TTM Technologies, Inc. Reports Fiscal Fourth Quarter and 2020

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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