Technologies, Inc. Reports Second Quarter 2007 Results
SANTA ANA, CA - July 31, 2007 - TTM Technologies, Inc. (Nasdaq: TTMI), North
America's largest printed circuit board manufacturer, today reported results for
the second quarter of 2007, ended July 2, 2007.
Highlights The acquired Printed Circuit Group (PCG) continued to be accretive for
the second consecutive quarter.
The Company paid down $30 million in debt associated with the PCG acquisition ahead
Orders from a key networking customer returned to healthy levels at the end of May,
and the aerospace/defense sector remained strong.
Second Quarter 2007 Financial Results Second quarter 2007 net sales of $162.0 million
declined $14.9 million, or 8.4 percent, from the first quarter of 2007 due primarily
to the closure of the company's Dallas, Oregon, facility in April. Compared to the
second quarter of 2006, sales increased $85.3 million, or 111 percent, due to the
inclusion of the Printed Circuit Group, which TTM acquired from Tyco International
Ltd. on October 27, 2006.
Gross margins were 18.2 percent for the second quarter of 2007, compared with 19.6
percent in the first quarter of 2007 and 30.0 percent for the second quarter of
2006. On a year-over-year basis, gross margins were affected by the inclusion of
PCG's backplane assembly operations, which carry a lower gross margin than printed
circuit board manufacturing.
Selling and marketing expense for the second quarter of 2007 was $7.6 million, representing
4.7 percent of sales. This compares to $7.6 million, or 4.3 percent of sales, in
the first quarter of 2007, and $3.5 million, or 4.5 percent of sales, in the year-ago
General and administrative expense, including amortization of intangibles, was $8.9
million in the second quarter of 2007, compared to $9.4 million in the first quarter
of 2007 and $4.0 million in the year-ago period. As a percent of sales, general
and administrative expense was 5.5 percent in the second quarter of 2007 compared
to 5.3 percent in the first quarter and 5.2 percent in the year-ago period.
TTM posted operating income of $13.1 million for the second quarter of 2007 compared
to $17.8 million for the first quarter of 2007 and $15.6 million for the second
quarter of 2006.
Net income for the second quarter of 2007 was $6.0 million, or $0.14 per diluted
share, compared with $8.5 million, or $0.20 per diluted share, for the first quarter
of 2007 and $10.6 million, or $0.25 per diluted share, for the second quarter of
EBITDA (earnings before interest, taxes, depreciation and amortization) for the
second quarter of 2007 was $20.1 million, compared with $25.5 million for the first
quarter of 2007 and $19.4 million for the second quarter of 2006. (A reconciliation
of this non-GAAP measure is provided after the GAAP financial statements below.)
PCB quick-turn business represented approximately 17 percent of net sales in the
second quarter of 2007, which was unchanged from the first quarter of 2007 (excluding
production from the Dallas, Oregon, facility, which was closed on April 6, 2007).
In the second quarter of 2006, PCB quick-turn business represented approximately
20 percent of net sales. The year-over-year decline was primarily due to PCG's limited
"As we expected, a number of factors resulted in lower revenues and earnings in
the second quarter of 2007," said Kent Alder, President and CEO of TTM. "The closure
of the Dallas facility reduced second quarter 2007 revenues by $11 million. A temporary
slowdown in orders from a key networking customer-as they adjusted inventory levels
in their supply chain-also negatively affected second quarter results. However,
the customer's orders returned to a healthy level at the end of May. In addition,
we had some short-term issues related to operating efficiency and the timing of
customer orders at a couple of our plants."
"The benefits from the acquisition of the Printed Circuit Group continue to exceed
our expectations," added Alder. "At the time of the purchase, we said the combination
would be accretive to earnings within the first year. In fact, it was accretive
in its first full quarter-the first quarter of 2007. It was accretive again in the
second quarter of 2007, and we expect it to remain so going forward."
The Company noted that financial results for the second quarter may be subject to
change pending the resolution of certain accounting matters relating to the acquisition
of PCG. Should results for the second 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 August 13, 2007.
Segment Information As a result of the PCG acquisition, TTM now has two reportable
operating segments: PCB Manufacturing and Commercial Assembly. For the PCB Manufacturing
segment, net sales (before inter-segment sales) were $138.6 million in the second
quarter of 2007, compared with $152.1 million in the first quarter of 2007. Operating
segment income (before amortization of intangibles) was $12.0 million in the second
quarter of 2007, compared with $16.4 million in the first quarter of 2007.
For the Commercial Assembly segment, net sales (before inter-segment sales) were
$32.2 million in the second quarter of 2007, compared with $33.7 million in the
first quarter of 2007. Operating segment income (before amortization of intangibles)
was $2.1 million, compared with $2.4 million in the first quarter of 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 second quarter of 2007, TTM paid down $30 million of debt, reducing the debt
balance to $120 million at the end of the quarter. In July, TTM repaid an additional
$11 million, bringing the current debt balance to $109 million. Cash and short-term
investments at the end of the second quarter of 2007 totaled $26.1 million, compared
with $45.4 million at the end of the first quarter of 2007.
Third Quarter Forecast For the third quarter of 2007, TTM estimates revenues in
a range of $160 million to $168 million and earnings in a range of $0.14 to $0.20
per diluted share. This estimate includes approximately $3 million in revenue from
customers of the former Dallas, Oregon, plant. "We expect to benefit from renewed
strength with our networking customers," concluded Alder. "Additionally, the military
sector remains very healthy. The high end computing market, however, remains soft.
And we continue to experience competitive
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 4:30 p.m. Eastern/1:30
p.m. Pacific time. To listen to the live web cast on the Internet, log on to the
company's 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 Tuesday, August 7, on the company's Web site,
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 Second Quarter