Gruss E.
TTM Technologies, Inc. Reports Fourth Quarter 2002 Results; Additional Cost Savings At Redmond Facility
1/31/2003 7:12:00 AM
REDMOND, Wash., Jan 31, 2003 /PRNewswire-FirstCall via COMTEX/ -- TTM Technologies, Inc. (TTMI) , a leading manufacturer of time-critical, technologically advanced printed circuit boards, today reported results for the fourth quarter and full year ended December 31, 2002.
Fourth-Quarter Results
In the fourth quarter, revenue and profitability declined, year-over-year, due to continued weakness in the electronics industry. Net sales declined 16 percent to $21.4 million, compared to $25.4 million for the fourth quarter of 2001. For the fourth quarter of 2002, quick-turn business increased to 52 percent of total revenues, compared to 39 percent for the fourth quarter of 2001.
Gross profit declined 51 percent to $2.4 million, as gross margins declined to 11.0 percent in the fourth quarter of 2002, compared to 19.0 percent for the same period in 2001.
As a result of lower volume, reduced absorption of fixed manufacturing overhead and a $3.0 million restructuring charge associated with the closure of the Burlington, Washington facility, TTM reported an operating loss of $4.0 million for the fourth quarter of 2002, compared to operating income of $863,000 for the fourth quarter of 2001. Prior-period results included quarterly goodwill amortization 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 fourth quarter of 2002, TTM reported net income of $3.5 million, or $0.09 per diluted share, which included an extraordinary gain of $6.3 million, or $0.16 per share, associated with the acquisition of Honeywell's Advanced Circuits operation (ACI). Excluding the extraordinary gain and the restructuring charge, the net loss in the fourth quarter of 2002 was $796,000 or $0.02 per share.
For the fourth quarter of 2001, TTM reported net income of $275,000, or $0.01 per diluted share. Excluding goodwill amortization, net income was $852,000, or $0.02 per diluted share.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter of 2002 was zero down from $4.2 million for the same period in 2001.
"While business conditions remained weak in the fourth quarter, we aggressively managed the business to market demand," said Kent Alder, President and CEO of TTM Technologies. "In addition, we continued to invest in our time and technology strategy."
Acquisition of ACI
On December 26, 2002, TTM completed the acquisition of Honeywell's Advanced Circuits operation (ACI) at a cost of approximately $1 million, including fees and expenses. "The combination nearly doubles our revenues, provides very high technology capacity, and gives us access to additional blue-chip clients, creating opportunities to cross sell our capabilities," said Alder.
Excluding the contribution from ACI-which was consolidated into TTM's results for five days-revenues for the fourth quarter of 2002 were $20.0 million. The inclusion of ACI did not materially affect operating or net income.
The extraordinary, non-cash gain associated with the purchase of ACI resulted from the fact that the purchase price was less than the fair value of the net assets acquired. The extraordinary gain is based upon a preliminary fair value assessment of the net assets acquired.
Additional Cost Savings at Redmond
TTM also announced layoffs at its Redmond, Washington facility. As a result, the company expects to generate annual cost savings of approximately $1.8 million, as of the second quarter of 2003.
"This cost-cutting action was taken in response to continued demand weakness in the industry," stated Alder. "Additionally, we were able to eliminate several high level positions that became redundant with the acquisition of ACI."
Full-Year Results
For 2002, net sales declined 31 percent to $89.0 million, compared to $129.0 million in 2001.
Gross profit declined 74 percent to $9.5 million in 2002, as gross margins declined to 10.7 percent for 2002, compared to 28.5 percent for 2001.
The company posted an operating loss of $6.5 million in 2002, compared with operating income of $19.2 million in 2001. Reported results in 2002 included restructuring charges of $3.9 million. Reported 2001 figures included goodwill amortization of $3.6 million, which was eliminated with the adoption of FAS No. 142.
For 2002, TTM reported net income of $1.6 million, or $0.04 per diluted share, including the extraordinary gain associated with the ACI acquisition. Excluding the extraordinary gain and the restructuring charges, TTM had a net loss of $2.1 million, or $0.05 per share.
For 2001, TTM reported net income of $11.0 million, or $0.28 per diluted share, including the amortization of goodwill. Excluding goodwill amortization, net income was $13.3 million, or $0.34 per diluted share.
Financial Strength
"Throughout the downturn in the electronics industry, we have maintained a strong balance sheet and good liquidity," said Alder. At the end of the fourth quarter, TTM had net cash of $8.9 million, compared with net debt of $8.1 million at year-end 2001.
Outlook
For the first quarter of 2003, TTM anticipates revenues ranging from $38 to $40 million and GAAP earnings per share between breakeven and a loss of $0.03.
"We have said that we would use our competitive strengths and strong balance sheet to capitalize on the opportunities presented by the downturn in the electronics industry," added Alder. "With the acquisition of ACI, we have done exactly that. And we are positioned better than ever to benefit from a market 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.
Conference Call/Webcast
The company will conduct a conference call to discuss its fourth-quarter performance and outlook today at 11 a.m. Eastern/8 a.m. Pacific time. The call will be simulcast and available for replay until February 7, 2003, on the company's Web site, 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, the company's ability to successfully integrate the ACI acquisition, and other "Risk Factors" set forth in the company's Form 10-K for 2001.
TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
Fourth Quarter
2001
2002 2001 Adjusted*
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales $21,411 $25,427 $25,427
Cost of goods sold 19,059 20,604 20,604
Gross profit 2,352 4,823 4,823
Operating expenses:
Sales and marketing 1,667 1,411 1,411
General and administrative 1,416 1,347 1,347
Amortization of intangibles 301 1,202 301
Restructuring charges 2,952 -- --
Total operating expenses 6,336 3,960 3,059
Operating income (loss) (3,984) 863 1,764
Interest expense (276) (543) (543)
Amortization of debt issuance costs (74) (11) (11)
Interest income and other, net 194 100 100
Income (loss) before income taxes
and extraordinary item (4,140) 409 1,310
Income tax benefit (provision) 1,360 (134) (458)
Income (loss) before extraordinary
item (2,780) 275 852
Extraordinary item 6,296 -- --
Net income $3,516 $275 $852
Income (loss) per share before
extraordinary item:
Basic $(0.07) $0.01 $0.02
Diluted (0.07) 0.01 0.02
Net income per common share:
Basic $0.09 $0.01 $0.02
Diluted 0.09 0.01 0.02
Weighted average common shares:
Basic 39,761 37,593 37,593
Diluted 39,761 38,917 38,917
* Adjusted to show the pro-forma impact of eliminating goodwill
amortization and the related income tax effect for the 2001 periods.
TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
Full Year
2001
2002 2001 Adjusted*
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales $88,989 $128,989 $128,989
Cost of goods sold 79,489 92,235 92,235
Gross profit 9,500 36,754 36,754
Operating expenses:
Sales and marketing 6,447 7,272 7,272
General and administrative 4,486 5,435 5,435
Amortization of intangibles 1,202 4,808 1,202
Restructuring charges 3,859 -- --
Total operating expenses 15,994 17,515 13,909
Operating income (loss) (6,494) 19,239 22,845
Interest expense (1,084) (2,644) (2,644)
Amortization of debt issuance
costs (105) (41) (41)
Interest income and other, net 694 629 629
Income (loss) before income taxes
and extraordinary item (6,989) 17,183 20,789
Income tax benefit (provision) 2,278 (6,189) (7,487)
Income (loss) before extraordinary
item (4,711) 10,994 13,302
Extraordinary item 6,296 -- --
Net income $1,585 $10,994 $13,302
Income (loss) per share before
extraordinary item:
Basic $(0.12) $0.29 $0.35
Diluted (0.12) 0.28 0.34
Net income per common share:
Basic $0.04 $0.29 $0.35
Diluted 0.04 0.28 0.34
Weighted average common shares:
Basic 39,511 37,482 37,482
Diluted 39,511 38,899 38,899
* Adjusted to show the pro-forma impact of eliminating goodwill
amortization and the related income tax effect for the 2001 periods.
SELECTED CONSOLIDATED BALANCE SHEET DATA 12/31/02 12/31/01
Cash $18,879 $24,490
Accounts receivable, net 20,499 11,208
Inventories 10,485 3,126
Total current assets 60,254 43,971
Net PP&E 45,569 50,906
Other assets 91,683 98,199
Total assets 197,506 193,076
Current maturities of long-term
debt $2,222 $4,500
Other current liabilities 17,628 10,372
Long-term liabilities 10,230 28,125
Shareholders' equity 167,426 150,079
Total liabilities and
shareholders' equity 197,506 193,076
SUPPLEMENTAL DATA
Fourth Quarter
2001
2002 2001 Adjusted*
EBITDA $ -- $4,192 $4,192
EBITA $(3,683) $2,065 $2,065
Gross margin 11.0 % 19.0 % 19.0
EBITDA margin -- 16.5 16.5
Operating margin (18.6) 3.4 6.9
End Market Breakdown:
Fourth Quarter
2002 2001
Networking/communications 30.5 % 25.3 %
High-end computing 16.8 22.9
Industrial/Medical 19.8 30.1
Computer peripherals 22.7 16.6
Handheld 3.6 2.7
Other 6.6 2.4
RECONCILIATIONS**
Fourth Quarter
2002 2001 2001
Adjusted*
EBITA/EBITDA Reconciliation:
Operating income (loss) $(3,984) $863 $1,764
Amortization of intangibles 301 1,202 301
EBITA (3,683) 2,065 2,065
Depreciation expense 3,683 2,127 2,127
EBITDA -- 4,192 4,192
SUPPLEMENTAL DATA
Full Year
2001
2002 2001 Adjusted*
EBITDA $5,113 $32,341 $32,341
EBITA $(5,292) $24,047 $24,047
Gross margin 10.7 % 28.5 % 28.5
EBITDA margin 5.7 25.1 25.1
Operating margin (7.3) 14.9 17.7
End Market Breakdown:
Networking/communications
High-end computing
Industrial/Medical
Computer peripherals
Handheld
Other
RECONCILIATIONS**
Full Year
2002 2001 2001
Adjusted*
EBITA/EBITDA Reconciliation:
Operating income (loss) $(6,494) $19,239 $22,845
Amortization of intangibles 1,202 4,808 1,202
EBITA (5,292) 24,047 24,047
Depreciation expense 10,405 8,294 8,294
EBITDA 5,113 32,341 32,341
** This information provides a reconciliation of EBITA/EBITDA to the
financial information in our consolidated statements of operations.
SOURCE TTM Technologies, Inc.
Stacey Peterson, Chief Financial Officer of TTM Technologies,
Inc., +1-714-241-0303
www.ttmtech.com
Copyright (C) 2003 PR Newswire. All rights reserved.
