TTM Technologies, Inc. Reports Third Quarter 2002 Results and Stock Buy-Back Program
SANTA ANA, CA - October 16, 2002 - TTM Technologies, Inc. Reports
Third Quarter 2002 Results and Stock Buy-Back Program.
Technologies, Inc. (Nasdaq: TTMI), a leading manufacturer of time-critical,
technologically advanced printed circuit boards, today reported results for the
third quarter ended September 30, 2002. The company also announced that its board
of directors has authorized a stock buy-back program.
In the third quarter, revenue and profitability declined, year-over-year, due to
continued weakness in the electronics industry. Net sales declined 24 percent to
$20.6 million, compared to $26.9 million for the third quarter of 2001. For the
third quarter of 2002, quick-turn business increased to 45 percent of total revenues,
compared to 40 percent for the third quarter of 2001.
Gross profit declined 52 percent to $2.8 million, as gross margins declined to 13.8
percent in the third quarter of 2002, compared to 21.8 percent for the same period
in 2001. As a result of lower volume and reduced absorption of fixed manufacturing
overhead, TTM reported an operating loss of $446,000, for the third quarter of 2002,
compared to operating income of $2.0 million for the third 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 third quarter of 2002, the net loss was $369,000, or $0.01 per diluted share,
compared to net income of $1.0 million, or $0.03 per diluted share, for the same
period in 2001. The net cash loss was $69,000, or breakeven on a per-share basis,
compared to cash earnings of $2.2 million, or $0.06 per diluted share, for the same
period in 2001.
Earnings before interest, taxes, depreciation and amortization (EBITDA) declined
63 percent to $1.9 million for the third quarter of 2002, compared to $5.3 million
for the same period in 2001.
"Business conditions remained challenging during the quarter," said Kent
Alder, President and CEO of TTM Technologies. "Nonetheless, we've continued
to successfully manage costs, surpassing the cost savings expected from the second-quarter
production realignment and headcount reduction. As a result, gross profit increased
45 percent sequentially, as gross margins increased from 8.4 percent in the second
quarter of 2002 to 13.8 percent in the third quarter of 2002."
"Throughout the downturn in the electronics industry, we have maintained a
strong balance sheet and excellent liquidity," said Alder. At the end of the
third quarter, TTM had net cash (cash less current and long-term debt obligations)
of $8.5 million, compared with net debt of $8.1 million at year-end 2001. Cash flow
from operations remained positive, at $1.8 million in the third quarter of 2002,
and the company has the full $25 million available under its revolving line of credit.
TTM's board authorized a stock repurchase program, enabling the company to buy back
up to $10 million of common stock. "With the current depressed state of the
electronics industry, there are a lot of undervalued assets," said Alder. "With
our strong balance sheet and net cash position, we have the ability to purchase
undervalued assets, including our own stock."
The repurchase program authorizes management, at its discretion,
to make purchases from time to time on the open market or in privately negotiated
block transactions. The stock repurchases would be based on management's assessment
of TTM's capital structure and liquidity, the market price of TTM's stock compared
to management's assessment of its underlying value, as well as regulatory, accounting
and other factors.
On October 15, 2002, the closing price of TTM common stock was $1.55
per share, and the company had approximately 40 million shares outstanding.
While the stock buy-back program is not expected to have a material impact on earnings
per share at current income levels, it should have an accretive impact when the
company is generating positive net income.
Production Realignment and Cost Savingsl
In the second quarter of 2002, TTM realigned production among its three facilities,
located in Burlington and Redmond, Washington, and Santa Ana, California, and reduced
headcount by approximately 130 employees. As a result, beginning in the third quarter
of 2002, the company realized quarterly cost savings of more than $1 million.
For the fourth quarter of 2002, TTM anticipates revenues ranging from $19 million
to $22 million, earnings per share between breakeven and a loss of $0.03, and cash
earnings per share between a profit of $0.01 and a loss of $0.02.
"Despite the protracted and deep downturn in the electronics industry, we aggressively
managed the business to market conditions and enhanced operating efficiencies,"
concluded Alder. "And with our low-cost production capabilities and strong
balance sheet, we plan to capitalize on the opportunities presented by the downturn
and are well positioned for an industry upturn."
TTM Technologies, Inc. is a leading supplier of time-critical, 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 October 23, 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, that 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, and the other "Factors
That May Affect Future Results" set forth in the company's Form 10-K for 2000.
"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.