TTM Technologes Reports Strong First Quarter 2007 Results
SANTA ANA, CA - May 2, 2007 - TTM Technologies, Inc. (Nasdaq: TTMI), North
America's largest printed circuit board manufacturer, today reported results for
the first quarter of 2007, which ended April 2, 2007.
Financial & Operational Highlights
First Quarter 2007 First quarter net sales of $176.9 million increased 143 percent
compared with the same period a year ago and 23 percent sequentially.
The Printed Circuit Group (PCG) acquisition was accretive to earnings in the first
quarter 2007, which was ahead of plan.
First quarter gross profit of $34.7 million increased $7.2 million sequentially.
The Company benefited from the PCG acquisition, which diversified our customer base
and broadened our end market exposure.
First Quarter 2007 Financial Results First quarter 2007 net sales increased $32.7
million, or 23 percent, from the fourth quarter of 2006, and $104.2 million, or
143 percent, to $176.9 million from the first quarter of 2006 due to the inclusion
of PCG. First quarter 2007 results included a full quarter of the operations of
PCG, which TTM acquired from Tyco International Ltd. on October 27, 2006, compared
with two months in the fourth quarter of 2006.
Gross margins were 19.6 percent for the first quarter of 2007, compared with 19.1
percent in the fourth quarter of 2006 and 27.8 percent for the first quarter of
2006. On a year-over-year basis, gross margins were affected by the inclusion of
PCG's backplane assembly operations, which inherently carry a lower gross margin
than printed circuit board manufacturing.
Selling and marketing expense for the first quarter of 2007 was $7.6 million, representing
4.3 percent of sales. This compares with $6.3 million, or 4.4 percent of sales,
in the fourth quarter of 2006 and $3.4 million, or 4.6 percent of sales, in the
General and administrative expense, including amortization of intangibles, was $9.4
million in the first quarter of 2007, compared with $9.5 million in the fourth quarter
of 2006 and $3.9 million in the year-ago period.
TTM posted operating income of $17.8 million for the first quarter of 2007, compared
with $11.5 million for the fourth quarter of 2006 and $13.0 million for the first
quarter of 2006.
Net income for the first quarter of 2007 was $8.5 million, or $0.20 per diluted
share, compared with $5.1 million, or $0.12 per diluted share, for the fourth quarter
of 2006 and $8.8 million, or $0.21 per diluted share, for the first quarter of 2006.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the
first quarter of 2007 was $25.5 million, compared with $18.5 million for the fourth
quarter of 2006 and $16.7 million for the first quarter of 2006. (A reconciliation
of this non-GAAP measure is provided after the GAAP financial statements below.)
PCB quick-turn business represented approximately 15 percent of net sales in the
first quarter of 2007, compared to 13 percent for the fourth quarter of 2006 and
21 percent for the first quarter of 2006. The year-over-year decline was primarily
due to PCG's limited quick-turn capacity.
"We are pleased with the Company's solid financial results for the first quarter
of 2007, the first full quarter of contributions from the PCG acquisition," said
Kent Alder, President and CEO. "Our results reflect the success of our strategy
to diversify our customer base through the acquisition of PCG, which clearly differentiates
us from our peers. With the exception of high-end computing and the inventory realignment
by one of our key customers, we saw continued steady demand."
Commenting on TTM's integration of PCG, Alder noted, "The integration is basically
complete, which is a tribute to the planning and execution of our combined management
team. The Company has paid down debt ahead of schedule, which helped make the acquisition
accretive to earnings in the first quarter of 2007." Alder concluded, "We are off
to a solid start in 2007 and will continue to benefit from the greater size, expanded
customer base, diversification, and cross-selling opportunities that we gain with
the acquisition of the Printed Circuit Group."
The Company noted that financial results for the first 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 first quarter change from those established in this
press release, the Company expects that revised numbers would be issued when it
files its Quarterly Report on Form 10-Q on or about May 14, 2007.
Balance Sheet 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.
In the first quarter of 2007, TTM paid down $50 million, or 25 percent of the debt,
and funded net capital expenditures of $3.6 million. Cash and short-term investments
at the end of the first quarter of 2007 totaled $45.4 million, compared with $70.7
million at year-end 2006.
Second Quarter Forecast For the second quarter of 2007, TTM estimates revenues in
a range of $158 million to $167 million and earnings in a range of $0.13 to $0.19
per diluted share. "We expect satisfactory demand from most end markets, and we
anticipate that the aerospace/defense sector will remain solid," said Alder. "In
addition, we expect the PCG acquisition to continue to be accretive to earnings
despite the closure of the Dallas, Oregon, facility on April 6, 2007, which will
reduce second quarter revenues by approximately $10 million. We paid down an additional
$25 million of debt in April, reducing our outstanding balance to $125 million,
and we expect to continue paying down debt ahead of the required schedule in the
To Access the Live Web Cast/Conference Call The company will conduct a conference
call to discuss its first-quarter performance and outlook today at 10 a.m. Eastern/7
a.m. Pacific time. To listen to the live web cast on the Internet, log on to the
company website at www.ttmtech.com. To access
the live conference call, dial 800-946-0742.
To Access A Replay of the Web Cast A replay of the conference call will be available
until Monday, May 7, 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.
About TTM TTM Technologies, Inc. is North America's largest printed circuit board
manufacturer, focusing on quick-turn and technologically advanced PCBs and the backplane
and sub-system assembly business. 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. Additional
information can be found at www.ttmtech.com.
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TTM Technologies, Inc. Reports First Quarter 2007
"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.