TTM Technologies, Inc. Reports Fourth Quarter and Full Year 2006 Results
SANTA ANA, CA - February 15, 2007 - TTM Technologies, Inc. (Nasdaq: TTMI),
a leading manufacturer of time-critical and technologically advanced printed circuit
boards, today reported results for the fourth quarter of 2006, ended December 31,
FINANCIAL & OPERATIONAL HIGHLIGHTS
The Company completed the acquisition of the Printed Circuit Group (PCG), making
TTM North America's largest printed circuit board manufacturer. Fourth quarter net
sales of $144.3 million increased 90 percent over the 2006 third quarter and 129
percent over the fourth quarter of 2005. 2006 net sales of $369.4 million increased
54 percent over 2005 net sales.
FOURTH QUARTER 2006 FINANCIAL RESULTS
Fourth quarter 2006 results include two months of the operations of PCG, which TTM
acquired from Tyco International Ltd. on October 27, 2006.
Fourth quarter 2006 net sales increased $68.5 million, or 90 percent, to $144.3
million from the third quarter of 2006 and $81.1 million, or 129 percent, from the
fourth quarter of 2005, due primarily to the inclusion of PCG.
PCB quick-turn business represented approximately 13 percent of net sales in the
fourth quarter of 2006, compared to 17 percent for the third quarter of 2006 and
22 percent for the fourth quarter of 2005. The decrease was primarily due to PCG's
limited quick-turn capacity.
Gross margins were 18.9 percent for the fourth quarter of 2006, compared with 29.7
percent in the third quarter of 2006 and 23.8 percent for the fourth quarter of
2005. Gross profit was negatively impacted by approximately $4.0 million for the
value of the manufacturing profit added to the PCG inventories at the acquisition
date. These inventories were substantially sold during the fourth quarter. Gross
margins also were affected by the inclusion of PCG's backplane assembly operations,
which inherently carry a lower gross margin than printed circuit board manufacturing.
Selling expense for the fourth quarter of 2006 was $6.3 million, representing 4.4
percent of sales. This compares to $3.3 million, or 4.4 percent of sales, in the
third quarter of 2006 and $3.0 million, or 4.8 percent of sales, in the year-ago
General and administrative expense, including amortization of intangibles, was $9.5
million in the fourth quarter of 2006, compared to $4.1 million in the third quarter
of 2006 and $3.1 million in the year-ago period. G&A expense for the fourth quarter
of 2006 included approximately $700,000 of audit and consulting fees related to
our accounting for and integration of the PCG acquisition.
TTM posted operating income of $11.2 million for the fourth quarter of 2006, compared
to $15.0 million for the third quarter of 2006 and $8.8 million for the fourth quarter
TTM recorded its fourth quarter income tax provision at a higher rate in order to
adjust the full-year provision. The PCG acquisition included additional domestic
locations in different states with higher tax rates, most notably California. The
company anticipates that its tax rate in the first quarter of 2007 will be approximately
Net income for the fourth quarter of 2006 was $4.9 million, or $0.12 per diluted
share, compared with $10.5 million, or $0.25 per diluted share, for the third quarter
of 2006 and $19.0 million, or $0.46 per diluted share, for the fourth quarter of
2005. Fourth quarter 2005 earnings included a $0.31 per diluted share benefit from
the reversal in TTM's deferred income tax asset valuation allowance.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the
fourth quarter of 2006 was $18.2 million, compared with $19.0 million for the third
quarter of 2006 and $12.5 million for the fourth quarter of 2005. A reconciliation
of this non-GAAP measure is provided after the GAAP financial statements below.
The Company noted that financial results for the fourth quarter may be subject to
change pending the resolution of certain accounting matters relating to the acquisition
of PCG. Such changes are likely to affect the opening balance sheet of the acquired
entity. Should results for the fourth quarter 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, 2007.
The $226 million purchase price for the PCG acquisition was financed with a $200
million, 6-year term loan and $26 million from cash on the balance sheet.
Cash and short-term investments at the end of the fourth quarter totaled $70.7 million,
compared with $110.3 million in the third quarter of 2006. The change in cash was
primarily attributable to the PCG purchase price plus related acquisition costs
of approximately $34 million and capital expenditures of $5.1 million in the fourth
FULL YEAR 2006 FINANCIAL RESULTS Net sales for 2006, including two months
of operations from PCG, were $369.4 million, compared to $240.2 million for 2005.
Net income increased to $34.8 million, or $0.82 per diluted share, in 2006, compared
to $30.8 million, or $0.74 per diluted share, in 2005. The reversal of the deferred
income tax asset valuation allowance accounted for $12.7 million, or $0.31 per diluted
share, of TTM's 2005 net income.
PROGRESS INTEGRATING ACQUIRED PRINTED CIRCUIT GROUP
Commenting on TTM's results for the fourth quarter and year end, Kent Alder, President
and CEO, noted, "We are very pleased with our performance, both operationally and
financially. Our financial results were solid, and we continue to make rapid and
significant progress toward our goal of integrating TTM Technologies and the Printed
Circuit Group as soon as possible. In addition, TTM's exclusive focus on printed
circuit boards and backplane assembly enables us to bring greater operating efficiency
and productivity to all aspects of the business."
Alder continued, "Although quick-turn business has declined as a percentage of sales,
the acquisition of PCG provides us with a significant opportunity to cross-sell
TTM's quick-turn capabilities to the PCG customer base. We are seeing strength in
the networking and military markets. We gained about 500 customers through the acquisition,
and we added 30 new customers during the quarter." Alder concluded, "We are excited
by our momentum and believe that we are well positioned to capitalize on the opportunities
in the printed circuit board industry."
FORECAST FOR FIRST QUARTER ENDING APRIL 2, 2007
For the first quarter of 2007, TTM estimates revenues in a range of $168 million
to $174 million and earnings in a range of $0.13 to $0.18 per diluted share.
TO ACCESS THE LIVE WEB CAST / CONFERENCE CALL
The company will conduct a conference call to discuss its fourth-quarter performance
and outlook today at 4:30 p.m. Eastern/1:30 p.m. Pacific time. Investors will have
the opportunity to listen to the conference call over the Internet. To listen to
the live web cast, log on to the company website at
www.ttmtech.com. To access the live conference call, dial 800-967-7185.
TO ACCESS A REPLAY OF THE WEB CAST
A replay of the conference call will be available until Thursday, February 22, on
the company's Web site, www.ttmtech.com.
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 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 PCG business, increased
competition from low-cost foreign manufacturers, and other "Risk Factors" set forth
in the company's most recent SEC filings.
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. TTMI's
common stock is publicly traded on the NASDAQ Global Market (NASDAQ GM: TTMI). The
company is based in Santa Ana, California. Additional information can be found at
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TTM Technologies, Inc. Reports Fourth Quarter
"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.