TTM Technologies, Inc. Reports Second Quarter 2002 Results; Announces Production
Realignment and Cost-Saving Restructuring
REDMOND, WA - August 1, 2002 - TTM Technologies, Inc. (Nasdaq:
TTMI), a leading manufacturer of time- critical, technologically advanced printed
circuit boards, today reported results for the second quarter ended July 1, 2002.
The company also announced the realignment of production among its three facilities,
an action expected to yield significant cost savings.
In the second quarter, revenue and profitability declined, year-over-year, due to
continued weakness in the electronics industry. Net sales declined 24 percent to
$23.3 million, compared to $30.7 million for the second quarter of 2001. For the
second quarter of 2002, quick-turn business remained essentially flat at 44 percent
of total revenues, compared to 45 percent for the second quarter of 2001.
Gross profit declined 75 percent to $2.0 million, as gross margins declined to 8.4
percent in the second quarter of 2002, compared to 25.3 percent for the same period
in 2001. As a result of lower volume and pricing, reduced absorption of fixed manufacturing
overhead, and a $907,000 restructuring charge, the company reported an operating
loss of $1.9 million in the second quarter of 2002, compared to operating income
of $3.8 million for the second quarter of 2001. Prior-period results included a
quarterly goodwill amortization charge of $900,000, which was eliminated with the
adoption of Statement of Financial Accounting Standards No. 142 in the first quarter
For the second quarter of 2002, the net loss was $1.3 million, or $0.03 per diluted
share, compared to net income of $2.2 million, or $0.06 per diluted share, for the
same period in 2001. The net cash loss was $1.0 million, or $0.02 on a per share
basis, compared to $3.4 million, or $0.09 per diluted share, for the same period
in 2001. Adjusted for the restructuring charge, the net cash loss per share for
the second quarter of 2002 was $0.01.
Earnings before interest, taxes, depreciation and amortization (EBITDA) declined
86 percent to $1.0 million for the second quarter of 2002, compared to $7.4 million
for the same period in 2001.
"We continue to manage the business to meet market conditions," said Kent
Alder, President and CEO of TTM Technologies. "With our production realignment
and associated workforce reduction, we further lowered our cost structure."
Production Realignment and Cost Savings
The latest cost-cutting steps include the realignment of production among TTM's
three facilities, located in Burlington and Redmond, Washington, and Santa Ana,
California. As a result of the realignment, the Burlington facility will specialize
in inner layer production. Outer layers, previously produced in Burlington, will
be shifted to Redmond and Santa Ana. With the reduction of 130 employees, plus associated
overhead and management support at the Burlington facility, TTM expects to generate
quarterly cost savings in excess of $1.0 million. The company booked a pretax charge
of $907,000, associated with the production realignment and headcount reduction.
Return on Invested Capital
TTM's return on invested capital (ROIC), based on tax-affected EBITA, was 1.2 percent
in the second quarter of 2002, excluding the restructuring charge, compared with
10.5 percent in the year-ago period. On a trailing 12-month basis, TTM generated
an ROIC of 4.4 percent.
"Our increasingly efficient production capabilities, combined with our strong
balance sheet, provide the strength we need to withstand the protracted downturn
in the electronics industry," concluded Alder. "We have continued to invest
in our time and technology strategy and remain well positioned to capture market
share when the industry recovers."
TTM Technologies, Inc. is a leading supplier of time-critical, technologically advanced
printed circuit boards to original equipment manufacturers and electronic 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 second 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 August 8, 2002, on the company's Web site
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, and other "Risk Factors" set forth in the company's Form 10-K
"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.