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TTM Technologies, Inc. Reports Second Quarter 2002 Results; Announces Production Realignment and Cost-Saving Restructuring

for immediate release

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.

Second-Quarter Results

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 of 2002.

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.

Conference Call/Webcast
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 at 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, and other "Risk Factors" set forth in the company's Form 10-K for 2001.

"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:
08/01/2002

Contact

Stacey Peterson
Chief Financial Officer
714/241-0303