TTM Technologies, Inc. Reports Strong Third Quarter 2006 Results, Completes Acquisition
of Tyco Printed Circuit Group
SANTA ANA, CA - November 1, 2006 - TTM Technologies, Inc. (Nasdaq: TTMI),
a leading manufacturer of time-critical and technologically advanced printed circuit
boards, today reported results for the third quarter of 2006.
Third Quarter Results
Third quarter 2006 net sales increased $14.8 million, or 24.2 percent, to $75.8
million from the third quarter of 2005 and decreased $0.9 million, or 1.2 percent,
from the second quarter of 2006.
For the third quarter of 2006, quick-turn business represented 17 percent of net
sales compared to 20 percent for the second quarter of 2006 and 21 percent for the
third quarter of 2005. The sequential decrease resulted from strength in our higher-volume
business and rather flat conditions in the quick-turn market during the third quarter.
Gross margins were 29.7 percent for the third quarter of 2006, compared with 30.0
percent during the second quarter of 2006 and 23.2 percent for the third quarter
of 2005. Gross margins were stable, sequentially, due to improved PCB pricing and
the company's ability to pass through rising raw material costs.
Selling and marketing expense was $3.3 million in the third quarter of 2006, a decrease
of $125,000 over the second quarter of 2006 and an increase of $279,000 from the
year-ago period. As a percentage of sales, selling and marketing expense was 4.4
percent in the third quarter of 2006, compared to 4.5 percent in the second quarter
of 2006 and 5.0 percent in the third quarter of 2005.
General and administrative expense, including amortization of intangibles, was $4.1
million in the third quarter of 2006, an increase of $158,000 over the second quarter
of 2006 and a decrease of $1.0 million from the year-ago period. The third quarter
of 2005 included a $2.0 million expense accrual related to an agreement in principle
to resolve a customer dispute concerning goods shipped in 2002 and 2003. The year-over-year
decrease was offset somewhat by higher incentive compensation, stock-based compensation
and labor-related expenses in the third quarter of 2006. As a percentage of sales,
G&A expense was 5.4 percent in the third quarter of 2006, compared to 5.2 percent
in the second quarter of 2006 and 8.5 percent in the third quarter of 2005.
TTM posted operating income of $15.0 million for the third quarter of 2006, compared
to $15.6 million for the second quarter of 2006 and $5.9 million for the third quarter
Net income for the third quarter of 2006 was $10.5 million, or $0.25 per diluted
share, compared with $10.6 million, or $0.25 per diluted share, for the second quarter
of 2006, and $4.1 million, or $0.10 per diluted share, for the third quarter of
EBITDA (earnings before interest, taxes, depreciation and amortization) was $19.0
million in the third quarter of 2006 compared with $19.4 million in the second quarter
of 2006 and $9.1 million in the third quarter of 2005.
In the third quarter of 2006, TTM generated cash flow from operations of $11.7 million,
enabling it to fund net capital expenditures of $3.0 million, while expanding its
cash and short-term investments to a total of $110.3 million, an increase of $9.0
million during the quarter.
"We continue to be pleased with our ability to execute our strategy and generate
superior financial results," said Kent Alder, President and CEO of TTM Technologies.
"Market conditions were relatively stable in the third quarter. We effectively planned
for and managed our business to account for higher raw material costs. We continue
to provide our customers with value-added services as well as technically advanced
products on a timely basis, which helps us to maintain our gross margins."
Acquisition of Tyco Printed Circuit Group
On October 27, 2006, TTM completed the acquisition of substantially all of the assets
of the Tyco Printed Circuit Group (TPCG). "The combination makes TTM Technologies
the largest PCB manufacturer in North America, with annualized sales of approximately
$650 million," stated Alder. "In addition to our leadership position in quick turn
and technology, we are now a leader in the attractive military/aerospace sector
of the PCB market and will provide expanded service capabilities to a more diversified
"Although TPCG has lower profit margins than TTM, our exclusive focus on printed
circuit boards and related technologies should enable us to bring greater operating
efficiency and productivity to the combined operations," added Alder. "Of course,
TPCG's operations include back-plane assembly, which is inherently less profitable
than PCB manufacturing. We expect the acquisition to be accretive to earnings within
For the fourth quarter of 2006, TTM is estimating revenues in a range of $140 million
to $148 million and earnings in a range of $0.13 to $0.19 per diluted share. TTM's
fourth quarter results will include roughly two months of TPCG's results.
"We expect the printed circuit board market to remain relatively stable, with flat
pricing and flat to slightly higher volume," concluded Alder. "In the fourth quarter,
profits will be negatively impacted due to costs to integrate the TPCG operations.
In addition, the accounting treatment associated with allocating the purchase price
to the fair market value of TPCG's assets will affect our earnings."
TTM Technologies, Inc. is a leading supplier of time-critical and 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.
The company will conduct a conference call to discuss its third-quarter performance
and outlook today at 4:30 p.m. Eastern/1:30 p.m. Pacific time. The call will be
simulcast and available for replay until November 3, 2006, on the company's website,
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, the unpredictability of and
potential fluctuation in future revenues and operating results, the risks and uncertainties
associated with the integration of the recently acquired TPCG business, increased
competition from low-cost foreign manufacturers, and other "Risk Factors" set forth
in the company's most recent SEC filings.
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TTM Technologies, Inc. Reports
Third Quarter 2006 Results
"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.