TTM Technologies, Inc. Reports Fiscal Fourth Quarter and 2020 Results

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 is not available without unreasonable effort and has not been provided.

- Tables Follow -

TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
              
      Fourth Quarter  Full Year
       2020  2019*   2020  2019*
              
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS         
              
 Net sales  $523,802  $535,715   $2,105,322  $2,133,210 
 Cost of goods sold  435,829   435,470    1,746,299   1,756,033 
              
 Gross profit    87,973       100,245         359,023       377,177  
                           
  Operating expenses:                  
    Selling and marketing     15,849       17,560         63,882       69,171  
    General and administrative     26,831       37,193         122,477       129,284  
    Research and development     4,604       4,367         19,770       17,937  
    Amortization of definite-lived intangibles     9,589       9,531         38,838       45,776  
    Restructuring charges     1,934       2,204         16,764       5,380  
    Impairment of goodwill     -       -         69,200       -  
      Total operating expenses     58,807       70,855         330,931       267,548  
                           
  Operating income     29,166       29,390         28,092       109,629  
                           
  Interest expense     (14,599 )     (19,976 )       (73,156 )     (82,087 )
  Other, net       (1,854 )     (1,741 )       (1,213 )     6,784  
                           
  Income (loss) from continuing operations before income taxes     12,713       7,673         (46,277 )     34,326  
  Income tax benefit (provision)     26,247       3,124         29,891       (2,405 )
                           
  Net income (loss) from continuing operations     38,960       10,797         (16,386 )     31,921  
  Income from discontinued operations, net of income taxes     -       14,462         193,921       9,380  
  Net income   $ 38,960     $ 25,259       $ 177,535     $ 41,301  
                           
  * Reclassified Research and development expenses as a separate line item from General and administrative expenses          
                           
  Earnings per share:                  
    Basic earnings (loss) per share from continuing operations   $ 0.36     $ 0.10       $ (0.15 )   $ 0.30  
    Basic earnings per share from discontinued operations     -       0.14         1.82       0.09  
      Basic earnings per share   $ 0.36     $ 0.24       $ 1.67     $ 0.39  
                           
    Diluted earnings (loss) per share from continuing operations   $ 0.34     $ 0.10       $ (0.15 )   $ 0.30  
    Diluted earnings per share from discontinued operations     -       0.14         1.82       0.09  
      Diluted earnings per share   $ 0.34     $ 0.24       $ 1.67     $ 0.39  
                           
                           
  Weighted-average shares used in computing per share amounts:                  
    Basic       106,755       105,502         106,366       105,195  
    Diluted     113,513       107,135         106,366       106,332  
                           
  Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:              
                           
  Weighted-average shares outstanding     106,755       105,502             105,195  
  Dilutive effect of convertible debt     5,193       -             -  
  Dilutive effect of performance-based stock units, restricted stock units & stock options     1,565       1,633             1,137  
  Diluted shares     113,513       107,135             106,332  
                           
SELECTED BALANCE SHEET DATA                  
            December 28, 2020   December 30, 2019          
  Cash and cash equivalents, including restricted cash   $ 451,565     $ 379,818            
  Accounts and notes receivable, net     381,105       503,598            
  Contract assets     273,256       254,600            
  Inventories     115,651       113,753            
  Current assets held for sale     -       67,572            
  Total current assets     1,248,758       1,342,684            
  Property, plant and equipment, net     650,435       678,201            
  Operating lease right of use asset     24,340       22,173            
  Non-current assets held for sale     -       425,597            
  Other non-current assets     972,411       1,092,278            
  Total assets     2,895,944       3,560,933            
                           
  Short-term debt, including current portion of long-term debt   $ -     $ 249,975            
  Accounts payable     327,102       329,866            
  Current liabilities held for sale     -       185,391            
  Total current liabilities     518,046       946,666            
  Debt, net of discount     842,853       1,225,962            
  Non-current liabilities held for sale     -       1,530            
  Total long-term liabilities     933,889       1,335,230            
  Total equity     1,444,009       1,279,037            
  Total liabilities and equity     2,895,944       3,560,933            
                           
SUPPLEMENTAL DATA                  
            Fourth Quarter     Full Year
              2020       2019         2020       2019  
  Gross margin     16.8 %     18.7 %       17.1 %     17.7 %
  Operating margin     5.6 %     5.5 %       1.3 %     5.1 %
                           
  Stock-based Compensation:                  
            Fourth Quarter          
              2020       2019            
    Amount included in:                  
      Cost of goods sold   $ 1,246     $ 938            
      Selling and marketing     620       479            
      General and administrative     2,211       3,147            
      Research and development     35       62            
      Total stock-based compensation expense   $ 4,112     $ 4,626            
                           
                           
  Operating Segment Data:                  
            Fourth Quarter          
    Net sales:     2020       2019            
    PCB     $ 475,614     $ 477,799            
    RF&S       11,382       10,591            
    E-M Solutions     36,806       47,325            
      Total net sales   $ 523,802     $ 535,715            
                           
    Operating segment income:                  
    PCB     $ 62,621     $ 69,184            
    RF&S       3,209       3,552            
    E-M Solutions     41       1,841            
    Corporate     (25,732 )     (34,373 )          
      Total operating segment income     40,139       40,204            
    Amortization of definite-lived intangibles     (10,973 )     (10,814 )          
      Total operating income     29,166       29,390            
    Total other expense     (16,453 )     (21,717 )          
    Income from continuing operations before income taxes   $ 12,713     $ 7,673            
                           
RECONCILIATIONS 1                  
                           
            Fourth Quarter     Full Year
              2020       2019         2020       2019  
                           
  Non-GAAP gross profit reconciliation 2 :                  
    GAAP gross profit from continuing operations   $ 87,973     $ 100,245       $ 359,023     $ 377,177  
    Add back item:                  
      Amortization of definite-lived intangibles     1,384       1,283         5,535       4,822  
      Accelerated depreciation     899       -         5,835       -  
      Stock-based compensation     1,246       938         3,889       3,148  
    Non-GAAP gross profit   $ 91,502     $ 102,466       $ 374,282     $ 385,147  
    Non-GAAP gross margin     17.5 %     19.1 %       17.8 %     18.1 %
                           
  Non-GAAP operating income reconciliation 3 :                  
    GAAP operating income from continuing operations   $ 29,166     $ 29,390       $ 28,092     $ 109,629  
    Add back items:                  
      Amortization of definite-lived intangibles     10,973       10,814         44,373       50,598  
      Accelerated depreciation     1,057       -         6,751       -  
      Stock-based compensation     4,112       4,626         16,073       16,816  
      (Gain) on sale of assets     (97 )     (66 )       (97 )     (66 )
      Impairments, restructuring, acquisition-related, and other charges     2,098       6,521         86,237       12,282  
    Non-GAAP operating income   $ 47,309     $ 51,285       $ 181,429     $ 189,259  
    Non-GAAP operating margin     9.0 %     9.6 %       8.6 %     8.9 %
                           
  Non-GAAP net income and EPS reconciliation 4 :                  
    GAAP net income (loss) from continuing operations   $ 38,960     $ 10,797       $ (16,386 )   $ 31,921  
    Add back items:                  
      Amortization of definite-lived intangibles     10,973       10,814         44,373       50,598  
      Accelerated depreciation     1,057       -         6,751       -  
      Stock-based compensation     4,112       4,626         16,073       16,816  
      Non-cash interest expense     2,962       3,501         17,451       14,288  
      (Gain) on sale of assets     (119 )     (186 )       (825 )     (3,743 )
      Impairments, restructuring, acquisition-related, and other charges     2,098       6,521         86,237       12,282  
      Income taxes 5     (19,800 )     (8,610 )       (36,988 )     (15,046 )
    Non-GAAP net income   $ 40,243     $ 27,463       $ 116,686     $ 107,116  
    Non-GAAP earnings per diluted share   $ 0.37     $ 0.26       $ 1.10     $ 1.01  
                           
  Non-GAAP diluted number of shares:                  
    Diluted shares     113,513       107,135         106,366       106,332  
    Dilutive effect of convertible debt     (5,193 )     -         -       -  
    Non-GAAP diluted number of shares     108,320       107,135         106,366       106,332  
                           
  Adjusted EBITDA reconciliation 6 :                  
    GAAP net income (loss) from continuing operations   $ 38,960     $ 10,797       $ (16,386 )   $ 31,921  
    Add back items:                  
      Income tax (benefit) provision     (26,247 )     (3,124 )       (29,891 )     2,405  
      Interest expense     14,599       19,976         73,156       82,087  
      Amortization of definite-lived intangibles     10,973       10,814         44,373       50,598  
      Depreciation expense     23,775       23,413         99,572       93,370  
      Stock-based compensation     4,112       4,626         16,073       16,816  
      (Gain) on sale of assets     (119 )     (186 )       (825 )     (3,743 )
      Impairments, restructuring, acquisition-related, and other charges     2,098       6,521         86,237       12,282  
    Adjusted EBITDA   $ 68,151     $ 72,837       $ 272,309     $ 285,736  
    Adjusted EBITDA margin     13.0 %     13.6 %       12.9 %     13.4 %
                           
  Free cash flow reconciliation, including Mobility:                  
    Operating cash flow   $ 55,490     $ 130,148       $ 287,176     $ 311,937  
    Capital expenditures, net     (18,663 )     (46,982 )       (102,551 )     (135,972 )
    Free cash flow   $ 36,827     $ 83,166       $ 184,625     $ 175,965  
                           
                           
  1 This 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.
                           
                           
  2 Non-GAAP gross profit and gross margin measures exclude amortization of intangibles, accelerated depreciation due to restructuring of two E-M Solutions plants, and stock-based compensation expense.
                           
  3 Non-GAAP operating income and operating margin measures exclude amortization of intangibles, accelerated depreciation due to restructuring of two E-M Solutions plants, stock-based compensation expense, gain on sale of assets, impairment of goodwill, acquisition-related costs, restructuring and other charges.
                           
  4 This 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 due to restructuring of two E-M Solutions plants, stock-based compensation expense, non-cash interest expense on debt (before consideration of capitalized interest), gain on sale of assets, impairment of goodwill, acquisition-related costs, 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 Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate.
                           
                           
  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, impairment of goodwill, acquisition-related costs, 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.
   



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