TTM reports strong gains in Q4 of 2003
Jan 29, 2004
TTM Technologies, Inc. (Nasdaq: TTMI), a manufacturer of time-critical and technologically advanced printed circuit boards, reported results for the fourth quarter ended December 31, 2003.Fourth-Quarter ResultsFourth quarter 2003 revenue increased 154 percent to $54.3 million, compared to $21.4 million for the fourth quarter of 2002, due to the acquisition of Advanced Circuits, Inc. (ACI) in the fourth quarter of 2002 and organic growth. Sequentially, from the third quarter to the fourth quarter of 2003, revenues increased $9.0 million, or 20 percent.For the fourth quarter of 2003, quick-turn business represented 27 percent of total revenues, compared to 52 percent for the fourth quarter of 2002 and 25 percent for the third quarter of 2003. The percentage declined, year-over- year, due to the acquisition of ACI, which focuses on standard lead time, high technology printed circuit boards.Gross margins increased to 26.1 percent for the fourth quarter of 2003, compared to 12.4 percent for the fourth quarter of 2002 and 20.9 percent for the third quarter of 2003. This margin improvement reflects TTM's significant operating leverage as well as its enhanced operating efficiency, higher labor productivity and lower raw material costs.TTM posted an operating profit of $7.1 million for the fourth quarter of 2003, compared to an operating loss of $4.0 million for the fourth quarter of 2002 and an operating profit of $3.7 million for the third quarter of 2003.Net income for the fourth quarter of 2003 was $4.7 million, or $0.11 per diluted share, compared with net income of $2.5 million, or $0.06 per diluted share, for the third quarter of 2003, and net income of $3.5 million, or $0.09 per diluted share, for the fourth quarter of 2002. Net income for the fourth quarter of 2003 included a pre-tax restructuring charge of $446,000 to write down assets held for sale and a $411,000 extraordinary gain for purchase accounting adjustments related to ACI, acquired in December 2002. Net income for the fourth quarter of 2002 included a pre-tax restructuring charge of $3.0 million, reflecting cost-cutting actions taken in response to weak industry demand, and a $6.3 million extraordinary gain associated with the purchase of ACI. Net income in the third quarter of 2003 also included an extraordinary gain of $218,000.Earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter of 2003 was $9.9 million, up from $0.2 million for the fourth quarter of 2002 and $5.9 million for the third quarter of 2003."We are gaining market share in an expanding market," said Kent Alder, President and CEO of TTM Technologies. "When combined with our disciplined expense control and strong operating leverage, the result was excellent bottom line performance.""For the first time since the printed circuit board industry peaked in late 2000, we are enjoying a meaningful strengthening in prices," continued Alder. "And there is evidence of a return in ramp-to-volume business, which means our customers are starting to bring new products to market."Full-Year PerformanceRevenues for 2003 expanded 102.6 percent to $180.3 million due to the acquisition of ACI in the fourth quarter of 2002 and organic growth. Net income increased to $7.4 million, or $0.18 per diluted share, in 2003, compared with net income of $1.6 million, or $0.04 per share, in 2002. Results in 2003 included pre-tax restructuring charges of $649,000 and an extraordinary gain of $1.5 million. Net income in 2002 included pre-tax restructuring charges of $3.9 million and an extraordinary gain of$6.3 million.Financial Strength"Our balance sheet continued to improve in the fourth quarter and for the year," continued Alder. TTM ended the year with cash and short-term investments of $31.7 million, compared with $18.9 million at year-end 2002. Debt declined to $7.8 million, from $10.0 million at the end of 2002. TTM's $25 million revolving credit facility remained undrawn at the end of 2003.Outlook"Generally we experience a seasonal slowdown in our quick-turn business in the first quarter of the year, which impacts our revenue and earnings," Alder said. "However, based on the improvement we have seen in the market and opportunities we have to capture additional market share, we look for greater sequential revenue and earnings in the first quarter of 2004."For the first quarter of 2004, TTM is estimating revenue of $55 million to $57 million and earnings of $0.12 to $0.14 per share.Conference Call/WebcastTTM Technologies, Inc. is a leading supplier of time-critical and 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 conducted a conference call to discuss its fourth-quarter performance and outlook yesterday at 5:00 p.m. Eastern/2:00 p.m. Pacific time. The call was simulcast and available for replay until February 4, 2004, on the company's Web site, www.ttmtech.com .