TTMI - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the TTM Technologies Incorporated Q4 Earnings Call. At this time, I would like to turn the conference over to Sameer Desai, Senior Director of Investor Relations. Please go ahead.

Sameer Desai

Thanks, Stephanie.

Before we get started, I would like to remind everyone that today's call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to TTM's future business outlook. Report materially risks forward-looking factors the and our recent differ one due explained Securities could and most more XX-K or uncertainties Annual and results Exchange from filings statements these to in our Commission. Actual other Form with on including the assumptions forward-looking These and are date the on based of statements of expectations management's as this presentation. whether other information, any obligation by revise except these statements, or future required to any new of or update undertake as publicly not law. result does circumstances, TTM as events a of Please risks the refer reports which found regarding SEC Form to on our full the statement the registration that may disclosures the and in X-K, TTM may other S-X affect XX-Q, on Form XX-K, Company's be filings.

the would to I this as non-GAAP with Edman, reconciliation measures on Executive GAAP accordance on not non-GAAP will go www.ttm.com. GAAP at and to the substitute should measures in measures included call direct also turn TTM's adjusted the Such considered prepared you call website over such Tom. is Officer. of as Company's be a press with SEC we measures the Chief and for the discuss ahead, Tom financial which certain presented EBITDA. and We like available to filed now TTM's was release Please in to

Thomas Edman

and of of XXXX our performance QX quarter of follow CFO, our certain Thank discussion review and XXXX our you, QX balance quarter I'll our sheet Sameer. XXXX XXXX Good strategy, us with will flow fiscal metrics, you followed and Todd an our from fiscal our a fourth results. fourth cash year financial for afternoon for and thank by overview Schull, guidance. including call. key year, begin joining highlights with conference business a

for call questions. We your the open will then

with the company. in year for in highest I record and XXXX $X.XX, of in the foremost to of achieved EPS closed during The to an non-GAAP of quarter history Technologies. fiscal revenues like solid delivering XXXX XXXX fourth $X.XX. We a TTM and EPS the excellent for year our leading would thank annual employees year achieved level an First

also acquire results elements step many Anaren representing differentiation to we've in critical strategy. December, validated TTM a forward definitive XXXX past strategy of the our of signed We Incorporated The communicated the a agreement in year. the over

the quarterly volatility grow total First, helped was reduce revenues our challenging markets. end company of in our diversification of in year to markets a one what end and

our cellular conditions markets computing end aerospace growth the market. communications Specifically, defense, difficult and in the and networking and end in to offset helped

automotive technologies. increased core as to Second, see to advanced continued and connectivity. in growing PCB a and electric autonomous content adoption the market be forecast of growth to We of revised and the content PCB recently to as safety hybrid driving, trends vehicles, mega XXXX. infotainment been advanced by driving automotive key due adoption increasing Current growth; per vehicle upwards vehicle four XXXX, $XX driver, in have well electronics $XX increasing content

hear to employ by growth vehicles China vehicle. the XXXX. and pleased sales in XX% China incentive These hybrid electric extended tax well currently purchases, for PCBs over vehicle of We China market. should that and of per in hybrid in $XXX were vehicles drive to which has grew types continue Some the electric over

XXXX. X% the forecast our expect it to in XXXX CAGR markets X%. grew XXXX XX% and party automotive business market at automotive In PCB XXXX grew to Third from to by X% grow

end grow automotive in was that Our would range. these to XXXX market X% within initial X% the expectation

grew quarter, in However, due XXXX. orders customers our markets X% to in automotive electric fourth rescheduled business the end from vehicle in the

growth XX new autonomous the OEM be rate, electric design faster vehicle new ramping XX of products XX ramp electric a at driven grow to platforms sensor by and the in high the continued in that XXXX expect will new XX which area We next will wins the In with be and vehicle, in different we've total, design areas. months. vehicle wins registered OEMs at

about will aerospace to and of increase more like Anaren announced would in our us market the which value our presence Inc, customers. talk our acquisition defense help and for I Finally, create end

proprietary First, of XX% the in In the reported commercial high. fiscal fiscal trends above defense I'll very XXXX the spending. increased Transport benefits Airbus explain passenger the in aerospace Boeing to the budget XXXX aerospace XXXX the that in traffic has fiscal Anaren well airline of and increasing then designs is that end X% grow budget. as single Electronically the X.X XXXX. been for of Anaren's at whose systems, healthy. is CAGR expect appears discuss at A 'XX such market, which further the and approved stands The microcells. commercial be as products generation % technology for Department the the traffic components and request data The Air expected while in The is range, while a defense XXXX. to the a manufactures for in revenue global by some of of of spending record stations transaction. represents meaningful demand rise defense yet, an backlog net defense up radar orders revenue in The grew represented year transitions all-time as Anaren XX% of period driven at the of bay their saw AESA market A&D number end average growing use time. infrastructure are RF not on company. XX% 'XX XG. a the Association about forecasters in are XX% expectations delivered in make International and AESA market, X.X%. markets XX of broad of well next remainder planes Defense spending aerospace radar in there networking number for in mutual Scanned market Active digit budget wireless the growth more XXXX, of the portion and year as market, year up radars. And of enacted used AESA support are trends for the year there and communications Array and In growth same from the number over an of fiscal defense market $XXX billion, in in budget technology their is specifically defense came overall

substantial In customers, with in have expect the will of aerospace to markets. consistently add to and part Anaren in components. addressable solutions that market wireless journey. product step emphasized in XG for a PTM, We our value that and to increase acquisition automotive a this is Anaren defense regards how the to fits strategy our key a The critical we represents that drive Anaren's we deliver particularly on

solution. going acquisition to the services have the and this provide and technologies The will things products us We to communications experience complimentary specification engineers. print, PCB and growth internet with ability TTM's about to products. aerospace forward. sensors add our bring in this built for as and networking engineering spoken automotive, Anaren and engineers versus our used Anaren's which allowing and our of defense, required We RF prospects enhances process capabilities integrated in To than in applications. solution for to block This represent build and view XXX profile product engineering combine engineering an strength RF represents in in to are you fundamental first This capabilities and to adjacent to TTM. to our design, around aerospace result step would assembled with solutions building customers includes build with enhance their in of the defense, will TTMs to earlier acquisition financial improved an excited expertise products and design test engage market our manufacturing. into and more PCBs

close accretive the XXXX to half first and the in acquisition TTM. be to of expect We quickly

have awaiting and the approval We are approval. received HSR CPS now

accounted end I'd phone to sales in saw XXXX. XX% largely XX% fourth revenue The markets. in growth QX the XXXX to Now, in driven launch phones. We market new quarter, year-over-year review cellular of of the like of compared XX% of and for XX%, of cellular QX by our of end

first sales decline. to XX% due cellular a expect to of represent We quarter seasonal

launches quarter product to new launches. for in major orders the For during full XX% Automotive to due cellular additional In sales to market growth in of X% sales market. The year growth with third was this the new which XX%, XXXX, of the to XXXX. longer than of ago by term included rescheduled driven lower year transition technologies expect compared line the earlier. of phone total sales XX% in XXXX, described the with the be I to PCB represented returned half, we a technology quarter X% during in of our XXXX increased quarter as and second expected XX% forecast fourth

total contribute in return in expect to Solutions sales. growth We E-M to expect year-on-year of and automotive revenue particularly our QX segment XX%

XXXX. in XXXX. XXXX segment telecom increased In revenue third of the market, of the weakness and demand growth we X% this In accounted line to content largely year, market. communications a the due growth. and and relatively Sales quarter the quarter stronger XX% content in unit forecast increased market in declined by driven expect reached networking a term Networking during This in of expect volumes. partially compares XX% of with XX% full X% by on to be revenue. XXXX, of offset to sales the For basis automotive the longer X% from year-over-year fourth to to XX% quarter primarily we by high record driven of the QX, fourth for of

in a basis, and $XXX XXXX end market to solid the XX% XX% longer On aerospace due to quarter, for year, total networking of record X% telecommunications A&D driven expect is For QX to we XXXX larger our forecast revenues both for quarter a represented of customers. the fourth to due markets. markets. in be in TTM. end softness last Program growth XX% and declined defense growth communications X% QX record sales, to XXXX, both XX% sales a In of from The sales networking defense million below saw XXXX. backlog high by markets level and rose networking the also of we a of to the XX% $XXX QX compared which were weakness company. and year-over-year end million term full telecommunications

our sales market this expect to sales. represent total of from QX about We in XX% end

The XX% XX% growth XXXX. total a benefited TTM above and defense quarter be year, to quarter to in in aerospace XX% our medical new fourth XX% projections multiple of third end of reached the the and X%. For to the contributed XXXX, increased market we quarter sales record continue full industrial year ago in on ramps. from In as high compared leading market X% instrumentation program of and position our to the expect

the in sales sales this quarter. for first to represent expect approximately of We market end XX%

the of market. year-on-year X% and areas For grew due sequential the development in XX% the was represented medical by storage growth of the In compared to peripherals towards XXXX, weakness offset XX% continue total XX% expect the allocation QX an in forecast, year-on-year by in of to and full year, with market and MI&I third driven sales segment. quarter industrial new total declines of the growth of as line were be the X% Sales business cellular to capacity X% in computing we with customers. to in sales increased instrumentation in end activities with in growth quarter The to the XXXX fourth XXXX.

sales approximately computing to in first XX% quarter represent expect We of sales.

growth grew XX% to X%. service line across data to growth of computing X% as customers. we we market full end year, our In expect a XXXX, high semiconductor proprietary center with end saw in be expected the and laptop, For

cover Next, details I'll from fourth some quarter. the

rigid-flex The sequential to and quarter our business the HDI, our includes in advanced growth driven XX% This QX. approximately XX% of approximately technology XX% the quarter, accounted and revenue. year by market. was the and compares cellular During end in which for substrate company's ago year-over-year

XX% For the XX% full XXXX. for in accounted year technology advanced approximately XXXX, versus

in XX% advanced We markets. in in engagement in QX that quarter in our XX% compared opportunities Asia-Pacific ago are year activities and new XX% continuing to pursue and technology business increase utilization to will design capabilities leverage Capacity customer QX. new the was

XX% capacity in in QX overall in was XX% Our compared in North the to utilization year quarter and America QX. XX% ago

ago customers the XX% quarter top total XXXX. XX% of in Our in to year third the XX% contributed and of compared quarter sales of five in the XXXX quarter fourth

top the quarter were Bosch, Our alphabetical Tesla. [indiscernible] order in during OEM customers and five Apple,

$XXX.X end in million was end to the quarter ago sales cancellations is versus of to year XX% compared for quarter accounted at customer largest the Our QX. backlog XX% fourth XX% quarter $XXX.X million at year of the million $XXX.X and of our of QX. in subject fourth XX At the and the QX, day in last which the end

operating growth for ending ratio our operational January X.X better the than achieved our defense the following we of about book benefits solid mix, of to TTM. summary, continued strength delivered end QX. and X. execution. market X market, days We diversified bill registered In expected demonstrated positive Our We our was PCB in results quarter and results fourth months cellular results our to aerospace computing strong focus on in the future see from markets automotive optimistic remain and in

performance will Todd financial for Now, review fourth our the quarter.

Todd Schull

of more for quarter had Adjusting afternoon sales Revenue good quarter in year-over-year. Revenue few highlights. X% fourth X% me notwithstanding Tom and that, quarter was extra everyone. XXXX We record. grew grew $XXX.X just Thanks, the than a strong summarize actually week. a had and an the year-over-year, let fourth a that of million

full also for an expectations. company. exceeding margin For the which high billion, all-time the Non-GAAP $X.X was was was operating year, XX.X%, revenue

share negative an the of year, model from of high end the above due Non-GAAP was an $X.XX U.S. fourth even Chinese including of For X.X% non-cash unrealized XX%. the full EPS currency. foreign we margin or operating X.X%, XXXX versus loss, guidance, dollar achieved $X.X million quarter, cents our to depreciation impact of the in target very improvement per the exchange close the $X.XX and of of to primarily the in

EPS this impact, was Excluding share. $X.XXper

adjusted from EBITDA increase year, quarter. We $X.XX the in full $XXX.X in of we of $X.XX generated fourth the million EPS, For XXXX. in earned XX% an

the For $XXX $XXX.X in an generated from the year fourth million. flow operations quarter the company. high record million, adjusted full of EBITDA Cash was we all-time for

$XXX.X net million quarter of of net $XX XXXX XXXX in million quarter On was in fourth our the of my year a loss $XX.X the compared non-GAAP to the increase offset a increase million, of was year-over-year year. our $Xmillion by partially fourth record XXXX For of sales of GAAP and income $X.XX markets. in third networking or in million. the the net and revenue The of share XX% the to full or in third fourth compared quarter strong focus $XXX.Xmillion, quarter, million, the On and to performance. $XXX.X compared year fourth per XXXX. in on was remainder last the quarter income due quarter fourth basis, year defense the $XXX.X XXXX and an was over income were and of $XX.X end growth sales for another year million aerospace comments markets, per share quarter cash net flow sales or and net diluted of the third XXXX net $XX.X from and to in The quarter operations $XX.X diluted this details, operating compares fourth of of GAAP per quarter of to of $X.XX $X.XX in lower million high. communications revenue cellular financial in million our in computing share. end This to will

excludes as and cost, or items, other performance costs, non-GAAP debt as associated tax infrequent unusual items the certain Our impact. non-cash related acquisition well extinguishment expense

ongoing we and to financial as we tax in margin was in into our essentially and XX.X% insight company We $XX.X margin certain the million Additionally, was impacted management or cellular a the and cost sales, Selling calls, X.X% compared costs. or products negative ago primarily sales, XXXX performance. X.X% to to the non-operational $XX.X cost operating yields eyes third same in G&A changes year into of such in of in discrete have Chinese exclude company's a quarter was sold net the provide quarter of XX.X% through expense million as marketing to non-cash improving the from in Fourth to in currency, non-GAAP net million of that the fourth sold. as financial a previous better due from of or G&A third costs the present the X.X% enable in sales goods expense in net the facility. year strengthening $XX.X million quarter. same gross the quarter of net of as fourth items. of earnings into sales expense quarter to was X.X% The million investors discussed to cost quarter continued see of sales The of XXXX. our the our Gross compared and reclassification cellular our in G&A which ramp quarter sequential third well year-over-year impact was The of at due reclassification ago XX.X% and was the the X.X% focused sales and decrease G&A of increase due $XX.X percentage $XX.X or quarter. goods net previous in of or decrease the largely to as a year-over-year was certain information of

Our last was of the and quarter, of $X.X same from to operating expense the well in the year re-pricing the X.X% of Interest to last XX.X%, due in quarter XX.X% quarter debt quarter million margin as same the decrease XXXX. in of $XX.X was dollar prior third Chinese last the million this million to quarter a in fourth versus compared $X.X as fourth our year compares of $X in U.S. recorded the a fourth net in appreciation 'XX foreign R&D the the We was X.X% fourth quarter. due during net the to the repayments. of gain other year. loss in million quarter quarter The income fourth the exchange quarter primarily loss the and debt in

was was the the a XX.X% same quarter quarter. in XX.X% ago. tax It rate effective fourth Our year in

million $XX.X quarter third share XX%. per XXXX or share. or was per fourth Fourth This share. quarter quarter $X.XX sales. or diluted quarter to income XX.X% due $X.XX the rate $XX.X XXXX, and million adjusted swing income compares Adjusted of And $XXX.X million was For of our XX.X% non-economic net in million XXXX was million EBITDA tax net exchange net $XX.X diluted The the of in with $XX.X of compares million or net decline diluted expense. $XX.X fourth XXXX $X.XX all per of third or effective income foreign $XXX.X EBITDA million to quarter net of or fourth adjusted was quarter of year-over-year net was This non-cash, XX.X% EBITDA sales. for sales.

million million XXXX. XXXX solutions $XXX.X up the the the was gross XXXX. sales third were the segment noted to income quarter X.X% million quarter PCB $XX.X XX.X% comments. year the Gross solution fourth on quarter X.X% in decrease Gross in to electro the margin margin mechanical had in from expense quarter of with PCB million the in to million million quarter million same quarter, $XX.X $XX.X due $X.X the sequential was $X.X the of in quarter over-year in quarter quarter fourth XX.X% our $X.X down $XX.X $XX.X The and million in ago the million mechanical product the year-over-year year due was million a of compared fourth The quarter. associated the rescheduled ago $XXX.X a operating mainly and the third million mix. $XX.X to $XXX.X SG&A of fourth was versus segment in and segments The from was in same earlier in XXXX. Corporate income third XXXX, the for to Moving the in quarter quarter. were vehicle last Cash quarter this year third in and a in $XX.X the quarter gross year-over-year quarter. fourth ago quarter The my segment fourth the $XX.X third quarter market. two third in fourth quarter the year year- The performance, in revenue million and million from and segment in these fourth compared operating $XXX.X last to net margin sequentially to fourth electric $XXX.X million this margins quarter, quarter segment of XXXX the and not compared operations fourth in quarter. in ago million the electro were change $XX.X sales segments of sales was for of million in in had and in the in segments of and flow in compared same XX.X% quarter million end directly year quarter. same the changes orders year The fourth third in the from customers XX.X% and

Our of quarter. improved cycle cash last in operating XX than the at cash year and the days to million fourth million metrics, equivalents quarter less end. versus days, $XXX.X Cash five third end totaled fundamental cash days the $XXX.X

the quarter flow capital was million. from for was the year million. Depreciation fourth $XX.X for was operations cash Net $XX.X For $XXX.X full XXXX, quarter the million. spending

Now guidance I'd quarter. like the to for first to turn

to total the expect quarter to the of XXXX first in of million. in range We revenue $XXX million be $XXX

reference a our was point, As first last quarter $XXX.X year revenue million.

Renminbi. diluted expect We range the per per is of guidance The provided against last networking share and of negative to of $X.XX based please count EPS as year's impact an the of dollar the diluted the the XXX of communication approximately to financing on in million share products, exchange any note in computing unit forecast Also, from related This be The well to cellular, decrease that compares decline potential quarter. $X.XX to earnings reported diluted $X.XX as year-over-year in excludes impact rebated a a volumes EPS and of is first Anaren the non-GAAP share. EPS in foreign weakening shares. Chinese costs. acquisition

our future includes as dilutive is guidance and security, bonds, X roughly such shares well million as of stock dilution from options with a dilution associated price. which as our count function RSUs, convertible share Our

in by million approximately above increase for increase outstanding share quarter, average reminder, $XX.XX dollar shares. a price during shares every X.X our a the As would

revenue expect be first quarter. about We SG&A will of the expense X.X% that in

rate to models, additional to following you your effective expense total be we We expect XX%. offer in To $XX.X financial the assist our between information. and interest million tax developing estimate about and XX% we

based first $X be expense quarter, amortization million. record of of and million, million intangibles compensation will expense expense $X.X $XX million, to non-cash expect stock of $X approximately depreciation about estimate during approximately about interest of the We we

Finally, February like I'd for Conference Morgan Leveraged the we'd concludes XX. And Finance now open & to questions. line Stephanie? be in High That the to that like Miami in our Global remarks. will participating announce we J.P. Yield on prepared

Operator

Absolutely. first We'll [Operator ahead. with Instructions] Stifel. go take Please from question our Matt Sheerin

Matt Sheerin

thank Yeah, Good you. afternoon.

Thomas Edman

Hello, Matt.

Matt Sheerin

Tom and Hey team.

the I there. guess target. looks question it cellular about year-over-year the on So leverage despite business, It you to just but and margin like still up in a so or looks XX% of your EPS so - implied you're I sequentially that's going significantly still to see have these year-over-year, decrease some expect

addition basis So through you things you in you to year-over-year to - that the I'm margins margins you of the out just weak. rest about, look why as excluding get do a can And year? to the think would as the trying year, think be the you on so improve can talked figure obviously, Anaren you

Thomas Edman

Let Matt. me take crack a at that

QX the to regards in first margins. So

observed you correct, You're that.

our normal it's downturn seasonal have We cellular and significant. pretty business in the

of As they few from months lot be disclosure public than companies, might maybe in the phone our market lots prospects of definitely you we thought ago. know QX by a a are softer cellular

range, that cycle, generations of a different price with a technology that, different in range ASP new or much having said few narrow incorporates prior phone technology selling the our generations, for and products. this a customer that compared biggest last drove to maybe this Now keep mind a new cycle

underlying still a you the year-over-year. pretty revenue standpoint, from different number, see revenue So are that a units solid but

- to by end two and what's of driven you cause at markets. equation the So - the and factors; main look and networking then you attributed come in be happening the the really to utilization and margins margin when particularly say, to here back cellular been facilities okay, challenged is our communications it's it's one, you our

which unit our and the bit from with you last of cellular a And new pretty up this, have little volume that capacity Our to - on FX, that more factor really just operating that's the and compound particularly, kind of which it's This referring We've facility. going, our year out to a is our in whammy adding that a cost on as currency you both going to technology recently FX become very line talked and that's of add you non-economic new capacity and declining a factors. effect widens so and about that is kind is factor the the market We correct. always down double that then visible really that at P&L, were pronounced significantly in non-cash, volumes we call we I'm unit below third in actually our invested cost. the structure. fact got gap

Obviously, have kinds we things currency a there's purchases raw are our and in cost in element - we significant dollars, Chinese also. in some currency labor of our of and our is a most are those of So US utility our done amount have based. operations, that selling have cost, but we - of cost material local that actually local

that selling degree this because of structure. all normally quarter, in move quarter QX our the the a increases some Currencies then last and deal that fourth with that management, part amounts, of the everyday they're as in get mitigate we year-over-year when prices against exchange USD, modest do in strengthens see our we to the the are of - at moving the pretty effectively percentage which currency change. all at, time just staring in but not change dollar So kind and so rates to our being way in With already when the some that, value that. Chinese of - cost the Normally dollar we the - same we time, in cost right. well and pretty significant we

now I and the QX think 'XX in QX 'XX. it's over currency X% right between

what's So you first quarter. in those pressure on margins putting the the factors take really together, that's

engineer, you given the that, you're and do - an margin operating Now, at right having looking I've still numbers reverse we're you X%. said means if still the expecting that's around

not have that falling is too. it significant away, and or like but we're going to assorting die it's we to a we're So challenge down go manage

history question our if watch last to business think and the several QX years, your rest and and to quarter. most dynamics we that of you you and see just point dealt QX would part QX I normally and look in peak you in The challenging over I seasonal our a always have we out have the with second - QX, of the year

always our year, QXis the year they lowest, Sometimes forth, expect imagination. be any they're world most sometimes pretty and view end consistent so go is the such long-term quarters. this of We we as don't an to pattern have two means with by back lowest, the pattern a the or would QX still this last that the challenging but over the

Matt Sheerin

and just growth suppliers the your that digits. other in Tom, a as What on - just of the are same visibility. ups maybe think couple business there. into business of year, cellular visibility single Okay obviously the kind I commentary this for seeing you not thing, much One, follow on low expectations mentioned,

do year? - have have that this can kind what how you that that you So of you you visibility grow or confidence business

Thomas Edman

certainly look year And ramp. technology strong cellular I so year-on-year, year, last certainly as very our growth phones, had about to congratulate and if environment up this year, team. shift last were we at with in big the we and look again a we Right you XX%

of job think remarkable challenge financially. that and responding did a I they to delivering

new the - looking looking and year, be the cycle as wind introductions based that ramped introductions be we up, year towards next cycle year. the product that winds on at product I expect - of we at last those together and in this technology the As end we'll we'll pulled this particular

and that sort our I certainly really the from be that end this indication - Year, be if into give will really, function Chinese market will you Year beyond post intend we goes really we'll handicap we juncture position next of cellular - Chinese that it's advantage at but point. better that's even yield, it to out visibility a it which starting and we through starting a point have a don't of be New on an be the So - indication quarter on until New phone QX our to can't sales.

going to transition, what's in out. on about and to what on next QX. QX, the to we work bill happen I we can in are cycle And technology done so, point thrilled know where that today going on say you're I'm is, the starting we've be are where don't yields right QX, that We

Matt Sheerin

structure just cost that? currency you're due that seeing, there on any to for are to higher the that mitigate plans anything and help headwinds the cost or can do Okay you cutting

Thomas Edman

a think I live regular how and direction as drum cost continue is operate that best to you TTM. this. mean, is we know What on headwinds and to environment all focus and in Chinese of structure cost and on to - cost so respond increases for focus that have as that in of a I mitigate. a improvement, the takes using really labor practice respond so we sudden function in frankly in - continue on we a ends beat business cost movements into we'll a our changes focus capability our that how period our material that which that usually time run sharing, and pointed the time. size we really right the we in We drive Yeah, never business, Todd our the a that's sudden - to continuous to to

and And based that good in is I that you a of continue our not we just remind also and So portion very subject absolutely would the to responding revenue process profitability of to shift. that are to more and North will America currency respond.

our advantage a terms nice there base. in of production got So we've

Matt Sheerin

Okay, thank you.

Thomas Edman

Thank you, Matt.

Operator

ahead. to question We'll next from William SunTrust. move go on Please from our Stein

William Stein

Thanks and quarter. brief financing update on good market given the the very taking my a us congrats help was hoping on or volatility you Great. today? for Anaren I can give a questions

Todd Schull

forward. carefully a foretell a watching a here We've question. last stabilization of the little week, stability half market day has that all good that last excited very quite more That's been as the to see the will over little and pleased of we go and we're hopefully and been where bit a

acquisition market fund are know, we price - the expect to $XXX to of that the in our you and XXX million. raise a that acquisition, we it we would to transaction. go time debt able of as be we purchase announced So we the out announced have At

you've result of million. almost excellent flow year, so end had as my to As the $XXX comments, $XXX our up balance year I last here at noted pick our cash this the company seen that we've over of past a through over really generation cash in million year. And the

one million We business market, will indicator use to at to think factor. generation reduce to financed pull to basically the cash that's our down very least the so an the capability plan it's we so go extra $XXX that I million model. XXX of million, And positive and a from acquisition and amount XXX the will

market stable, regulatory received his comments, obtain to does as stay the have in opening yet approval. that's the and mentioned another clearance, Tom assuming Secondly, CPS but we still one

this the splitting to underwriters close the B but do loan a and a would the go, that fairly model cash get excited that be target which when leverage. and again tomorrow, flow track next is debt is generation we together we'll package put period, month, out We're but term with room, to on our will pretty short go market. X.X that we conditions that we've market really depending we that we've of to our We'll and So next structured the at to couple strong B good market get of focused a approval record go when it provide consider until and and committed it to vacant able probably confident timing that with our exact we The and little time. us perhaps financing. - of and our I that proven gives are to timing financing deleveraging with back of determined. - in won't net getting between a is to our week, that's structure, capability to to still us expectations in full we're time watch is paying high be trying market loan it be all a with able But term it bit yield time

Thomas Edman

first look dependent on only the regulatory will add the year this of to from we first and Yeah that in to and standpoint is the I'd we six this - be regulatory a as would continue thing months at a close intend process. still that

William Stein

XXXX Automotive That's can, helpful, schedule, bit quarter important later I up a in actually different year? then this thank in maybe shouldn't normal level full being than at if push expected given of as I'm and fundamentally we you note the topic. outs a end get we you that as you. follow a behind and wondering the demand through momentarily year shouldn't the think expect saw the Why above market you. we you growth really push is it that to this if the One little opposed what range. be coming Thank you within end it's coming is better in a outlook stated high or it's lower to through

Thomas Edman

so that little to and beyond in fourth was OEM Sure. prior, a was particularly the solutions the - take were as because to the Yeah, of of it out, of electric into the much side the was year some in of just I were we actually EV at subsidy on very in of quarter, - I the customers interpret that going bit we vehicle terms think don't end that, effect the area. comparable pointed high China demand quarter how changes our don't read had that - they out I area really quarter year. deliveries the - I primarily pushed several

as So But a the the the share early now. this look year, of at certainly difficult one. hope bit that year, right range is comparable we that it's also above we in view we be to little

to growth better areas to as autonomous in of as and on customers our the potential that America highlight, production our we advantage particularly the of as North our that RF really X% reflects geographic TTM it's that perspective I on footprint, I vehicle electronics intend Anaren in positive well the growth as there, and would build close but is footprint volume which - look now China combined as range, we a growth indicated, think acquisition. the think with content experience our automotive capabilities certainly to is management automotive in well at the take very in I I a safety here view area to support from X%

William Stein

thanks. the Great, luck good year. And in

Thomas Edman

you. Thank

Operator

our take from go from Fox Please Steven Cross next Research. ahead. We'll question

Steven Fox

unexpected that you yield meet with good the was sort in the afternoon. QX in customers went had for any in profound of your though other next were off, leverage staggered, that relative how bit with that generation Can there talk targets, you, did see color you other your on thanks obviously for to did related little technology. performance, in better what's I ramp perhaps that or Thank you how ramps it all you going on you operating is a what first cost own color QX, guess QX, needed? about that year-over-year absorbed your words on more

Thomas Edman

Sure QX. we this indication of exiting some and had

we internal in were QX on forecast to yield were performance was If really see that. - ahead our you remember, that excited we of

expect into QX improve, even we ahead QX that continue will expectations. certainly extent technology so change of carrying to processing momentum it QX. in The had major a of continue. that we're given we that a yields - we're team subsidy our expecting the So continued course that to the to through improve is move yields like to - is, those and really to We

in area exceeded job I on by think yields, expectations our that organization. really tremendous in QX overall the

Steven Fox

customer? I by programs Great, a you in little business, over those was sense of auto that's what ramping XX sort end mentioned give And us a bit within next of then helpful. the it XX the for of that are new terms application are months. XX the you think Can

Todd Schull

Again that mix, the way you primarily and activity seeing and the still it's We've in to you're activity, area but volume at other board and with that most is facilities, China ramp. PCB facilities we're those mix of so advance TTMs the area do with a Valley which in advance US the facilities are in Yeah, in RF. sensors And see so customers. customers technology structure growth. see in they're function areas, programs we are assembled mainly as on programs sales - along the are of few then we're then China. those as predominantly commercially can in that ramping, focused to technology a nice And that geographically them. and customers again solutions drag got in proximity. a PCB other the organization medium for and Silicon coupled view, in work really a of the E-M that supporting Chine, ramp with programs that area with the are with lot solutions to areas footprint mainly support There particularly security a conventional gives being RF that electric expect, proximities one the we stage our assembled predominantly engaging of development solutions our our our they're US early there same through of in - we're a the working lot being in of ability the going these a but and support and the ongoing thing vehicle, technology That then

through of the So manner engagement. that's

Steven Fox

Great, you. the the flows thank cash and year. in which were lastly And just fantastic quarter on then the

that would profit operations that should growth. assume as about to of some be lead maybe in higher for think you a cash going from to something full top lead the working you. on in picture Does XXXX. a or the Thank that year flow XXXX? going is line drag growth painting there capital also it You're terms I

Todd Schull

cycle that working managing that take capital key cash we of to our I of look as regards capital. Steve. working In identify in exercise, our base I'll at kind terms our metrics

push day's therefore gear a $X And all to to million pull improve very cash we're because day of internally on we important estimate that worth that time We program that try is buttons influence a it's motivated us. we to that. to to one cycle or levers the cash, metric different trying vigorous have the - that so of work

ten of but take challenging, lot year-over-year very don't to way on a there becomes run is another that off deterioration five Now, basis. a I or days expect

I QX, year to expect see the should last parallel in in see see cycle do. for path, hope QX QX, continue cash any the over terms would see but eight that cash we you'll what improvement will revenue you so our we challenging and if over difficult some but deterioration, to a from But each that's flow compare seasonality, example, business. you'll QX that should quarters growth days operations You over profit very, thing very serious and therefore don't of and

Steven Fox

Great, that's very helpful. Thanks again.

Todd Schull

Thank you.

Operator

Coster to with caller, move ahead. Morgan. J.P. Please Paul our on next go We'll

Paul Coster

taking the a so first you same remainder It this full my Thank of thanks for expect through impressive, the year? year. question. for looks the I Should have pretty quick few questions, quarter. the we

Todd Schull

the we're XXXX So to way XX%. that looking yeah, guidance, our XX% at is of that range

year for that's the projection and you tweak you kind you and full as our So it then go actual get of forward more results.

Paul Coster

combined seems The mean acquired half in business, once the and are expand integration? of business acquisition year - out to Do more Anaren advise will range the to to had legacy superior you the the second operation that so it think going margins the that assume the margins business top Anaren reasonable doubled I target the it the way. have will in than is consecutive operational of

Todd Schull

we're that sure close, get not provide in to certainly we'll we're variable and the look to timing closing date. a like Tom when sense we to outlook but big that going might One try mentioned, is as better of when what

the we so normally teens, what to upside and kind operating right generates is mid You're model. mid twice EBITDA that their XXs there a observe and financial margins of that business significant average is model margin into we're the on their are see

willing, positive not if you in seasonal the on not, so look quarter our is some at that. you color guidance have indicated the transaction if patterns. acquisition. and as if a first that We going price look in quickly going would we reasonable like And we transaction. very see expectations at we some the what that sure given financing debt business synergies forecasting like layer either comes profit the obviously or given Tom's I contribution ability, encourage revenue this accretive after second the that for that will, close typical be baked assuming on I where you as some there, your is if which you - from make to our the markets we've for also And expect to as think on base earlier, Then to would our definitely far

the about ability, drive profit how If points and to last XX% incremental PCB leverage years through and business. the often you grows on talked are. look flow We've what generally see grow profits you XX% our revenues over several know our as revenues our

kind street comment years, kind in those to we over how knowledge that. have estimates I the would of you that act of of using So this point. and several build can't specifically are metrics at the last to out your

Paul Coster

US you've Asia running Last share plan China question to got a in based What are there? you some you kind list; you have comfortable essentially but can based CPS, and large here you're through ownership. get company place situation got on that also of and other operation, the how risks US based contingents and you

Todd Schull

couple a seven going under So department government, on security a with US TTM acted special [ph] points defense the to acquisition, now. years with agreement degree so so of there, the lethal is the since a

if this excellent needed. process. through is there take have will so amended and We third those of far, there. we twice so There slice here which you that certainly is an and as understand process requirements so relationship say be an our government ongoing and very the can been the - agreement an agreement that And to have with there working is road the relationship seriously we the

that government's I'll clock that to to but work optimistic - have we the fairly have this. We there through time so that time and will we an about on is this how view together, goes table all a we is review and existing have relationship, come have the table - will with a

keep either transaction. is close QX, we'll our informed to So again and you here it intent certainly QX the or

Paul Coster

very you thank much. Okay,

Todd Schull

Thank you.

Operator

ahead. on Sean Please Hannan And we'll go with Company. to move Needham &

Sean Hannan

during here taking the to for you're did expecting that number like to question two, in as this talk many look question ramp you number timing would that my going It's proceeds XX Thanks. there 'XX, thanks one you the took you and Yeah, ramp wins back on what when for here. how for the of that reference, a 'XX, just and automotive, year? then course that about just

Thomas Edman

last number you really will going we this Yeah, and the forward. doing Sean, that disclosed we so for is year haven't something be

ramps point with here occur then the will these next and volume, the programs in building there, small at to take terms know we're of relatively tend next process volumes. is two at two those occurring be or In you in to and early when years volumes as commercial ramps build year that would early the of the to meaningful and stage year course the and - volume but starting building in yeah, that this

a So you're volume and year this XXXX, building looking XXXX. at then meaningful into - really starting more into

Sean Hannan

should folks. bit for so year, at this into much, maybe space trying to of that And just understand looking an the follow the segment, where understood. how year, about, on incremental maybe then some this perhaps until where Okay, look? that year, you're uptick that growth think we end going then something path than a for of at norm current to expecting so below the think point or up from about general to middle be provided Is of and we slow that different sort little were the to comments you the networking do down communications, shape Thanks that how typical we of segment? expect the

Thomas Edman

we - little piece telecom enterprise the networking bit give difficult and the year, - these we are communications thirds side to a space seeing that is that of difficult now of is is an I networking The of with I different a and and very set outside it and about call two what causes large So customers is to forecast. dynamics overall come networking the we're in the the a to terms would third of slowdown networking side. the deal right and think of be this gradually visibility to in what back course of it's difficult there really spend. always networking during all on expect on of of that but

relatively happen is the to we next this a side. outs and telecom as along look then flat into would the bouncing to bottom it now way as the and year telecom the of And the year. would the that's forecasting towards through initial on us to of sort for build course right when the of year, expect start end probably XG, So see volume right the then at develop

build So your in we that's what that would see timeframe start a as where one point volume then XXXX. I we start good into is, QX really next think and seeing then higher go year to the and volumes into some

Sean Hannan

Okay, very folks. helpful. Thanks the questions taking today for here

Thomas Edman

you. Thank

Operator

call And no Edman any I'd there the queue. are in Mr. questions now further for to back over to Tom closing turn remarks. the like

Thomas Edman

to points Stephanie by just made good commitment. summarizing the And like you thank and Okay, earlier. I'd close

First, of really XXXX. quarter for we strong fourth delivered results the

that full year. of we the fourth number for the heard You recorded quarter and both records for the

just did our forecast my just So as strong of congratulations end terrific share a capped I'd per that flow. our on due quarter. high and earnings cash content to the record outstanding team like to operating really We to where we that well non-GAAP growth off just an very beat was year reached as solid non-GAAP EPS execution operational and and revenues, reiterate

all And close our continued thanking you who're on our a those Thank mutual TTM like employees set engineering to phone. and finally, your capability benefits. by new those We for just customers transaction Good employees of able are Anaren welcome of closing the I forward excited and I and you into potential support. the and to terrific about investors, being to look all bye.

Operator

today's so Thank for And this much call. concludes you participation. your

now may You disconnect.

TTM (TTMI) 8 Feb 182017 Q4 Earnings call transcript