing $  386     271     253      
   General and administrative    3,975     2,145     2,981      
   Total stock-based compensation expense $  5,000  $  2,845  $  3,628      
                
                
 Operating Segment Data:           
      Second Quarter First Quarter     
   Net sales:   2017   2016   2017      
   PCB   $  576,566  $  563,574  $  586,695      
   E-M Solutions     52,898     40,427     41,669      
   Corporate   -   -   -      
    Total sales     629,464     604,001     628,364      
   Inter-segment sales     (2,282)    (2,154)    (3,117)     
    Total net sales  $  627,182  $  601,847  $  625,247      
                
   Operating segment income:            
   PCB   $  69,435  $  64,970  $  82,256      
   E-M Solutions     2,689     (153)    (1,642)     
   Corporate     (21,158)    (24,189)    (22,132)     
    Total operating segment income     50,966     40,628     58,482      
   Amortization of definite-lived intangibles     (5,910)    (5,949)    (5,912)     
    Total operating income     45,056     34,679     52,570      
   Total other expense     (18,747)    (16,893)    (15,306)     
   Income before income taxes  $  26,309  $  17,786  $  37,264      
                
RECONCILIATIONS1           
      Second Quarter First Quarter First Two Quarters 
       2017   2016   2017   2017   2016  
 Non-GAAP gross profit reconciliation2:           
  GAAP gross profit $  95,867  $  97,645  $  105,019  $  200,886  $  181,208  
  Add back item:           
   Stock-based compensation    639     429     394     1,033     749  
  Non-GAAP gross profit $  96,506  $  98,074  $  105,413  $  201,919  $  181,957  
  Non-GAAP gross margin  15.4%  16.3%  16.9%  16.1%  15.4% 
                
 Non-GAAP operating income reconciliation3:           
  GAAP operating income $  45,056  $  34,679  $  52,570  $  97,626  $  53,581  
  Add back items:           
   Amortization of definite-lived intangibles    5,910     5,949     5,912     11,822     11,896  
   Stock-based compensation    5,000     2,845     3,628     8,628     5,091  
   Gain on sale of assets    (1,251)    (1,472)    (1,549)    (2,800)    (1,472) 
   Impairments, restructuring, acquisition-related, and other charges    417     4,594     709     1,126     10,544  
  Non-GAAP operating income $  55,132  $  46,595  $  61,270  $  116,402  $  79,640  
  Non-GAAP operating margin  8.8%  7.7%  9.8%  9.3%  6.7% 
                
 Non-GAAP net income and EPS attributable to stockholders reconciliation4:           
  GAAP net income (loss) attributable to stockholders $  20,591  $  18,548  $  32,959  $  53,550  $  11,284  
  Add back items:           
   Amortization of definite-lived intangibles    5,910     5,949     5,912     11,822     11,896  
   Stock-based compensation    5,000     2,845     3,628     8,628     5,091  
   Non-cash interest expense    2,726     5,608     2,627     5,353     11,762  
   Gain on sale of assets    (1,251)    (1,472)    (1,549)    (2,800)    (1,472) 
   Impairments, restructuring, acquisition-related, and other charges    417     4,594     709     1,126     10,544  
   Income taxes    (119)    (7,649)    (5,093)    (5,212)    (6,828) 
  Non-GAAP net income attributable to stockholders $  33,274  $  28,423  $  39,193  $  72,467  $  42,277  
  Non-GAAP earnings per diluted share attributable to stockholders $  0.31  $  0.28  $  0.37  $  0.68  $  0.42  
                
 Non-GAAP diluted number of shares5:           
  Diluted shares    133,224     126,950     130,922     132,073     126,730  
  Dilutive effect of convertible debt    (25,940)    (25,940)    (25,940)    (25,940)    (25,940) 
  Non-GAAP diluted number of shares    107,284     101,010     104,982     106,133     100,790  
                
 Adjusted EBITDA reconciliation6:           
  GAAP net income (loss) $  20,751  $  18,765  $  33,125  $  53,876  $  11,615  
  Add back items:           
   Income tax provision (benefit)    5,558     (979)    4,139     9,697     4,498  
   Interest expense    12,922     20,084     13,596     26,518     41,868  
   Amortization of definite-lived intangibles    5,910     5,949     5,912     11,822     11,896  
   Depreciation expense    36,146     40,457     36,077     72,223     80,684  
   Stock-based compensation    5,000     2,845     3,628     8,628     5,091  
   Gain on sale of assets    (1,251)    (1,472)    (1,549)    (2,800)    (1,472) 
   Impairments, restructuring, acquisition-related, and other charges    417     4,594     709     1,126     10,544  
  Adjusted EBITDA $  85,453  $  90,243  $  95,637  $  181,090  $  164,724  
  Adjusted EBITDA margin  13.6%  15.0%  15.3%  14.5%  13.9% 
                
 Free cash flow reconciliation:           
  Operating cash flow    59,114     80,057     49,584     108,698     97,949  
  Add back items:           
   Payment of acquisition-related costs  -     691     153     153     3,015  
  Adjusted operating cash flow    59,114     80,748     49,737     108,851     100,964  
  Capital expenditures, net    (45,626)    (15,329)    (23,378)    (69,004)    (35,445) 
  Free cash flow $  13,488  $  65,419  $  26,359  $  39,847  $  65,519  
                
 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, 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, 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 Non-GAAP diluted number of shares used in computing non-GAAP earnings per share attributable to stockholders excludes the dilutive effect of convertible debt. 
                
 6 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:
Sameer Desai,
Senior Director, Corporate Development & Investor Relations
sameer.desai@ttmtech.com
714-327-3050

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