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

Rhea-AI Summary

TTM Technologies (NASDAQ:TTMI) reported fourth quarter 2021 net sales of $598.1 million, up from $523.8 million in Q4 2020. GAAP net income fell to $8.4 million or $0.08 per diluted share, down from $39 million or $0.34 per diluted share in the previous year. For the full year 2021, net sales increased by 6.8% to $2.25 billion. Non-GAAP net income for 2021 was $138 million, or $1.28 per diluted share. TTM estimates Q1 2022 revenue between $540 million and $580 million with non-GAAP net income ranging from $0.20 to $0.26 per diluted share.

Positive

• Fourth quarter net sales increased by 14.2% year-over-year.
• Full year 2021 net sales grew by 6.8%, reaching $2.25 billion.
• Operating cash flow for 2021 was $176.6 million, demonstrating strong cash generation.

Negative

• GAAP net income decreased significantly from $39 million in Q4 2020 to $8.4 million in Q4 2021.
• Non-GAAP net income also fell from $40.2 million in Q4 2020 to $36.2 million in Q4 2021.
• First quarter 2022 revenue guidance is lower than fourth quarter performance, reflecting labor and seasonal challenges.

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.
	3 Non-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.
	4 Non-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

FAQ

What were TTM Technologies' earnings results for Q4 2021?

TTM Technologies reported Q4 2021 net sales of $598.1 million and GAAP net income of $8.4 million, or $0.08 per diluted share.

How did TTM Technologies perform in fiscal year 2021?

In fiscal year 2021, TTM Technologies achieved net sales of $2.25 billion, a 6.8% increase from the previous year.

What is the revenue outlook for TTM Technologies in Q1 2022?

TTM Technologies estimates Q1 2022 revenue between $540 million and $580 million, with non-GAAP net income ranging from $0.20 to $0.26 per diluted share.

What were TTM Technologies' non-GAAP earnings for fiscal year 2021?

TTM reported non-GAAP net income of $138 million, or $1.28 per diluted share, for fiscal year 2021.