TTMI TTM Technologies Inc

TTM Technologies, Inc. (NASDAQ: TTMI), a leading global manufacturer of technology solutions including mission systems, radio frequency (“RF”) components and RF microwave/microelectronic assemblies, quick-turn and technologically advanced printed circuit boards (“PCB”), today reported results for the first quarter 2024, which ended on April 1, 2024.  

First Quarter 2024 Highlights

• Net sales were $570.1 million
• GAAP net income of $10.5 million, or $0.10 per diluted share
• Non-GAAP net income was $32.8 million, or $0.31 per diluted share
• Cash flow from operations was $43.9 million
• Repurchased 600,000 shares of common stock for $9.3 million at an average price of $15.56 per share

First Quarter 2024 GAAP Financial Results

Net sales for the first quarter of 2024 were $570.1 million, compared to $544.4 million in the first quarter of 2023.

GAAP operating income for the first quarter of 2024 was $17.1 million compared to GAAP operating loss for the first quarter of 2023 of $3.5 million.

GAAP net income for the first quarter of 2024 was $10.5 million, or $0.10 per diluted share, compared to GAAP net loss of $5.8 million, or ($0.06) per diluted share in the first quarter of 2023.

First Quarter 2024 Non-GAAP Financial Results

On a non-GAAP basis, net income for the first quarter of 2024 was $32.8 million, or $0.31 per diluted share. This compares to non-GAAP net income of $18.6 million, or $0.18 per diluted share, for the first quarter of 2023.

Adjusted EBITDA in the first quarter of 2024 was $74.8 million, or 13.1% of sales compared to adjusted EBITDA of $58.5 million, or 10.7% of sales for the first quarter of 2023.

“TTM reported Non-GAAP EPS that was above the high end of the guided range and demonstrated solid year on year growth due to improved mix and operational execution. Revenues were at the high end of the guided range and returned to year on year growth due to demand strength in our Aerospace and Defense and Data Center Computing end markets,” said Tom Edman, CEO of TTM. “In addition, cash flow from operations was a healthy 7.7% of revenue enabling us to repurchase stock while maintaining a solid balance sheet with a net leverage ratio of 1.5x,” concluded Mr. Edman.

Business Outlook

For the second quarter of 2024, TTM estimates that revenues will be in the range of $560 million to $600 million, and non-GAAP net income will be in the range of $0.32 to $0.38 per diluted share.  

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 has not been provided because the Company is unable to provide such reconciliation without unreasonable effort. For the same reasons, TTM is unable to address the probable significance of the information.

Live Webcast/Conference CallTTM will host a conference call and webcast to discuss first quarter 2024 results and the second quarter 2024 outlook on Wednesday, May 1, 2024, at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time). The conference call will include forward-looking statements.

Access to the conference call is available by clicking on the registration link TTM Technologies, Inc. first quarter 2024 conference call. Registering participants will receive dial in information and a unique PIN to join the call. Participants can register at any time up to the start of the conference call. The conference call will also be simulcast on the company’s website, and can be accessed by clicking on the link TTM Technologies, Inc. first quarter 2024 webcast.. The webcast will remain accessible for one week following the live event.

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 TTM Technologies, Inc. first quarter 2024 webcast.

About TTMTTM Technologies, Inc. is a leading global manufacturer of technology solutions including mission systems, RF components/RF microwave/microelectronic assemblies, quick-turn and technologically advanced PCBs. 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-Q 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, 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 MeasuresTo supplement our consolidated condensed financial statements presented on a GAAP basis, 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 reconciliations below 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.

Contact:Sameer Desai,Vice President, Corporate Development & Investor RelationsSameer.desai@ttmtech.com714-327-3050

- Tables Follow -

TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
					First Quarter
					2024				2023
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
	Net sales				$	570,113			$	544,437
	Cost of goods sold					466,394				458,314
	Gross profit					103,719				86,123
	Operating expenses:
		Selling and marketing				20,294				21,302
		General and administrative				43,670				35,073
		Research and development				7,321				7,085
		Amortization of definite-lived intangibles				11,429				21,964
		Restructuring charges				3,938				4,167
			Total operating expenses			86,652				89,591
	Operating income (loss)					17,067				(3,468	)
	Interest expense					(12,324	)			(12,807	)
	Gain on sale of subsidiary					-				1,339
	Other, net					9,326				1,198
	Income (loss) before income taxes					14,069				(13,738	)
	Income tax (provision) benefit					(3,603	)			7,924
	Net income (loss)				$	10,466			$	(5,814	)
	Earnings (loss) per share:
		Basic			$	0.10			$	(0.06	)
		Diluted				0.10				(0.06	)
	Weighted-average shares used in computing per share amounts:
		Basic				101,952				102,381
		Diluted				104,098				102,381
	Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:
	Weighted-average shares outstanding					101,952				102,381
	Dilutive effect of performance-based stock units, restricted stock units and stock options					2,146				-
	Diluted shares					104,098				102,381

SELECTED BALANCE SHEET DATA		First Quarter
		2024			2023
		April 1, 2024			January 1, 2024
Cash and cash equivalents, including restricted cash		$	440,388		$	450,208
Accounts and notes receivable, net			367,537			413,557
Receivable from sale of SH E-MS property			-			6,737
Contract assets			320,514			292,050
Inventories			220,515			213,075
Total current assets			1,406,114			1,429,687
Property, plant and equipment, net			825,834			807,667
Operating lease right of use asset			83,847			86,286
Other non-current assets			983,015			1,000,023
Total assets			3,298,810			3,323,663
Short-term debt, including current portion of long-term debt		$	2,625		$	3,500
Accounts payable			348,913			334,609
Total current liabilities			671,207			703,984
Debt, net of discount			913,888			914,336
Total long-term liabilities			1,106,495			1,108,640
Total equity			1,521,108			1,511,039
Total liabilities and equity			3,298,810			3,323,663

SUPPLEMENTAL DATA					First Quarter
					2024				2023
	Gross margin					18.2	%			15.8	%
	Operating margin					3.0	%			(0.6	)%
	End Market Breakdown:
					First Quarter
					2024				2023
		Aerospace and Defense				46	%			43	%
		Automotive				13	%			17	%
		Data Center Computing				21	%			10	%
		Medical/Industrial/Instrumentation				14	%			19	%
		Networking				6	%			11	%
	Stock-based Compensation:
					First Quarter
		Amount included in:			2024				2023
			Cost of goods sold		$	2,029			$	1,662
			Selling and marketing			868				741
			General and administrative			3,595				2,562
			Research and development			295				275
			Total stock-based compensation expense		$	6,787			$	5,240
	Operating Segment Data:
					First Quarter
		Net sales:			2024				2023
		PCB			$	561,841			$	534,111
		RF&S Components				8,272				10,326
			Total net sales		$	570,113			$	544,437
		Operating segment income:
		PCB			$	69,652			$	51,634
		RF&S Components				1,662				2,168
		Corporate & Other				(40,482	)			(29,498	)
			Total operating segment income			30,832				24,304
		Amortization of definite-lived intangibles				(13,765	)			(27,772	)
			Total operating income (loss)			17,067				(3,468	)
			Total other expense			(2,998	)			(10,270	)
		Income (loss) before income taxes			$	14,069			$	(13,738	)

RECONCILIATIONS1
					First Quarter
					2024				2023
	Non-GAAP gross profit reconciliation2:
		GAAP gross profit			$	103,719			$	86,123
		Add back item:
			Amortization of definite-lived intangibles			2,336				5,808
			Stock-based compensation			2,029				1,662
			Unrealized gain on commodity hedge			(752	)			(2,128	)
			Purchase accounting related inventory markup			-				163
			Other charges			(162	)			1,233
		Non-GAAP gross profit			$	107,170			$	92,861
		Non-GAAP gross margin				18.8	%			17.1	%
	Non-GAAP operating income reconciliation3:
		GAAP operating income (loss)			$	17,067			$	(3,468	)
		Add back items:
			Amortization of definite-lived intangibles			13,765				27,772
			Stock-based compensation			6,787				5,240
			Gain on sale of assets			-				(173	)
			Unrealized gain on commodity hedge			(752	)			(2,128	)
			Purchase accounting related inventory markup			-				163
			Restructuring, acquisition-related and other charges			3,826				5,944
		Non-GAAP operating income			$	40,693			$	33,350
		Non-GAAP operating margin				7.1	%			6.1	%
	Non-GAAP net income and EPS reconciliation4:
		GAAP net income (loss)			$	10,466			$	(5,814	)
		Add back items:
			Amortization of definite-lived intangibles			13,765				27,772
			Stock-based compensation			6,787				5,240
			Non-cash interest expense			518				727
			Gain on sale of assets			-				(173	)
			Gain on sale of subsidiary			-				(1,339	)
			Unrealized gain on commodity hedge			(752	)			(2,128	)
			Purchase accounting related inventory markup			-				163
			Restructuring, acquisition-related and other charges			3,738				5,944
			Income taxes5			(1,735	)			(11,744	)
		Non-GAAP net income			$	32,787			$	18,648
		Non-GAAP earnings per diluted share			$	0.31			$	0.18
	Non-GAAP diluted number of shares:
		GAAP diluted number of shares				104,098				102,381
		Dilutive effect of performance-based stock units, restricted stock units and stock options				-				1,949
		Non-GAAP diluted number of shares				104,098				104,330
	Adjusted EBITDA reconciliation6:
		GAAP net income (loss)			$	10,466			$	(5,814	)
		Add back items:
			Income tax provision (benefit)			3,603				(7,924	)
			Interest expense			12,324				12,807
			Amortization of definite-lived intangibles			13,765				27,772
			Depreciation expense			24,696				25,253
			Stock-based compensation			6,787				5,240
			Gain on sale of assets			-				(173	)
			Gain on sale of subsidiary			-				(1,339	)
			Unrealized gain on commodity hedge			(752	)			(2,128	)
			Purchase accounting related inventory markup			-				163
			Restructuring, acquisition-related and other charges			3,900				4,668
		Adjusted EBITDA			$	74,789			$	58,525
		Adjusted EBITDA margin				13.1	%			10.7	%
	Free cash flow reconciliation:
		Operating cash flow			$	43,895			$	55,078
		Capital expenditures, net				(49,296	)			(30,707	)
		Free cash flow			$	(5,401	)		$	24,371

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, stock-based compensation expense, unrealized gain on commodity hedge, purchase accounting related inventory markup, and other charges.

3 Non-GAAP operating income and operating margin measures exclude amortization of intangibles, stock-based compensation expense, gain on sale of assets, unrealized gain on commodity hedge, purchase accounting related inventory markup, restructuring, acquisition-related costs, 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, stock-based compensation expense, non-cash interest expense on debt (before consideration of capitalized interest), gain on sale of assets, gain on sale of subsidiary, unrealized gain on commodity hedge, purchase accounting related inventory markup, 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.

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 income taxes, interest expense, amortization of intangibles, depreciation, stock-based compensation expense, gain on sale of assets, gain on sale of subsidiary, unrealized gain on commodity hedge, purchase accounting related inventory markup, 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.