TTM Technologies(TTMI) - 2025 Q1 - Quarterly Report

PART I: FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Unaudited consolidated condensed financial statements for Q1 2024 are presented, covering balance sheets, income, equity, and cash flow statements with detailed notes Consolidated Condensed Balance Sheets Total assets were $3.30 billion as of April 1, 2024, with liabilities at $1.78 billion and stockholders' equity at $1.52 billion Consolidated Condensed Balance Sheet Highlights (in thousands) | Account | April 1, 2024 | January 1, 2024 | | :--- | :--- | :--- | | Total Current Assets | $1,406,114 | $1,429,687 | | Total Assets | $3,298,810 | $3,323,663 | | Total Current Liabilities | $671,207 | $703,984 | | Total Liabilities | $1,777,702 | $1,812,624 | | Total Stockholders' Equity | $1,521,108 | $1,511,039 | Consolidated Condensed Statements of Operations Q1 2024 net sales increased 4.7% to $570.1 million, achieving a net income of $10.5 million ($0.10 diluted EPS) from a prior-year loss Q1 2024 vs. Q1 2023 Statement of Operations (in thousands, except per share data) | Metric | Q1 2024 (ended Apr 1) | Q1 2023 (ended Apr 3) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $570,113 | $544,437 | +4.7% | | Gross Profit | $103,719 | $86,123 | +20.4% | | Operating Income (Loss) | $17,067 | $(3,468) | Turnaround to Profit | | Net Income (Loss) | $10,466 | $(5,814) | Turnaround to Profit | | Diluted EPS | $0.10 | $(0.06) | Turnaround to Profit | Consolidated Condensed Statements of Cash Flows Net cash from operations was $43.9 million in Q1 2024, with investing activities using $42.6 million and financing activities using $11.1 million Q1 2024 vs. Q1 2023 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2024 (ended Apr 1) | Q1 2023 (ended Apr 3) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $43,895 | $55,078 | | Net Cash (used in) provided by Investing Activities | $(42,559) | $9,627 | | Net Cash used in Financing Activities | $(11,084) | $(50,000) | | Net (Decrease) Increase in Cash | $(9,820) | $14,703 | Notes to Consolidated Condensed Financial Statements Detailed notes provide disclosures on accounting policies, revenue recognition, segment information, debt, and restructuring activities, including Q1 2024 stock repurchases Revenue by End Market (Q1 2024 vs Q1 2023) | End Market | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Aerospace and Defense | 46% | 43% | | Data Center Computing | 21% | 10% | | Medical/Industrial/Instrumentation | 14% | 19% | | Automotive | 13% | 17% | | Networking | 6% | 11% | - The company has a share repurchase program authorized for up to $100 million[30] - In Q1 2024, it repurchased 600,000 shares for approximately $9.3 million, with about $66.2 million remaining under the program[31] - A consolidation plan announced in February 2023 resulted in the closure of three manufacturing facilities[83] - Restructuring charges of $3.9 million were recorded in Q1 2024 related to this and other realignment efforts[84] - Significant customer concentration exists, with two customers accounting for approximately 22% of net sales in Q1 2024[36] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2024 financial performance, highlighting sales growth drivers, gross margin improvement, and significant capital expenditure plans for a new PCB facility - Net sales increased by 4.7% to $570.1 million in Q1 2024, driven by demand growth in the aerospace and defense (+13.5% YoY) and data center computing (+107% YoY) end markets[99] - Gross margin rose to 18.2% in Q1 2024 from 15.8% in Q1 2023, attributed to a favorable product mix and improved execution in North America[100] - The company is in the advanced planning stages for a new PCB manufacturing facility in Syracuse, New York, with phase one estimated to cost $100.0 million to $130.0 million through 2026[87] - Cash flow from operations was $43.9 million, down from $55.1 million year-over-year, primarily due to increased investment in working capital[109] - Total capital expenditures for 2024 are projected to be in the range of $170.0 million to $190.0 million[113] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company manages market risks from interest rates, foreign currency (RMB), and commodity prices (copper) using derivative instruments, with 80.9% of debt fixed rate as of April 1, 2024 - The company manages interest rate risk on its variable-rate debt using an interest rate swap with a notional amount of $250.0 million, effectively fixing the rate at 3.49% on that portion of debt[127] - Primary foreign currency exposure is to the Chinese Renminbi (RMB) due to operational costs in China[130] - TTM hedges against copper price volatility, a key raw material cost driver, using commodity contracts[132] - A 100 basis point change in variable interest rates would cause the annual interest cost to change by $1.8 million[129] Item 4. Controls and Procedures Management, including the CEO and CFO, deemed disclosure controls effective as of April 1, 2024, with ongoing ERP system implementation and no material changes to internal controls - The CEO and CFO concluded that disclosure controls and procedures were effective as of April 1, 2024, providing reasonable assurance of timely and accurate reporting[134] - The company is continuing the rollout of a new ERP system across its remaining locations to standardize processes[136] - There were no material changes in the company's internal control over financial reporting during the first quarter of 2024[137] PART II: OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various legal proceedings, but management does not expect a material adverse effect on its financial condition or results - The company does not expect known legal proceedings to have a material impact on its financial statements[139] Item 1A. Risk Factors There have been no material changes to the company's risk factors from those disclosed in its Annual Report on Form 10-K for the fiscal year ended January 1, 2024 - No material changes to risk factors were reported for the quarter[140] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds In Q1 2024, TTM repurchased 600,000 shares for $9.3 million under its $100 million share repurchase program, with $66.2 million remaining Issuer Purchases of Equity Securities (Q1 2024) | Period | Total Shares Purchased (in thousands) | Average Price Paid per Share | Approx. Dollar Value Remaining in Program (in thousands) | | :--- | :--- | :--- | :--- | | Jan 30 - Feb 26, 2024 | 600 | $15.56 | $66,234 | Item 3. Defaults Upon Senior Securities This item is not applicable to the company for the reporting period - Not applicable[143] Item 4. Mine Safety Disclosures This item is not applicable to the company for the reporting period - Not applicable[144] Item 5. Other Information During the first fiscal quarter of 2024, none of the company's directors or executive officers adopted or terminated a Rule 10b5-1 trading plan for the purchase or sale of company securities - No directors or executive officers adopted or terminated a Rule 10b5-1 trading plan during the quarter[145] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications under Sarbanes-Oxley and Inline XBRL financial data files - The report includes required CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, along with Inline XBRL data files[147] Signatures - The Form 10-Q report was signed on May 7, 2024, by Thomas T. Edman, President and Chief Executive Officer, and Daniel L. Boehle, Executive Vice President and Chief Financial Officer[151][153]