TTM Technologies, Inc. Reports Fiscal Fourth Quarter and Fiscal

TTM Technologies, Inc. Reports Fiscal Fourth Quarter and Fiscal 2017 Results

Contact:
Sameer Desai,
Senior Director, Corporate Development & Investor Relations
Sameer.desai@ttmtech.com
714-327-3050

- Tables Follow -

TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)


	Fourth Quarter						Third Quarter			Full Year
	2017			2016			2017			2017			2016

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

Net sales	$	739,349		$	706,534		$	666,814		$	2,658,592		$	2,533,359
Cost of goods sold		607,488			573,689			569,980			2,229,011			2,109,744

Gross profit		131,861			132,845			96,834			429,581			423,615

Operating expenses:
Selling and marketing		17,081			16,848			16,269			65,856			66,366
General and administrative		37,764			38,998			30,018			128,489			148,719
Amortization of definite-lived intangibles		5,907			6,407			5,905			23,634			24,252
Restructuring charges		65			946			100			1,190			8,951
Impairment of long-lived assets		-			-			-			-			3,346
(Gain)/loss on sale of assets		-			-			452			(2,348	)		(1,472	)
Total operating expenses		60,817			63,199			52,744			216,821			250,162

Operating income		71,044			69,646			44,090			212,760			173,453

Interest expense		(13,782	)		(15,267	)		(13,598	)		(53,898	)		(76,008	)
Loss on extinguishment of debt		-			(47,767	)		(768	)		(769	)		(47,767	)
Other, net		(3,617	)		8,994			(6,984	)		(18,135	)		17,324

Income before income taxes		53,645			15,606			22,740			139,958			67,002
Income tax provision		(4,329	)		(17,416	)		(1,205	)		(15,231	)		(31,427	)

Net income (loss)	$	49,316		$	(1,810	)	$	21,535		$	124,727		$	35,575

Net income attributable to noncontrolling interest		(105	)		(195	)		(82	)		(513	)		(714	)
Net income (loss) attributable to stockholders	$	49,211		$	(2,005	)	$	21,453		$	124,214		$	34,861

Earnings (loss) per share attributable to stockholders:
Basic	$	0.48		$	(0.02	)	$	0.21		$	1.22		$	0.35
Diluted	$	0.40		$	(0.02	)	$	0.19		$	1.04		$	0.34

Weighted-average shares used in computing per share amounts:
Basic		101,817			100,365			101,814			101,580			100,099
Diluted		133,170			100,365			131,596			132,476			101,482


Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share:

Net income attributable to stockholders	$	49,211					$	21,453		$	124,214
Add back items: interest expense, net of tax		3,508						3,469			13,803
Adjusted net income attributable to stockholders	$	52,719					$	24,922		$	138,017
Weighted-average shares outstanding		101,817						101,814			101,580
Dilutive effect of convertible debt		25,939						25,939			25,940
Dilutive effect of warrants		2,938						2,151			2,799
Dilutive effect of performance-based stock units, restricted stock units & stock options		2,476						1,692			2,157
Diluted shares		133,170						131,596			132,476
Earnings per share attributable to stockholders:
Basic	$	0.48					$	0.21		$	1.22
Diluted	$	0.40					$	0.19		$	1.04


SELECTED BALANCE SHEET DATA
	January 1, 2018			January 2, 2017
Cash and cash equivalents, including restricted cash	$	409,326		$	256,277
Accounts and notes receivable, net		483,903			432,788
Inventories		294,588			269,212
Total current assets		1,221,307			1,012,841
Property, plant and equipment, net		1,056,845			966,638
Other non-current assets		503,730			520,597
Total assets		2,781,882			2,500,076

Short-term debt, including current portion of long-term debt	$	4,578		$	110,652
Accounts payable		438,990			371,610
Total current liabilities		720,356			689,065
Debt, net of discount		975,479			909,030
Total long-term liabilities		1,050,146			981,886
Total equity		1,011,380			829,125
Total liabilities and equity		2,781,882			2,500,076

SUPPLEMENTAL DATA
	Fourth Quarter						Third Quarter			Full Year
	2017			2016			2017			2017			2016
Gross margin		17.8	%		18.8	%		14.5	%		16.2	%		16.7	%
Operating margin		9.6	%		9.9	%		6.6	%		8.0	%		6.8	%

End Market Breakdown:
	Fourth Quarter						Third Quarter
	2017			2016			2017

Aerospace/Defense		15	%		14	%		16	%
Automotive		18	%		19	%		20	%
Cellular Phone		27	%		19	%		17	%
Computing/Storage/Peripherals		10	%		12	%		14	%
Medical/Industrial/Instrumentation		12	%		13	%		14	%
Networking/Communications		17	%		21	%		17	%
Other		1	%		2	%		2	%

Stock-based Compensation:
	Fourth Quarter						Third Quarter
	2017			2016			2017
Amount included in:
Cost of goods sold	$	613		$	469		$	606
Selling and marketing	$	450			305			369
General and administrative		3,921			2,426			3,703
Total stock-based compensation expense	$	4,984		$	3,200		$	4,678


Operating Segment Data:
	Fourth Quarter						Third Quarter
Net sales:	2017			2016			2017
PCB	$	688,572		$	654,379		$	609,742
E-M Solutions		54,899			55,332			60,620
Corporate		-			-			-
Total sales		743,471			709,711			670,362
Inter-segment sales		(4,122	)		(3,177	)		(3,548	)
Total net sales	$	739,349		$	706,534		$	666,814

Operating segment income:
PCB	$	100,352		$	95,208		$	70,443
E-M Solutions		2,799			3,029			2,870
Corporate		(26,200	)		(22,184	)		(23,318	)
Total operating segment income		76,951			76,053			49,995
Amortization of definite-lived intangibles		(5,907	)		(6,407	)		(5,905	)
Total operating income		71,044			69,646			44,090
Total other expense		(17,399	)		(54,040	)		(21,350	)
Income before income taxes	$	53,645		$	15,606		$	22,740

RECONCILIATIONS ¹
	Fourth Quarter						Third Quarter			Full Year
	2017			2016			2017			2017			2016
Non-GAAP gross profit reconciliation ² :
GAAP gross profit	$	131,861		$	132,845		$	96,834		$	429,581		$	423,615
Add back item:
Stock-based compensation		613			469			606			2,252			1,630
Non-GAAP gross profit	$	132,474		$	133,314		$	97,440		$	431,833		$	425,245
Non-GAAP gross margin		17.9	%		18.9	%		14.6	%		16.2	%		16.8	%

Non-GAAP operating income reconciliation ³ :
GAAP operating income	$	71,044		$	69,646		$	44,090		$	212,760		$	173,453
Add back items:
Amortization of definite-lived intangibles		5,907			6,407			5,905			23,634			24,252
Stock-based compensation		4,984			3,200			4,678			18,290			11,090
(Gain)/loss on sale of assets		-			-			452			(2,348	)		(1,472	)
Impairments, restructuring, acquisition-related, and other charges		2,331			1,725			100			3,556			14,569
Non-GAAP operating income	$	84,266		$	80,978		$	55,225		$	255,892		$	221,892
Non-GAAP operating margin		11.4	%		11.5	%		8.3	%		9.6	%		8.8	%

Non-GAAP net income and EPS attributable to stockholders reconciliation ⁴ :
GAAP net income (loss) attributable to stockholders	$	49,211		$	(2,005	)	$	21,453		$	124,214		$	34,861
Add back items:
Amortization of definite-lived intangibles		5,907			6,407			5,905			23,634			24,252
Stock-based compensation		4,984			3,200			4,678			18,290			11,090
Non-cash interest expense		3,017			2,697			2,699			11,069			19,180
(Gain)/loss on sale of assets		-			-			452			(2,348	)		(1,472	)
Loss on extinguishment of debt		-			47,767			768			769			47,767
Impairments, restructuring, acquisition-related, and other charges		2,331			1,725			100			3,556			14,569
Income taxes ⁵		(4,204	)		49			(2,643	)		(12,059	)		(7,987	)
Non-GAAP net income attributable to stockholders	$	61,246		$	59,840		$	33,412		$	167,125		$	142,260
Non-GAAP earnings per diluted share attributable to stockholders	$	0.57		$	0.58		$	0.32		$	1.57		$	1.40

Non-GAAP diluted number of shares ⁶ :
Diluted shares		133,170			102,563			131,596			132,476			101,482
Dilutive effect of convertible debt		(25,939	)		-			(25,939	)		(25,940	)		-
Non-GAAP diluted number of shares		107,231			102,563			105,657			106,536			101,482

Adjusted EBITDA reconciliation ⁷ :
GAAP net income (loss)	$	49,316		$	(1,810	)	$	21,535		$	124,727		$	35,575
Add back items:
Income tax provision (benefit)		4,329			17,416			1,205			15,231			31,427
Interest expense		13,782			15,267			13,598			53,898			76,008
Amortization of definite-lived intangibles		5,907			6,407			5,905			23,634			24,252
Depreciation expense		41,090			38,539			37,496			150,809			156,229
Stock-based compensation		4,984			3,200			4,678			18,290			11,090
(Gain)/loss on sale of assets		-			-			452			(2,348	)		(1,472	)
Loss on extinguishment of debt		-			47,767			768			769			47,767
Impairments, restructuring, acquisition-related, and other charges		2,331			1,725			100			3,556			14,569
Adjusted EBITDA	$	121,739		$	128,511		$	85,737		$	388,566		$	395,445
Adjusted EBITDA margin		16.5	%		18.2	%		12.9	%		14.6	%		15.6	%

Free cash flow reconciliation:
Operating cash flow		152,691			97,650			71,366			332,755			298,336
Capital expenditures, net		(32,209	)		(20,501	)		(22,877	)		(124,090	)		(81,498	)
Free cash flow	$	120,482		$	77,149		$	48,489		$	208,665		$	216,838

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

⁶ Non-GAAP diluted number of shares used in computing non-GAAP earnings per share attributable to stockholders excludes the dilutive effect of convertible debt.

⁷ 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.

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