GlobeNewswire Inc | Oct 28, 2020 04:06PM EDT

October 28, 2020

SANTA ANA, Calif., Oct. 28, 2020 (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 2020, which ended on September 28, 2020.

On April 19th, 2020, TTM completed the previously announced sale of its Mobility business unit. The operating results and related assets and liabilities of the Mobility business under US GAAP are presented as discontinued operations for all periods. Non-GAAP results do not include Mobility results but still include the two E-MS plants being shut down. Please refer to the earnings schedule for additional details on exited businesses and continuing operations.

Third Quarter 2020 Highlights

-- Net sales were $513.6 million -- GAAP net loss of $41.5 million, or ($0.39) per diluted share, inclusive of a goodwill impairment charge of $69.2 million -- Non-GAAP net income was $26.8 million, or $0.25 per diluted share -- Cash flow from operations of $84.8 million -- Received all remaining proceeds from Mobility sale and repaid $400 million of Term Loan B -- Leverage ratio at September 28th was 1.6x defined as net debt/last twelve months EBITDA excluding Mobility

Third Quarter 2020GAAP Financial Results Net sales from continuing operations for the third quarter of 2020 were $513.6 million, compared to $534.2 million in the third quarter of 2019.

GAAP operating loss from continuing operations for the third quarter of 2020 was $40.3 million, inclusive of a goodwill impairment charge of $69.2 million. This compares to GAAP operating income of $21.1 million in the third quarter of 2019.

GAAP net loss for the third quarter of 2020 was $41.5 million, or ($0.39) per diluted share, compared to net income of $15.9 million, or $0.15 per diluted share in the third quarter of 2019.

Third Quarter 2020 Non-GAAP Financial ResultsOn a non-GAAP basis, net income for the third quarter of 2020 was $26.8 million, or $0.25 per diluted share. This compares to non-GAAP net income of $23.2 million, or $0.22 per diluted share, for the third quarter of 2019.

Adjusted EBITDA for the third quarter of 2020 was $67.2 million, or 13.1 percent of net sales, compared to adjusted EBITDA of $66.7 million, or 12.5 percent of net sales, for the third quarter of 2019.

In the third quarter, TTM demonstrated excellent operational execution to deliver revenue and earnings above the previously guided range. The diversified mix of end markets that we serve enabled the PCB segment to grow revenues and outperform profit expectations due to solid growth in the data center and defense end markets despite weakness in the commercial aerospace end market, said Tom Edman, CEO of TTM. Additionally, strict financial discipline led to strong operating cash flow in the quarter driving our net debt leverage ratio down to 1.6x.

Business Outlook TTM estimates that revenue for the fourth quarter of 2020 will be in the range of $490 million to $530 million, and non-GAAP net income will be in the range of $0.22 to $0.28 per diluted share. This guidance continues to include the E-MS business unit while that business winds down.

Live Webcast/Conference CallTTM will host a conference call and webcast to discuss third quarter 2020 results and the fourth quarter 2020 outlook on Wednesday, October 28, 2020, 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 800-367-2403 or international 334-777-6978 (ID 9148146). The conference call also will be webcast on TTMs 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 TTMs 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 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 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 MeasuresThis release includes information about TTMs 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 TTMs 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 Companys 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 managements 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.

ContactSameer Desai,Senior Director, Corporate Development & Investor RelationsSameer.desai@ttmtech.com714-327-3050

TTM TECHNOLOGIES, INC.Selected Unaudited Financial Information(In thousands, except per share data) Third Quarter First Three Quarters 2020 2019* 2020 2019* CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS Net sales $ 513,576 $ 534,173 $ 1,581,520 $ 1,597,495 Cost of goods sold 424,298 448,915 1,310,470 1,320,563 Gross profit 89,278 85,258 271,050 276,932 Operating expenses: Selling and marketing 15,895 17,153 48,033 51,611 General and 27,998 33,104 95,646 92,091 administrative Research and 5,223 4,358 15,166 13,570 development Amortization of definite-lived 10,126 9,500 29,249 36,245 intangibles Restructuring charges 1,088 12 14,830 3,176 Impairment of goodwill 69,200 - 69,200 - Total operating 129,530 64,127 272,124 196,693 expenses Operating (loss) income (40,252 ) 21,131 (1,074 ) 80,239 Interest expense (20,204 ) (20,423 ) (58,557 ) (62,111 )Other, net (2,316 ) 5,875 641 8,525 (Loss) income fromcontinuing operations (62,772 ) 6,583 (58,990 ) 26,653 before income taxesIncome tax benefit 1,300 (4,190 ) 3,644 (5,529 )(provision) Net (loss) income from (61,472 ) 2,393 (55,346 ) 21,124 continuing operationsIncome (loss) fromdiscontinued operations, 20,021 13,477 193,921 (5,082 )net of income taxesNet (loss) income $ (41,451 ) $ 15,870 $ 138,575 $ 16,042 * Reclassified Research and development expenses as a separate line item from General and administrative expenses (Loss) earnings per share: Basic (loss) earnings per share from $ (0.58 ) $ 0.02 $ (0.52 ) $ 0.20 continuing operations Basic earnings (loss) per share from 0.19 0.13 1.83 (0.05 ) discontinued operations Basic (loss) $ (0.39 ) $ 0.15 $ 1.31 $ 0.15 earnings per share Diluted (loss) earnings per share from $ (0.58 ) $ 0.02 $ (0.52 ) $ 0.20 continuing operations Diluted earnings (loss) per share from 0.19 0.13 1.83 (0.05 ) discontinued operations Diluted (loss) $ (0.39 ) $ 0.15 $ 1.31 $ 0.15 earnings per share Weighted-average sharesused in computing per share amounts: Basic 106,729 105,492 106,130 105,092 Diluted 106,729 106,474 106,130 106,065 Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share: Weighted-average shares 105,492 105,092 outstandingDilutive effect ofperformance-based stock 982 973 units, restricted stockunits & stock optionsDiluted shares 106,474 106,065 SELECTED BALANCE SHEET DATA September 28, 2020 December 30, 2019 Cash and cash equivalents,including restricted cash^ $ 663,285 $ 379,818 1Accounts and notes 374,971 503,598 receivable, netContract assets 281,663 254,600 Inventories 127,588 113,753 Current assets held for - 67,572 saleTotal current assets 1,486,177 1,342,684 Property, plant and 654,837 678,201 equipment, netOperating lease right of 22,993 22,173 use assetNon-current assets held - 425,597 for saleOther non-current assets 984,407 1,092,278 Total assets 3,148,414 3,560,933 Short-term debt, includingcurrent portion of $ 249,975 $ 249,975 long-term debtAccounts payable 341,505 329,866 Current liabilities held - 185,391 for saleTotal current liabilities 787,322 946,666 Debt, net of discount 840,023 1,225,962 Non-current liabilities - 1,530 held for saleTotal long-term 961,789 1,335,230 liabilitiesTotal equity 1,399,303 1,279,037 Total liabilities and 3,148,414 3,560,933 equity SUPPLEMENTAL DATA Third Quarter First Three Quarters 2020 2019 2020 2019 Gross margin 17.4 % 16.0 % 17.1 % 17.3 %Operating margin (7.8 )% 4.0 % (0.1 )% 5.0 % Stock-based Compensation: Third Quarter 2020 2019 Amount included in: Cost of goods sold $ 1,173 $ 937 Selling and 557 574 marketing General and 2,705 3,089 administrative Research and 44 62 development Total stock-based $ 4,479 $ 4,662 compensation expense RECONCILIATIONS^2 Third Quarter First Three Quarters 2020 2019 2020 2019 Non-GAAP gross profit reconciliation^3: GAAP gross profit from $ 89,278 $ 85,258 $ 271,050 $ 276,932 continuing operations Add back item: Amortization of definite-lived 1,384 1,180 4,151 3,539 intangibles Accelerated 2,539 - 4,936 - depreciation Stock-based 1,173 937 2,647 2,210 compensation Non-GAAP gross profit $ 94,374 $ 87,375 $ 282,784 $ 282,681 Non-GAAP gross margin 18.4 % 16.4 % 17.9 % 17.7 % Non-GAAP operating income reconciliation^4: GAAP operating (loss) income from continuing $ (40,252 ) $ 21,131 $ (1,074 ) $ 80,239 operations Add back items: Amortization of definite-lived 11,510 10,680 33,400 39,784 intangibles Accelerated 2,940 - 5,694 - depreciation Stock-based 4,479 4,662 11,961 12,190 compensation Impairments, restructuring, 68,270 1,532 84,139 5,761 acquisition-related, and other charges Non-GAAP operating $ 46,947 $ 38,005 $ 134,120 $ 137,974 income Non-GAAP operating 9.1 % 7.1 % 8.5 % 8.6 % margin Non-GAAP net income and EPS reconciliation^5: GAAP net (loss) income from continuing $ (61,472 ) $ 2,393 $ (55,346 ) $ 21,124 operations Add back items: Amortization of definite-lived 11,510 10,680 33,400 39,784 intangibles Accelerated 2,940 - 5,694 - depreciation Stock-based 4,479 4,662 11,961 12,190 compensation Non-cash interest 7,332 3,452 14,489 10,787 expense (Gain) on sale of (199 ) (251 ) (706 ) (3,557 ) assets Impairments, restructuring, 68,270 1,532 84,139 5,761 acquisition-related, and other charges Income taxes^6 (6,081 ) 725 (17,188 ) (6,436 ) Non-GAAP net income $ 26,779 $ 23,193 $ 76,443 $ 79,653 Non-GAAP earnings per $ 0.25 $ 0.22 $ 0.72 $ 0.75 diluted share Adjusted EBITDA reconciliation^7: GAAP net (loss) income from continuing $ (61,472 ) $ 2,393 $ (55,346 ) $ 21,124 operations Add back items: Income tax (benefit) (1,300 ) 4,190 (3,644 ) 5,529 provision Interest expense 20,204 20,423 58,557 62,111 Amortization of definite-lived 11,510 10,680 33,400 39,784 intangibles Depreciation expense 25,669 23,031 75,797 69,957 Stock-based 4,479 4,662 11,961 12,190 compensation (Gain) on sale of (199 ) (251 ) (706 ) (3,557 ) assets Impairments, restructuring, 68,270 1,532 84,139 5,761 acquisition-related, and other charges Adjusted EBITDA $ 67,161 $ 66,660 $ 204,158 $ 212,899 Adjusted EBITDA margin 13.1 % 12.5 % 12.9 % 13.3 % Free cash flowreconciliation, including Mobility: Operating cash flow 84,776 58,742 231,685 181,789 Capital expenditures, (29,067 ) (25,803 ) (83,888 ) (88,990 ) net Free cash flow $ 55,709 $ 32,939 $ 147,797 $ 92,799

TTM Consolidated End Markets 1Q 19 2Q 19 3Q 19 4Q 19 FY2019 1Q 20 2Q 20 3Q 20Aerospace/Defense 27% 28% 24% 26% 26% 30% 31% 36%Automotive 17% 16% 17% 14% 16% 12% 12% 14%Cellular Phones 7% 6% 19% 16% 13% 11% 3% 0%Computing/Storage/Periph 13% 15% 12% 14% 13% 14% 13% 12%Medical/Industrial/Inst 15% 15% 13% 13% 14% 16% 20% 19%Networking/Communications 18% 17% 13% 15% 15% 14% 19% 17%Other 3% 3% 2% 2% 3% 3% 2% 2% Mobility Business Unit End Markets 1Q 19 2Q 19 3Q 19 4Q 19 FY2019 1Q 20 2Q 20 3Q 20Aerospace/Defense 0% 0% 0% 0% 0% 0% 0% 0%Automotive 5% 6% 3% 2% 4% 3% 4% 0%Cellular Phones 48% 41% 73% 65% 60% 56% 54% 0%Computing/Storage/Periph 28% 36% 14% 19% 22% 22% 25% 0%Medical/Industrial/Inst 7% 5% 2% 3% 4% 3% 4% 0%Networking/Communications 5% 5% 4% 6% 5% 6% 5% 0%Other 7% 7% 4% 5% 5% 10% 8% 0% TTM excluding Mobility End Markets 1Q 19 2Q 19 3Q 19 4Q 19 FY2019 1Q 20 2Q 20 3Q 20Aerospace/Defense 31% 33% 31% 35% 33% 37% 32% 36%Automotive 19% 18% 21% 17% 19% 14% 12% 14%Cellular Phones 0% 0% 1% 0% 0% 1% 0% 0%Computing/Storage/Periph 11% 11% 11% 12% 11% 12% 13% 12%Medical/Industrial/Inst 17% 17% 17% 17% 17% 18% 21% 19%Networking/Communications 20% 19% 17% 18% 18% 16% 19% 17%Other 2% 2% 2% 1% 2% 2% 3% 2% SZ + SH-EMS End Markets 1Q 19 2Q 19 3Q 19 4Q 19 FY2019 1Q 20 2Q 20 3Q 20Aerospace/Defense 0% 1% 0% 0% 0% 0% 0% 0%Automotive 56% 58% 74% 59% 63% 49% 54% 49%Cellular Phones 0% 0% 0% 0% 0% 0% 0% 0%Computing/Storage/Periph 0% 0% 0% 0% 0% 0% 0% 0%Medical/Industrial/Inst 22% 23% 11% 19% 18% 23% 14% 14%Networking/Communications 21% 18% 16% 22% 19% 29% 35% 44%Other 1% 0% -1% 0% 0% -1% -3% -7% TTM, excluding Mobility, SZ & SH E-MS End Markets 1Q 19 2Q 19 3Q 19 4Q 19 FY2019 1Q 20 2Q 20 3Q 20Aerospace/Defense 33% 36% 36% 37% 35% 38% 33% 37%Automotive 17% 15% 15% 15% 15% 13% 11% 13%Cellular Phones 0% -1% 1% 0% 0% 1% 0% 0%Computing/Storage/Periph 12% 12% 12% 13% 12% 12% 13% 13%Medical/Industrial/Inst 16% 17% 18% 17% 17% 18% 21% 19%Networking/Communications 20% 19% 16% 17% 18% 16% 19% 16%Other 2% 2% 2% 1% 3% 2% 3% 2%

Select Non-GAAP Income Statement Data TTM Consolidated Q1-19A Q2-19A Q3-19A Q4-19A FY Q1-20A Q2-20A Q3-20A 2019ASales 620.2 633.0 716.8 719.3 2,689.3 610.8 601.1 513.6Gross Profit 90.6 86.4 106.0 126.8 409.7 88.3 107.2 94.4Gross Margin 14.6% 13.6% 14.8% 17.6% 15.2% 14.5% 17.8% 18.4%Op Income 40.5 37.2 54.0 72.3 204.0 35.7 54.7 46.9Operating Margin 6.5% 5.9% 7.5% 10.1% 7.6% 5.8% 9.1% 9.1%EBITDA 78.5 82.9 103.5 107.8 372.7 82.1 80.3 67.2EBITDA % 12.7% 13.1% 14.4% 15.0% 13.9% 13.4% 13.4% 13.1% Mobility Proforma Q1-19A Q2-19A Q3-19A Q4-19A FY Q1-20A Q2-20A Q3-20A 2019ASales 83.8 106.1 182.6 183.5 556.0 113.2 30.8 -Gross Profit (10.1) (8.2) 18.6 24.3 24.5 4.7 2.4 -Gross Margin -12.1% -7.8% 10.2% 13.2% 4.4% 4.2% 7.8% -Op Income (11.9) (10.3) 16.0 21.0 14.8 2.1 1.1 -Operating Margin -14.2% -9.7% 8.8% 11.4% 2.7% 1.9% 3.6% -EBITDA 5.9 9.2 36.9 38.5 90.5 21.9 3.5 -EBITDA % 7.0% 8.7% 20.2% 21.0% 16.3% 19.3% 11.4% - TTM Proforma Excluding Q1-19A Q2-19A Q3-19A Q4-19A FY Q1-20A Q2-20A Q3-20AMobility 2019ASales 536.4 526.9 534.2 535.8 2,133.3 497.6 570.3 513.6Gross Profit 100.7 94.6 87.4 102.5 385.2 83.6 104.8 94.4Gross Margin 18.8% 18.0% 16.4% 19.1% 18.1% 16.8% 18.4% 18.4%Op Income 52.4 47.5 38.0 51.3 189.2 33.6 53.6 46.9Operating Margin 9.8% 9.0% 7.1% 9.6% 8.9% 6.8% 9.4% 9.1%EBITDA 72.6 73.7 66.6 69.3 282.2 60.2 76.8 67.2EBITDA % 13.5% 14.0% 12.5% 12.9% 13.2% 12.1% 13.5% 13.1% SZ + SH-EMS Proforma Q1-19A Q2-19A Q3-19A Q4-19A FY Q1-20A Q2-20A Q3-20A 2019ASales 36.0 40.9 54.5 29.8 161.2 14.2 21.4 20.5Gross Profit 3.0 3.4 5.2 2.3 13.9 (2.4) (0.3) 3.4Gross Margin 8.3% 8.3% 9.5% 7.7% 8.6% -16.7% -1.4% 16.6%Op Income 2.0 1.2 4.3 2.0 9.5 (3.8) (0.8) 2.3Operating Margin 5.6% 2.9% 7.9% 6.7% 5.9% -26.8% -3.8% 11.3%EBITDA 2.5 3.1 7.1 2.0 14.7 (3.6) 0.1 2.6EBITDA % 6.9% 7.6% 13.0% 6.7% 9.1% -25.4% 0.4% 12.9% TTM Proforma Excluding Q1-19A Q2-19A Q3-19A Q4-19A FY Q1-20A Q2-20A Q3-20AMobility, SZ & SH-EMS 2019ASales 500.4 486.0 479.7 506.0 1,972.1 483.4 548.9 493.1Gross Profit 97.7 91.2 82.2 100.1 371.2 86.0 105.1 91.0Gross Margin 19.5% 18.8% 17.1% 19.8% 18.8% 17.8% 19.1% 18.5%Op Income 50.4 46.2 33.7 49.3 179.6 37.7 54.4 44.6OM 10.1% 9.5% 7.0% 9.7% 9.1% 7.8% 9.9% 9.0%EBITDA 70.1 70.6 59.5 67.0 267.1 63.8 76.7 64.6EBITDA % 14.0% 14.5% 12.4% 13.2% 13.5% 13.2% 14.0% 13.1%

^1Includes restricted cash of $249,975 as of September 28, 2020. ^2This information provides a reconciliation of non-GAAP gross profit, non-GAAPoperating income, non-GAAP net income, non-GAAP EPS, and adjusted EBITDA to thefinancial information in our consolidated condensed statements of operations. ^3 Non-GAAP gross profit and gross margin measures exclude amortization ofintangibles, accelerated depreciation due to restructuring of two E-M Solutionsplants, and stock-based compensation expense. ^4 Non-GAAP operating income and operating margin measures exclude amortizationof intangibles, accelerated depreciation due to restructuring of two E-MSolutions plants, stock-based compensation expense, impairment of goodwill,acquisition-related costs, restructuring and other charges. ^5 This information provides non-GAAP net income and non-GAAP EPS, which arenon-GAAP financial measures. Management believes that both measures -- whichadd back amortization of intangibles, accelerated depreciation due torestructuring of two E-M Solutions plants, stock-based compensation expense,non-cash interest expense on debt (before consideration of capitalizedinterest), gain on sale of assets, impairment of goodwill, acquisition-relatedcosts, restructuring and other charges as well as the associated tax impact ofthese charges and discrete tax items -- provide additional useful informationto investors regarding the Company's ongoing financial condition and results ofoperations. ^6 Income tax adjustments reflect the difference between income taxes based ona 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, impairment of goodwill, acquisition-related costs,restructuring and other charges. We present adjusted EBITDA to enhance theunderstanding of our operating results, and it is a key measure we use toevaluate our operations. In addition, we provide our adjusted EBITDA because webelieve that investors and securities analysts will find adjusted EBITDA to bea useful measure for evaluating our operating performance and comparing ouroperating performance with that of similar companies that have differentcapital structures and for evaluating our ability to meet our future debtservice, capital expenditures, and working capital requirements. However,adjusted EBITDA should not be considered as an alternative to cash flows fromoperating activities as a measure of liquidity or as an alternative to netincome as a measure of operating results in accordance with accountingprinciples generally accepted in the United States of America.