TTMI - Earnings call transcript Q3 2020

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the TTM Technologies Third Quarter 2020 Financial Results Conference Call. Today's presentation, all parties will be in a listen-only mode.

Following the presentation, the conference will open for questions. reminder, is a October recorded As XXXX. XX, Instructions] this being conference today [Operator Senior Corporate Director Relations TTM's Desai, Sameer of review disclosure will Development TTM's statement. now Investor and

Sameer Desai

Great. Thanks, Casey.

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

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

Tom Edman

business you us safe call. These of our with COVID-XX business review strategy continue are our thank Schull, on then by update discussion our QX quarter XXXX all and hope your with impacted third from afternoon, how of QX quarter and Good I'll our and loved performance for financial an Sameer. and the that, our our third begin quarter healthy. followed you follow And XXXX and ones a has overview for you, joining XXXX CFO challenging I to our times. be of Thank of Todd conference an results. will highlights a guidance.

that to of We and non-GAAP will I the range. pleased XXXX, then EPS open guided quarter the to am TTM report generated in questions. the call revenues your above third

despite aerospace revenues grow diversified year-on-year us markets PCB and Our allowed to end in end commercial markets. automotive the weakness

the proud In and inefficiencies, to has due extra am cost of environment. and employees I to this excellent addition, extremely COVID-XX. concerns. uncertainty, we macroeconomic employee despite TTM pandemic unprecedented strong operational continued deliver COVID-XX formidable operational and difficulties, execution, created of worked overcame performance, have The how production challenges

QX. Combined X.X to like debt-to-EBITDA our received net of ratio of at we our divestiture from applied them the have unit operations, that highlight dropped I'd Finally, end loan mobility to the in the business remaining term proceeds and B. has flow strong to QX repay cash with

XXXX acquisitions. will in and in capabilities more part complementary with update more new believe be a rewarded value market TTM for sale that that capabilities our slowing to reduced a of current Next, mobility customers. through and Anaren provide the We on be internally less with and our strategy over long-term time margins. transaction that market our improving has us key to more will cellular Anaren is like of cyclical, direction. performance, to but growth an the -- differentiated our with transform and growth, adjacency the and years. provide a provided would of offerings and enabled slowing this business investors are volatile our effectively We acquisition step disciplined. to business key and and more components to to in has XXXX, stable that lower strong paid add be unit cash to in which on journey end to I represented flow been A products The strategy. exposure growth us that engineering seen RF subassemblies margins recent

strategic In of addition process of which down subscale two E-MS in XXXX, value the limited were and offering margins. we shutting are lower our plants, in

sheet commercial our the our expanding well investment that for RF balance addressable to market, is more the an is I would forward, market. further in strong company. update as footprint. well both strengths, a to providing Looking our our you maximum focus to as COVID component benefit We pursue acquisitions, around Anaren's and across organic manufacturing position to more the markets, our the capabilities acquisitions to prefer diversify is and the A&D core to to capabilities customers, In supplier as add focus be also In situation. on commercial our like markets needs. our as indispensable A&D

managing after relatively protocols. infected through Those to impact following COVID-XX and minor cleared, production. currently being We quarantine our to are returning testing are with work

who in use quarantine team to continue deep tracing contact affected to infected and in addition contact are areas. members individuals with work cleaning close We

in much and preventative communications, thought and our of in the place than continue less these events masking, stringent have also checks proper as in culture of Because at communications of the transparency extensive We had our start measures on other measures worldwide. operations internal distancing the year. our facilities impact such we temperature

States including an vigilant team leadership the the the in see United in remain of of COVID-XX of we the enter winter cases. Our fall impact mitigating parts as to continues acceleration and some world

disclosures our and unit mobility business end E-MS review the All to the plants exclude like two down. are I'd shutting Now end we market historical markets.

represented The For XX% and defense XX% end and sales aerospace QX market to end in on total our of to XXXX press details of earnings quarter third please QX XX% compared market release. sales second more of sales, refer XXXX. disclosures quarter

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

Weakness offset a We in than continue instrumentation aerospace beam in instrumentation and to million key was see segment Assure for X% our A&D weakness in in the alignment with this growth end quarter and XXXX. being scalable the Northrop. industrial We end pleased year program in by solid strength program built LRDR and U.S. quarter, that such offset as XX% strong built total AESA year by Growth second as The to the market quarter and medical jets our up XX% in of fighter program is radar third to programs of Lockheed, medical variant market ago X% ago in customers. agile systems million our compared radar as the A&D revenues Aegis, of by market the was the compared market year-on-year program sales were of defense XX% saw QX commercial a as an our our grow industrial $XXX customers strength for we $XXX with result partially to on year-on-year quarter. by see Japan more in the contributed well the upgrading end in F-XX defense. franchise in in of bookings backlog

end In took QX represented of XX% segment levels less this sales the and elevated For from market of during third be we quarter in in quarter expect market subdued. XX% as segment telecom Networking to expect in Sales second total market computing as the compared QX the end in the we we to relative to quarter for and compares XXXX decline fourth year-on-year This continue revenue to quarter X% quarter builds as storage revenue return grew networking XX% emergency third to be products. center for XX% XX% the and peripherals revenues of XG quarter, of to remains XX% in XXXX. in this strength medical customers. telecom second industrial data accounted We demand customers XX% communications of pause. to of segment revenue the compared of strength XXXX XXXX. XG the the in of our in third of XXXX. of This of saw XX% a the demand

the We XX% in represented to XX% this approximately quarter expect of total quarter revenues the in third second of XX% ago quarter sales market and the year of end represent compared fourth XXXX. XX% Automotive to sales. during of XXXX, during sales quarter

sales year-over-year saw better While COVID-XX originally X% expected. than a the decline slight we growth, was impacts sequential declined to automotive which due

the total of sales automotive continues. expect We contribute in automotive as recovery to QX XX%

quarter. third the all the that following business and metrics E-MS two the exclude cover Next the details from I'll some mobility closing. are that of plants Note unit operations

which RF to XX% rigid QX. HDI, During the This flex, accounted of components in technology compares quarter, business, our includes year XX% and revenue. in subsystems the approximately quarter approximately for our XX% and ago and advanced

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

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

XX% sales in the the contributed quarter Our quarter in XXXX of XX% top to second customers total third five XXXX. compared of of

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

COVID-XX-related better efforts employees' Despite that months challenges engage concerted customers. long-term. and also our months during by to particularly customers. medical September X.XX customers this our of the times employees continuing Their of ratio our moves than book-to-bill performed like strengthen in has efforts TTM areas to inspiring excellence a in market PCB and business direct was strategic we result again our our with industry. critical thanking our positive as taken diversification ending and We've are to Our support the the to defense critical expectations appreciated three innovation for XX. mission first -- I'd by year, end of essential like operational and faced TTM ended nine for our contribute the conclude these for will

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

Todd Schull

Thanks, Tom everyone. good and afternoon,

April Now of unit. TTM as Tom earlier, announced its mobility of on the business closing the XX mentioned sale

have details unit additional on such results will TTM's non-GAAP the for results the earnings as financial non-GAAP business the reflects the of business operation. included the I reported. E-MS schedule businesses Please still refer continuing results we and both in exited unit operations. The GAAP to the the and is unit. excludes which of GAAP discontinued business mobility information, a As discuss mobility disclosure also

coming continuing million For from third million end in compared market a third quarter majority the decline and in decrease with defense, the plants and instrumentation was of to This are medical, decline by quarter, our aerospace of the end the to automotive offset net closing. from year-over-year our sales $XXX.X that growth were computing industrial operations in the in due revenue partially The was and E-MS we $XXX.X markets. XXXX.

in impact X% of loss business of grew current in revenues plants million two $XX.X million Anaren ago. include the commercial XXXX of the the the impairment Excluding E-MS being operations we related income The operating to year-over-year. a acquired a to a results our down, year compared from goodwill of GAAP $XX.X charge million third for operating portion quarter of continuing back third the GAAP was $XX.X quarter XXXX. the shut year

a On resulting $X.XX or customers, in sold per Chinese reduced on third certain will in and share net million income third U.S. last actions year. of focus the products non-GAAP net profits financial This revenues quarter or been $XX.X per government million The remainder quarter of compares XXXX share. $XX.X impairment. of loss our diluted imposing was to a comments restrictions of manufactured on my result diluted $X.XX performance. U.S. GAAP of the basis to As the trade have in

costs, X.X% periods. to the XX.X% restructuring to present Our in in non-GAAP net non-GAAP revenues the increased of Gross defense, mobility the the prior margin The as as volumes. marketing in year-over-year to in quarter our third goodwill million due and items. X% costs, higher $XX.X We see enable divested unit, end third XXXX. Selling financial and instrumentation gross of business ago. eyes markets, generated was items was quarter increase performance facilitate to computing non-cash which quarter to to of or or the $XX.X production to infrequent medical management impairments, margin and was million aerospace net of XX.X% other and expense sales and certain sales information comparison year unusual efficiencies compared in company primarily investors industrial or excludes our M&A-related expense well in with compared third expectations a

G&A the third to or the of net was of million million quarter QX of $XX.X to in or revenue quarter net XXXX. compared R&D was $X.X sales quarter. $XX.X $X.X in Third In X.X% million sales or revenues XXXX, year X.X% million X.X% or expense compared ago X% of of

repayment operating Our This QX quarter last year decrease third to and Interest $XX.X year. $XXX of in same a million margin X.X% our in was the X.X%. of the from term due quarter, of million last to $X.X lower was same the compares loan. rates million expense in interest quarter

the loss foreign losses. $X.X EPS. of compares This $X.X $X.X million recorded $X.XX to to Government of a of reduced net million approximately $X.XX in last approximately incentives we EPS QX the net year. of During of or gaining quarter, or million exchange

Our was in the effective third quarter. tax XX% rate

Third net was quarter $X.XX income million third diluted EBITDA quarter share. third million sales. share. the $XX.X XX.X% compares $XX.X This of to sales of adjusted $X.XX was $XX.X quarter or net XXXX XX.X% income or of to net Adjusted net million million EBITDA per per $XX.X third or diluted for of XXXX quarter compared or

the Our sheet to This was collected business quarter $XX and very positions strong. $XX.X the million inclusive of $XX.X year. third million in we sale. million the after remain quarter flow from same in close balance operations the compares accounts from of receivable liquidity last Cash mobility

the we cash of taxes. $XXX.X equivalents $XXX million business withholding of quarter ratio QX mobility from were the quarter, leverage the debt during of sale the approximately Cash was net third XXXX the $XXX at addition remaining At of In received net proceeds the third the end million. unit of X.X. and our end million

to for due the As principal was a mid-December third in $XXX spending intend for $XX.X repay million. we Net in reminder our cash. and million. million debenture the convertible Depreciation was comes quarter capital quarter the $XX.X

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

well production. end may believe ahead challenges, Now COVID-XX looking to continue supply as as demand chain own we with market disruptions, that inefficiencies cause our

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

diluted approximately at revenue range EMS We the be the of a results to expect diluted we share. $X.XX closing from includes operating This million share that non-GAAP the guidance shares. end $X.XX to two plants per EPS earnings year. of in count forecast and the XXX.X on of are The is based

stock count Our function is share with securities our our RSUs associated as future such includes no but shares bonds guidance a convertible dilutive price. of which and options

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

and be fourth about to revenue quarter expect SG&A R&D the We X.X% that will expense X.X% be of revenue. in of

about interest total $XX expect expense million. We to

be additional to assist in financial models you information. XX% we following developing your tax offer our and effective estimate rate the we between To Finally, XX%.

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

the I'd Baird announce The Conference also Industrial November Barclays then prepared Casey? in we'd Finally we our Conference on to December XX the Midwest like and concludes XX, for and Conference Stifel line the November questions. on be on That to participating like will XX. Growth open One-on-One that remarks virtually Technology

Operator

Needham from Instructions] & Mike Company. first Cikos question We'll [Operator our with take

Mike Cikos

taking Hey question. the for guys, thanks

providing on based had on it looking is and This now. your consecutive previously? Or you we wanted I'm you outperformance in the the First portfolio? you're looking had the curious second us we've within that thing I guidance on you just visibility if -- seen greater than are the had I'm now confidence and guidance earnings. at quarter provided versus about do guys is guidance the differently based revenue have movements numbers you And just this to that ask at

Todd Schull

dynamic the So as July, know And looked felt that markets can as had been were you was say automotive we Mike. as times. we very at I these automotive. I we The what the were have improved to would we piece maybe address in was revenue -- And the that and even strengthening what expected. upside at fact we surprised commented but time, most that strongly beyond on by our

And so you was if a that really positive tailwind will.

a was is other quarter QX than sort product customers networking of more that outperformer, communications. rather pulling expected. this anything The if as of of out the you inventory was will than of last QX big towards function end And

at look we forecast. as right which with and very that these kinds we try been very markets our have also are to to close that forecast if as general, you of their customers increase In stay dynamic dynamic So, just would difficult can to now.

we think following we're as as based And so look And customers. inputs quarter, numbers they are be on again, at as solid point, can our into the guidance this from our fourth process. I

Mike Cikos

another And you impact you. cope been to been to I your I'm there us All in pleasantly right. And COVID your way relation QX year impact think QX? internal obviously, comment made from just I Thanks Thank guidance. executing looks guess the like think what Can about you for question a for able the you. Because I have guys you that how as guys by well help that. of structured then regarding and in surprised If thinking, with was that operations that have have metric? this potential pandemic? against

Tom Edman

with agree I would comment. And that

the protecting employees. I think of has and challenges, an operations done of the real team our foremost, face first job in outstanding

States, our the continue be aerospace we And They guidance our be communities the our our leave facilities in to and cases cases know really not communities facilities and cognizant footprint, following yes, environment seeing same that we're work in United other they that then impact if to environment -- overseas enter North COVID is are at that always as workers Our to rise that -- cases our very the -- look employees. they our are these in. safe consider, as China And a particularly, defense of in when cases that's something offices. spikes occurring comes At TTM America. when the time, we we in have in in situation. it are those our to for can occurring you these employees so nor because very

So it's really it just when comes that's to about with America. us, limitations North production primarily going disruption about in aerospace North defense for careful to have And to area where be production America -- potential and be COVID. from we

always guidance in was quarter. that's that's it this past -- than in encompassed our way same So the

Mike Cikos

you. Thank Great.

Tom Edman

you. Thank

Operator

Our Pajjuri Srini next Nikko Securities. SMBC question from with comes

Srini Pajjuri

Thank you. Good afternoon, guys.

To all, how especially impact congrats from upcoming -- potential you on can have have how a Tom, next that extent of the about might the given solid the First business. planning your XX a are on the execution. months about forward? the you and thinking the budgets on you going defense visibility, election you question talk standpoint defense

Tom Edman

And the forecast. hard we COVID you. to particularly go Thank on elections, that dynamic to the of and world's given the economies is very admit into Okay. course you very the out a no with on impact winter has the of and I'll be crystal look this very factor given, the ball as one situation we mentioned as yes, one first

me just is we comment on let what XXXX. we into there look generally see So out as

or slightly the have market aerospace to X% opposed impact we the over we continue defense or confident our grow as the growth there something weakness, higher so than think, business. will years, again, on think is guidance, the from so rates kind last X% of be that at that X% of -- several that have business around be forecasting the than I we've to Prismark I so probably to X%. than to XX% reason business, and that the There an can to some which we business certainly looking that even less higher seeing been we're

it's I the think on is headwind at being area. still to aerospace challenge facing be But going looking that to above in we're be that biggest going that.

As we look automotive seen at course automotive, we've of recover. all

spike continue situations. the COVID demand, are we of to they as as think Again, first I year. and will into watching think down next in enter recover shut all automobile European encounter I cases automotive we demand, part another

So go more the be we this would for had a But -- When that strong to on as be range we expectation. would to on returning into certain. compare of growth see of positive going say momentum industrial and would heightened computing -- side. such data we're our look the a there's kind going continuing into that year impact computing, portion largest that's certainly, for a all the that there. that we've computing on is at QX that's rate to be different we Again of center a general area medical so not medical certainly XXXX there, for levels, as real to X% -- X% QX go improvement seen is the normal normal next -- looking that we to demand center some around MII, the data side. area returning -- because a and at us. tougher to the demand I instrumentation you interesting you're

barring hand, into the again disruption we should COVID front improving other -- huge go the industrial XXXX. no on should start as On if

would So, of be we to fighting there to kind that's forecast the range in what the X% X% achieve.

impacted first predominantly little of equipment that could the China. but requirements. a we we are purchases U.S. see Europe X that may now of And would bit the half will slowdown XG spend the be by think pick I expect better. networking the XG and a right the year will I that and up been of out then bulk the China. second half for the China out tough, in get has driving of Phase infrastructure demand communications,

a portion on the then of of when about us and higher and telecom the which than the at slightly is network is think can good third for for reasons positive us to communications moving. I half the -- really networking of peak around certainly business business So, be it

communication into and positive a So, should network more look XXXX.

that's the So, mix.

it's think exposure. of this market benefit great having I a end diversified

markets improve I some think to continuing we'll strongly. be seeing

may of demand a good with but that mixture markets situation back businesses. Some heightened the falling bit, have COVID experienced a

Srini Pajjuri

great you. gross have I then And as for XX% up then here. at and come color. Todd one question That's Thank utilization Todd margins have the well. nicely roughly

just So, margin? improvement potential talk into XX need to you think the here XX look to do outside utilization puts as of capacity? any can high you increase the And we some of you about months, mix further next gross itself? can before and takes And how the that of go for

Todd Schull

It's Well of different utilization two utilization a North challenging of say be In model because it's a high-mix low-volume and levels I business but important going we business we America, inherently models. metric. have so is are challenging lower. to more an have metric, kind so

XX%, capacity North in to to in up North actually around to close in increase capacity. production and operating at there really been us that's Getting XX% we So, stretches and adding we're our good ability selectively our try a America America. here say when XX% very we've number North America to

a mix. story. volumes The mid there Now, to business different and in geared Asia model lower is towards though it's more higher

opportunity improve. to And factor. a good a And Asia is of becomes much upward quite there not in utilization number. XX% important so is a frankly more And lot utilization

be in commercial tend have several by plants plants. of key markets. end our to in our capacity driven China We These

is mentioned, A&D a America Tom really North market. As

what's computing And watch really have utilization what Those significant will equipment and so, end leverage there's we in lot involved you our end fixed So, those in do us and in There's in a markets cost of for a we into networking because our medical utilization. market, lot our so business. market, there of technology lot markets -- will with and key will is play factor business happening of element also. have going the model. drive end communications what's a a end a instrumentation and fairly industrial particularly on automotive and to

side So, on we there's more quite of opportunity upside a grow although too. there to still North in commercial America bit some opportunity have the constrained

Srini Pajjuri

Got it. And one just clarification.

convert December to will share that the or you're the impact on retire going any said in the have forward? Does Thank You you. count going quarter. that

Todd Schull

this There at is impact really stage, -- The is the warrant. expected zero to frankly. be the on count a share quite

years convert entered ago, did we call from option to company we when -- a protected called spread dilution So, which what's a into seven the the up $XX.XX.

for becomes second piece warrant we warrant involves the a that during XXXX. to a the The transaction the opportunity of of exercise that have strategy couple with And that in the it warrant did money warrant roughly that XXXX. above at the $XX.XX. that of issued the we banks every dollar expire the could that during impact At XXXX, will above is $XX.XX but point it become And dilutive end stock price. that

diluted million quarter, about shares X.X%. a for average share our be or could X.X count the On

is some really of all. still will as convert. don't expect there any But if on the this you the I tail exposure dilution So at at year,

Srini Pajjuri

Got Thank you. it.

Operator

next Alvin our Park We'll from question take Stifel. with

Alvin Park

on for you the to for pause. taking telecom XG the the up Yes. just wanted just Hi. I Sheerin. follow Matt call. and on Thank I'm

headwinds Europe be that end that in there mention an will pause. But U.S. out does and tailwind? of did be You curiosity associated of and pickup impediments Or that infrastructure eventual resume will you restrictions? the when potential -- investments because see trade their will China will XG

Todd Schull

Yes.

is than if investment. double the the is entire at now, China XG base of -- terms China look rest -- rest more investments continuing the of you out certainly, So pace of total station the if the China -- right they're world in

little China which the to-date, China. to TTM continue going market. we been able hard provide standpoint, primarily some business it's products our have engineered Ericsson important future. So beneficiaries be to a Huawei, ZTE market have of But no in predict well. From been of The question, to as bit very with out with to to-date a

So printed be able and of Huawei. to we circuit our supply China manufactured all to which boards, our to are which -- backplane in continue assemblies resister components,

the beneficiary be be business very ongoing of occurs will investment And I China. and in investment large And has would so not Phase that a again X think that that investment and been certainly, there. impacted

Alvin Park

I follow-up a understand. good. it. see. That's I on And

that another expecting on they some more similar XX go order be global the if to production possibly months relatively auto going Or bookings So quarter production peak bullish -- still a calendar quarter next next at to for is least the potential determination? that is make scenario? mentioned December a or into any they XX could optimistic supplier basically sentiment that December least. XXXX the visibility the -- visibility visibility any stating see in have Do just terms auto that you it limited were of mentioned to months or or you year is or possibly supply or beyond at color that

Todd Schull

Yes. for beyond quarter. off beyond quarter, the -- forecast volatile of automotive business, beyond that visibility do we go work our the but Definitely very they're

I'll with that start comment. So

expect I what high what of comment in started quarter were referring Europe. or North think into America QX. that's QX. our regional were to we reached that we certainly saw third was What of levels to We And fact sales QX to selling in in is what missing we'd and China. really be production already reflected and that come may we sort the in that the really continue regionally optimal was

regionally sign for So stable demand. again automotive that a balanced great and servicing a is stable we business end really up which

then And those demand next what hopefully going consumer think we stable at negative. point, we're a really positive seeing of be from state. I both lot to be looks markets. there we'll as different into in go So year, in think Again, I like and a impacts that

electronics therefore in cars the think towards content for is content vehicles and in improving us. government electrical incentives -- a I positive electric towards

Europe move to active that positive and area very I China standpoint which in incentivizing generally from think and and are vehicle. a aggressively printed both very per a EV board content is circuit improves demand

that's be to real going positive. So a

safety to we sales, adder well the be then If would the incorporation just closer at overall see EV demand XXXX say would side And into would unit features to demand the let's levels for think are that stabilize I suppressing of flip impacts conversions levels on that increasing be TTM. ADAS extent the can -- sales that really of to that that would -- real consumer demand. demand features to be vehicles. COVID and the bode unit cars

we So hope year. into that's go see trend the here next that to certainly we as

Alvin Park

much. I see. you very Thank

Operator

Instructions] comes Securities. Our question Mike Riley Crawford [Operator from B. with next

Mike Crawford

to that Thank component I into you. you of that external? capabilities Is much differentiated of some product add wanting would talked how be internal Tom, think set. about more is -- RF your

Tom Edman

Yes.

point, So both. great

development areas our business with are side capability We RF organic our commercial specialty the and commercial to and. business on component help our using

as the components versus in photonics those are for we the on efforts. complete those to said our discrete build I've more focused just to opportunity in on customers well the a solution engineered As auto provide continue of opportunities past, -- and

piece it. one that's of So

early win the on A&D large specifications. side We a result program as as that. focus continue engagement customers to on with release they opportunities And those our of again,

to M&A that on the commented I defense. the So that the that's and is look to side on continuing side in as aerospace as commercial area second on on business improve area. then positions build engineering third the both a component the And capability we well in where will that

Mike Crawford

Okay. that from be in could but much And engagement addition then important just side, key agile the today, revenue few not as in opportunity any early on radars. Are to there programs other of next the in to -- you're years? you're looking the defense generating record

Tom Edman

whether scanned you think incorporating and retrofit an The Absolutely. would rate I you is way, active program whether any or see that's have about program a electronically where it's opportunities. where -- array new

back of would The be Air -- the opportunity. upgrades going LTAMDS -- and Low place. then Defense one an build occurring That's forward, system about But I you go the an example would out even of look can legacy program in in some example. patriot talked be there going are Tier and missile the course programs and F-XX Missile at past So there. the

the submarine If fleet are digitalized. really you part analog of still as as look be our well we and upgrades to at there fleet, is at needs the looking an

So there. opportunities

on that's an broad is So way a service depth have wins. those it the to is will of radar going mainly see we're every going a ocean opportunity But we that the to very array we saw space, you're quarter where we'll or land whether continue capability broad based, and though range that's programs based Mike to focused of we opportunities where that think really where the comment to continue bigger about easy on to programs. see bigger

Mike Crawford

And Okay. been relates just the last to the Anaren then question commercial of portion had what base.

does thoughts satisfaction acquisition, brought what way or took else the a today number goodwill anything forward? acquisition that diminish after charge your going this in you with acquisition any that about of or your you non-cash So change the years

Todd Schull

aerospace you acquisition side between interesting we it business goodwill always the the allocating production to allocated goodwill for of business the business yes of And frankly an side and components. to business. side of continue know as the the as beginning at one. it commercial commercial We and we the of of the -- art -- took grow the of course Huawei and on So of the Syracuse defense is an expected

last million on we $XXX our can see and the fact to defense So components have up meantime to I've of efforts, makes you today they're it very side. $XXX on the And $XXX when the forecast. grown defense development that that we the enough see in export no commented million out side that's $XXX longer led to gaining charge just Syracuse. we million great difficult business Anaren In which early even from is are say to quarter. to really million traction about let's traction backlog evidenced as to has to are continued that the acquired able And the while what program

defense they've and that side. to as tremendous the an So organization to traction helped deliver aerospace TTM on

we way am if long But in of was the allocation of excited today quarter. I about needed I have as care we not this more. So business as take that to then saying a issue goodwill

Mike Crawford

you Thank much. very Great.

Todd Schull

Certainly. Thank you.

Operator

Ho next we'll from Jin our And Intelligence. take with Bloomberg question Woo

Woo Jin Ho

Thank It XQ the piece. on a approaching automotive just in little wanted bit for a close you're to Tom, that's basis, pro level revenue quarterly to forma XXXX. my Great. dig question. you I taking looks like a on

headwinds can go it's mean, European fiscal the very I into this there. us do pandemic nice the I where to think relative risks. business XXXX? So a ahead of understand rebound you potential

Tom Edman

the is this let's Yes, business level back Woo Again isn't to bring say this it is the XXXX. board, in about is Jin bringing back Then call content, the year can circuit all I vehicle content. mid-XXs question, levels, to to this in would up about all be about, go-forward up big $XX really content QX XXXX right? it? in the going that for printed what it's getting -- is if a which But just talked back us that we've we traditionally in that's about today electronics around taking PCB what somewhere to from in from

two into vehicles looking in to And the terms content with years' play move and at plus upwards. $XXX content. that of time that electronics EVs So also improve to EVs continuing impact in as as come number ADAS helping PCB then

So extent we able and to see volumes that to effort to again that to improve return see back great driven content stabilize, PCB and electronics really and be is content by unit very positive come then to going vehicles. the we're that's what I'd have hope -- happens demand we're going that to a to a consumer

unit as levels next is QX? of And look volume, question really year. we does happens what million-dollar consumer quickly move the how at the So beyond into that demand

Woo Jin Ho

Okay.

fashion question ask different that in then. Let me a

demand unit pipeline auto visibility? type couple XXXX, of time we think business So into design So pipeline frame? over about of that's your your should could titrate XXXX the we -- more a answer. next of How

Tom Edman

that's So, so a great point. yes,

most this we up won last about million. recent XX everyone bring value to Just speed. designs, quarter, In $XXX in of about program -- to our lifetime

about that $XXX time, last you back But -- it level. we in roughly we think was same about program won slightly is as this value gone you've If that to -- if that in than total roughly less year this about the quarter. think were last year about was million

of that us that what placing is that means customers our the new I and what translate mean next out are starting $XXX with following is year this confidence year, will or that that into design very wins. continuing to in represents level they're to that design -- have million sound roll translates take last work -- the will automotive enough quarter into So that but business good that

the million. in one step we you about back quarter a value in If $XXX the second second program quarter XX quarter designs had of

revenues that that program into see those relatively in forward wins, can but So will occur the and are confidence years. constant of moving terms upcoming you in program feeding see we much more

good gives TTM So in level shape good of confidence that a we're here. to

Woo Jin Ho

side. follow-on And networking then it. my Got the on question

you the piece, couple XG about you. going build Any out And bit the little over of into feeling pulled How talked the that three U.S. visibility that looks like -- please? about networking around any build-out. into it XXXX? commentary Thank next comments quarter. the You the third China that quarters phase around you the into in commented wide a are

Tom Edman

Yes.

So in U.S. side telecom on the the

we're there's have infrastructure. commercial big not looking increasingly either defense look at drivers and at XG the there's I I again now think need case XG and up predict a I election proper around then in driver if back the think -- a but infrastructure results won't to spending. you There

It's clearly government a concerned. the so And priority. is high

this discussions this momentum. translates increasingly that you defense need the department about vocal coming and from If requirement into

be will that Congress a So I will the that of expect coming government of an from XG would that that. extent even isn't standpoint. the if XG part something to there's And bill priority infrastructure there be U.S. out

in Now area. service backdrop And to to they're it encourage see momentum, strong it's the service going to translate gains And initial as traction their that has seen spend. I that we're extent certainly of all move I U.S. in the think you've advertising spend to the right providers a this they to the but to that providers advertising their and are think kind the

XG. think of structures I on networking we've lot remained place of but to we've constant from to layering -- and -- a just of XG a an relatively side TTM XG a that top networking market before wait in -- it's around allocation the perspective, and I've putting move On and of spending sort attributed and see this seen

weakness of when networking to bit expect way. QX QX really in I we're on should momentum terms in stronger at small it's infrastructure think I in continue And start a we're XG variance. would the potentially the looking -- really going see improvement a to been That's compared side. We little relatively But networking networking the of in laid. after that to occur telecom we has to again in

Woo Jin Ho

Okay. Thank very much. you

Tom Edman

Thank you.

Operator

remarks. This today's it session. I now for Edman Tom concludes back turn closing will question-and-answer to

Tom Edman

Yes. to made just I'd the Thank by you. of summarizing close earlier. I like points some

guided the excellence. despite operational above earnings and us to challenges range, COVID-XX-related revenues delivered we our First, that allowed demonstrate

end of we a subsegments. And flow cash market loan. our -- to operations the the in portion proceeds of very of a strong our remaining has loan despite divestiture our continuum generated a and receive the portion weakness mobility third, allowed from couple sale the good diversification term Second, grow unit repaid of term

able we're to result X.Xx. to drive a leverage As our

Thank forward. support in investors to TTM like closing, for I our and much. you So your our for thank continued very would as our employees support and we customers your go you

Operator

your you call. today's for concludes This participation. Thank

You disconnect may now your lines. phone

TTM (TTMI) 28 Oct 202020 Q3 Earnings call transcript