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TTM TECHNOLOGIES INC
Symbol U : TTMI
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TTM Technologies, Inc. Reports Fourth Quarter and Fiscal Year 2012 Results

2013-02-05 16:05 ET - News Release

COSTA MESA, Calif., Feb. 5, 2013 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (Nasdaq:TTMI), a major global printed circuit board (PCB) manufacturer, today reported results for the fourth quarter and fiscal year 2012, which ended December 31, 2012.

Fourth Quarter 2012 Highlights

-  Net sales were $382.4 million

-  GAAP net income attributable to stockholders was $15.7 million, or $0.19 per diluted share

-  Non-GAAP net income attributable to stockholders was $21.5 million, or $0.26 per diluted share

-  Gross margin was 16.3 percent

Fiscal Year 2012 Highlights

-  Net sales were $1.3 billion

-  GAAP net loss attributable to stockholders was $172.6 million, or $2.11 per share

-  Excluding the goodwill and asset impairment charges recorded in 2012, GAAP net income attributable to stockholders was $43.2 million, or $0.52 per diluted share

-  Non-GAAP net income attributable to stockholders was $72.0 million, or $0.87 per diluted share

-  Gross margin was 16.7 percent

Fourth Quarter 2012 Financial Results

Net sales for the fourth quarter increased 12.8 percent to $382.4 million from $339.0 million in the third quarter. 

GAAP operating income for the fourth quarter was $21.4 million compared to operating loss of $202.7 million in the third quarter.

Included in operating results for the third quarter of 2012 were non-cash charges of $218.4 million to write down goodwill, customer-related intangibles and property, plant and equipment. Excluding these charges, operating income for the third quarter of 2012 was $15.7 million.

GAAP net income attributable to stockholders for the fourth quarter was $15.7 million, or $0.19 per diluted share, compared to net loss attributable to stockholders of $208.3 million, or $2.54 per share, for the third quarter. Fourth quarter net income attributable to stockholders includes a $3.3 million, or $0.04 per diluted share, tax valuation adjustment to noncontrolling interest.  Net income attributable to stockholders, excluding the impairment charges, was $7.5 million, or $0.09 per diluted share, for the third quarter.

On a non-GAAP basis, net income attributable to stockholders for the fourth quarter was $21.5 million, or $0.26 per diluted share. This compares to non-GAAP net income attributable to stockholders of $18.1 million, or $0.22 per diluted share, for the third quarter.

Adjusted EBITDA for the fourth quarter was $50.3 million, or 13.2 percent of net sales, compared to adjusted EBITDA of $36.5 million, or 10.8 percent of net sales, for the third quarter.

"We were pleased to close 2012 with strong financial and operational performance in the fourth quarter," said Kent Alder, CEO of TTM. "We experienced broad-based demand for our advanced HDI PCBs across multiple end markets, particularly for smartphones and touchpad tablets. The product mix shift toward more advanced HDI PCBs drove higher gross margin and operating profit, resulting in stronger earnings for the quarter."

Full Year 2012 Financial Results

Net sales for fiscal year 2012 decreased to $1.3 billion from $1.4 billion in fiscal year 2011.

Operating loss for fiscal year 2012 was $141.4 million, a decrease from operating income of $91.1 million in fiscal year 2011. Included in operating results were non-cash goodwill and asset impairment charges of $218.4 million in 2012 and $63.3 million in 2011. Excluding these charges, operating income for fiscal year 2012 was $77.0 million compared to operating income of $154.4 million in 2011.  The year over year decline in operating income primarily reflects higher labor costs in Asia and lower capacity utilization.

GAAP net loss attributable to stockholders for fiscal year 2012 was $172.6 million, or $2.11 per share, compared to GAAP net income of $41.9 million, or $0.51 per diluted share, for fiscal year 2011. Net income attributable to stockholders for fiscal year 2012 includes the noncontrolling interest adjustment discussed above.  GAAP net income attributable to stockholders, excluding the impairment charges, was $43.2 million, or $0.52 per diluted share, for fiscal year 2012. GAAP net income attributable to stockholders, excluding the impairment charges, was $100.4 million, or $1.23 per diluted share, for fiscal year 2011.

On a non-GAAP basis, net income attributable to stockholders for fiscal year 2012 was $72.0 million, or $0.87 per diluted share. This compares to fiscal year 2011 non-GAAP net income attributable to stockholders of $126.5 million, or $1.54 per diluted share.

Adjusted EBITDA for fiscal year 2012 was $175.5 million, or 13.0 percent of net sales, compared to $250.2 million, or 17.5 percent of net sales, for fiscal year 2011.

"While the global macroeconomic challenges weighed on the demand environment for much of 2012, we significantly expanded our advanced HDI business during the year to meet future demand. We are confident that advanced technology PCBs provide our strongest growth prospect, and we are well positioned to capitalize on these opportunities as our customers' end markets recover," continued Alder.

"Looking ahead to the first quarter, we expect a normal seasonal decline in our business.  Longer term, we remain optimistic as we are clearly differentiated through our focus on leading edge technology, our diversified end markets, and our broad customer base," concluded Alder.

Business Outlook

For the first quarter of 2013, TTM estimates revenue will be in the range of $310 million to $330 million, GAAP earnings attributable to stockholders in a range from breakeven to $0.05 per diluted share and non-GAAP earnings attributable to stockholders in a range from $0.07 to $0.12 per diluted share. 

To Access the Live Webcast/Conference Call

The company will host a conference call and webcast to discuss the fourth quarter and fiscal year 2012 results and the first quarter 2013 outlook on Tuesday, February 5, 2013, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time).

Telephone access is available by dialing domestic 1-888-549-7880 or international 1-480-629-9770. The conference call also will be webcast on TTM Technologies' website at www.ttmtech.com.

To Access a Replay of the Webcast

The webcast will be available for replay until February 12, 2013, on TTM Technologies' website at www.ttmtech.com.

About Our Non-GAAP Financial Measures

This release includes information about the Company's non-GAAP net income attributable to stockholders and non-GAAP earnings per share 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, asset impairments, restructuring and other charges as well as the associated tax impact of these charges -- provide additional useful information to investors regarding the Company'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. The Company 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.

Safe Harbor Statement

This release contains forward-looking statements that relate to future events or performance. These statements reflect the company's current expectations, and the company 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 company statements will not be realized. Furthermore, readers are cautioned that these statements involve risks and uncertainties, many of which are beyond the company'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 company's dependence upon the electronics industry, contemplated significant capital expenditures and related financing requirements, the Company's ability to integrate and manage its Asia Pacific operations, the company's dependence upon a small number of customers, the unpredictability of and potential fluctuation in future revenues and operating results and other "Risk Factors" set forth in the company's most recent SEC filings.

About TTM

TTM Technologies, Inc. is a major global printed circuit board 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 the company'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.

 
TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
           
           
  Fourth Quarter Third Quarter Full Year
  2012 2011 2012 2012 2011
           
CONSOLIDATED STATEMENTS OF OPERATIONS          
Net sales          
Cost of goods sold  $ 382,393  $ 361,460  $ 339,011  $ 1,349,326  $ 1,428,639
   320,221  290,082  286,695  1,123,669  1,127,326
           
Gross profit  62,172  71,378  52,316  225,657  301,313
           
Operating expenses:          
Selling and marketing  9,592  9,867  8,735  35,957  36,891
General and administrative  28,682  24,178  23,735  98,005  92,682
Amortization of definite-lived intangibles  2,515  4,517  4,104  14,637  17,311
Impairment of goodwill and definite-lived intangibles  --   15,184  200,335  200,335  15,184
Impairment of long-lived assets  --   --   18,082  18,082  48,125
Total operating expenses  40,789  53,746  254,991  367,016  210,193
           
Operating income (loss)  21,383  17,632  (202,675)  (141,359)  91,120
           
Interest expense  (6,558)  (6,795)  (6,429)  (25,784)  (26,504)
Loss on extinguishment of debt  --   --   (5,527)  (5,527)  -- 
Other, net  2,440  2,851  1,117  4,956  8,616
           
Income (loss) before income taxes  17,265  13,688  (213,514)  (167,714)  73,232
Income tax (provision) benefit  (3,584)  (1,328)  850  (11,386)  (26,005)
           
Net income (loss)  13,681  12,360  (212,664)  (179,100)  47,227
           
Net loss (income) attributable to noncontrolling interest  2,062  (1,190)  4,322  6,506  (5,359)
Net income (loss) attributable to stockholders  $ 15,743  $ 11,170  $ (208,342)  $ (172,594)  $ 41,868
           
Earnings (loss) per share attributable to stockholders:          
Basic  $ 0.19  $ 0.14  $ (2.54)  $ (2.11)  $ 0.52
Diluted  $ 0.19  $ 0.14  $ (2.54)  $ (2.11)  $ 0.51
           
Weighted average common shares:          
Basic  81,932  81,336  81,929  81,800  81,176
Diluted  82,613  81,988  81,929  81,800  81,944
   
SELECTED BALANCE SHEET DATA  
   
     
  December 31, 2012 December 31, 2011
Cash and cash equivalents  $ 285,433  $ 196,052
Accounts and notes receivable, net  302,215  316,568
Inventories  146,012  129,430
Total current assets  765,151  671,534
Property, plant and equipment, net  833,389  766,800
Other non-current assets  77,673  310,735
Total assets  $ 1,676,213  $ 1,749,069
     
Short-term debt, including current portion long-term debt  $ 30,004  $ 120,882
Accounts payable  221,265  185,906
Total current liabilities  370,172  437,140
Debt, net of discount  527,541  368,518
Total long-term liabilities  551,210  389,259
Noncontrolling interest  98,883  113,753
Total stockholders' equity  754,831  922,670
Total liabilities and stockholders' equity  $ 1,676,213  $ 1,749,069
           
SUPPLEMENTAL DATA          
  Fourth Quarter Third Quarter Full Year
  2012 2011 2012 2012 2011
Gross margin 16.3% 19.7% 15.4% 16.7% 21.1%
Adjusted EBITDA margin  13.2  16.6  10.8  13.0  17.5
Operating margin  5.6  4.9  (59.8)  (10.5)  6.4
           
End Market Breakdown:          
         
  Fourth Quarter Third Quarter    
  2012 2011 2012    
           
Aerospace/Defense 13% 15% 16%    
Cellular Phone  17  14  15    
Computing/Storage/Peripherals  23  20  21    
Medical/Industrial/Instrumentation  7  8  8    
Networking/Communications  30  33  29    
Other  10  10  11    
           
Stock-based Compensation:          
         
  Fourth Quarter Third Quarter    
  2012 2011 2012    
Amount included in:          
Cost of goods sold  $ 265  $ 251  $ 253    
Selling and marketing  124  106  115    
General and administrative  2,432  1,786  2,089    
Total stock-based compensation expense  $ 2,821  $ 2,143  $ 2,457    
           
           
Operating Segment Data:          
         
  Fourth Quarter Third Quarter    
 Net sales:  2012 2011 2012    
 Asia Pacific   $ 259,378  $ 218,448  $ 215,746    
 North America   123,890  144,079  123,861    
 Total sales   383,268  362,527  339,607    
 Inter-segment sales   (875)  (1,067)  (596)    
 Total net sales   $ 382,393  $ 361,460  $ 339,011    
           
 Operating segment income (loss):           
 Asia Pacific   $ 17,644  $ 20,094  $ (206,806)    
 North America   6,254  2,055  8,235    
 Total operating segment income (loss)   23,898  22,149  (198,571)    
 Amortization of definite-lived intangibles   (2,515)  (4,517)  (4,104)    
 Total operating income (loss)   21,383  17,632  (202,675)    
 Total other expense   (4,118)  (3,944)  (10,839)    
 Income (loss) before income taxes   $ 17,265  $ 13,688  $ (213,514)    
           
RECONCILIATIONS1          
       
  Fourth Quarter Third Quarter Full Year
  2012 2011 2012 2012 2011
Adjusted EBITDA reconciliation2:          
Net income (loss)  $ 13,681  $ 12,360  $ (212,664)  $ (179,100)  $ 47,227
Add back items:          
Income tax provision  3,584  1,328  (850)  11,386  26,005
Interest expense  6,558  6,795  6,429  25,784  26,504
Amortization of definite-lived intangibles  2,515  4,546  4,104  14,684  17,427
Depreciation expense  23,962  19,946  21,046  84,286  69,698
EBITDA  $ 50,300  $ 44,975  $ (181,935)  $ (42,960)  $ 186,861
           
Add back: Asset impairments  --   15,184  218,417  218,417  63,309
Adjusted EBITDA  $ 50,300  $ 60,159  $ 36,482  $ 175,457  $ 250,170
           
GAAP EPS excluding impairments reconciliation3:          
GAAP net income (loss) attributable to stockholders  $ 15,743  $ 11,170  $ (208,342)  $ (172,594)  $ 41,868
Add back items:          
Asset impairments  --   15,184  218,417  218,417  63,309
Income tax effects  --   (4,058)  (2,574)  (2,574)  (4,764)
GAAP net income, excluding impairments, attributable to stockholders  $ 15,743  $ 22,296  $ 7,501  $ 43,249  $ 100,413
           
GAAP earnings per diluted share, excluding impairments, attributable to stockholders  $ 0.19  $ 0.27  $ 0.09  $ 0.52  $ 1.23
           
Non-GAAP EPS reconciliation4:          
GAAP net income (loss) attributable to stockholders  $ 15,743  $ 11,170  $ (208,342)  $ (172,594)  $ 41,868
Add back items:          
Amortization of definite-lived intangibles  2,515  4,546  4,104  14,684  17,427
Stock-based compensation  2,821  2,143  2,457  10,266  8,075
Non-cash interest expense  2,016  1,947  1,977  7,893  8,163
Impairments, restructuring and other charges  --   15,184  223,944  223,944  63,309
Income tax effects  (1,550)  (5,666)  (6,045)  (12,172)  (12,379)
Non-GAAP net income attributable to stockholders  $ 21,545  $ 29,324  $ 18,095  $ 72,021  $ 126,463
           
Non-GAAP earnings per diluted share attributable to stockholders  $ 0.26  $ 0.36  $ 0.22  $ 0.87  $ 1.54
           
           
1 This information provides a reconciliation of EBITDA, adjusted EBITDA, GAAP net income (excluding impairments) attributable to stockholders, GAAP EPS (excluding impairments) attributable to stockholders, non-GAAP net income attributable to stockholders and non-GAAP EPS attributable to stockholders to the financial information in our consolidated statements of operations.
           
2 Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization and asset impairments. 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.
           
3 This information provides GAAP net income attributable to stockholders and GAAP EPS attributable to stockholders excluding asset impairments and related income tax effects.
           
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), asset impairments, restructuring and other charges as well as the associated tax impact of these charges --- provide additional useful information to investors regarding the Company's ongoing financial condition and results of operations.
CONTACT: Steve Richards, CFO
         714-327-3000

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