TTM Technologies, Inc. Reports Fiscal Fourth Quarter and 2019 Results

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TM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) and radio frequency (RF) components manufacturer, today reported results for the fourth quarter of fiscal 2019, which ended on December 30, 2019.

Fourth Quarter 2019 Highlights

• Net sales were $719.3 million
• GAAP net income was $25.3 million, or $0.21 per diluted share
• Non-GAAP net income was $43.9 million, or $0.41 per diluted share, inclusive of $0.03 foreign exchange losses
• Cash flow from operations of $130.1 million

Fourth Quarter 2019 Financial Results
Net sales for the fourth quarter of 2019 were $719.3 million, compared to $711.0 million in the fourth quarter of 2018 and $716.8 million in the third quarter of 2019.

GAAP operating income for the fourth quarter of 2019 was $49.4 million, compared to $42.8 million in the fourth quarter of 2018 and $36.4 million in the third quarter of 2019. 

GAAP net income for the fourth quarter of 2019 was $25.3 million, or $0.21 per diluted share. This compares to income of $52.5 million, or $0.42 per diluted share in the fourth quarter of 2018, and $15.9 million, or $0.14 per diluted share, in the third quarter of 2019. The fourth quarter of 2018 results reflect the release of a tax valuation allowance of $43.6 million. 
                                                                                                                                            
On a non-GAAP basis, net income for the fourth quarter of 2019 was $43.9 million, or $0.41 per diluted share. This compares to non-GAAP net income of $55.0 million, or $0.52 per diluted share, for the fourth quarter of 2018 and $38.9 million, or $0.37 per diluted share, in the third quarter of 2019.

Adjusted EBITDA for the fourth quarter of 2019 was $111.3 million, or 15.5% of net sales, compared to adjusted EBITDA of $117.4 million, or 16.5% of net sales, for the fourth quarter of 2018 and $103.5 million, or 14.4% of net sales, for the third quarter of 2019.

“For the fourth quarter, TTM continued to generate strong cash flow and delivered revenue and earnings above the previously guided range,” said Tom Edman, CEO of TTM. “The year over year growth we experienced in the aerospace and defense, cellular and computing end markets offset weakness in our other commercial end markets.”

Full Year 2019 Financial Results
Net sales for fiscal year 2019 decreased to $2.69 billion from $2.85 billion in fiscal year 2018, a 5.5% decrease.

GAAP operating income for fiscal year 2019 was $120.1 million, a decrease from GAAP operating income of $159.1 million in fiscal year 2018.

GAAP net income for fiscal year 2019 was $41.3 million, or $0.39 per diluted share, compared to GAAP net income of $173.6 million, or $1.38 per diluted share, for fiscal year 2018. The 2018 results reflect the release of a tax valuation allowance of $118.2 million. 

On a non-GAAP basis, net income for fiscal year 2019 was $120.5 million, or $1.13 per diluted share. This compares to fiscal year 2018 non-GAAP net income of $190.4 million, or $1.76 per diluted share.

Adjusted EBITDA for fiscal year 2019 was $376.2 million, or 14.0% of net sales, compared to $438.8 million, or 15.4% of net sales, for fiscal year 2018. 

"In 2019, we finished with strong results in Q4 and made progress on our strategy of diversification, differentiation and discipline. Specifically, we acquired differentiating technology with an important asset purchase from i3 Technologies, which enables us to manufacture products that require finer lines and smaller spacing for our aerospace and defense and commercial end markets broadening our technology offerings in North America. In addition, in early January, we announced the sale of our more seasonal and generally more volatile mobility business," continued Edman. “Finally, our financial discipline allowed us to generate significant year over year growth in cash flow despite year over year declines in revenues and profits.”

Business Outlook
Typically, in the first calendar quarter of every year, our China based factories are shut down over the Lunar New Year holiday. This year, due to government restrictions from the coronavirus, the shutdown has been extended approximately nine days to February 10^th. Assuming our factories in the PRC can resume production on February 10^th, TTM estimates that revenue for the first quarter of 2020 will be in the range of $580 million to $620 million, and non-GAAP net income will be in the range of $0.05 to $0.11 per diluted share, which includes approximately $0.09 negative impact from the additional nine days of closure. If the government extends the factory shutdown beyond February 10^th, our financial results would be further negatively impacted.

To Access the Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss fourth quarter 2019 results and the first quarter 2020 outlook on Wednesday, February 5, 2020, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call will include forward-looking statements.

Telephone access is available by dialing domestic 800-367-2403 or international 334-777-6978 (ID 6010319). The conference call also will be webcast on TTM’s website at www.ttm.com.