TTMI - Earnings call transcript Q1 2024

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

Operator

Thank you for standing by. Welcome to the TTM Technologies First Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded on May 1, 2024. I would now like to turn the conference over to your host, Mr. Sameer Desai, TTM's Vice President of Corporate Development and Investor Relations, will now review TTM's disclosure statement.

Sameer Desai

you. Thank

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

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

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

Thomas Edman

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

these X on support like I results presentation of We quarter's a employees in We and open our of demonstrated questions. to the year-on-year XXXX, the range Highlights the TTM's share the quarter thank of favorable work end above hard website. the summarized we your guided per solid then a and high solid their I now are would a positive posted performance were be provide now will differentiated. less registered on on continues as to high the strength to to was defense and our the to like end is Slide quarter, and and were instrumentation and data by of improved financial Revenues markets, to end delivered be the quarter, industrial book-to-bill for contributions defense $X.XX billion. of and the guided and market, backlog our have cyclical program growth end results. of call non-GAAP range product solid operating In first earnings earnings and returned previously at due mix. our XX% in to quarter a would in business automotive revenues update. more from was lower-than-expected which aerospace for computing and our due the from of year-on-year aerospace demand medical, and and to transform Demand center which a TTM strategic of growth partially journey markets. to offset results approximately

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

integrated less from of through PCBs result the products and defense a Telephonics. are overall. acquisitions end electronic of than transactions in revenues the with and market engineered strategic of in defense our contributing Over generated and Anaren XX% aerospace aerospace and As XX% now

chain service PCB our our factory about of new manufacturing in response locations this regional customers our in a to medical, our the will automated supply a resiliency in the The in outside facility commercial build increasing is center is decision markets. China Greater to our Malaysia highly new state-of-the-art, computing instrumentation. networking, need multilayer region. Malaysia to The investment element our new options such and manufacturing customers' end direct diversification. in concerns particular, commercial Penang, for differentiation and PCB data strategy as important facility Another support advanced And customers industrial markets, and in in

sampling our progress was thrilled the panel make which in Malaysian was yields event on on test climbing. officials audits welcome occurring to to with qualification our to customers, April continue with customer facility ongoing opening and grand We Penang, held government and I and vendors XX.

plant to We expect investments in second starting revenues of with the like utilization, expansion profitability. and our also announced end the the operational the to of focus manufacturing previously in to X Phase customer the of second manufacturing consolidation and total limited plan improve performance, our you further half I'd facilities facility to X update register year. our in We footprint. in order facility quarter on the close small Penang ramp towards

in into the Santa of remaining Kong and were TTM's Hong XXXX, PCB Clara, manufacturing facilities. closed California and During Anaheim course operations and consolidated

on are ramping production North track and for throughout facilities presently the and Pacific. America and Asia receiving are transferred We parts

PCBs. prepared requirements with of of their support to will of on the technology to stakeholders complete lead with you and regarding XX first and immediately months expected follow in groundbreaking. to defense adjacent announcement construction facility that we Finally, specialized increasing within to discussions will PCB new times capacity security for This PCBs York existing increase We advanced for previous production, for a like the focus of customers aerospace low facility our on capability providing able intent new reduced significant our XXXX, anticipate after this to Syracuse, rate high-technology campus. facility. I in a domestic be expand in initial various ground for would to the ultra New are through market update the support high-technology with production our Provided we break HDI half national

investment investment million and million including X proposed in previously Phase is the project, be anticipated the of we to for $XXX for of As capital through improvements run to campus-wide expect between to range the announced, $XXX XXXX, the with this support government various for secured and in future land date, purchases. commitments for TTM's To incentive stakeholders. facility packages with equipment after determined of various terms finalizing applied we capital have

an quarter Now represented and on XX% the I'd market Page defense alignment and the ongoing aerospace book-to-bill which key a strong positive program tailwind quarter program billion QX of The compared bookings X.X, like previous a leading and franchise first of of presentation the $X.XX with demand budgets, on our XXXX. to programs. We defense market for website. is our of approximately at defense QX total in solid a end backlog are XXXX result markets, earnings had The of a to sales end XX% referenced review X quarter. bookings end A&D to of of of in ratio first sales sales XX% in our strong the

we significant Scalable saw or and During Radar, missile the for Beam SABR program program. Javelin the Agile F-XX the program, bookings restricted quarter, key

of of We in the to generative XX% building XXX% defense in for our our into the visibility longer in than good sales. data end market of expect data applications. a total from performed Sales ship This quarter commercial expected to and market revenue future in first of end about AI due than represent XX% XXXX market and and saw center growth to total quarter time period of sales sales market over aerospace growth. Bookings the year-on-year and in in products the in our this markets XX% center in fourth provide QX represented QX end XXXX. better XX% strength customers compared computing

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

purchases market, automated see leading driving in However, of we to equipment. DRAM test are beginning the is AI to generative which increased growth

quarter, and XX% fourth the decline XX% The XXXX due compared second continued during quarter to expect XX% market we several Automotive for be primarily XX% sales the inventory represented end ago medical quarter customers. instrumentation first the year-over-year of revenues. to of of during sales the quarter For industrial to automotive adjustments in at demand of XXXX. was year the soft and total

market business of XXXX. Demand X% contribute demand. on expect for the XX% of our compares digestion customers of to Networking of of first We end fourth quarter in to inventory X% and focus revenue quarter weak quarter QX. first automotive was and continue in the revenue as XX% sales the XXXX. of experience softer accounted XXXX This to in during total

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

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

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

markets. capabilities We to design and compared opportunities our in the increase our QX. in in PCV ago leverage are will product in advanced suppressed Asia weak continuing customer Utilization of technology engineered in several was markets. QX and new utilization that programs demand business activities capacity year engagement to in new XX% pursue and and were XX% to due Pacific XX% quarter rates commercial new

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

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

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

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

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

Daniel Boehle

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

offset in were the XXXX quarter increase net data of computing quarter aerospace first and For GAAP the $X.X and with This of operating was $XX.X quarter performance. first of loss first growth a income to in $XXX.X medical, markets. or and $XX.X $XX.X last remainder non-GAAP operating GAAP comments basis, of end first defense as or our automotive, for million a in industrial end per GAAP by of the $X.XX $X.X GAAP XXXX. compares the markets, net million to diluted year. networking and first will compared instrumentation partially first declines million income million in On million million diluted to year-over-year net was our loss quarter the sales $X.XX compared for The quarter of focus of in our center share. on The due XXXX. share the my XXXX quarter, of was per financial

year-on-year Partially more a compares increase the was to execution and due mix the offset in XXXX. by comparisons such of sales improved favorable management to of volume non-GAAP first was America Our intangibles, investors or eyes unusual the financial see certain Gross through region. noncash in lower The quarter XX.X% XX.X% expectations North items product and and stock sale of restructuring expense on the other to sales sales of was impairment M&A-related in net compensation, year $XX.X as Selling the in and with quarter items. non-GAAP X.X% net of and gains first to prior and of first in million enable excludes some goodwill in markets. costs, information premium or amortization commercial quarter present the performance marketing We ago. facilitate periods. infrequent the to X.X% a margin or and company sales versus of million costs, less property expense $XX.X

of expense net G&A net compared sales million of quarter of compared sales $XX quarter to the million in same development sales of research $XX.X last or same year. $X.X quarter X.X% with First a and first or net was of ago. net X.X% the in year $X was sales or X.X% quarter In million X% million XXXX, or the

last was year. was million XXXX to X.X% in increase margin basis quarter XXXX $XX.X same quarter operating same XXX in Our the compared of the points first in the the quarter $XX.X year. in first X.X%, last Interest a million of quarter from expense

During This Government year gain totaling there positive of or net a or $X.XX and $X.X interest impact $X.X current quarter to in line. $X.X million, EPS. million to a $X.X the gain to below EPS quarter, operating incentives compares was same foreign million last resulted income a exchange the $X.XX million positive in a impact of an impact net the year. income

in Our expense XX% rate the a million. million effective tax in the tax of was tax $X.X to expense $X.X a resulting or in last a compares XX% This first rate quarter, of same year. quarter of

the Depreciation net quarter net compares with fit-out million of flow for Adjusted inclusive million. per operations diluted the quarter $XX.X spending million remaining XXXX $XX.X income Penang our We quarter XXXX sales of of $XX.X costs million, the adjusted first which income the net first first XXXX in quarter quarter is of quarter was of million. from EBITDA sales. XXXX stock and $XX.X First to Cash was net facility. share. cash per $X.X million for of equivalents for capital of was XXXX was of million was $XX.X the Cash of XXXX $XXX.X or This $XX.X the compared EBITDA million. XXX,XXX first $XX.XX or quarter average price Net common $X.XX $XX.X or end XX.X% quarter diluted of for the or million totaled purchased at of XX.X% $X.XX share. per share. first for an at shares

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

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

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

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

Riley were Finally, May in to and Stifel on in X. the I'd Conference That like Austin in announce that on Conference Los remarks. our B. Cross-Sector on in Insight we the participating the concludes June Investor Conference Barclays Leverage prepared XX, Angeles Finance Institutional May Boston XX

for Operator? Now I'll line questions. open the

Operator

Matt And instructions] Sheerin our will [Operator line from Stifel. question of with come first the

Matthew Sheerin

be question first implies XX% it just gross up margin your a Just sequentially. regarding guidance, will that over

just of growth So modest off revenue there good sequential growth.

benefits some Kong? of also from Hong facilities Or seeing some in if the in I'm to So closures you the those wondering mix that all? and at U.S. is related are of

Thomas Edman

a your it's would things. for few I question. of combination Thanks a say

mix. there's a So bit little of

Year. seeing benefits Chinese QX X the We impact got seeing and the you some closures the X are factory. of from mentioned, are -- the the last plants New year. in just that the some you has There's Clover, of -- of efficiencies more QX, QX the between we

the lower the with factories operating -- get so tend obviously, And the we there, volume leverage. lower covering in with to efficiencies, AP, in just

a that. QX QX, is from part which So natural that is to another improvement of

Matthew Sheerin

factor headwind what's -- expansion and there? from does factory the the seeing you're in still that Penang. in also you headwinds Are And the that

Thomas Edman

we've the of quickly year, about the about what year of Penang then back the expected. to year, come headwind the the and kind is year on significant of half which the first half headwind, impact pretty there, second points ramp points to for full half in the we we'll to XXX from basis XXX of basis There's second get in the

Matthew Sheerin

you're then significant concentration, on for the visibility? customers. more of that about your the seeing could year? the end could in that the little looks talk talk the bit And It But to markets, of growth the where the seeing rest in you're about down be you're datacom some with you visibility you customer Could elaborate area Tom, sequentially. like seeing going you regarding a you're hyperscale

Thomas Edman

sure. So

it's than we a In bit year XX% when better in than AI be actually we're about really demand at of higher and remains center growth sequentially you still sequential, little strength flat pointed this terms where of last data point, relatively that but started. And center data out, were what absolutely, the concentrated, to, that as is certainly generative continues computing. seeing, in

level at area another capacity we're of the major think more as there, I the as high adding in at facility facility and both hyperscale as services incremental to year, second we're going that continue look growth, of work. look some qualifying to for we So our AI start that to well that half

to there to So second demand in year. what meet scaling we'll of expect the we the be look half

strong really or as go here we're that see through really, part that of course also the start well. computing I of So computing semiconductor going forward expect year environment improve to end we data as market the to the center there.

Matthew Sheerin

sort an serve also point? as that that at market talked of maybe is enterprise about come thing, you like you And where and well server there will OEM some that adoption,

Thomas Edman

that market an there. that's we area. is in into data that a center that also that well. serve yes, We part So put that the area as we of But broadly serve

Operator

line from of Ricchiuti with Jim Needham Co. And & that will come the

James Ricchiuti

vertical and guidance a the nice like in following markets midpoint Maybe in contributions, were your way question. down sequentially step-up look you're If last QX, of up auto couple on sequential MII. and notably I that the assuming all seems Dan, are the improvement a revenue New maybe, it characterizing seeing you this. just market of the to the you're seasonality question or may bright some is seeing out those a there? on Chinese coming you spot, Same are you of on have in Tom, alluded And QX auto, potential you semi-test touched markets? what MII. Is Year but the outlook in at

Thomas Edman

there. things of couple going A on

You're absolutely right.

positive. there New impact, In a Chinese of is terms Year

we think bit than little So helps QX that that of with markets. more a production about as end those week a bring back into it

production are into that at much too we to to Of point. have auto, I'm at In course, to that see not up. being you going read absorb demand the capacity. this sequentially looking

pointed we equipment. to think area you In in there as growth, trends I seeing that instrumentation of it's at if That's area, out -- instrumentation you the as certainly some the encouraging have improve where book-to-bill. look of the test come industrial medical We're of return overall see now semiconductor primarily a positive side the in solid some the seeing booking category. market overall is back. to commercial incremental capital demand, that are the which particularly well

the And into in well. market. as go starting would to so some customers to end half through that momentum add the as challenges, we is finally that of Expecting helping I customers worked inventory the have And We're continue networking demand sequential several we're side. that and inventory their kind through improvement work year. incremental see of back and on seeing

James Ricchiuti

you anticipating again, brings to decline round in on the -- could some me at assuming that. color That midpoint, looks discussion if And question verticals. the I'm a like sequential wondering you're, out provide It A&D. that next actually to the around

over you given looking how out the backlog, A&D remainder business Just of year? are about the growth you're the given the seeing, the thinking

Thomas Edman

production QX the we strongest we the year. able And didn't but as outperformed here. end area. not too QX, say QX, you were have really would significant A&D we just A&D off. -- that generally certainly have a that. the was I wouldn't expectations. we mainly that read out was much have that, quarter A&D We in we because finish the into -- usually The to a I drop Yes. off drop maximize in as fact actually remember our market overproduced, That

And expecting more the, then QX, we're As call sort again, Project there shut there expecting we're as expecting love as go look the normal what bring or the the at that we receiving QX, to of we we quarter we tailwind revenues we're the and facilities as we of a in down, into up look improve QX towards Clover A&D. QX, facilities QX. help that A&D to that we

to receiving you're So right, sort again, QX, kick that down, flattish facilities. slightly QX, QX of but to capacity the absolutely expecting with in

Operator

And William line the come with Stein from Truist Securities. that will of

William Stein

congrats First, sub And some that progress quarter. guidance last was I good question. hit seasonal. the actually this topics the for defense the in to that overlapping in your wanted and for aerospace on

strong that's are you aerospace past, when of I -- way anticipate long-duration wonder just of good I different. we but am if it, in the we is happened related explained the backlog go backlog. we have these defense something and reminded think In company but book-to-bill have up, just more lack quarters growth labor bookings. the sort of it's historically if has When of sort the any you know and this or shortages. when what I of dogging there And see because to in it's growth still where been very

Thomas Edman

have still out. can ago, Systems. we Mission quarter. as with there percent how our we we headwind of with area than to about in our get accounting it's were focus continues always a half in the still a stand chain. year of overcome facilities. several is I but a really, a have those recognition be today, million of $X that looking And less quarterly. headwind is that where Telephonics, as production of Will. We're with to the of we about say certainly That headwind we complete But you we at Labor supply then in do A&D would remember, each factor, an addition That's businesses concentrated have volumes,

percent a complete in get little process. So that lumpy are can depending the we bit on where

business. were beyond are traditionally So go in that those of sort factors where we that

much supply absolutely perspective, but a as And bit of a of just out that lumpiness we from situation. ongoing then challenge, chain it's particular labor little ship on more programs. really, So

William Stein

really the been it's in there my commercial math, back I book-to-bill to the like that, was you continue answered expecting stronger but quarters accelerate just think The you're than half. by it revenue in sounds to markets in many

I So I that little me things forward? what that there is instead on I is to to a let any was This guess surprised year-over-year OpEx Or we -- forward? focus going that activity year-over-year? are any area unusual up there OpEx. Is expect an and try wonder constrain going should drove the increase

Thomas Edman

about QX. There year-end care-related estimates, were that health items one-off and a regards later budgeted had we to for then were the related true-ups expansion, few fees paid in some in QX that $X.X that QX bit expected. in million personnel And in had were we little than There our a that we accruals we the higher were year. Syracuse QX application of true-ups had with

headwind one-offs. will -- of are up the we're to And with Penang, even that expense OpEx basis still recur. margin that XXX other increasing points about of and so million the basis the conglomerate quarter points into operating year-over-year. QX. We're forecasting was almost $X.X Those those additional not another first from But XXX that in up

half see in back come the year, of yes, to grow. the continue that So second you'll

Operator

And with of line Securities. from B. Mike that the will come Riley Crawford

Michael Crawford

wins program value of provide you the in the automotive the secured quarter? you lifetime Could

Thomas Edman

wins QX. to in great about of had not in terms So automotive. a in $XX We wins program quarter regards million in

a you year million. at ago, were we look If $XXX

terms marketplace. as in EV to with attribute the about for to, difference, quarter would shifts Mike. remember, we look withholding suppliers production it appears with are to what the from that row production in -- dealing X as So and on at with they're get that's starts our that of some And look program turbulence packages a as at most they're changes And that market anticipate And that there, coming part they year trying second to quite now. starts. our certainty customers begin Tier customers a more the global try their a again, of of they

imagine So there is those in the you can environment how it challenging to starts. out production anticipate

of not this just saw package opportunities last year year. volume we're So we seeing that the

So going on that's what in be appears auto. to

Michael Crawford

already like the regarding some just helping as It but then within local tax hear X you rates, months. to $XX looks to break down federal did next Syracuse. purchase get I hoping breaks And say you've received equipment in the million you're well? you're new in some facility And still

Thomas Edman

forthcoming So -- you're been bit thrilled side. more federal yes, very takes to just state that And The we're really just with and that. a has we're And the right. time. looking finalize

So that. our customers up in that working our were we through agreements well. we're And I'd able firm quarter, the as to also with way say

of So it overall break year hasn't here the final our but the the of as preparation terms changed through schedule of half in ground we stages get first of in working breaking just sort ready to ground.

Michael Crawford

in little Or based surprised, QX question. was just else conservative? But that buyback active restock relatively that count comp, again and a I'll is you're something Is guiding to end higher a but being you're with just with XQ. a in share was minor the of there happening? kind diet I

Thomas Edman

guidance. be that be shares our in from Yes, there. bit likely QX it's a the will -- the conservative that we for more plan. There used will probably bring vesting we've what of But I stock down a the little some $X.XX got that's will bit that that would with say issued more that buyback than

Operator

showing I'm like Edman the to over questions for queue to turn closing further this [Operator remarks. Instructions] Tom Mr. I time. in would no the call at

Thomas Edman

that the like just few I'd of summarizing by I to a close Yes, earlier. made you. Thank points

EPS year-on-year basis. guided operational improved and Revenues end a non-GAAP range, delivered the we of high performance favorable with range. at product First, guided of mix the above the end high on

flow our to you, target for Thank like with of cash a our thank to you I stock That revenues. EBITDA And repurchase our end our us employees, from generated X.Xx did sheet support. in low we of and much. net a healthy just solid customers balance maintain range. enable a and would of at at Second, operations very X.X% about the leverage closing, investors, your continued

Operator

This for concludes participating. today's program. Thank you

disconnect. now may You

TTM (TTMI) 1 May 242024 Q1 Earnings call transcript