TTMI - Earnings call 4 2023 | TTM Technologies, Inc.

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Operator

Good morning. Thank you for standing by. Welcome to the TTM Technologies Fourth Quarter and Full Year 2023 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, February 7, 2024. Sameer Desai, TTM's Vice President of Corporate Development and Investor Relations, will now review TTM's disclosure statement.

Sameer Desai

you. Thank

could based represent started, forward-looking we to to which review. to X you currently statements, law. management's does business our expectations TTM encourage Actual the or get today's assumptions revise publicly any everyone obligation TTM's statements with Commission, or Exchange of would these filings statements, we outlook. contains These not and from will by uncertainties, of call including result results risk other more these future I risks we to a new on due or any events and information. including remind like except available circumstances, that future forward-looking and forward-looking Before statements materially required the to forward-looking factors undertake differ Securities as information, statements whether update in as related provide

call Such the considered such discuss measures certain We financial on substitute a in investors.ttm.com. as we is should between Investor will measures and and accordance for section the available to website release, included measures with reconciliations company's this also presented you direct measures on GAAP non-GAAP and prepared EBITDA. not adjusted which TTM's of as be Relations in the GAAP, at non-GAAP earnings

Chief call. TTM's posted will Edman, now website also we call Officer. a our to that to ahead, on Tom. Tom during I We will turn have slide Please deck refer which over go the Executive

Thomas Edman

begin review our our the performance fourth a joining full Dan followed with XXXX fourth our and our business financial QX our from Sameer. of guidance. XXXX of our Good Boehle, year a quarter summary us by and you of morning, of I'll for call. you, a will results, and overview an follow our XXXX highlights strategy. QX and quarter for CFO, Thank discussion thank business conference quarter with

call to your then questions. open We the will

year current Slide their Medical, share and on would XXXX, and earnings website. shown contribution macroeconomic high to operating and work In are mix. generating results. the despite per lower-than-expected strong posted which Data of results X quarter The Center the Automotive for guided quarter's markets, by presentation from like range our on the previously TTM's of Instrumentation a fourth end were were was environment, of above our offset uncertain guided performance the non-GAAP these employees Defense hard delivered to and excellent range We our investor better-than-expected also thank and the the to to to I within favorable end end due due Industrial Revenues the markets. product Aerospace and results from Computing results and finish

Defense which backlog, with be Demand some by demand was strong in in continues our weaker market, Aerospace continued revenues XX% quarter, end solid to the our of commercial for and of offset markets.

For and XXXX, the by by the downturn growth end revenues the Defense XX%, offset declined market. end commercial Aerospace in full markets, driven year in

the down While while revenue quarter enabling revenue $XXX.X margins the capital operations up some was strengthen headwinds. driven operating shareholders. actually the year returning margins despite of to fourth year sheet decline, operating balance from were were year-on-year to non-GAAP full our flow Full cash year-on-year us by million,

out loan with term date we and In maturity first XXXX. improving to addition, refinanced our tenor, loan, the the asset-based

transform cyclical strategic less to update. TTM now our journey be and on would I like a to more differentiated. business is a to provide

Defense to of product that several Over that to Aerospace years, market. we add the strategy particularly in to key solutions the the value a is emphasized deliver our consistently past our has and TTM part customers,

less integrated Anaren with are XXXX, and of A&D PCBs electronic now our being the from A&D acquisitions revenues contribution. moves As being and a generated since of result engineered overall XX% of Telephonics over than products, the strategic with of XX%

Another Penang, our need new And a and response to diversification. facility multilayer advanced resiliency manufacturing customers and the The locations state-of-the-art Malaysia in in new element region. automated in and highly for about concerns build differentiation Networking, decision regional The strategy PCB customers' particular, in China of Industrial increasing Instrumentation. chain manufacturing direct in is Data as will markets the commercial PCB outside important Malaysia. Center to a supply investment our options support this our in facility Greater is Computing our such new factory Medical,

to to continue processes all make with on now for sampling progress major and Malaysian customers the We currently facility products running, qualifications. are we

manufacturing you update of operational to close to facilities utilization, improve our plant manufacturing performance, customer total small previously the announced profitability. and consolidation like to We in also I'd footprint. focus on X our plan order

During Clara of Santa Anaheim and in quarter XXXX, operations into third end Santa of at We Clara, quarter, the and the Hong and XXXX. Hong PCB California, ceased and were the course Anaheim at Kong in facilities. production during Kong manufacturing TTM manufacturing facility second consolidated the remaining closed our

are for at ramping parts the We transferred facilities America our throughout presently footprint. North production receiving

update would the advanced and Defense market Aerospace New announcement capability to of the the through technology to adjacent our Syracuse, previous York new intent campus. you of immediately like for I to Finally, facility construction our on our a expand

prepared ground we with high-technology facility production are discussions support This domestic focus new bring in high-technology half production of after stakeholders capacity XX Our times of disruptive within HDI first to significant able XXXX, customers will facility, we groundbreaking. to their this and the for regarding various providing production proposed HDI North initial of in Ultra expected will national PCBs. with with anticipate is new months support on for America, PCB in security Ultra lead a to reduced Provided in increase facility break requirements. PCBs domestic be complete we that

finalizing capital million with XXXX, $XXX Phase after be to $XXX is determined terms capital improvements, campus-wide stakeholders. to for final investment X commitments of with including anticipated estimated run is the project, million proposed and various to through TTM's

QX XX% Page review on presentation franchise compared the earnings in tailwind and referenced bookings XXXX. The of result Now positive fourth our in market defense XXXX which sales to strategic our and program budgets, of our billion. programs. key ongoing of aerospace total X our like strong represented in QX XX% website. backlog for market the defense to end demand I'd At the alignment previous defense fourth sales quarter end is and a on The of was are markets, A&D XX% sales of solid $X.X program quarter, a end the of

for quarter, program. During significant saw the key we a bookings restricted

in XX% QX from sales off total about sales, to represent our also expect of We a coming end this high QX. market seasonally

Aerospace XX%, full a year to compared in Telephonics grew due primarily year, full the X revenues months Defense to XXXX. of For and XXXX in

above organic longer-term projections Excluding XXXX, In that was of to growth impact, growth market to end X%. expect market X%. we X% be

in the of Computing XX% Center XX% XXXX due to XX% in our we and of compared end in and represented in to third Sales AI generative building than XXXX. market applications. for XX% end strength customers, expected data of Data quarter better growth This market year-on-year QX fourth quarter sales total the the saw products in performed center

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

longer-term XX% data declined above For of semiconductor we inventory XX% due center driven In XXXX, following growth growth applications. XX% for AI XXXX market to X%, the in X% the Center end year, X% expect by year, primarily full to customers the XXXX, in to in and be and growth Computing early in Data generative XXXX. corrections

third in The of a XX% at ago areas. medical caused inventory XXXX. end and industrial quarter sales XX% quarter XX% customers, in instrumentation industrial by quarter reductions contributed our of year of the compared in in instrumentation market total year-over-year the to was The our particularly decline the number fourth and the primarily

of For be the first expect to quarter, we MI&I XX% revenues.

years XX.X% MI&I growth inventory many correction as line declined growth demand this weak this to semiconductor XXXX, forecast in in a we X the forecasts took to market. XX% industry subsegments longer-term XXXX, year, X% growth In market. above to due XXXX we end end of be at the companies, industry in with customers advantage in expect test growth in megatrends of for XX.X% full well the and in faster-growing XXXX, following XX.X% X% from and row For

XXXX during customers. XXXX. year year-over-year during quarter was the of XX% The due represented total several of in XX% of quarter to sales primarily quarter third automotive the for XX% Automotive at sales decline and compared ago adjustments the to fourth inventory continued

to business automotive quarter from our sales softness. in to typical Year XX% expect of demand due QX the in contribute New and ongoing We total the first seasonality Lunar

inventory market product compared XXXX, at correction to XX% automotive our full In areas. XXXX was advanced XX% growth end and in customers. year, automotive our automotive the strong due to HDI to XX% due For of in the RADAR decreased technology

Designs XXXX. will revenues $XXX with years. a designs this In compared XXXX, million winning we lifetime future we won to contribute million $XXX in of value year are to in new that

X% expect continue customers to inventories softness. market longer-term be as to XXXX demand to below of adjust this in ongoing We in light of forecasts X%

Networking revenue Demand of to digestion third softer end to during continue X% in fourth inventory of the quarter well fourth and as X% of weak in XXXX. market demand. was customers as of compares accounted XX% This the of for quarter revenue focus XXXX quarter XXXX. the as on

revenues. Shanghai of market this X% we approximately contributed this the million end our XXXX. As in quarter $XX QX, business, sold a the In backplane be in we quarter, fourth second which reminder, of sales segment expect in to

at networking both as For and full declined the due networking at telecom weak correction customers customers. to demand well inventory telecom year, as XX%

$XX BPA $X XXXX. In XXXX QX of facility had compared addition, in million the we that sold million in to in XXXX Shanghai revenues

growth due to to be X% start this expect year. market longer-term We XXXX the forecast X% the in of to softer below of

information Next, on from of the available our I'll X cover quarter. presentation. earnings This details also fourth Page some is

business, Advanced year which our engineered components XX% in quarter Engineered HDI, Technology quarter, the approximately in approximately QX. systems, RF and the XX% and revenue. accounted During XX% and for This subsystems compares Products to of rigid-flex, and our ago includes

business will new to design continuing engineered increased customer products' new We and that leverage programs new opportunities activities in and advanced are our and capabilities markets. technology engagement pursue

was quarter to in XX% in utilization in and in year-ago XX% Asia QX capacity compared QX. XX% PCB Pacific the

in PCB in by overall year was to QX. Asia America North in of added while and year-over-year less technology due was rate that as in the production Pacific compared a XX% greater America caused rate utilization year-over-year quarter finished a QX The XX% to decline product the XX% in ago capacity mix requires lower in Our North plating. in capacity higher well volumes, additional plating as was lower

because reminder, which as Pacific meaningful facilities we America are in occur utilization plating, areas calculating in volume not as North the that of is a As core process Asia rates. bottlenecks in use outside these utilization figures to tend

total of total quarter XX% end in compared the which is X the XX% We of to At compared was of to the million cancellations, of over quarter. $XXX.X top in to QX, XX% our third customers $XXX.X Our the had X million the fourth XXXX. last of XX-day fourth in XXXX our quarter sales sales backlog, quarter contributed the subject of at year. end customers

Our book-to-bill X.XX the ratio months was X ended January for X.

review will financial quarter. our Dan? Dan for Now the performance fourth

Daniel Boehle

morning, Tom, the our for website. the I of results earnings well financial today included presentation everyone. release Slide that quarter on Thanks, the will and review distributed on X press our good as were in as fourth posted

the medical, end our For markets. were our and center industrial million declines and million the decrease growth by networking was automotive, net The $XXX.X $XXX computing end in data quarter, fourth and XXXX. defense partially of instrumentation due aerospace fourth in compared sales to year-over-year offset and quarter markets, to in

QX the The decline sale contributed sales. the BPA well XXXX, facility announced in previously net consolidation, as of in to also plant our PCB as

markets, the driven sale contributed The BPA growth also was defense in decline full aerospace offset declines plant year, and net well a net partially and end market XXXX. sales decline to PCB our in by $X.X The QX acquisition. the of were by XXXX billion as billion For previously $X.X in to commercial XX% full our Telephonics in the the year in sales. facility announced of as the consolidations compared

of $XX.X for occupied was the XXXX $X.XX of net share million per Shanghai million. net fourth last E-MS and property the was operating or a income This GAAP per a $XX.X operating from million for million to compares million GAAP the our quarter diluted of fourth in the of entity. GAAP year. the or was income of XXXX fourth December XXXX of the On sale gain share. from GAAP $X included diluted quarter former quarter income income in fourth in of basis, X% quarter XXXX $XX.X $XX.X

The focus our remainder non-GAAP performance. financial of on my comments will

other on of expense comparison unusual compensation, prior performance investors or property gains restructuring certain financial the impairment non-GAAP M&A-related the to Our periods. through amortization in excludes stock and company to of management We as costs, and see costs, of the present goodwill items eyes of noncash to infrequent sale and with expectations non-GAAP intangibles, such enable information items. facilitate

quarter million expense to was year Gross year-on-year of in the due in compares XX.X% fourth the sales margin quarter sales partially commercial The the or volume to X.X% lower and net or G&A net was fourth sales million of or increase XXXX. X.X% $XX.X net $XX.X sales and offset North sales Fourth ago. the or our favorable to was improved net the markets. expense of a of less quarter million ago. $XX.X X.X% X.X% was execution $XX.X marketing region, year versus more a compared same of America and quarter a fourth million in XX.X% in and quarter in product in Selling premium by mix

and $X.X X.X% X% year ago XXXX, million or the to development net $X.X QX and of quarter. research was million compared in In sales

QX Our compares in last in last million fourth Interest was operating X.X% quarter to in year. same was $XX.X to margin in the which $XX.X the quarter XX.X%, same quarter year. compared expense the million

a was or $X.XX interest This impact QX net loss and income foreign year. or a $X.X below EPS to of income $X.X Government EPS. there on exchange quarter, a million resulted negative the $X.XX million negative incentives a loss net compares million the impact operating impact in line. million a of $X.X in last to $X.X During

adjusted fourth compares was a of tax of fourth fourth net quarter tax the $X.XX or for in $X.XX fourth to net $XX.X tax share. $XX.X XX.X% in was quarter compared with million quarter, expense share. of of XX.X% quarter Our X.X% net million to million a the of expense or rate $XX.X quarter This effective $XX.X sales of tax prior million. or of XXXX EBITDA diluted XXXX Adjusted or the $X.X million $X.X was compares income X.X% This sales. year. or rate in per Fourth resulting net per million diluted EBITDA income

the totaled $XX.X million Net of the for million. repurchased $XX.X Depreciation price capital the million. Cash from an end for $XX.XX was million. fourth per fourth of average at XXX,XXX $XX.X in common quarter flow quarter was of million. spending of shares XXXX We stock the $X.X and equivalents at Cash was $XXX share. operations quarter XXXX for cash

X.Xx the EBITDA divided low months' Our our targeted by Xx. net XX debt the to last end of was X.Xx of range at

the of flow of or For year, facility. our was we full the flow operations in cash Penang or as million from net $XX.X cash for year million $XXX.X X.X% net sales. X.X% sales, was Free invested full

on approximately for and and turn first to dilutive will net diluted XXX million million stock is quarter XXXX which of the million based is our of which first project I The per of to the $XXX range in guidance XXXX. other be facility. forecast inclusive our for to count of effect diluted of to the $XXX in share includes outstanding share, Now awards. sales the with non-GAAP the $X.XX shares, be $X.XX earnings of We range associated options Penang stock to starting EPS up costs of quarter

be SG&A X.X% about of sales. sales R&D expect expense the We of first net quarter in to to about be net and X.X%

$XX.X expect of We interest approximately of income million approximately million. $X interest and expense

$X.X million, XX%. and of be expense to our approximately compensation rate million, million XX% expense noncash amortization estimate $XX $X depreciation we Further, effective of interest to Finally, approximately between record million. approximately and tax expect stock-based of we $XX of approximately

Finance February March in Conference like to D.C. participating remarks. JPMorgan Miami the That and Defense in in the and I'd Conference on prepared High in on that JPMorgan Yield February we the York XX, and are Leverage Global Industrials XX New our on Washington, Conference And announce Aerospace finally, concludes Cowen XX.

questions. Now to line I'd like for open up the Operator?

Operator

Thank of for question Jim Instructions] Ricchiuti come first you. & today from [Operator Our Needham will Company.

James Ricchiuti

you're this drawdown the inventory U.S. also and in side, automotive seeing you EV the what the are seeing the seeing on signs as softness to Tier of some duration of some that? extent the the on Tom, any of Xs? Europe? side just with And that you weakness On any Are to sense

Thomas Edman

Jim. Yes. Thanks,

is overall, on this markets X soft. of think, the relatively is automotive, So that I

you year-on-year our X China. as And a in tends reminder, Xs, just in to go seeing we -- regions, are We declines Asia. that of volume will, tend to in Western Tier major particularly ventures joint ventures all China, joint to Tier if -- of are world in Xs,

impact the EVs. are think there they I of So feeling

look you into Americas so. If Europe, the and less

down think it I demand though climate better year-on-year. we're there, still seeing is still

their controls certainly inventory combination So as forecast. ongoing softness of customers adjust demand and a ongoing

there, So answer hopefully, Jim. an that gives you

James Ricchiuti

Yes. Dan, in I QX as margins? maybe it. a the that my do you Penang, if That's question the for much headwind how scale-up about see -- you And can But is as follow-up, how referenced easing a we through think apologize that have as you helpful. gross in how we of maybe year? -- And go and may does that to

Daniel Boehle

QX first equal XX easing do basis XX points for the for into might of -- the the historically, to got that. XXXX, to Sure. although easing and what year did Good QX, headwind towards a XX higher bit towards a the It's of half see much into for the the we the It's year But that to the of about is XX points year. headwind pretty basis XXXX. second points next half we we first end, we'd Thanks. and breakeven the then half. slip year XX the probably in question. little so basis were -- about in than of on year, Penang, We experienced going see and going end in be mentioned XX to we through that

James Ricchiuti

get I'll back it. queue. in Got the

Operator

of Securities. question Riley next Mike from be Crawford And Instructions] coming our B. [Operator will

Michael Crawford

end that how center AI? data revenue your there? much you customers attribute would to are who generative market, your And vertical And of

Thomas Edman

Yes.

but answer generative question So -- of to there. center AI market. The let we don't general continues your computing end customers, grow talk about specific the as a be data me to portion

end can at the strength now of this XX% with we're to Today, perhaps probably generative data XX% data semiconductor. I we've XX% being as center a of semiconductor. well expenditures shift over looking So for -- center, in the to And than less XX% strong demand XX% at really that you from softness to well that seeing combined semiconductor slightly function AI you're slightly center close data as market remember with looked traditionally, demand, data really And data being we're of traditional that center, over generative center think, that's, capital center, in AI. some AI-driven. generative as more away data

a So just that the strength combination ongoing in seeing AI computing generative us. of data strength, certainly, center market we're terrific there, for end portion but

Michael Crawford

to to Tom. but about you Thanks, work then how wondering, that's just emulator And customer know -- talk in [ but of help Keysight gears. before types how engagements RADAR win by getting like with where Okay. blog the win the of in I'm only Technologies with that to I other many I business? product ] you them that referenced post, product you're And ], early customers recent shifting the and designing not seen you design supply. business name, really that like a [

Thomas Edman

defense -- side And for as course, more look XX% other you the we specifications our look with start it of early at gotten develop to customers involvement, if us now, But business, defense with for at It's at engineering they to strategy. part engagement, all really on close they working built as deliberately the business, of absolutely customers as programs programs. of working that into customers critical systems, specifications, the which that involved sure. well. a product the we've Mike. to and of really our RADAR we've very And at critical level as our look as closely engagement crosses is with that course, portfolio, of our is Yes. about you, Thank it's how

defense and So strategy on really of the aerospace developing pleased the with how side business. is that

to you requirements components right? speeds, that's commercial engage terms driving with at side highlighted also is looking as We ]. also more to the to there, becoming On like printed lines right, critical developing their the right, and more with a shrinking order as That for them they're in more they're and differentiator as and board. really in circuit they're real As becoming speeds. in to spacing critical, to more critical and the on of higher drive business, they [ engineers, start the TTM. higher estate, of the populate Turin density engage And engineers and

architecture a As limitations side, very they also they're material around combination those there and of of make, ability drive to and as on board elements that of the to see in the require. potential our printed circuit such are that supplier to they most of then kind provide work durability technology, need that the that the lines choices they closely starting product spacing that with applications

And that standpoint. a intimacy, customer right, requires combination from so

now involved customers. as commercial are part with our very our of the That's a critical engineers we strategy at well. So

Michael Crawford

Okay. lot top And there's Penang be digits flow question. on moving you final a But you've for year, -- if, just Syracuse. line extent? to capital guidance, I free with single to would of parts or I know know what a XQ expect and the but low the TTMI and provided grows a drag cash working then

Thomas Edman

and the our shifting QX. assembly with if I'll right? BPA And sold revenues, that working question. facility. starting Shanghai answer look we production, that So to plants Dan have were we you capital closing we've closing highlight, been at and wanted specific Remember -- also I just

fourth that about the million. the and So BPA $XX Right? facility impact quarter, was if the plants at you look combined of the closed in

at quarter, combined about impact In looking first of million. we're $XX a the

pick if would you about if growing exclude year-on-year see that guidance, midpoint, So you factors. those the X% our look we're you at

critical a really that's So here. point

begin But time plants. Now qualifications the we are ramp. and takes ramping we in the that finish receiving of as process

of of a the of the revenue drag. revenue And at as and have moved are trough through So ramping bit year, be then slight we receiving little the we'll in removing course equipment really facilities, the there's that meantime, there.

working So I side. the capital? just revenue the wanted to Dan, highlight that on

Daniel Boehle

Sure. Obviously, you. working revenue Thank increase relative a should increasing, capital. -- have you you with in

we budgeted Basically, we this challenged went reduce year. capital to kind a However, our a year go year-end. working the bit AR current into have overall next up of we ourselves bit as at as quite

Some A&D. IE of that area deliveries in and was our

So went up a bit. quite

So can reduce that, we push monthly extent hard we we're our really we our manage well. meet can average to of where kind balance, and the manage AR pushing then days out to to inventory our payable appropriately as and

that little cash like we're normally working revenue cash. increases, to year. flow back bring I it we're our and believe, think So and ourselves really to of in our now, to but working hard a this down said, a going revenues I challenge capital up go with bit to I XX% will cash, high of target get we're increase XX% will the

Operator

Stein question William next coming be Securities. of from our Truist And Instructions] will [Operator

William Stein

for question answered inventory, to I high First, just to on note, you The inventory already calculation recognize where questions want apologies too days my -- the areas. relate on X had that. mistakenly I

you're First, above overall for revenue business seasonal. guiding the

seeing to Any but considering to what correction? me the is be given way everyone fairly gave doing pretty like this, details significant in the as insight how still a now. remarkable especially supply market, tech chain, it's else still you're else semis, in by to able is guiding You everyone end the

Thomas Edman

I of of all, Sure. -- roughly course, question, that, first Thank revenue. Will. recognizing The AMD so of the think, XX%, you XX% for is

-- for there, That's we're to slightly. that so market. QX looking a if we A&D you're us And in down tends as high mainly be quarter just sequential, seasonally

aside. that just let's -- So set -- let's that that that X say

commercial with to AI TTM demand. Certainly, we're we that the data look as driver, now continues So center, big at talking generative that really a markets. about be

that's very helpful. So

as We know. Year, you Chinese have do New

sequentially, plants to to commercial Chinese And that plants we're we operate of -- be in as we trying New Year. In down QX course, AI during area, generative QX going as as so always on as can we're shut Year. Chinese New much down to

from of to So why drop as that QX. perspective little a certainly accounts a be for not bit might that great, QX TTM

a seeing think that bit as QX instrumentation, I Year sequentially, instrumentation the Chinese holding bit up New better and more you're then portions of look seeing a down medical if medical And industrial Automotive, pretty as is little at with getting than well we're well. factor. well just you others just in

remember important -- that's role. and America an North footprint that played our there So has

So while we're our China, again shutting and mitigate little in are sequential that we down so able facilities North decline. operating of in bit to America a

the And Glad relatively see finally, to flattish. that. networking area, then we're

networking at they us, of a continue Still for function bit through think first inventories, some that's to starting and I bottom the we of hit sort expect our but to there. that see customers now. with dealing and of half. least little a demand better

a you me what Will, hopefully, gives seeing. flavor of but others, to we're that for comment again, hard on So

William Stein

that like I'd to follow-up, ask margin we're the my Then about improvement seeing.

AI those self-help But a a restructuring and you're you X helping. growth into I -- know applications, margin there's sort impact I'm mix your the the [ such. Can on you greater is in going were beat nicely I X to on improvement, sure product divide having of ], QX in categories, potentially bluntly and in QX. is consensus lot of if X talk business? about Can guiding is well, the it You which buckets, it above as which split into X

Thomas Edman

that So you between asked? year's Is -- closure facilities? center closure what the AI last versus improvements of the data of generative

William Stein

mix. more as operations-specific that company-specific changes to are other opposed any And or Yes.

Thomas Edman

North the We've obviously to that's strategic our in the is worked also the business. increased So margins Well, Tom full I more better mentioned. much and strong. we right? work, our integrated customers, products earlier integrated to the Telephonics value-added and think electronics margins that's business AMD, on And there. as -- -- chain And We've that's engineering first us, year a in to supply and bit. pricing those been get can our the that electronics America, a well, get we've This business. has in quite expanded in improved involved helping focus their hard had on engaged

I'd in we North productivity productivity better we good business, also had PCB just than America say last year, year. our had very across this

So the getting those getting -- the and good efficiencies And flow probably through then are -- good we X drivers. factories keeping on had that probably -- way. largest so

So have driver, markets, largest mix. good that from the wasn't markets. in in some offset operational. the forward. generative a and improvement the as We AP commercial of commercial net-net, continued the mentioned, than did the that you strength other but softness -- product more those that more region, going say AI it's But certainly But I'd

And then bit that then that plants probably drag had this we -- of about the improve million the versus improvement last that that. probably QX closed that to X from year, down, just QX of $X just we going in the year from was last and did

William Stein

you. Thank

Thomas Edman

additional X just Jim's that earlier Remember regarding question And highlight. Dan's Penang. to answer

on that so improvements are those headwinds. seeing take Penang we So ramp and additional as -- we

Operator

moment our will And of for Matt Stifel. One the next coming Sheerin question. next from be question

Matthew Sheerin

versus from how Could is then much the revenue what China of as be regarding ramped? will it what you that -- other look you fully and Question shifting or or remind the in areas? will us is Yes. incremental expansion revenue And some capacity production Malaysia. that ramp like

Thomas Edman

Sure.

won't it's product of So reach looking $XXX we in million we're That million. course, year, between which capacity, the at -- and mix, at next depends on we're full until facility. $XXX looking somewhere

advanced highlight XX% I roughly so out least we facilities shift China our Penang. into think would we being the that coming to or at from do plan roughly a that, -- technology of China of are as work. about where this most So like

for Penang get the and that demand. the can AI it that us we sooner from up of is generative the better standpoint running shift serving production, and So

of So the by can. we Penang capacity, of going as sure capacity and to the that are systems get as Matt. the we the -- again, go next of of driving to that ramp. as soon through year. go right -- we're so but And to through make end up full ensure level quality But we certainly we ramp we magnitude, in that full roughly hitting that that's But performance order we as we quality continuing next way as place have year, course the be hitting that have kind

Matthew Sheerin

Okay. I'm XX% sorry, or was XX%? that

Thomas Edman

XX%.

Matthew Sheerin

new So be would the rest program wins?

Thomas Edman

Yes. correct. That's

XX facility do targeted designed, So that standard think as technology. to that -- layers. at standard as of That's is now don't what technology in our We we China layer much the XX is count all remember, plant.

So -- opening that to suppliers up Penang a goal. move the to major facility. customers from opportunity other our we're resiliency what so our supply that's is for chain That's product

of China combination Penang. with to move comes But Now our looking production it's China the are a where startup, is may in. facility. of this product that held They're to out XX% non-China and allowing new move help to of into out that that's that a existing customers bulk -- be into us some piece programs programs of

Matthew Sheerin

it. Got

mean by that then sort by in And that. the Does And have that Syracuse, commitments certain to regarding in. exactly that need do co-investments? not stakeholders on or buying what expansion Okay. expand that? the plans contingent you we What purchasing some mean any of you plans you mean of said to is sure I'm

Thomas Edman

supportive, CapEx is for at there. very -- funding. at -- funding, that with time as we of sync and for And sure particularly sure to in make we're we're requirements in potential we requirement, us, also -- primarily that schedule. that need the that we terms potential look in we agreements. customer long-term just government since ramp sync So good make is with our on really, line in government the as based look shape that We're customer looking We

that's So about, we're talking really Matt. what

Operator

we question will be from And Jim have Company. a Needham & in. follow-up There follow-up Ricchiuti question you. of a coming Thank

James Ricchiuti

a booking relation you the said I side. wondering, on I'm think business? legacy referenced, was the was that But I relates the Telephonics And Or restricted program. you a can defense really you you sizable to think, or business? that say it defense whether say to Can say TTM Tom, you in did that?

Thomas Edman

I really can't, Jim.

there. large in we booking, say just correct. But unfortunately, but exact So not disclose in or the I can't did involved you're that. the yes, program product that we're type --

James Ricchiuti

it. understand. I Got

that Moving business at trough seeing you're some a to next an instrumentation in what side Because I'm do we semi. a is of that in upturn seeing level, side of business, I kind are think your over question to us follow-up the quarters. on the take weakness, -- of of the wondering you weakness been Is business MII the related clearly you've think? of couple anticipating that? many are semi-cap is business the

Thomas Edman

Yes, program sure. I on highlight, backlog. to did did slightly to And just just -- down want I complete to thought want the we A&D, on are I

terms down in end to $X.XX last at billion of from quarter. at the exact That's backlog. we're billion $X.XX be program of So

opportunities a up should as very first booking strong we're So at pretty look still be A&D. year we well. program at half looking holding And what in

On the MII side, yes.

seeing, and I'm at we're what Jim test burn-in -- requirements. and looking board So remember,

equipment different large -- traditional requirements. different slightly So capital semiconductor than cycle

Of as portion but equipment service well, that companies we of instrumentation it's a course, smaller piece. those

to for tend customers capability. and front a as we be invest that generation their board equipment. of to need there So test new end little bit base in They start burn-in

bit which wouldn't test QX-ish. that which the until can larger process to and trough are again us than We're what at there activity that leaves as year. back characterized into half And requirements, that we've area, agree seeing expect there now go I you the equipment for I I more that. in it. that measurement of that how And I So certainly, a in are we requirements, meantime, would tell you, board the towards look is the to some demand I earlier hit think come with the momentum and that certainly, good burn-in of expect test Jim, in be trough, kind right XX until there. see But indicators.

bit are back that sure, yes, should activity of a trough see the that starting So think, improve. again, I good for half is indicators to

James Ricchiuti

in. I Got slip it. And quick X X if could

providing that been we lumpy a it all of Or on to just that in I paying business? down of Is A&D should think and commercial kind You've commercial I is the curious appreciate. like some sequentially. last defense, which air, quarters business, A&D be was couple breakdown of that was it business? that part we looked the attention aerospace there anything

Thomas Edman

you roughly Actually, about up a aerospace. commercial And so is year-on-year ] for still us and -- also slightly percentages X That's [ we in strong. air percentage, commercial quarter-on-quarter -- if year-on-year. if

remarkable, -- rate right, as yes, has as commercial a see but So It's so revenue remains we that did growth which aerospace slowed recovered, growth of still growth about the we ish. down, still percentage was percentage X rate, in quarter. A&D the

large here nice content. everyone, see ongoing largest see to not be reminder And So there. a for growth the content on and our to part, tends XXX that's but just the so the a we largest where --

Of across but course, that's the we're us. platforms, for major content

James Ricchiuti

the Got it. quarter. Congrats on

Thomas Edman

Thanks, Jim.

Operator

ahead. remarks. I Q&A Tom our concludes today. like for closing Edman over That you. to turn go would to session Thank call the Please now for

Thomas Edman

Thank you. made I'll the just of summarizing earlier. I some close points by

non-GAAP high product guided of with Really range, First, we with in revenues excellent and favorable range. the delivered end performance operational EPS mix. was the that line the above guided

your finally, you past closing, Second, thank X.X% we our would customers flow you, And from I our did a their a healthy support. stock, in of year, solid efforts certainly, And to for cash generated us investors, to maintain repurchase sheet. our again Thank like much. at well. in employees this very continued for as That operations allow balance revenue.

Operator

This concludes today's conference call.

disconnect. may all You

TTM (TTMI) 7 Feb 242023 Q4 Earnings call transcript