ttm technologies, inc. investor presentation€¦ · 9 guangzhou, china 10 huiyang, china 11...

TTM Technologies, Inc. Investor Presentation

March 2016

DisclaimerForward-Looking Statements

Certain statements in this communication may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to TTM’s future business outlook. Actual results may differ materially from these forward-looking statements. Such statements relate to a variety of matters, including but not limited to: the operations of the businesses of TTM Technologies, Inc. (“TTM” or the “Company”). These statements are made on the basis of the current beliefs, expectations and assumptions of the management of TTM regarding future events and are subject to significant risks and uncertainty. Statements regarding our expected performance in the future are forward-looking statements.

It is uncertain whether any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what impact they will have on the results of operations and financial condition of the Company. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements and are set forth in the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q and in the Company’s other filings filed with the Securities and Exchange Commission (the “SEC”) under the heading “Risk Factors” and which are available at the SEC’s website at www.sec.gov.

TTM does not undertake any obligation to update any of theses statements to reflect any new information, subsequent events or circumstances, or otherwise, except as may be required by law.

Use of Non-GAAP Financial Measures

In addition to the financial statements presented in accordance with U.S. GAAP, TTM uses certain non-GAAP financial measures, including “adjusted EBITDA.” The companies present non-GAAP financial information to enable investors to see each company through the eyes of management and to provide better insight into its ongoing financial performance.

Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, asset impairments, restructuring, costs related to acquisitions, and other charges. For a reconciliation of adjusted EBITDA to net income, please see the appendix at the end of this presentation. Adjusted EBITDA is not a recognized financial measure under U.S. GAAP and does not purport to be an alternative to operating income or an indicator of operating performance. Adjusted EBITDA is presented to enhance an understanding of operating results and is not intended to represent cash flows or results of operations. The use of this non-GAAP measure provides an indication of each company’s ability to service debt, and management considers it an appropriate measure to use because of the Company’s leveraged positions.

Adjusted EBITDA has certain material limitations, primarily due to the exclusion of certain amounts that are material to each Company’s consolidated results of operations, such as interest expense, income tax expense, and depreciation and amortization. In addition, adjusted EBITDA may differ from the adjusted EBITDA calculations reported by other companies in the industry, limiting its usefulness as a comparative measure.

Data Used in This Presentation

Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Third Party Information

This presentation has been prepared by the Company and includes information from other sources believed by the Company to be reliable. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of any of the opinions and conclusions set forth herein based on such information. This presentation may contain descriptions or summaries of certain documents and agreements, but such descriptions or summaries are qualified in their entirety by reference to the actual documents or agreements. Unless otherwise indicated, the information contained herein speaks only as of the date hereof and is subject to change, completion or amendment without notice.

1

• A leading global PCB manufacturer - $2.6B in Pro-forma revenue in 2015

• Acquisition of Viasystems expands end markets and customer base

• Leader in automotive, aerospace and defense, networking and telecom, and

advanced mobile devices

• Leveraging advanced technology position for new applications in automotive

• Disciplined integration planning process focused on improving operational

execution and delivering $55M in annualized synergies

• Solid cash flow to delever post-acquisition balance sheet

‒ $183 million of free cash flow generated in 2015

2

TTM Differentiated Leadership Position

Global Footprint

3

910

Legacy TTM

13 8

9

14

Legacy Viasystems

5

4

6

1

3

2

11

7

13

12

1

10

4

6

3

2

8712

11

Stafford Springs, CT

12 Guangzhou, China

13 Shanghai, China

Shanghai, China8

Advanced TechnologyHigh Mix / Low Volume

11 Forest Grove, OR

12 Toronto, Canada

4 Chippewa Falls, WI

6 Logan, UT

Volume Production - Conventional

9 Guangzhou, China

10 Huiyang, China

11 Dongguan, China

8 Zhongshan, China

Aerospace / Defense

6 North Jackson, OH

5 Denver, CO

7 Sterling, VA

Cleveland, OH4

1 Stafford, CT

3 San Diego, CA

2 Santa Clara, CA

QTA

5 Santa Ana, CA

7 Hong Kong, China

1 Anaheim, CA

2 Milpitas, CA

San Jose, CA3

Custom Assembly

9 Shanghai, China

10

13 Juarez, Mexico

15 Shenzhen, China

14 Shanghai, China

5

TTM Facilities

15

World PCB Outlook

4

Region2014 ($bn)

2019F ($bn)

14/19F CAGR

China $26.1 $33.6 5.2%

SE Asia, S. Korea $19.5 $23.3 3.6%

Japan $6.6 $5.0 (5.4%)

Americas $3.0 $2.9 (0.5%)

Europe $2.2 $2.1 (1.5%)

World $57.4 $66.9 3.1%

Source: Prismark Partners – World PCB Report, April 2000, May 2015

• The worldwide PCB market is expected to grow approximately 3 percent through 2019 with the majority of growth occurring in Asia

• ~50% of the world PCB production will be generated from China/HK in 2019

$3.6

$26.1 $33.6

$8.5

$19.5

$23.3

$11.3

$6.6

$5.0

$10.9

$3.0

$2.9

$6.7

$2.2

$2.1

$0

$10

$20

$30

$40

$50

$60

$70

$80

2000 2014 2019 F

$B China SE Asia, S. Korea Japan Americas Europe

$40.9

$57.4

$66.9

3,176

2,539 2,483

2,130

1,562 1,523 1,493 1,414 1,3911,159

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Nippon Mektron TTM Zhen Deng Unimicron SEMCO Young Poong Ibiden Sumitomo Tripod Daeduck

Creates a Leading Global Player

5

2014 Top 10 world PCB manufacturers by revenue ($ millions)

Note: TTM revenue is pro forma including Viasystems 2014 revenueSource: NT Information, July 2015; Prismark Partners May 2015

Top 10 represent ~33% of 2014 total world PCB output$M

• A leading supplier to commercial aerospace & defense contractors

• A major supplier to the high growth automotive end market

• Core supplier to wide range of high-end networking products addressing increasing bandwidth demands

• A strong position in advanced mobile device market

Flex 1-2 Sided 4-6 Low 8-16 Mid 18+ High Microvia (HDI) Substrates Rigid-Flex

World 15% 14% 25% 11% 2% 13% 15% 5%

TTM 1% 5% 22% 24% 15% 25% 2% 6%

0%

10%

20%

30%

40% World TTM

Focused on Growth in Advanced Technology

6

Source: Prismark Partners, May2015; Company reports FY2014

Advanced Technologies

• PCB Technologies

– High Reliability

– Advanced HDI & Rigid-Flex

– High Layer Count

• Product Examples

– Automotive braking & engine controls, aerospace & defense systems

– Automotive infotainment & advanced mobile devices

– Telecom base stations & networking line cards

PCB Product Types (% of Total Production Value)

Aerospace & Defense14%

Automotive18%

Cellular Phones17%

Computing / Storage / Peripherals

13%

Medical / Industrial /

Instrumentation14%

Networking / Communications

22%

Other2%

Pro Forma Revenue

Diversified End Markets - Full Year 2015

7

2015 Pro Forma Net Sales $2,602mm

End Market

(PCB Growth Rates)SAM $mm

2014 – 2019 CAGR

Automotive $2,589 6% - 8%

Networking/Communications $5,278 3% - 6%

Computing/Storage/Peripherals $5,666 5% - 8%

Cellular Phone $6,454 5% - 8%

Aerospace/Defense $1,752 2% - 4%

Medical/Industrial/Instrument $2,524 4% - 6%

Other (Consumer) $3,885 3% - 5%

Sources: Prismark Partners May 2015, BPA March 2015, Electronic Outlook Corporation Q3 2015, Company estimates

Top 5 OEM Customers

(alphabetical order)

Alcatel-Lucent

Apple

Bosch

Cisco

Huawei

Top 5 customers ~34%

Pro Forma 2015

Revenue

$3.6$3.9

$4.1$4.5

$4.9

2010 2011 2012 2013 2014

74.179.7

83.587.3 89.7

2010 2011 2012 2013 2014

8

New High Growth Automotive End Market

Source: NTI & Electronic Outlook Corporation – November 2015

Advantages of Automotive End Market

Note: Market units for fuel efficiency, safety, informatics applications and ECU. Market value for electronic devices such as semiconductors or connectors.Source: TTM company data, Wards, Anfavea, AEB, JAMA, JAPA, CAAM, SIAM, GAIKINDO, TMT, TSR, Marklines, Gartner, JEITA, Bishop, Citi Research estimates

Auto shipment (millions units)

• Strong unit growth forecast

• Content per vehicle increasing

• A leader in core automotive requirements

• Opportunities for TTM’s advanced technology

‒ RF radar

‒ Rigid-Flex

‒ HDI

PCB usage - automotive electronics ($ billions)

Integration Update

• One TTM focus– Executing to customers’ needs– Delivering quick wins for new organization: cross selling, technology

opportunities, best practices– Optimizing total plant utilization, profitability and customer focus

• Synergies– Target of $55M (annualized) in the first 12 months– Implemented $30M of annualized cost savings through Q4’15– Announced the planned closure of three N.A. plants in Sept. 2015

• $16.5M in annual cost savings

– Announced new global operating model in Dec. 2015 • $10M in annual cost savings

– Total implemented and announced synergies-to-date: ~$45 million

• Leverage– Announced plan to repay between $70 and $80 million of debt in Q1’16

9

Strategic Initiatives

10

Complete integration of Viasystems

Continued focus on delivering advanced technology to broad base of customers across diverse end markets

Drive operational excellence through global best practice sharing, yield improvement and rapid new product ramps

Manage balance sheet for growth and risk- use free cash flow to deleverage the balance sheet

1111

Financial Overview

12

TTM Operating Performance

Revenue Gross margin1

Adjusted EBITDA2 Non-GAAP EPS3

1 Adjusted for stock-based compensation expense, inventory markup and PP&E step up2 Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based

compensation expense, gain on sale of assets, inventory markup, acquisition-related costs, asset impairments, restructuring and other charges3 Adjusted for amortization of intangibles, stock-based compensation expense, non-cash interest expense on debt, gain on sale of assets,

inventory markup, acquisition-related costs, asset impairments, restructuring and other charges as well as the associated tax impact of these

charges and discrete tax items

Note: Refer to reconciliations in Appendix

12

$1,349 $1,368 $1,326

$2,095

2012 2013 2014 2015

Revenue FY ($mm)

$191 $181 $166

$286

14.1% 13.3%12.5%

13.6%

0.0%

5.0%

10.0%

15.0%

20.0%

2012 2013 2014 2015

Adj. EBITDA margin

$226$219 $196

$327

16.8%16.0%

14.8%

15.6%

2012 2013 2014 2015

Gross profit FY ($mm) Gross margin

$0.85$0.62

$0.47

$0.87

2012 2013 2014 2015

EPS FY ($mm) Adj. EBITDA FY ($mm)

13

TTM Non-GAAP Income Statement¹

13

1 Non-GAAP results add back amortization of intangibles, stock-based compensation expense, non-cash interest expense on debt , gain on sale of assets, inventory

markup, acquisition-related costs, asset impairments, restructuring and other charges as well as the associated tax impact of these charges and discrete tax items .

Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on

sale of assets, inventory markup, acquisition-related costs, asset impairments, restructuring and other charges. Adjusted operating cash flow adds back payment of

accreted interest on convertible senior notes and payment of acquisition-related costs.2 Pro forma for Viasystems acquisition3 Leverage is defined as debt (net of discount) less cash divided by EBITDA

$ Millions (except where noted) Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Target Model

Legacy TTM $291.9 $297.6 $345.3 $390.9 $329.2 $352.2 $368.8 $381.0

Legacy Viasystems - - - - - 93.2 283.2 287.9 5% - 7%

Total Revenue 291.9 297.6 345.3 390.9 329.2 445.4 652.0 668.9 Annual Growth

Gross Profit 38.8 38.8 49.3 68.7 51.8 68.8 97.7 109.213.3% 13.0% 14.3% 17.6% 15.7% 15.5% 15.0% 16.3%

Operating Income 8.8 9.2 17.9 34.6 18.4 29.2 45.0 53.4 10%3.0% 3.1% 5.2% 8.9% 5.6% 6.6% 6.9% 8.0%

TTM Technologies Net Income 1.2 3.9 11.0 23.2 10.8 14.9 23.8 31.50.4% 1.3% 3.2% 5.9% 3.3% 3.3% 3.7% 4.7%

Earnings Per Share $0.01 $0.05 $0.13 $0.28 $0.13 $0.17 $0.24 $0.31($ per Diluted Share)

Adjusted EBITDA 29.1 32.8 43.6 60.5 42.5 59.7 87.6 95.810.0% 11.0% 12.6% 15.5% 12.9% 13.4% 13.4% 14.3%

Adjusted Operating Cash Flow 46.7 (11.8) 43.8 54.5 72.1 47.6 21.3 141.416.0% -4.0% 12.7% 13.9% 21.9% 10.7% 3.3% 21.1%

Free Cash Flow 17.9 (35.8) 14.3 28.3 49.3 23.9 (9.0) 118.46.1% -12.0% 4.2% 7.2% 15.0% 5.4% -1.4% 17.7%

Leverage3

1.3 1.6 1.5 1.3 1.0 3.12

3.12

2.72

14

TTM Balance Sheet Highlights

14

($ in Millions) December 29, 2014 December 28, 2015

AssetsCash and Cash Equivalents, Including Restricted Cash $279.0 $262.6

Accounts and Notes Receivable, Net 307.9 454.0

Inventories 145.2 268.9

Property, Plant and Equipment, Net 754.7 1,103.1

All Other Assets 114.5 582.7

Total Assets $1,601.3 $2,671.3

Liabilities and EquityAccounts Payable 217.3 347.9

Convertible Senior Notes, Net 228.9 204.6

Debt, Net of Discount 273.8 997.4

All Other Liabilities 165.8 294.7

Total Liabilities 885.8 1,844.6

Total Equity 715.5 826.7

Total Liabilities and Equity $1,601.3 $2,671.3

15

Investment Summary

15

Well positioned in high growth segments of the PCB market

Viasystems transaction enables opportunities for end market and customer expansion

A leader in the automotive, aerospace & defense, networking & telecomand advanced mobile device markets as well as in advanced technology PCBs

Strong financial performance in 2015 plus target synergies of $55 million(annualized) in the first 12 months

Healthy balance sheet and solid cash flow to fund growth and delever the balance sheet

16

Appendix

17

TTM Non-GAAP Income Statement¹

17

1 Non-GAAP results add back amortization of intangibles, stock-based compensation expense, non-cash interest expense, acquisition-related costs, asset

impairments, restructuring and other infrequent items as well as the associated tax impact of these items and out of period tax items. Adjusted EBITDA is

defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, acquisition-related

costs, asset impairments, restructuring and other infrequent items. Adjusted operating cash flow adds back payment of accreted interest on convertible senior

notes and payment of acquisition-related costs.

$ Millions (except where noted) 2012 2013 2014 2015

Legacy TTM $1,348.7 $1,368.2 $1,325.7 $1,431.2

Legacy Viasystems - - - 664.3

Total Revenue 1,348.7 1,368.2 1,325.7 2,095.5

Gross Profit 226.1 218.9 195.6 327.516.8% 16.0% 14.8% 15.6%

Operating Income 101.4 83.8 70.6 146.07.5% 6.1% 5.3% 7.0%

TTM Technologies Net Income 69.8 51.3 39.3 81.15.2% 3.7% 3.0% 3.9%

Earnings Per Share ($ per diluted share) 0.85 0.62 0.47 0.87

Adjusted EBITDA 190.6 181.3 166.0 285.714.1% 13.3% 12.5% 13.6%

Adjusted Operating Cash Flow 182.6 99.1 133.2 282.413.5% 7.2% 10.0% 13.5%

1818

Reconciliations$ Millions (except where noted) Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

GAAP Gross Profit $38.5 $38.6 $49.1 $68.5 $51.6 $61.2 $89.1 $108.3

Add back items:

Inventory markup and PP&E step up - - - - - 7.4 8.2 0.6

Stock-based compensation 0.3 0.2 0.2 0.2 0.2 0.2 0.3 0.3

Non-GAAP Gross Profit 38.8 38.8 49.3 68.7 51.8 68.8 97.7 109.2

GAAP Operating Income (Loss) 4.5 3.2 12.3 26.6 8.3 (7.1) 23.6 36.5Add back items:

Amortization of intangibles 2.2 2.2 2.0 1.9 1.9 3.9 6.4 6.7


Gain on sale of assets - - - - (2.5) - - -

Acquisition-related costs - - 1.6 4.3 8.2 22.6 2.1 1.5


Impairments and restructuring charges - 1.9 - - 0.5 0.1 2.0 5.4

Non-GAAP Operating Income 8.8 9.2 17.9 34.6 18.4 29.2 45.0 53.4

GAAP TTM Technologies Net Income (Loss) (3.8) (3.1) 7.7 13.9 3.4 (36.6) (2.2) 9.5Add back items:



Non-cash interest expense 2.6 2.5 2.5 2.6 2.6 3.3 4.8 4.9




Impairments, restructuring and other infrequent items 0.5 1.9 0.0 0.0 0.6 0.9 2.0 5.4

Income taxes (2.4) (1.5) (4.8) (1.3) (5.4) 11.1 (0.1) 0.3

Non-GAAP TTM Technologies Net Income 1.2 3.9 11.0 23.2 10.8 14.9 23.8 31.5

Non-GAAP EPS ($ per diluted share) $0.01 $0.05 $0.13 $0.28 $0.13 $0.17 $0.24 $0.31

GAAP Net Income (Loss) (3.8) (3.1) 7.7 13.9 3.4 (36.6) (2.1) 9.7Add back items:

Income tax provision (benefit) (1.8) 0.5 0.4 8.6 (1.4) 16.6 8.7 10.6

Interest expense 6.2 5.9 6.0 5.7 5.8 12.8 21.0 20.2


Depreciation expense 23.7 23.5 23.9 24.3 24.5 29.8 40.1 39.1




Inventory markup - - - - - 7.4 6.8 -

Impairments, restructuring and other infrequent items 0.5 1.9 - - 0.6 0.9 2.0 5.4

Adjusted EBITDA 29.1 32.8 43.6 60.5 42.5 59.7 87.6 95.8

Operating Cash Flow 45.4 (11.8) 43.8 52.4 67.4 15.5 14.7 139.8

Add back items:

Payment of accreted interest on convertible sr. notes 1.3 - - - - 8.7 - -

Payment of acquisition-related costs - - - 2.1 4.7 23.4 6.6 1.5

Adjusted Operating Cash Flow 46.7 (11.8) 43.8 54.5 72.1 47.6 21.3 141.4

19

Reconciliations

19

$ Millions (except where noted) 2012 2013 2014 2015

GAAP Gross Profit $225.0 $217.8 $194.7 $310.1Add back item:

Inventory markup and PP&E step up - - - 16.2

Stock-based compensation 1.1 1.1 0.9 1.1

Non-GAAP Gross Profit 226.1 218.9 195.6 327.5

GAAP Operating Income (Loss) (142.0) 69.1 46.5 61.3Add back items:

Amortization of intangibles 14.7 9.4 8.4 18.9


Impairment and restructuring 218.4 14.2 1.9 7.9


Other infrequent items - (17.9) 6.0 32.0

Non-GAAP Operating Income 101.4 83.8 70.6 146.0

GAAP TTM Technologies Net Income (Loss) (174.6) 21.9 14.7 (25.9)Add back items:



Non-cash interest expense 7.9 8.4 10.2 15.6

Impairment and restructuring 218.4 14.2 1.9 8.7


Other infrequent items 5.5 (7.2) 6.5 32.0

Income tax effects (12.4) (4.4) (10.2) 5.9

Non-GAAP TTM Technologies Net Income 69.8 51.3 39.3 81.1

Non-GAAP EPS ($ per diluted share) 0.85 0.62 0.47 0.87

GAAP Net Income (Loss) (181.1) 23.9 14.7 (25.6)Add back items:

Income tax provision 12.7 15.9 7.6 34.6

Interest expense 25.8 24.0 23.8 59.8


Depreciation expense 84.3 92.1 95.3 133.5


Gain on sale of assets - (17.9) - (2.5)

Inventory markup - - - 14.2

Impairments, restructuring and other infrequent items 223.9 24.9 8.4 43.1

Adjusted EBITDA 190.6 181.3 166.0 285.7

Operating Cash Flow 182.6 71.4 129.8 237.5Add back items:

Payment of accreted interest on convertible senior notes - 27.7 1.3 8.7

Payment of acquisition-related costs - - 2.1 36.2

Adjusted Operating Cash Flow 182.6 99.1 133.2 282.4

ttm technologies, inc. investor presentation€¦ · 9 guangzhou, china 10 huiyang, china 11...

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