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TTM Technologies, Inc. Reports Fourth Quarter 2002 Results; Additional Cost Savings at Redmond Facility

for immediate release

REDMOND, WA - January 31, 2003 - TTM Technologies, Inc. (Nasdaq: TTMI), a leading manufacturer of time-critical, technologically advanced printed circuit boards, today reported results for the fourth quarter and full year ended December 31, 2002.

Fourth-Quarter Results
In the fourth quarter, revenue and profitability declined, year-over-year, due to continued weakness in the electronics industry. Net sales declined 16 percent to $21.4 million, compared to $25.4 million for the fourth quarter of 2001. For the fourth quarter of 2002, quick-turn business increased to 52 percent of total revenues, compared to 39 percent for the fourth quarter of 2001.

Gross profit declined 51 percent to $2.4 million, as gross margins declined to 11.0 percent in the fourth quarter of 2002, compared to 19.0 percent for the same period in 2001.

As a result of lower volume, reduced absorption of fixed manufacturing overhead and a $3.0 million restructuring charge associated with the closure of the Burlington, Washington facility, TTM reported an operating loss of $4.0 million for the fourth quarter of 2002, compared to operating income of $863,000 for the fourth quarter of 2001. Prior-period results included quarterly goodwill amortization of $900,000, which was eliminated with the adoption of Statement of Financial Accounting Standards No. 142 in the first quarter of 2002.

For the fourth quarter of 2002, TTM reported net income of $3.5 million, or $0.09 per diluted share, which included an extraordinary gain of $6.3 million, or $0.16 per share, associated with the acquisition of Honeywell's Advanced Circuits operation (ACI). Excluding the extraordinary gain and the restructuring charge, the net loss in the fourth quarter of 2002 was $796,000 or $0.02 per share.

For the fourth quarter of 2001, TTM reported net income of $275,000, or $0.01 per diluted share. Excluding goodwill amortization, net income was $852,000, or $0.02 per diluted share.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter of 2002 was zero down from $4.2 million for the same period in 2001.

"While business conditions remained weak in the fourth quarter, we aggressively managed the business to market demand," said Kent Alder, President and CEO of TTM Technologies. "In addition, we continued to invest in our time and technology strategy."

Acquisition of ACI
On December 26, 2002, TTM completed the acquisition of Honeywell's Advanced Circuits operation (ACI) at a cost of approximately $1 million, including fees and expenses. "The combination nearly doubles our revenues, provides very high technology capacity, and gives us access to additional blue-chip clients, creating opportunities to cross sell our capabilities," said Alder.

Excluding the contribution from ACI?which was consolidated into TTM's results for five days?revenues for the fourth quarter of 2002 were $20.0 million. The inclusion of ACI did not materially affect operating or net income.

The extraordinary, non-cash gain associated with the purchase of ACI resulted from the fact that the purchase price was less than the fair value of the net assets acquired. The extraordinary gain is based upon a preliminary fair value assessment of the net assets acquired.

Additional Cost Savings at Redmond
TTM also announced layoffs at its Redmond, Washington facility. As a result, the company expects to generate annual cost savings of approximately $1.8 million, as of the second quarter of 2003.

"This cost-cutting action was taken in response to continued demand weakness in the industry," stated Alder. "Additionally, we were able to eliminate several high level positions that became redundant with the acquisition of ACI."

Full-Year Results
For 2002, net sales declined 31 percent to $89.0 million, compared to $129.0 million in 2001.

Gross profit declined 74 percent to $9.5 million in 2002, as gross margins declined to 10.7 percent for 2002, compared to 28.5 percent for 2001.

The company posted an operating loss of $6.5 million in 2002, compared with operating income of $19.2 million in 2001. Reported results in 2002 included restructuring charges of $3.9 million. Reported 2001 figures included goodwill amortization of $3.6 million, which was eliminated with the adoption of FAS No. 142.

For 2002, TTM reported net income of $1.6 million, or $0.04 per diluted share, including the extraordinary gain associated with the ACI acquisition. Excluding the extraordinary gain and the restructuring charges, TTM had a net loss of $2.1 million, or $0.05 per share.

For 2001, TTM reported net income of $11.0 million, or $0.28 per diluted share, including the amortization of goodwill. Excluding goodwill amortization, net income was $13.3 million, or $0.34 per diluted share.

Financial Strength
"Throughout the downturn in the electronics industry, we have maintained a strong balance sheet and good liquidity," said Alder. At the end of the fourth quarter, TTM had net cash of $8.9 million, compared with net debt of $8.1 million at year-end 2001.

Outlook
For the first quarter of 2003, TTM anticipates revenues ranging from $38 to $40 million and GAAP earnings per share between breakeven and a loss of $0.03.

"We have said that we would use our competitive strengths and strong balance sheet to capitalize on the opportunities presented by the downturn in the electronics industry," added Alder. "With the acquisition of ACI, we have done exactly that. And we are positioned better than ever to benefit from a market upturn."

TTM Technologies, Inc. is a leading supplier of time-critical, technologically advanced printed circuit boards to original equipment manufacturers and electronics manufacturing services companies. 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.

Conference Call/Webcast
The company will conduct a conference call to discuss its fourth-quarter performance and outlook today at 11 a.m. Eastern/8 a.m. Pacific time. The call will be simulcast and available for replay until February 7, 2003, on the company's Web site, www.ttmtech.com.

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 company's dependence upon a small number of customers, general economic conditions and specific conditions in the markets TTM addresses, including the recent significant slowdown in the technology sector and related excess capacity, the unpredictability of future revenues and expenses, potential fluctuations in revenues and operating results, the company's ability to successfully integrate the ACI acquisition, and other "Risk Factors" set forth in the company's Form 10-K for 2001.

- Tables Follow - (Click on below link)
TTM Technologies, Inc. Earnings Release Schedule For Forth Quarter 2002

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding TTM Technologies' business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.

 

 

Company

TTM Technologies
(ticker: TTMI, exchange: NASDAQ)

Release Info

News Release:
01/31/2003

Contact

Stacey Peterson
Chief Financial Officer 714/241-0303