TTM Technologies, Inc. Reports Fiscal Fourth Quarter and 2021 Results

Source: Nasdaq GlobeNewswire / 09 Feb 2022 16:05:01 America/New_York

SANTA ANA, Calif., Feb. 09, 2022 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) and radio frequency (“RF”) components manufacturer, today reported results for the fourth quarter and fiscal 2021, which ended on January 3, 2022.

Fourth Quarter 2021 Highlights

Net sales were $598.1 million
GAAP net income of $8.4 million, or $0.08 per diluted share
Non-GAAP net income was $36.2 million, or $0.34 per diluted share
Operating cash flow of $62.4 million
Repurchased 2.2 million shares of common stock for $29.6 million at an average price of $13.47 per share

Fourth Quarter 2021 GAAP Financial Results
Net sales for the fourth quarter of 2021 were $598.1 million, compared to $523.8 million in the fourth quarter of 2020.

GAAP operating income for the fourth quarter of 2021 was $33.1 million. This compares to GAAP operating income of $29.2 million in the fourth quarter of 2020.

GAAP net income for the fourth quarter of 2021 was $8.4 million, or $0.08 per diluted share, compared to net income of $39.0 million, or $0.34 per diluted share in the fourth quarter of 2020.

Fourth Quarter 2021 Non-GAAP Financial Results
On a non-GAAP basis, net income for the fourth quarter of 2021 was $36.2 million, or $0.34 per diluted share. This compares to non-GAAP net income of $40.2 million, or $0.37 per diluted share, for the fourth quarter of 2020.

Adjusted EBITDA in the fourth quarter of 2021 was $70.4 million, or 11.8 percent of net sales, compared to adjusted EBITDA of $68.2 million, or 13.0% percent of net sales, for the fourth quarter of 2020.

“In the fourth quarter, TTM achieved revenues above the high end of guidance and non-GAAP earnings at the high end of the guided range. This outperformance was driven by strength in all of our commercial end markets, despite labor and production challenges in North America and tight supply conditions globally for certain raw materials,” said Tom Edman, CEO of TTM.

Full Year 2021 Financial Results¹
Net sales for fiscal year 2021 increased to $2.25 billion from $2.11 billion from continuing operations in fiscal year 2020, a 6.8% increase. Excluding the two E-MS facilities that were closed at the end of 2020, our revenues grew 10.9% for the year.

GAAP operating income for fiscal year 2021 was $126.0 million, an increase from GAAP operating income of $28.1 million from continuing operations in fiscal year 2020.

GAAP net income for fiscal year 2021 was $54.4 million, or $0.50 per diluted share, compared to GAAP net loss of $16.4 million from continuing operations, or ($0.15) per diluted share, for fiscal year 2020.

On a non-GAAP basis, net income for fiscal year 2021 was $138.0 million, or $1.28 per diluted share. This compares to fiscal year 2020 non-GAAP net income of $116.7 million from continuing operations, or $1.10 per diluted share.

Adjusted EBITDA for fiscal year 2021 was $275.6 million, or 12.3 percent of net sales, compared to $272.3 million from continuing operations, or 12.9 percent of net sales, for fiscal year 2020. Cash flow from operations for fiscal year 2021 was $176.6 million.

"Despite the headwinds from materials and labor inflation and availability, COVID-19 and the strengthening Chinese currency, we delivered solid results in 2021 with revenues growing 10.9% year on year excluding divested businesses," continued Edman. “Also in 2021, we generated $176.6 million in operating cash flow which enabled us to strengthen our balance sheet and return capital to our shareholders. For the year we repurchased 4.7 million shares for $64.6 million on our $100 million stock buyback program.”

Business Outlook
In the first quarter, we are seeing continued labor challenges along with normal seasonality associated with Chinese New Year and one less week in the quarter compared to the fourth quarter.

Taking these factors into consideration, TTM estimates that revenue for the first quarter of 2022 will be in the range of $540 million to $580 million, and non-GAAP net income will be in the range of $0.20 to $0.26 per diluted share.

Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss fourth quarter 2021 results and the first quarter 2022 outlook on Wednesday, February 9th, 2022 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call will include forward-looking statements.

Telephone access is available by dialing domestic 888-394-8218 or international 323-794-2588 (ID 1667874). 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 volume production of technologically advanced PCBs and backplane assemblies as well as a global designer and manufacturer of high-frequency radio frequency (RF) and microwave components and assemblies. 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-K 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
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.

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.

¹ In 2020, we completed the sale of the Mobility business so we are comparing 2021 results to 2020 continuing operations, which excludes the Mobility business. The E-MS business is still included in 2020 continuing operations.

- Tables Follow -

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


				Fourth Quarter						Full Year
					2021			2020			2021			2020

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

	Net sales			$	598,141		$	523,802		$	2,248,740		$	2,105,322
	Cost of goods sold				500,819			435,829			1,876,729			1,746,299

	Gross profit				97,322			87,973			372,011			359,023

	Operating expenses:
		Selling and marketing			16,271			15,849			63,016			63,882
		General and administrative			33,790			26,831			124,865			122,477
		Research and development			5,071			4,604			18,146			19,770
		Amortization of definite-lived intangibles			8,911			9,589			35,748			38,838
		Restructuring charges			211			1,934			4,245			16,764
		Impairment of goodwill			-			-			-			69,200
			Total operating expenses		64,254			58,807			246,020			330,931

	Operating income				33,068			29,166			125,991			28,092

	Interest expense				(11,860	)		(14,599	)		(45,475	)		(73,156	)
	Loss on extinguishment of debt				-			-			(15,217	)		-
	Other, net				(584	)		(1,854	)		4,754			(1,213	)

	Income (loss) from continuing operations before income taxes				20,624			12,713			70,053			(46,277	)
	Income tax (provision) benefit				(12,237	)		26,247			(15,639	)		29,891

	Net income (loss) from continuing operations				8,387			38,960			54,414			(16,386	)
	Income from discontinued operations, net of income taxes				-			-			-			193,921
	Net income			$	8,387		$	38,960		$	54,414		$	177,535


	Earnings (loss) per share:
		Basic earnings (loss) per share from continuing operations		$	0.08		$	0.36		$	0.51		$	(0.15	)
		Basic earnings per share from discontinued operations			-			-			-			1.82
			Basic earnings per share	$	0.08		$	0.36		$	0.51		$	1.67

		Diluted earnings (loss) per share from continuing operations		$	0.08		$	0.34		$	0.50		$	(0.15	)
		Diluted earnings per share from discontinued operations			-			-			-			1.82
			Diluted earnings per share	$	0.08		$	0.34		$	0.50		$	1.67



	Weighted-average shares used in computing per share amounts:
		Basic			104,186			106,755			106,314			106,366
		Diluted			105,769			113,513			108,153			106,366


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

	Weighted-average shares outstanding				104,186			106,755			106,314
	Dilutive effect of convertible debt				-			5,193			-
	Dilutive effect of warrants				-			-			200
	Dilutive effect of performance-based stock units, restricted stock units & stock options				1,583			1,565			1,639
	Diluted shares				105,769			113,513			108,153

SELECTED BALANCE SHEET DATA
				January 3, 2022			December 28, 2020
	Cash and cash equivalents, including restricted cash			$	537,678		$	451,565
	Accounts and notes receivable, net				386,347			381,105
	Contract assets				324,862			273,256
	Inventories				127,612			115,651
	Total current assets				1,407,413			1,248,758
	Property, plant and equipment, net				665,755			650,435
	Operating lease right of use asset				20,802			24,340
	Other non-current assets				931,577			972,411
	Total assets				3,025,547			2,895,944

	Accounts payable			$	361,484		$	327,102
	Total current liabilities				558,148			518,046
	Debt, net of discount				927,818			842,853
	Total long-term liabilities				1,011,982			933,889
	Total equity				1,455,417			1,444,009
	Total liabilities and equity				3,025,547			2,895,944

SUPPLEMENTAL DATA
				Fourth Quarter						Full Year
					2021			2020			2021			2020
	Gross margin				16.3	%		16.8	%		16.5	%		17.1	%
	Operating margin				5.5	%		5.6	%		5.6	%		1.3	%

	End Market Breakdown, excludes Mobility:
				Fourth Quarter
					2021			2020

		Aerospace/Defense			30	%		36	%
		Automotive			19	%		21	%
		Data Center Computing			15	%		13	%
		Medical/Industrial/Instrumentation			19	%		15	%
		Networking/Communications			16	%		15	%
		Other			1	%		0	%

	Stock-based Compensation:
				Fourth Quarter
					2021			2020
		Amount included in:
			Cost of goods sold	$	1,404		$	1,246
			Selling and marketing		721			620
			General and administrative		2,806			2,211
			Research and development		277			35
			Total stock-based compensation expense	$	5,208		$	4,112


	Operating Segment Data:
				Fourth Quarter
		Net sales:			2021			2020
		PCB		$	581,817		$	488,762
		RF&S Components			16,324			11,382
		Other¹			-			23,658
			Total net sales	$	598,141		$	523,802

		Operating segment income:
		PCB		$	70,731		$	63,188
		RF&S Components			6,906			3,209
		Corporate & Other¹			(34,168	)		(26,258	)
			Total operating segment income		43,469			40,139
		Amortization of definite-lived intangibles			(10,401	)		(10,973	)
			Total operating income		33,068			29,166
		Total other expense			(12,444	)		(16,453	)
		Income from continuing operations before income taxes		$	20,624		$	12,713

RECONCILIATIONS²

				Fourth Quarter						Full Year
					2021			2020			2021			2020
	Non-GAAP gross profit reconciliation³:
		GAAP gross profit from continuing operations		$	97,322		$	87,973		$	372,011		$	359,023
		Add back item:
			Amortization of definite-lived intangibles		1,490			1,384			5,641			5,535
			Accelerated depreciation		-			899			-			5,835
			Stock-based compensation		1,404			1,246			4,714			3,889
			Unrealized gain on commodity hedge		(362	)		-			(297	)		-
			Restructuring and other charges		7			-			261			-
		Non-GAAP gross profit		$	99,861		$	91,502		$	382,330		$	374,282
		Non-GAAP gross margin			16.7	%		17.5	%		17.0	%		17.8	%

	Non-GAAP operating income reconciliation⁴:
		GAAP operating income from continuing operations		$	33,068		$	29,166		$	125,991		$	28,092
		Add back items:
			Amortization of definite-lived intangibles		10,401			10,973			41,389			44,373
			Accelerated depreciation		-			1,057			-			6,751
			Stock-based compensation		5,208			4,112			17,711			16,073
			(Gain) on sale of assets		-			(97	)		(421	)		(97	)
			Unrealized gain on commodity hedge		(362	)		-			(297	)		-
			Impairments, restructuring, acquisition-related and other charges		800			2,098			5,350			86,237
		Non-GAAP operating income		$	49,115		$	47,309		$	189,723		$	181,429
		Non-GAAP operating margin			8.2	%		9.0	%		8.4	%		8.6	%

	Non-GAAP net income and EPS reconciliation⁵:
		GAAP net income (loss) from continuing operations		$	8,387		$	38,960		$	54,414		$	(16,386	)
		Add back items:
			Amortization of definite-lived intangibles		10,401			10,973			41,389			44,373
			Accelerated depreciation		-			1,057			-			6,751
			Stock-based compensation		5,208			4,112			17,711			16,073
			Non-cash interest expense		496			2,962			2,109			17,451
			(Gain) on sale of assets		-			(119	)		(991	)		(825	)
			Change in fair value of warrant liabilities		(373	)		-			(4,241	)		-
			Loss on extinguishment of debt		-			-			15,217			-
			Unrealized gain on commodity hedge		(362	)		-			(297	)		-
			Impairments, restructuring, acquisition-related and other charges		800			2,098			5,350			86,237
			Income taxes⁶		11,636			(19,800	)		7,373			(36,988	)
		Non-GAAP net income		$	36,193		$	40,243		$	138,034		$	116,686
		Non-GAAP earnings per diluted share		$	0.34		$	0.37		$	1.28		$	1.10

	Non-GAAP diluted number of shares:
		GAAP diluted number of shares			105,769			113,513			108,153			106,366
		Dilutive effect of convertible debt			-			(5,193	)		-			-
		Non-GAAP diluted number of shares			105,769			108,320			108,153			106,366

	Adjusted EBITDA reconciliation⁷:
		GAAP net income (loss) from continuing operations		$	8,387		$	38,960		$	54,414		$	(16,386	)
		Add back items:
			Income tax provision (benefit)		12,237			(26,247	)		15,639			(29,891	)
			Interest expense		11,860			14,599			45,475			73,156
			Amortization of definite-lived intangibles		10,401			10,973			41,389			44,373
			Depreciation expense		22,231			23,775			85,942			99,572
			Stock-based compensation		5,208			4,112			17,711			16,073
			(Gain) on sale of assets		-			(119	)		(991	)		(825	)
			Change in fair value of warrant liabilities		(373	)		-			(4,241	)		-
			Loss on extinguishment of debt		-			-			15,217			-
			Unrealized gain on commodity hedge		(362	)		-			(297	)		-
			Impairments, restructuring, acquisition-related and other charges		800			2,098			5,350			86,237
		Adjusted EBITDA		$	70,389		$	68,151		$	275,608		$	272,309
		Adjusted EBITDA margin			11.8	%		13.0	%		12.3	%		12.9	%

	Free cash flow reconciliation⁸:
		Operating cash flow		$	62,369		$	55,491		$	176,632		$	247,714
		Capital expenditures, net			(19,455	)		(18,663	)		(80,524	)		(93,001	)
		Free cash flow		$	42,914		$	36,828		$	96,108		$	154,713


	¹Other represents the Shanghai E-MS and Shenzhen plant results.

	²This 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.

	³Non-GAAP gross profit and gross margin measures exclude amortization of intangibles, accelerated depreciation, stock-based compensation expense, unrealized gain on commodity hedge, restructuring and other charges.

	⁴Non-GAAP operating income and operating margin measures exclude amortization of intangibles, accelerated depreciation, stock-based compensation expense, gain on sale of assets, unrealized gain on commodity hedge, impairment of goodwill, restructuring, acquisition-related costs, and other charges.

	⁵ 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, 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, unrealized gain on commodity hedge, impairment of goodwill, 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.

	⁶ Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate.

	⁷Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, change in fair value of warrant liabilities, loss on extinguishment of debt, unrealized gain on commodity hedge, impairment of goodwill, 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.

	⁸ Free Cash Flow in 2020 has been restated to exclude the Mobility business which was sold in Q2 of 2020.

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

TTM Technologies, Inc. Reports Fiscal Fourth Quarter and 2021 Results

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