SANTA ANA, Calif., Feb. 10, 2009 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (Nasdaq:TTMI), North America's largest printed circuit board (PCB) manufacturer, today reported results for the fourth quarter of 2008, ended December 31, 2008.
Fourth Quarter 2008 Financial & Operational Highlights
* TTM demonstrated strong free cash flow, increasing cash and cash equivalents and short-term investments by $17.1 million in the fourth quarter for a quarter-ending balance of $152.1 million. * Net sales of $164.9 million exceeded guidance. Gross margin of 18.6 percent and earnings per diluted share of $0.18, excluding impairment charges of $123.3 million or $1.78 per diluted share, net of tax, were at the high end of guidance.
Fourth Quarter 2008 Financial Results
Kent Alder, President and CEO of TTM, noted, "We are pleased with our results for the fourth quarter. Although global macroeconomic conditions remain challenging, the Company's highly focused strategy enabled us to continue our trend of delivering solid financial performance from our business. We generated significant cash during the quarter, and the Aerospace/Defense end market was again a significant part of our success."
Fourth quarter net sales of $164.9 million decreased $4.1 million, or 2.4 percent, from third quarter net sales of $169.0 million.
Fourth quarter gross margin of 18.6 percent declined from third quarter gross margin of 19.0 percent.
In the fourth quarter, TTM conducted a review of its goodwill, long-lived and intangible assets for potential impairment. Due to the current economic downturn and a significant decline in the Company's market capitalization, TTM recorded significant non-cash impairment charges of $123.3 million related to its goodwill and fixed assets in the fourth quarter. The charges reduced goodwill by $117.0 million and fixed assets by $6.3 million. The Company noted that the non-cash impairment charges do not affect its cash balance, liquidity, operating cash flow or the terms of the Company's debt.
As a result of these charges, TTM posted a fourth quarter operating loss of $108.9 million. Fourth quarter operating income, excluding impairment charges, was $14.5 million compared with third quarter operating income of $15.5 million.
Fourth quarter net loss was $68.5 million, or $1.60 per basic share. Excluding impairment charges, fourth quarter net income was $7.6 million, or $0.18 per diluted share, a decline from third quarter net income of $9.5 million, or $0.22 per diluted share.
EBITDA (earnings before interest, taxes, depreciation and amortization) was negative $102.7 million for the fourth quarter. Excluding impairment charges, adjusted EBITDA for the fourth quarter was $20.7 million, or 12.5 percent of net sales, compared with third quarter EBITDA of $22.2 million, or 13.1 percent of net sales. (A reconciliation of this non-GAAP measure is provided after the GAAP financial statements accompanying this press release.)
Fourth Quarter Segment Information
TTM Technologies reports two operating segments: PCB Manufacturing and Backplane Assembly.
For the PCB Manufacturing segment, fourth quarter net sales (before inter-company sales) were $144.2 million, compared with $148.0 million in the third quarter. Fourth quarter operating segment loss (before amortization of intangibles) was $107.5 million due to a fixed asset and goodwill impairment charge of $120.6 million. Excluding this charge, fourth quarter operating income (before amortization of intangibles) for the PCB Manufacturing segment was $13.1 million compared with operating income of $14.3 million in the third quarter.
For the Backplane Assembly segment, fourth quarter net sales (before inter-company sales) were $31.1 million, compared with $29.3 million in the third quarter. Fourth quarter operating segment loss (before amortization of intangibles) was $0.4 million due to a fixed asset impairment charge of $2.7 million. Excluding this charge, fourth quarter operating income (before amortization of intangibles) for the Backplane Assembly segment was $2.3 million compared with operating income of $2.1 million in the third quarter.
Full Year 2008 Financial Results
Net sales of $681.0 million for the full year 2008 increased $11.5 million, or 1.7 percent, from full year 2007 net sales of $669.5 million.
For 2008, TTM recorded a net loss of $35.3 million, or $0.83 per basic share. Excluding impairment charges, full year 2008 net income was $40.9 million, or $0.95 per diluted share, compared with full year 2007 net income of $34.7 million, or $0.81 per diluted share.
The Company noted that financial results for the fourth quarter and full year 2008 may be subject to change pending the resolution of certain accounting matters relating to the impairment of assets. Should results for the fourth quarter or the full year change from those established in this press release, the Company expects that revised numbers would be issued when it files its Annual Report on Form 10-K on or about March 16, 2009.
Balance Sheet
Cash and cash equivalents and short-term investments at the end of the fourth quarter totaled $152.1 million, an increase of $17.1 million from $135.0 million at the end of the third quarter.
First Quarter Fiscal Year 2009 Forecast
For the first quarter of 2009, TTM estimates revenues in a range from $146 million to $154 million and earnings in a range from $0.01 to $0.06 per diluted share.
TTM expects to record a restructuring charge of approximately $2.8 million, or about $0.04 per diluted share, in the first quarter of 2009 related to the closure of the Redmond, Washington, facility as well as other layoffs announced on January 15.
The Company noted that effective January 1, the accounting rules governing convertible debt changed. As a result, TTM will record interest expense of approximately $2.7 million on its $175 million convertible debt balance in the first quarter of 2009. The non-cash portion of this interest expense will be $1.3 million, or about $0.02 per diluted share.
To Access the Live Webcast/Conference Call
The company will host a conference call to discuss the fourth quarter results and the first quarter 2009 outlook on February 10, 2009, at 4:30 p.m. Eastern Standard Time (1:30 p.m. Pacific Standard Time).
To listen to the live webcast, log on to the TTM Technologies website at http://www.ttmtech.com. To access the live conference call, dial 303-262-2141 or 800-240-4186.
To Access a Replay of the Webcast
A digital replay will be available on TTM Technologies' website at http://www.ttmtech.com and will remain accessible for one week following the live event.
A telephone replay also will be available beginning two hours after the conclusion of the conference call until February 12, 2009. You may access the telephone replay by dialing 303-590-3000 or 800-405-2236 and entering confirmation code 11125737#.
Safe Harbor Statement
This release contains forward-looking statements that relate to future events or performance. These statements reflect the company's current expectations, and the company 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 company statements will not be realized. Furthermore, readers are cautioned that these statements involve risks and uncertainties, many of which are beyond the company'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 company's dependence upon the electronics industry, the impact of the current economic crisis, the company's dependence upon a small number of customers, the unpredictability of and potential fluctuation in future revenues and operating results, increased competition from low-cost foreign manufacturers and other "Risk Factors" set forth in the company's most recent SEC filings.
About TTM
TTM Technologies, Inc. is North America's largest printed circuit board manufacturer, focusing on quick-turn and technologically advanced PCBs and the backplane and sub-system assembly business. TTM stands for time-to-market, representing how the company'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.ttmtech.com.
The TTM Technologies logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5691
- Tables Follow -
TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
------------------ -------- ------------------
Fourth Quarter Third Full Year
Quarter
------------------ -------- ------------------
2008 2007 2008 2008 2007
-------- -------- -------- -------- --------
CONSOLIDATED
STATEMENTS OF
OPERATIONS
Net sales $164,916 $167,466 $169,019 $680,981 $669,458
Cost of goods
sold 134,240 132,809 136,873 543,977 539,289
-------- -------- -------- -------- --------
Gross profit 30,676 34,657 32,146 137,004 130,169
-------- -------- -------- -------- --------
Operating expenses:
Selling and
marketing 7,420 7,623 7,552 30,436 29,835
General and
administrative 7,835 8,445 8,138 33,003 32,628
Amortization of
definite-lived
intangibles 951 1,036 951 3,799 4,126
Impairment of
goodwill and
long-lived
assets 123,322 -- -- 123,322 --
Metal reclamation -- -- -- (3,700) --
-------- -------- -------- -------- --------
Total operating
expenses 139,528 17,104 16,641 186,860 66,589
-------- -------- -------- -------- --------
Operating income
(loss) (108,852) 17,553 15,505 (49,856) 63,580
Interest expense (1,744) (2,734) (1,556) (8,423) (13,828)
Interest income 223 152 702 1,370 1,379
Other, net (416) 48 (384) (1,804) 137
-------- -------- -------- -------- --------
Income (loss)
before income
taxes (110,789) 15,019 14,267 (58,713) 51,268
Income tax
(provision)
benefit 42,245 (3,186) (4,809) 23,443 (16,585)
-------- -------- -------- -------- --------
Net income
(loss) $(68,544) $ 11,833 $ 9,458 $(35,270) $ 34,683
======== ======== ======== ======== ========
Earnings (loss)
per common
share:
Basic $ (1.60) $ 0.28 $ 0.22 $ (0.83) $ 0.82
Diluted $ (1.60) $ 0.28 $ 0.22 $ (0.83) $ 0.81
Weighted average
common shares:
Basic 42,810 42,360 42,805 42,681 42,242
Diluted 42,810 42,756 43,182 42,681 42,568
SELECTED BALANCE SHEET DATA
-------------------------------------
December 31, 2008 December 31, 2007
----------------- -----------------
Cash and cash equivalents $ 148,465 $ 18,681
Short-term investments 3,657 --
Accounts receivable, net 115,232 118,581
Inventories 71,011 65,675
Total current assets 353,130 219,936
Property, plant and equipment,
net 114,931 123,647
Other non-current assets 88,189 155,215
Total assets 556,250 498,798
Current portion long-term debt $ -- $ 40,000
Accounts payable 48,750 53,632
Total current liabilities 72,731 121,097
Long-term liabilities 177,522 49,107
Stockholders' equity 305,997 328,594
Total liabilities and
stockholders' equity 556,250 498,798
-------------------------------------
SUPPLEMENTAL
DATA
-------------------- --------- --------------------
Fourth Quarter Third Full Year
Quarter
-------------------- --------- --------------------
2008 2007 2008 2008 2007
--------- --------- --------- --------- ---------
EBITDA $(102,653) $ 24,356 $ 22,151 $ (25,065) $ 92,110
EBITA $(108,064) $ 18,819 $ 16,803 $ (46,373) $ 69,338
Gross margin 18.6% 20.7% 19.0% 20.1% 19.4%
EBITDA margin (62.2) 14.5 13.1 (3.7) 13.8
Operating margin (66.0) 10.5 9.2 (7.3) 9.5
End Market
Breakdown:
-------------------- ---------
Fourth Quarter Third
Quarter
-------------------- ---------
2008 2007 2008
--------- --------- ---------
Networking/
Communications 37% 40% 39%
Aerospace/
Defense 40 33 39
Computing/
Storage/
Peripherals 12 13 11
Medical/
Industrial/
Instrument-
ation/Other 11 14 11
Stock-based
Compensation:
-------------------- ---------
Fourth Quarter Third
Quarter
-------------------- ---------
2008 2007 2008
--------- --------- ---------
Amount included
in:
Cost of goods
sold $ 331 $ 250 $ 388
Selling and
marketing 97 22 116
General and
adminis-
trative 787 622 888
--------- --------- ---------
Total stock-
based
compensation
expense $ 1,215 $ 894 $ 1,392
========= ========= =========
Operating
Segment Data:
-------------------- ---------
Fourth Quarter Third
Quarter
-------------------- ---------
Net sales: 2008 2007 2008
--------- --------- ---------
PCB
Manufacturing $ 144,211 $ 147,524 $ 148,003
Backplane
Assembly 31,064 27,837 29,254
--------- --------- ---------
Total sales 175,275 175,361 177,257
Inter-company
sales (10,359) (7,895) (8,238)
--------- --------- ---------
Total net
sales $ 164,916 $ 167,466 $ 169,019
--------- --------- ---------
Operating
segment
income (loss):
PCB
Manufacturing $(107,495) $ 17,055 $ 14,312
Backplane
Assembly (406) 1,534 2,144
--------- --------- ---------
Total op
segment
income (loss) (107,901) 18,589 16,456
Amortization
of intangibles (951) (1,036) (951)
--------- --------- ---------
Total op
income (loss) (108,852) 17,553 15,505
Total other
expense (1,937) (2,534) (1,238)
--------- --------- ---------
Income (loss)
before income
taxes $(110,789) $ 15,019 $ 14,267
========= ========= =========
RECONCILIATIONS*
-------------------- --------- --------------------
Fourth Quarter Third Full Year
Quarter
-------------------- --------- --------------------
2008 2007 2008 2008 2007
--------- --------- --------- --------- ---------
EBITA/EBITDA
reconciliation:
Net income
(loss) $ (68,544) $ 11,833 $ 9,458 $ (35,270) $ 34,683
Add back items:
Income tax
provision
(benefit) (42,245) 3,186 4,809 (23,443) 16,585
Interest
expense 1,744 2,734 1,556 8,423 13,828
Amortization
of
intangibles 981 1,066 980 3,917 4,242
--------- --------- --------- --------- ---------
EBITA (108,064) 18,819 16,803 (46,373) 69,338
Depreciation
expense 5,411 5,537 5,348 21,308 22,772
--------- --------- --------- --------- ---------
EBITDA $(102,653) $ 24,356 $ 22,151 $ (25,065) $ 92,110
========= ========= ========= ========= =========
Add back:
Impairment 123,322 -- -- 123,322 --
--------- --------- --------- --------- ---------
Adjusted
EBITDA $ 20,669 $ 24,356 $ 22,151 $ 98,257 $ 92,110
========= ========= ========= ========= =========
* This information provides a reconciliation of EBITA/EBITDA/Adjusted
EBITDA to the financial information in our consolidated statements
of operations.
"EBITDA" means earnings before interest expense, income taxes,
depreciation and amortization. "EBITA" means earnings before interest
expense, income taxes and amortization. We present EBITDA / EBITA /
Adjusted EBITDA to enhance the understanding of our operating results.
EBITDA / EBITA / Adjusted EBITDA is a key measure we use to evaluate
our operations. In addition, we provide our EBITDA / EBITA / Adjusted
EBITDA because we believe that investors and securities analysts will
find EBITDA / EBITA / 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, EBITDA / EBITA / 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 of
operating results in accordance with accounting principles generally
accepted in the United States of America.