TTM Technologies, Inc. Reports Fiscal Second Quarter 2023 Results

Источник: Nasdaq GlobeNewswire / 02 авг 2023 07:30:01 America/Chicago

SANTA ANA, Calif., Aug. 02, 2023 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ: TTMI), a leading global manufacturer of technology solutions including mission systems, radio frequency (“RF”) components and RF microwave/microelectronic assemblies, and printed circuit boards (“PCB”), today reported results for the second quarter fiscal 2023, which ended on July 3, 2023.

Second Quarter 2023 Highlights

Net sales were $546.5 million
GAAP net income of $6.8 million, or $0.07 per diluted share
Non-GAAP net income was $33.0 million, or $0.32 per diluted share
Completed refinancing of Term Loan B, US Asset Backed Revolving Credit Facility (“ABL”), and Asia ABL facility
Completed shutdown of Hong Kong manufacturing facility

Second Quarter 2023 GAAP Financial Results

Net sales for the second quarter of 2023 were $546.5 million, compared to $625.6 million in the second quarter of 2022.

GAAP operating income for the second quarter of 2023 was $21.4 million, compared to GAAP operating income of $37.2 million in the second quarter of 2022.

GAAP net income for the second quarter of 2023 was $6.8 million, or $0.07 per diluted share, compared to GAAP net income of $27.8 million, or $0.27 per diluted share in the second quarter of 2022.

Second Quarter 2023 Non-GAAP Financial Results

On a non-GAAP basis, net income for the second quarter of 2023 was $33.0 million, or $0.32 per diluted share. This compares to non-GAAP net income of $55.3 million, or $0.54 per diluted share, for the second quarter of 2022.

Adjusted EBITDA in the second quarter of 2023 was $74.7 million, or 13.7% of sales compared to adjusted EBITDA of $96.9 million, or 15.5% of sales for the second quarter of 2022.

“Revenues were within the guided range due to strength in our Aerospace and Defense and Data Center Computing end markets,” said Tom Edman, CEO of TTM. “Non-GAAP EPS was well above the guided range as a result of improved execution in our North America region. In addition, we successfully completed the refinancing of our Term Loan B, US ABL, and Asia ABL facilities, resulting in a conservative capital structure with no significant maturities before 2028 and a net leverage ratio of 1.5x,” concluded Mr. Edman.

Business Outlook

For the third quarter of 2023 , TTM estimates that revenues will be in the range of $550 million to $590 million, and non-GAAP net income will be in the range of $0.25 to $0.31 per diluted share.

With respect to the Company’s outlook for non-GAAP net income per diluted share, we are unable to predict with reasonable certainty or without unreasonable effort certain items that may affect a comparable measure calculated and presented in accordance with GAAP. Our expected non-GAAP net income per diluted share excludes primarily the future impact of restructuring actions, impairment charges, unusual gains and losses, and tax adjustments. These reconciling items are highly variable and difficult to predict due to various factors outside of management’s control and could have a material impact on our future period net income per diluted share calculated and presented in accordance with GAAP. Accordingly, a reconciliation of non-GAAP net income per diluted share to a comparable measure calculated and presented in accordance with GAAP has not been provided because the Company is unable to provide such reconciliation without unreasonable effort. For the same reasons, TTM is unable to address the probable significance of the information.

Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss second quarter 2023 results and the third quarter 2023 outlook on Wednesday, August 2nd, 2023, at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time). The conference call will include forward-looking statements.

Access to the conference call is available by clicking on the registration link TTM Technologies, Inc. second quarter fiscal year 2023 conference call. Registering participants will receive dial in information and a unique PIN to join the call. Participants can register at any time up to the start of the conference call. The conference call also will be webcast on TTM’s website at TTM Technologies, Inc. second quarter fiscal year 2023 webcast.

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 TTM Technologies, Inc. second quarter fiscal year 2023 webcast.

About TTM
TTM Technologies, Inc. is a leading global manufacturer of technology solutions including mission systems, RF components/RF microwave/microelectronic assemblies, quick-turn and technologically advanced PCBs. 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
The preliminary financial results included in this press release represent the most current information available to management. The company’s actual results when disclosed in its Form 10-Q may differ from these preliminary results as a result of the completion of the company’s financial closing procedures, final adjustments, completion of the review by the company’s independent registered accounting firm, and other developments that may arise between now and the disclosure of the final results. 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 impact of COVID-19, 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
To supplement our consolidated condensed financial statements presented on a GAAP basis, 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 reconciliations below 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 Two Quarters
		2023			2022			2023			2022

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

	Net sales	$	546,509		$	625,550		$	1,090,946		$	1,206,810
	Cost of goods sold		448,002			508,477			906,316			998,814

	Gross profit		98,507			117,073			184,630			207,996

	Operating expenses:
	Selling and marketing		18,180			17,557			39,482			35,829
	General and administrative		37,840			48,350			72,913			81,120
	Research and development		6,424			5,233			13,509			10,788
	Amortization of definite-lived intangibles		3,852			8,275			25,816			16,549
	Restructuring charges		10,803			456			14,970			640
	Total operating expenses		77,099			79,871			166,690			144,926

	Operating income		21,408			37,202			17,940			63,070

	Interest expense		(11,843	)		(10,711	)		(24,650	)		(22,072	)
	Loss on extinguishment of debt		(1,154	)		-			(1,154	)		-
	(Loss) gain on sale of subsidiary		(69	)		-			1,270			-
	Other, net		5,068			7,638			6,266			9,608

	Income (loss) before income taxes		13,410			34,129			(328	)		50,606
	Income tax (provision) benefit		(6,586	)		(6,337	)		1,338			(5,568	)

	Net income	$	6,824		$	27,792		$	1,010		$	45,038

	Earnings per share:
	Basic	$	0.07		$	0.27		$	0.01		$	0.44
	Diluted		0.07			0.27			0.01			0.43

	Weighted-average shares used in computing per share amounts:
	Basic		102,759			101,270			102,570			101,941
	Diluted		104,820			103,221			104,575			103,762

	Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:
	Weighted-average shares outstanding		102,759			101,270			102,570			101,941
	Dilutive effect of warrants		-			-			-			3
	Dilutive effect of performance-based stock units, restricted stock units & stock options		2,061			1,951			2,005			1,818
	Diluted shares		104,820			103,221			104,575			103,762

SELECTED BALANCE SHEET DATA
		July 3, 2023		January 2, 2023
	Cash and cash equivalents, including restricted cash	$	398,716	$	402,749
	Accounts and notes receivable, net		386,903		473,225
	Receivable from sale of SH E-MS property		6,595		69,240
	Contract assets		312,529		335,788
	Inventories		186,765		170,639
	Total current assets		1,336,054		1,493,056
	Property, plant and equipment, net		709,577		724,204
	Operating lease right of use asset		14,041		18,862
	Other non-current assets		1,088,819		1,087,482
	Total assets		3,148,491		3,323,604

	Short-term debt, including current portion of long-term debt	$	3,500	$	50,000
	Accounts payable		306,298		361,788
	Total current liabilities		602,384		761,325
	Debt, net of discount		864,413		879,407
	Total long-term liabilities		1,001,798		1,026,700
	Total equity		1,544,309		1,535,579
	Total liabilities and equity		3,148,491		3,323,604


SUPPLEMENTAL DATA		Second Quarter						First Two Quarters
		2023			2022			2023			2022
	Gross margin		18.0	%		18.7	%		16.9	%		17.2	%
	Operating margin		3.9	%		5.9	%		1.6	%		5.2	%

	End Market Breakdown:
		Second Quarter
		2023			2022
	Aerospace and Defense		47	%		30	%
	Automotive		17	%		18	%
	Data Center Computing		12	%		17	%
	Medical/Industrial/Instrumentation		16	%		21	%
	Networking		8	%		14	%

	Stock-based Compensation:
		Second Quarter
	Amount included in:	2023			2022
	Cost of goods sold	$	1,497		$	1,172
	Selling and marketing		698			620
	General and administrative		2,677			2,396
	Research and development		249			239
	Total stock-based compensation expense	$	5,121		$	4,427

	Operating Segment Data:
		Second Quarter
	Net sales:	2023			2022
	PCB	$	536,531		$	609,429
	RF&S Components		9,978			16,121
	Total net sales	$	546,509		$	625,550

	Operating segment income:
	PCB	$	58,479		$	91,908
	RF&S Components		3,202			6,678
	Corporate & Other		(33,998	)		(51,726	)
	Total operating segment income		27,683			46,860
	Amortization of definite-lived intangibles		(6,275	)		(9,658	)
	Total operating income		21,408			37,202
	Total other expense		(7,998	)		(3,073	)
	Income before income taxes	$	13,410		$	34,129


RECONCILIATIONS¹		Second Quarter						First Two Quarters
		2023			2022			2023			2022

	Non-GAAP gross profit reconciliation²:
	GAAP gross profit	$	98,507		$	117,073		$	184,630		$	207,996
	Add back item:
	Amortization of definite-lived intangibles		2,423			1,383			8,231			2,767
	Accelerated depreciation associated with plant closures		1,416			105			2,649			105
	Stock-based compensation		1,497			1,172			3,159			2,448
	Unrealized loss (gain) on commodity hedge		867			5,210			(1,261	)		3,807
	Purchase accounting related inventory markup		164			-			327			-
	Non-GAAP gross profit	$	104,874		$	124,943		$	197,735		$	217,123
	Non-GAAP gross margin		19.2%			20.0%			18.1%			18.0%

	Non-GAAP operating income reconciliation³:
	GAAP operating income	$	21,408		$	37,202		$	17,940		$	63,070
	Add back items:
	Amortization of definite-lived intangibles		6,275			9,658			34,047			19,316
	Accelerated depreciation associated with plant closures		1,373			105			2,649			105
	Stock-based compensation		5,121			4,427			10,361			8,661
	Gain on sale of assets		(42	)		-			(215	)		-
	Unrealized loss (gain) on commodity hedge		867			5,210			(1,261	)		3,807
	Purchase accounting related inventory markup		164			-			327			-
	Restructuring, acquisition-related and other charges		10,924			11,012			15,592			12,150
	Non-GAAP operating income	$	46,090		$	67,614		$	79,440		$	107,109
	Non-GAAP operating margin		8.4%			10.8%			7.3%			8.9%

	Non-GAAP net income and EPS reconciliation⁴:
	GAAP net income	$	6,824		$	27,792		$	1,010		$	45,038
	Add back items:
	Amortization of definite-lived intangibles		6,275			9,658			34,047			19,316
	Accelerated depreciation associated with plant closures		1,373			105			2,649			105
	Stock-based compensation		5,121			4,427			10,361			8,661
	Non-cash interest expense		497			537			1,224			1,069
	Gain on sale of assets		(42	)		-			(215	)		(827	)
	Change in fair value of warrant liabilities		-			-			-			(99	)
	Loss on extinguishment of debt		1,154			-			1,154			-
	Loss (gain) on sale of subsidiary		69			-			(1,270	)		-
	Unrealized loss (gain) on commodity hedge		867			5,210			(1,261	)		3,807
	Purchase accounting related inventory markup		164			-			327			-
	Restructuring, acquisition-related and other charges		10,924			11,012			15,592			12,150
	Income taxes⁵		(182	)		(3,424	)		(11,926	)		(8,650	)
	Non-GAAP net income	$	33,044		$	55,317		$	51,692		$	80,570
	Non-GAAP earnings per diluted share	$	0.32		$	0.54		$	0.49		$	0.78

	Adjusted EBITDA reconciliation⁶:
	GAAP net income	$	6,824		$	27,792		$	1,010		$	45,038
	Add back items:
	Income tax provision (benefit)		6,586			6,337			(1,338	)		5,568
	Interest expense		11,843			10,711			24,650			22,072
	Amortization of definite-lived intangibles		6,275			9,658			34,047			19,316
	Depreciation expense		24,937			21,789			50,190			43,289
	Stock-based compensation		5,121			4,427			10,361			8,661
	Gain on sale of assets		(42	)		-			(215	)		(827	)
	Change in fair value of warrant liabilities		-			-			-			(99	)
	Loss on extinguishment of debt		1,154			-			1,154			-
	Loss (gain) on sale of subsidiary		69			-			(1,270	)		-
	Unrealized loss (gain) on commodity hedge		867			5,210			(1,261	)		3,807
	Purchase accounting related inventory markup		164			-			327			-
	Restructuring, acquisition-related and other charges		10,924			11,012			15,592			12,150
	Adjusted EBITDA	$	74,722		$	96,936		$	133,247		$	158,975
	Adjusted EBITDA margin		13.7%			15.5%			12.2%			13.2%

	Free cash flow reconciliation:
	Operating cash flow	$	25,884		$	79,317		$	80,962		$	115,308
	Capital expenditures, net		(49,417	)		(26,394	)		(80,124	)		(49,814	)
	Free cash flow	$	(23,533	)	$	52,923		$	838		$	65,494

¹This information provides a reconciliation of non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP EPS, and adjusted EBITDA to the financial information in our consolidated condensed statements of operations.

²Non-GAAP gross profit and gross margin measures exclude amortization of intangibles, accelerated depreciation associated with plant closures, stock-based compensation expense, unrealized loss (gain) on commodity hedge, and purchase accounting related inventory markup.

³Non-GAAP operating income and operating margin measures exclude amortization of intangibles, accelerated depreciation associated with plant closures, stock-based compensation expense, gain on sale of assets, unrealized loss (gain) on commodity hedge, purchase accounting related inventory markup, restructuring, acquisition-related costs, and other charges.

⁴This information provides non-GAAP net income and non-GAAP EPS, which are non-GAAP financial measures. Management believes that both measures -- which add back amortization of intangibles, accelerated depreciation associated with plant closures, stock-based compensation expense, non-cash interest expense on debt (before consideration of capitalized interest), gain on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, loss (gain) on sale of subsidiary, unrealized loss (gain) on commodity hedge, purchase accounting related inventory markup, restructuring, acquisition-related costs, 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.

⁵Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate.

⁶Adjusted EBITDA is defined as earnings before income taxes, interest expense, amortization of intangibles, depreciation, stock-based compensation expense, gain on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, loss (gain) on sale of subsidiary, unrealized loss (gain) on commodity hedge, purchase accounting related inventory markup, restructuring, acquisition-related costs, 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,
Vice President, Corporate Development & Investor Relations
Sameer.desai@ttmtech.com
714-327-3050

TTM Technologies, Inc. Reports Fiscal Second Quarter 2023 Results

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