TTM Technologies, Inc. Reports Fourth Quarter and Fiscal Year 2015 Results
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TTM Technologies, Inc. Reports Fourth Quarter and Fiscal Year 2015 Results

COSTA MESA, Calif., Feb. 04, 2016 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (Nasdaq:TTMI), a leading global printed circuit board (“PCB”) manufacturer, today reported results for the fourth quarter and fiscal year 2015, which ended December 28, 2015.  Our results include the contribution from the Viasystems Group, Inc. ("Viasystems") acquisition, which was completed on May 31, 2015.

Fourth Quarter 2015 Highlights

Fiscal Year 2015 Highlights

Fourth Quarter 2015 Financial Results

Net sales for the fourth quarter of 2015 were $668.9 million compared to $652.0 million in the third quarter of 2015 and $390.9 million in the fourth quarter of 2014.

GAAP operating income for the fourth quarter of 2015 was $36.5 million compared to operating income of $23.6 million in the third quarter of 2015 and operating income of $26.6 million in the fourth quarter of 2014. 

GAAP net income attributable to stockholders for the fourth quarter of 2015 was $9.5 million, or $0.09 per diluted share.  This compares to GAAP net loss attributable to stockholders of $2.2 million, or $0.02 per share, in the third quarter of 2015 and GAAP net income of $13.9 million, or $0.17 per diluted share, in the fourth quarter of 2014.  

On a non-GAAP basis, net income attributable to stockholders for the fourth quarter of 2015 was $31.5 million, or $0.31 per diluted share.  This compares to non-GAAP net income of $23.8 million, or $0.24 per diluted share, for the third quarter of 2015 and $23.2 million, or $0.28 per diluted share, for the fourth quarter of 2014.

Adjusted EBITDA for the fourth quarter of 2015 was $95.8 million, or 14.3 percent of net sales, compared to adjusted EBITDA of $87.6 million, or 13.4 percent of net sales, for the third quarter of 2015 and $60.5 million, or 15.5 percent of net sales, for the fourth quarter of 2014.

“Our solid fourth quarter execution combined with seasonal growth in the cellular phone end market and robust demand in the automotive and aerospace and defense end markets drove our sequential increases in gross margin, operating profit and strong free cash flow generation,” said Tom Edman, CEO of TTM.  “We are pleased to report non-GAAP earnings above the high end of our guidance range and revenue in line with expectations.  In addition, we generated $118 million in free cash flow during the quarter which we will use to repay $70-80 million of principal on our term loan late in the first quarter.”

Full Year 2015 Financial Results

Net sales for fiscal year 2015 increased to $2.1 billion from $1.3 billion in fiscal year 2014. 

GAAP operating income for fiscal year 2015 was $61.3 million, an increase from GAAP operating income of $46.5 million in fiscal year 2014.

GAAP net loss attributable to stockholders for fiscal year 2015 was $25.9 million, or $0.28 per share, compared to GAAP net income of $14.7 million, or $0.18 per diluted share, for fiscal year 2014.  The GAAP results were negatively impacted by approximately $59.4 million of expenses related to the acquisition and integration of Viasystems.

On a non-GAAP basis, net income attributable to stockholders for fiscal year 2015 was $81.1 million, or $0.87 per diluted share.  This compares to fiscal year 2014 non-GAAP net income of $39.3 million, or $0.47 per diluted share.

Adjusted EBITDA for fiscal year 2015 was $285.7 million, or 13.6 percent of net sales, compared to $166.0 million, or 12.5 percent of net sales, for fiscal year 2014.

“2015 was a transformational year for our company that culminated in the creation of one of today’s leading global PCB manufacturers with increased customer and end market diversity.  We delivered on our integration initiatives and exited the year having achieved 80% of our $55 million annualized synergy target,” continued Edman.

“We expect our leadership in a diverse set of end markets to pay-off in the first quarter of 2016 as anticipated strength in automotive and aerospace and defense markets will help to mitigate a seasonal downturn in the cellular phone market. We will continue to build on these strengths as we leverage TTM’s advanced technology position into the automotive market in particular.”

Business Outlook

For the first quarter of 2016, TTM estimates that revenue will be in the range of $570 million to $610 million, and non-GAAP net income will be in the range of $0.05 to $0.11 per diluted share. 

To Access the Live Webcast/Conference Call

TTM will host a conference call and webcast to discuss fourth quarter and fiscal year 2015 results and first quarter 2016 outlook on Thursday, February 4, 2016, 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 888-438-5535 or international 719-457-2648 (ID 4399593).  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 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) 
                
                
      Fourth Quarter Third Quarter Full Year 
       2015   2014   2015   2015   2014  
                
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS           
                
 Net sales  $  668,874  $  390,912  $  652,005  $  2,095,488  $  1,325,717  
 Cost of goods sold    560,604     322,437     562,887     1,785,351     1,131,028  
                
 Gross profit    108,270     68,475     89,118     310,137     194,689  
                
 Operating expenses:           
  Selling and marketing    17,963     9,926     17,642     57,361     36,919  
  General and administrative    41,654     30,046     39,456     167,109     100,944  
  Amortization of definite-lived intangibles    6,683     1,935     6,421     18,888     8,387  
  Restructuring charges    5,429     (7)    2,003     7,941     55  
  Impairment of long-lived assets    -      -      -      -      1,845  
  Gain on sale of asset    -      -      -      (2,504)    -   
   Total operating expenses    71,729     41,900     65,522     248,795     148,150  
                
 Operating income (loss)    36,541     26,575     23,596     61,342     46,539  
                
 Interest expense    (20,208)    (5,691)    (21,002)    (59,753)    (23,830) 
 Loss on extinguishment of debt    -      -      -      (802)    (506) 
 Other, net     3,925     1,620     3,998     8,189     88  
                
 Income (loss) before income taxes    20,258     22,504     6,592     8,976     22,291  
 Income tax (provision) benefit     (10,601)    (8,566)    (8,730)    (34,594)    (7,598) 
                
 Net income (loss) $  9,657  $  13,938  $  (2,138) $  (25,618) $  14,693  
                
 Net income attributable to noncontrolling interest    (136)    -      (99)    (264)    -   
 Net income (loss) attributable to stockholders $  9,521  $  13,938  $  (2,237) $  (25,882) $  14,693  
                
 Earnings (loss) per share attributable to stockholders:           
  Basic  $  0.10  $  0.17  $  (0.02) $  (0.28) $  0.18  
  Diluted  $  0.09  $  0.17  $  (0.02) $  (0.28) $  0.18  
                
 Weighted-average shares used in computing per share amounts:           
  Basic     99,134     83,345     99,128     92,675     83,238  
  Diluted     126,329     84,205     99,128     92,675     83,941  
                
                
 Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share for the quarter ended Q4 2015  
                
 Net income attributable to stockholders $  9,521          
  Add back items: interest expense, net of tax    2,009          
 Adjusted net income attributable to stockholders $  11,530          
 Weighted-average shares outstanding    99,134          
 Dilutive effect of convertible debt    25,940          
 Dilutive effect of performance-based stock units, restricted stock units and stock options    1,255          
 Diluted shares    126,329          
 Earnings per share attributable to stockholders:           
  Basic  $  0.10          
  Diluted  $  0.09          
                
                
SELECTED BALANCE SHEET DATA            
      December 28, 2015 December 29, 2014       
 Cash and cash equivalents, including restricted cash $  262,630  $  279,042        
 Accounts and notes receivable, net    454,001     307,933        
 Inventories     268,923     145,187        
 Total current assets    1,022,520     798,123        
 Property, plant and equipment, net    1,103,067     754,718        
 Other non-current assets    545,717     48,448        
 Total assets    2,671,304     1,601,289        
                
 Short-term debt, including current portion of long-term debt $  157,375  $  128,045        
 Accounts payable    347,916     217,326        
 Total current liabilities    744,994     496,012        
 Debt, net of discount    1,044,582     374,642        
 Total long-term liabilities    1,099,641     389,813        
 Total equity    826,669     715,464        
 Total liabilities and equity    2,671,304     1,601,289        
                
SUPPLEMENTAL DATA           
      Fourth Quarter Third Quarter Full Year 
       2015   2014   2015   2015   2014  
 Gross margin  16.2%  17.5%  13.7%  14.8%  14.7% 
 Operating margin  5.5%  6.8%  3.6%  2.9%  3.5% 
                
 End Market Breakdown:           
      Fourth Quarter Third Quarter     
       2015   2014   2015      
                
  Aerospace/Defense  13%  14%  14%     
  Automotive  18%  3%  17%     
  Cellular Phone  18%  35%  16%     
  Computing/Storage/Peripherals  12%  10%  12%     
  Medical/Industrial/Instrumentation  13%  8%  14%     
  Networking/Communications  23%  27%  25%     
  Other   3%  3%  2%     
                
 Stock-based Compensation:           
      Fourth Quarter Third Quarter     
       2015   2014   2015      
  Amount included in:           
   Cost of goods sold $  327  $  197  $  322      
   Selling and marketing    301     263     294      
   General and administrative    2,007     1,287     2,056      
   Total stock-based compensation expense $  2,635  $  1,747  $  2,672      
                
                
 Operating Segment Data:           
      Fourth Quarter Third Quarter     
   Net sales:   2015   2014   2015      
   PCB   $  611,045  $  372,465  $  604,771      
   E-M Solutions     61,021     19,073     49,658      
   Corporate     -      -      -       
    Total sales     672,066     391,538     654,429      
   Inter-segment sales     (3,192)    (626)    (2,424)     
    Total net sales  $  668,874  $  390,912  $  652,005      
                
   Operating segment income:            
   PCB   $  66,320  $  37,236  $  52,191      
   E-M Solutions     2,612     744     (1,729)     
   Corporate     (25,708)    (9,470)    (20,445)     
    Total operating segment income     43,224     28,510     30,017      
   Amortization of definite-lived intangibles     (6,683)    (1,935)    (6,421)     
    Total operating income     36,541     26,575     23,596      
   Total other expense     (16,283)    (4,071)    (17,004)     
   Income before income taxes  $  20,258  $  22,504  $  6,592      
                
RECONCILIATIONS1           
      Fourth Quarter Third Quarter Full Year 
       2015   2014   2015   2015   2014  
 Non-GAAP gross profit reconciliation2:           
  GAAP gross profit $  108,270  $  68,475  $  89,118  $  310,137  $  194,689  
  Add back item:           
   Inventory markup and PP&E step up    598     -      8,214     16,220     -   
   Stock-based compensation    327     197     322     1,117     866  
  Non-GAAP gross profit $  109,195  $  68,672  $  97,654  $  327,474  $  195,555  
  Non-GAAP gross margin  16.3%  17.6%  15.0%  15.6%  14.8% 
                
 Non-GAAP operating income reconciliation3:           
  GAAP operating income (loss) $  36,541  $  26,575  $  23,596  $  61,342  $  46,539  
  Add back items:           
   Amortization of definite-lived intangibles    6,683     1,935     6,421     18,888     8,387  
   Stock-based compensation    2,635     1,747     2,672     9,661     7,800  
   Gain on sale of asset    -      -      -      (2,504)    -   
   Acquisition-related costs    1,521     4,349     2,065     34,448     5,981  
   Inventory markup and PP&E step up    598     -      8,214     16,220     -   
   Impairments and restructuring charges    5,429     (7)    2,003     7,941     1,900  
  Non-GAAP operating income $  53,407  $  34,599  $  44,971  $  145,996  $  70,607  
  Non-GAAP operating margin  8.0%  8.9%  6.9%  7.0%  5.3% 
                
 Non-GAAP net income and EPS attributable to stockholders reconciliation4:           
  GAAP net income (loss) attributable to stockholders $  9,521  $  13,938  $  (2,237) $  (25,882) $  14,693  
  Add back items:           
   Amortization of definite-lived intangibles    6,683     1,935     6,421     18,888     8,387  
   Stock-based compensation    2,635     1,747     2,672     9,661     7,800  
   Non-cash interest expense    4,893     2,585     4,819     15,626     10,165  
   Gain on sale of asset    -      -      -      (2,504)    -   
   Acquisition-related costs    1,521     4,349     2,065     34,448     5,981  
   Inventory markup and PP&E step up    598     -      8,214     16,220     -   
   Impairments, restructuring and other charges    5,429     (7)    2,003     8,743     2,406  
   Income taxes    247     (1,332)    (122)    5,869     (10,121) 
  Non-GAAP net income attributable to stockholders $  31,527  $  23,215  $  23,835  $  81,069  $  39,311  
  Non-GAAP earnings per diluted share attributable to stockholders $  0.31  $  0.28  $  0.24  $  0.87  $  0.47  
                
 Non-GAAP diluted number of shares5:           
  Diluted shares    126,329     84,205     100,035     93,640     83,941  
  Dilutive effect of convertible debt    (25,940)    -     -     -     -  
  Non-GAAP diluted number of shares    100,389     84,205     100,035     93,640     83,941  
                
 Adjusted EBITDA reconciliation6:           
  GAAP net income (loss) $  9,657  $  13,938  $  (2,138) $  (25,618) $  14,693  
  Add back items:           
   Income tax provision (benefit)    10,601     8,566     8,730     34,594     7,598  
   Interest expense    20,208     5,691     21,002     59,753     23,830  
   Amortization of definite-lived intangibles    6,683     1,935     6,421     18,888     8,387  
   Depreciation expense    39,105     24,318     40,091     133,508     95,349  
   Stock-based compensation    2,635     1,747     2,672     9,661     7,800  
   Gain on sale of asset    -      -      -      (2,504)    -   
   Acquisition-related costs    1,521     4,349     2,065     34,448     5,981  
   Inventory markup    -      -      6,792     14,200     -   
   Impairments, restructuring and other charges    5,429     (7)    2,003     8,743     2,406  
  Adjusted EBITDA $  95,839  $  60,537  $  87,638  $  285,673  $  166,044  
  Adjusted EBITDA margin  14.3%  15.5%  13.4%  13.6%  12.5% 
                
 Free cash flow reconciliation:           
  Operating cash flow    139,829     52,407     14,735     237,462     129,810  
  Add back items:           
   Payment of accreted interest on convertible sr. notes    -      -      -      8,730     1,324  
   Payment of acquisition-related costs    1,522     2,123     6,610     36,210     2,123  
  Adjusted operating cash flow    141,351     54,530     21,345     282,402     133,257  
  Capital expenditures, net    (22,967)    (26,262)    (30,345)    (99,718)    (108,571) 
  Free cash flow $  118,384  $  28,268  $  (9,000) $  182,684  $  24,686  
                
 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 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, 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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