COSTA MESA, Calif., Oct. 30, 2018 (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 third quarter of fiscal 2018, which ended October 1, 2018. The financial results provided below for the third quarter include a full quarter contribution from the acquisition of Anaren, Inc. (“Anaren”), which was completed on April 18, 2018.

Third Quarter 2018 Highlights

• Net sales were $755.8 million
• GAAP net income was $27.0 million, or $0.22 per diluted share
• Non-GAAP net income was $55.1 million, or $0.50 per diluted share
• Cash flow from operations of $80.0 million

Third Quarter 2018 Financial Results Net sales for the third quarter of 2018 were $755.8 million, compared to $666.8 million in the third quarter of 2017 and $716.9 million in the second quarter of 2018.

GAAP operating income for the third quarter of 2018 was $54.6 million, compared to $44.1 million in the third quarter of 2017 and $31.7 million in the second quarter of 2018.

GAAP net income for the third quarter of 2018 was $27.0 million, or $0.22 per diluted share. This compares to $21.5 million, or $0.19 per diluted share, in the third quarter of 2017 and $84.0 million, or $0.65 per diluted share, in the second quarter of 2018. On a non-GAAP basis, net income for the third quarter of 2018 was $55.1 million, or $0.50 per diluted share. This compares to non-GAAP net income of $33.4 million, or $0.32 per diluted share, for the third quarter of 2017 and $52.3 million, or $0.48 per diluted share, in the second quarter of 2018.

Adjusted EBITDA for the third quarter of 2018 was $122.3 million, or 16.2 percent of net sales, compared to adjusted EBITDA of $85.7 million, or 12.9 percent of net sales, for the third quarter of 2017 and $115.9 million, or 16.2 percent of net sales, for the second quarter of 2018.

“TTM delivered record revenues and earnings for a third quarter,” said Tom Edman, CEO of TTM. “We were pleased to see solid year over year growth from the aerospace and defense, cellular, computing and medical/industrial/instrumentation end markets that more than offset weakness in our automotive end market. Following record third quarter revenues in the cellular end market, we’re anticipating weaker sales and profits in the fourth quarter.”

Business Outlook For the fourth quarter of 2018 TTM estimates that revenue will be in the range of $720 million to $760 million, and non-GAAP net income will be in the range of $0.44 to $0.50 per diluted share.

To Access the Live Webcast/Conference CallTTM will host a conference call and webcast to discuss third quarter 2018 results and fourth quarter 2018 outlook on Tuesday, October 30, 2018, 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 800-667-5617 or international 334-323-0509 (ID 9367022). The conference call also will be webcast on TTM’s website at www.ttm.com.

To Access a Replay of the WebcastThe replay of the webcast will remain accessible for one week following the live event on TTM’s website at www.ttm.com.

About TTMTTM Technologies, Inc. is a leading global printed circuit board manufacturer, focusing on quick-turn and volume production of technologically advanced PCBs, backplane assemblies and electro-mechanical solutions as well as a global designer and manufacturer of 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 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, 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 MeasuresThis 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 such 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 such 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)
						Third Quarter								Second Quarter				First Three Quarters
							2018				2017				2018				2018				2017
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
	Net sales					$	755,837			$	666,814			$	716,887			$	2,136,306			$	1,919,243
	Cost of goods sold						626,253				569,980				600,747				1,801,904				1,621,523
	Gross profit						129,584				96,834				116,140				334,402				297,720
	Operating expenses:
		Selling and marketing					18,533				16,269				18,619				54,780				48,775
		General and administrative					39,974				30,018				45,721				119,822				90,725
		Amortization of definite-lived intangibles					16,609				5,905				19,489				41,959				17,727
		Restructuring charges					(82	)			100				577				1,556				1,125
		(Gain)/loss on sale of assets					-				452				-				-				(2,348	)
			Total operating expenses				75,034				52,744				84,406				218,117				156,004
	Operating income						54,550				44,090				31,734				116,285				141,716
	Interest expense						(22,225	)			(13,598	)			(20,453	)			(56,425	)			(40,116	)
	Loss on extinguishment of debt						-				(768	)			-				-				(769	)
	Other, net						2,213				(6,984	)			6,178				7,284				(14,518	)
	Income before income taxes						34,538				22,740				17,459				67,144				86,313
	Income tax (provision) / benefit						(7,537	)			(1,205	)			66,545				53,958				(10,902	)
	Net income					$	27,001			$	21,535			$	84,004			$	121,102			$	75,411
	Net income attributable to noncontrolling interest						-				(82	)			-				-				(408	)
	Net income attributable to stockholders					$	27,001			$	21,453			$	84,004			$	121,102			$	75,003
	Earnings per share attributable to stockholders:
		Basic				$	0.26			$	0.21			$	0.81			$	1.17			$	0.74
		Diluted				$	0.22			$	0.19			$	0.65			$	0.98			$	0.65
	Weighted-average shares used in computing per share amounts:
		Basic					103,676				101,814				103,553				103,246				101,501
		Diluted					136,435				131,596				134,721				134,871				131,914
	Reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share:
	Net income attributable to stockholders					$	27,001			$	21,453			$	84,004			$	121,102			$	75,003
		Add back items: interest expense, net of tax					3,628				3,469				3,587				10,763				10,296
	Adjusted net income attributable to stockholders					$	30,629			$	24,922			$	87,591			$	131,865			$	85,299
	Weighted-average shares outstanding						103,676				101,814				103,553				103,246				101,501
	Dilutive effect of convertible debt						25,938				25,939				25,938				25,939				25,939
	Dilutive effect of warrants						5,226				2,151				3,854				4,086				2,753
	Dilutive effect of performance-based stock units, restricted stock units & stock options						1,595				1,692				1,376				1,600				1,721
	Diluted shares						136,435				131,596				134,721				134,871				131,914
	Earnings per share attributable to stockholders:
		Basic				$	0.26			$	0.21			$	0.81			$	1.17			$	0.74
		Diluted				$	0.22			$	0.19			$	0.65			$	0.98			$	0.65
SELECTED BALANCE SHEET DATA
						October 1, 2018				January 1, 2018
	Cash and cash equivalents, including restricted cash					$	207,952			$	409,326
	Accounts and notes receivable, net						569,215				483,903
	Contract assets						296,836				-
	Inventories						122,232				294,588
	Total current assets						1,233,008				1,221,307
	Property, plant and equipment, net						1,059,246				1,056,845
	Other non-current assets						1,196,972				503,730
	Total assets						3,489,226				2,781,882
	Short-term debt, including current portion of long-term debt					$	40,000			$	4,578
	Accounts payable						451,645				497,455
	Total current liabilities						695,276				720,356
	Debt, net of discount						1,518,315				975,479
	Total long-term liabilities						1,619,039				1,050,146
	Total equity						1,174,911				1,011,380
	Total liabilities and equity						3,489,226				2,781,882
SUPPLEMENTAL DATA
						Third Quarter								Second Quarter				First Three Quarters
							2018				2017				2018				2018				2017
	Gross margin						17.1	%			14.5	%			16.2	%			15.7	%			15.5	%
	Operating margin						7.2	%			6.6	%			4.4	%			5.4	%			7.4	%
	End Market Breakdown:
						Third Quarter								Second Quarter
							2018				2017				2018
		Aerospace/Defense					23	%			16	%			24	%
		Automotive					15	%			20	%			19	%
		Cellular Phone					17	%			17	%			8	%
		Computing/Storage/Peripherals					14	%			14	%			15	%
		Medical/Industrial/Instrumentation					13	%			14	%			14	%
		Networking/Communications					17	%			17	%			17	%
		Other					1	%			2	%			3	%
	Stock-based Compensation:
						Third Quarter								Second Quarter
							2018				2017				2018
		Amount included in:
			Cost of goods sold			$	774			$	606			$	829
			Selling and marketing				520				369				545
			General and administrative				4,165				3,703				4,493
			Total stock-based compensation expense			$	5,459			$	4,678			$	5,867
	Operating Segment Data:
						Third Quarter								Second Quarter
		Net sales:					2018				2017				2018
		PCB				$	698,983			$	609,742			$	657,601
		E-M Solutions					59,481				60,620				61,842
		Corporate					-				-				-
			Total sales				758,464				670,362				719,443
		Inter-segment sales					(2,627	)			(3,548	)			(2,556	)
			Total net sales			$	755,837			$	666,814			$	716,887
		Operating segment income:
		PCB				$	98,039			$	70,443			$	80,964
		E-M Solutions					2,205				2,870				2,496
		Corporate					(26,920	)			(23,318	)			(32,237	)
			Total operating segment income				73,324				49,995				51,223
		Amortization of definite-lived intangibles					(18,774	)			(5,905	)			(19,489	)
			Total operating income				54,550				44,090				31,734
		Total other expense					(20,012	)			(21,350	)			(14,275	)
		Income before income taxes				$	34,538			$	22,740			$	17,459
RECONCILIATIONS1
						Third Quarter								Second Quarter				First Three Quarters
							2018				2017				2018				2018				2017
	Non-GAAP gross profit reconciliation2:
		GAAP gross profit				$	129,584			$	96,834			$	116,140			$	334,402			$	297,720
		Add back item:
			Inventory markup				-				-				4,900				4,900				-
			Amortization of definite-lived intangibles				2,165				-				-				2,165				-
			Stock-based compensation				774				606				829				2,132				1,639
		Non-GAAP gross profit				$	132,523			$	97,440			$	121,869			$	343,599			$	299,359
		Non-GAAP gross margin					17.5	%			14.6	%			17.0	%			16.1	%			15.6	%
	Non-GAAP operating income reconciliation3:
		GAAP operating income				$	54,550			$	44,090			$	31,734			$	116,285			$	141,716
		Add back items:
			Amortization of definite-lived intangibles				18,774				5,905				19,489				44,124				17,727
			Stock-based compensation				5,459				4,678				5,867				14,948				13,306
			(Gain)/loss on sale of assets				-				452				-				-				(2,348	)
			Inventory markup				-				-				4,900				4,900				-
			Impairments, restructuring, acquisition-related, and other charges				230				100				7,429				12,693				1,225
		Non-GAAP operating income				$	79,013			$	55,225			$	69,419			$	192,950			$	171,626
		Non-GAAP operating margin					10.5	%			8.3	%			9.7	%			9.0	%			8.9	%
	Non-GAAP net income and EPS attributable to stockholders reconciliation4:
		GAAP net income attributable to stockholders				$	27,001			$	21,453			$	84,004			$	121,102			$	75,003
		Add back items:
			Amortization of definite-lived intangibles				18,774				5,905				19,489				44,124				17,727
			Stock-based compensation				5,459				4,678				5,867				14,948				13,306
			Non-cash interest expense				3,992				2,699				3,353				10,399				8,052
			(Gain)/loss on sale of assets				-				452				-				-				(2,348	)
			Inventory markup				-				-				4,900				4,900				-
			Loss on extinguishment of debt				-				768				-				-				769
			Impairments, restructuring, acquisition-related, and other charges				230				100				7,742				13,235				1,225
			Income taxes5				(337	)			(2,643	)			(73,073	)			(73,302	)			(7,855	)
		Non-GAAP net income attributable to stockholders				$	55,119			$	33,412			$	52,282			$	135,406			$	105,879
		Non-GAAP earnings per diluted share attributable to stockholders				$	0.50			$	0.32			$	0.48			$	1.24			$	1.00
	Non-GAAP diluted number of shares6:
		Diluted shares					136,435				131,596				134,721				134,871				131,914
		Dilutive effect of convertible debt					(25,938	)			(25,939	)			(25,938	)			(25,939	)			(25,939	)
		Non-GAAP diluted number of shares					110,497				105,657				108,783				108,932				105,975
	Adjusted EBITDA reconciliation7:
		GAAP net income				$	27,001			$	21,535			$	84,004			$	121,102			$	75,411
		Add back items:
			Income tax provision (benefit)				7,537				1,205				(66,545	)			(53,958	)			10,902
			Interest expense				22,225				13,598				20,453				56,425				40,116
			Amortization of definite-lived intangibles				18,774				5,905				19,489				44,124				17,727
			Depreciation expense				41,092				37,496				40,298				121,165				109,719
			Stock-based compensation				5,459				4,678				5,867				14,948				13,306
			(Gain)/loss on sale of assets				-				452				-				-				(2,348	)
			Inventory markup				-				-				4,900				4,900				-
			Loss on extinguishment of debt				-				768				-				-				769
			Impairments, restructuring, acquisition-related, and other charges				230				100				7,429				12,693				1,225
		Adjusted EBITDA				$	122,318			$	85,737			$	115,895			$	321,399			$	266,827
		Adjusted EBITDA margin					16.2	%			12.9	%			16.2	%			15.0	%			13.9	%
	Free cash flow reconciliation:
		Operating cash flow					79,992				71,366				55,639				121,370				180,064
		Capital expenditures, net					(35,038	)			(22,877	)			(38,948	)			(116,125	)			(91,881	)
		Free cash flow				$	44,954			$	48,489			$	16,691			$	5,245			$	88,183
	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 amortization of intangibles, stock-based compensation expense and inventory markup.
	3 Non-GAAP operating income and operating margin measures exclude amortization of intangibles, stock-based compensation expense, gain on sale of assets, inventory markup, 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, inventory markup, 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, inventory markup, 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.

Contact:Sameer Desai,Senior Director, Corporate Development & Investor Relations[email protected]714-327-3050

Source: TTM Technologies

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