TTM Reports Fiscal Fourth Quarter and Fiscal 2018 Results

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TTM Technologies, Inc. reported results for the fourth quarter and full year of fiscal 2018, which ended December 31, 2018.

Fourth Quarter 2018 Highlights

• Net sales were $711.0 million
• GAAP net income was $52.5 million, or $0.42 per diluted share
• Non-GAAP net income was $55.0 million, or $0.52 per diluted share
• Cash flow from operations of $151.8 million
• Repaid $70 million of our Term Loan B in Q4 and an additional $30 million on February 1, 2019

Fiscal Year 2018 Highlights

• Net sales were $2.85 billion, a record high
• GAAP net income was $173.6 million, or $1.38 per diluted share
• Non-GAAP net income was $190.4 million, or $1.76 per diluted share, a record high
• Cash flow from operations of $273.1 million
• Repaid $114 million of our Term Loan B in 2018

Fourth Quarter 2018 Financial Results

Net sales for the fourth quarter of 2018 were $711.0 million, compared to $739.3 million in the fourth quarter of 2017 and $755.8 million in the third quarter of 2018.

GAAP operating income for the fourth quarter of 2018 was $42.8 million, compared to $71.0 million in the fourth quarter of 2017 and $54.6 million in the third quarter of 2018.

GAAP net income for the fourth quarter of 2018 was $52.5 million, or $0.42 per diluted share.  This compares to $49.2 million, or $0.40 per diluted share, in the fourth quarter of 2017 and $27.0 million, or $0.22 per diluted share, in the third quarter of 2018. The current quarter 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 2018 was $55.0 million, or $0.52 per diluted share. This compares to non-GAAP net income of $61.2 million, or $0.57 per diluted share, for the fourth quarter of 2017 and $55.1 million, or $0.50 per diluted share, in the third quarter of 2018.

Adjusted EBITDA for the fourth quarter of 2018 was $117.4 million, or 16.5 percent of net sales, compared to adjusted EBITDA of $121.7 million, or 16.5 percent of net sales, for the fourth quarter of 2017 and $122.3 million, or 16.2 percent of net sales, for the third quarter of 2018.

“For the fourth quarter, TTM delivered earnings above the high end of guidance, despite softening commercial end markets,” said Tom Edman, CEO of TTM.  “We were pleased to see strong year over year growth from the aerospace and defense, computing and medical/industrial/instrumentation end markets that partially offset weakness in our cellular and automotive end markets.  Solid operational execution and expense management resulted in our operating margin exceeding expectations.”

Full Year 2018 Financial Results

Net sales for fiscal year 2018 increased to $2.85 billion from $2.66 billion in fiscal year 2017, a 7.1% increase year over year.

GAAP operating income for fiscal year 2018 was $159.1 million, a decrease from GAAP operating income of $212.8 million in fiscal year 2017.

GAAP net income for fiscal year 2018 was $173.6 million, or $1.38 per diluted share, compared to GAAP net income of $124.2 million, or $1.04 per diluted share, for fiscal year 2017.  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 2018 was $190.4 million, or $1.76 per diluted share. This compares to fiscal year 2017 non-GAAP net income of $167.1 million, or $1.57 per diluted share.

Adjusted EBITDA for fiscal year 2018 was $438.8 million, or 15.4 percent of net sales, compared to $388.6 million, or 14.6 percent of net sales, for fiscal year 2017. 

"2018 validated TTM’s strategy of diversification, differentiation and discipline.  We saw solid organic growth in the aerospace and defense, medical, industrial and instrumentation and computing end markets," continued Edman.  “In addition, we closed the acquisition of Anaren which allows us to engage with customers earlier in the design cycle providing differentiated, value added RF solutions.”

Business Outlook

For the first quarter of 2019 TTM estimates that revenue will be in the range of $610 million to $650 million, and non-GAAP net income will be in the range of $0.14 to $0.20 per diluted share.

“In the first quarter of 2019, we are seeing significant weakness in our cellular end market which is resulting in the under-utilization of our advanced technology factories. Consequently, we are exercising discipline in managing our costs and focusing on continued cash flow generation.  Longer term, we are confident in our diversification and differentiation strategy as well as secular growth drivers such as 5G wireless technology, increasing automotive electronic content, and ongoing demand strength in aerospace and defense electronics,” concluded Mr. Edman.

About TTM

TTM Technologies, Inc. is a leading global printed circuit board manufacturer, focusing on quick-turn and volume production of technologically advanced PCBs, backplane assemblies and electro-mechanical solutions as well as a global designer and manufacturer of RF and microwave components and assemblies. TTM stands for time-to-market, representing how TTM's time-critical, one-stop manufacturing services enable customers to shorten the time required to develop new products and bring them to market.