TTM Technologies, Inc. Reports Fiscal Second Quarter 2020 Results

Santa Ana, California, UNITED STATES


SANTA ANA, Calif., July 29, 2020 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) and radio frequency (“RF”) components manufacturer, today reported results for the second quarter of fiscal 2020, which ended on June 29, 2020. 

On April 19th, TTM completed the  previously announced sale of its Mobility business unit.  The operating results and related assets and liabilities of the Mobility business under US GAAP are presented as discontinued operations for all periods. To facilitate the comparison of TTM’s results to previously issued guidance, non-GAAP financial information is also provided below which includes approximately three weeks of results for the Mobility business unit as well as results from the previously announced closure of the two E-MS plants.  Please refer to the earnings schedule for additional details on exited businesses and continuing operations.

Second Quarter 2020 Highlights

  • GAAP net sales were $570.3 million
  • Non-GAAP net sales were $601.1 million
  • GAAP net income of $192.8 million, or $1.79 per diluted share, inclusive of a net gain on the sale of the Mobility business unit of $183.1 million or $1.70 per diluted share
  • Non-GAAP net income was $33.3 million, or $0.31 per diluted share, inclusive of $0.01 of foreign exchange loss
  • Cash flow from operations of $119.0 million
  • Today repaid $400 million of Term Loan B from cash received from Mobility Business Unit divestiture

Second Quarter 2020 GAAP Financial Results
Net sales from continuing operations for the second quarter of 2020 were $570.3 million, compared to $526.9 million in the second quarter of 2019 and $497.6 million in the first quarter of 2020.

GAAP operating income from continuing operations for the second quarter of 2020 was $23.0 million, compared to $29.0 million in the second quarter of 2019 and $16.2 million in the first quarter of 2020. 

GAAP net income for the second quarter of 2020 was $192.8 million, or $1.79 per diluted share and includes an estimated net gain of $183.1 million from the sale of the Mobility business.  This compares to net income of $3.4 million, or $0.03 per diluted share in the second quarter of 2019, and net loss of $1.2 million, or ($0.01) per diluted share, in the first quarter of 2020.    

Second Quarter 2020 Non-GAAP Financial Results
Net sales for the second quarter of 2020 were $601.1 million, compared to $633.0 million in the second quarter of 2019 and $610.8 million in the first quarter of 2020.
                                                                                                                                            
On a non-GAAP basis, net income for the second quarter of 2020 was $33.3 million, or $0.31 per diluted share. This compares to non-GAAP net income of $21.3 million, or $0.20 per diluted share, for the second quarter of 2019 and $19.6 million, or $0.18 per diluted share, in the first quarter of 2020.

Adjusted EBITDA for the second quarter of 2020 was $80.3 million, or 13.4 percent of net sales, compared to adjusted EBITDA of $82.9 million, or 13.1 percent of net sales, for the second quarter of 2019 and $82.1 million, or 13.4 percent of net sales, for the first quarter of 2020.

“In the second quarter, TTM demonstrated excellent operational execution and overcame COVID-19 related challenges to deliver revenue and earnings above the previously guided range.  All of our manufacturing facilities continue to remain operational and I want to recognize all of our employees for their tremendous efforts in support of our customers during these challenging times,” said Tom Edman, CEO of TTM.  “The diversified mix of end markets that we serve enabled TTM to grow revenues and outperform earnings expectations despite weakness in the automotive and commercial aerospace end markets.  Finally, TTM has shown financial discipline, bringing our net debt to EBITDA ratio to 2.1, following the receipt of proceeds from the sale of the Mobility Business Unit and subsequent repayment of our Term loan.”

Business Outlook
Looking ahead, we believe that we will continue to experience COVID-19 related impacts on our end markets as well as inefficiencies with our own production.  Taking this into consideration, TTM estimates that revenue for the third quarter of 2020 will be in the range of $470 million to $510 million, and non-GAAP net income will be in the range of $0.16 to $0.22 per diluted share. This guidance no longer includes the Mobility Business Unit but continues to include the E-MS business unit while that business winds down.  

Live Webcast/Conference Call
TTM will host a conference call and webcast to discuss second quarter 2020 results and the third quarter 2020 outlook on Wednesday, July 29, 2020, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time).  The conference call will include forward-looking statements.

Telephone access is available by dialing domestic 800-367-2403 or international 334-777-6978 (ID 9715005).  The conference call also will be webcast on TTM’s website at www.ttm.com.

To Access a Replay of the Webcast
The replay of the webcast will remain accessible for one week following the live event on TTM’s website at www.ttm.com.

About TTM
TTM Technologies, Inc. is a leading global printed circuit board manufacturer, focusing on quick-turn and volume production of technologically advanced PCBs and backplane assemblies as well as a global designer and manufacturer of high-frequency radio frequency (RF) and microwave components and assemblies. TTM stands for time-to-market, representing how TTM's time-critical, one-stop manufacturing services enable customers to shorten the time required to develop new products and bring them to market. Additional information can be found at www.ttm.com.

Forward-Looking Statements
This release contains forward-looking statements that relate to future events or performance. TTM cautions you that such statements are simply predictions and actual events or results may differ materially. These statements reflect TTM's current expectations, and TTM does not undertake to update or revise these forward looking statements, even if experience or future changes make it clear that any projected results expressed or implied in this or other TTM statements will not be realized. Further, these statements involve risks and uncertainties, many of which are beyond TTM's control, which could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties include, but are not limited to, the impact of COVID-19, general market and economic conditions, including interest rates, currency exchange rates and consumer spending, demand for TTM's products, market pressures on prices of TTM's products, warranty claims, changes in product mix, contemplated significant capital expenditures and related financing requirements, TTM's dependence upon a small number of customers and other factors set forth in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's public reports filed with the SEC.

About Our Non-GAAP Financial Measures
This release includes information about TTM’s adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share, all of which are non-GAAP financial measures. TTM presents non-GAAP financial information to enable investors to see TTM through the eyes of management and to provide better insight into TTM’s ongoing financial performance. 

A material limitation associated with the use of the above non-GAAP financial measures is that they have no standardized measurement prescribed by GAAP and may not be comparable to similar non-GAAP financial measures used by other companies.  TTM compensates for these limitations by providing full disclosure of each non-GAAP financial measure and reconciliation to the most directly comparable GAAP financial measure.  However, the non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

With respect to the Company’s outlook for non-GAAP net income per diluted share, we are unable to predict with reasonable certainty or without unreasonable effort certain items that may affect a comparable measure calculated and presented in accordance with GAAP. Our expected non-GAAP net income per diluted share excludes primarily the future impact of restructuring actions, impairment charges, unusual gains and losses, and tax adjustments. These reconciling items are highly variable and difficult to predict due to various factors outside of management’s control and could have a material impact on our future period net income per diluted share calculated and presented in accordance with GAAP.  Accordingly, a reconciliation of non-GAAP net income per diluted share to a comparable measure calculated and presented in accordance with GAAP is not available without unreasonable effort and has not been provided.

- Tables Follow -


TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
                
                
      Second Quarter First Quarter First Two Quarters
       2020  2019*  2020   2020  2019* 
                
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS           
                
 Net sales  $570,298  $526,877  $497,646  $1,067,944  $1,063,322  
 Cost of goods sold  469,868   434,029   416,304   886,172   871,648  
                
 Gross profit  100,430   92,848   81,342   181,772   191,674  
                
 Operating expenses:           
  Selling and marketing  15,969   16,898   16,169   32,138   34,458  
  General and administrative  33,309   29,137   34,339   67,648   58,987  
  Research and development  5,181   4,496   4,762   9,943   9,212  
  Amortization of definite-lived intangibles  9,561   10,593   9,562   19,123   26,745  
  Restructuring charges  13,414   2,732   328   13,742   3,164  
   Total operating expenses  77,434   63,856   65,160   142,594   132,566  
                
 Operating income  22,996   28,992   16,182   39,178   59,108  
                
 Interest expense  (18,572)  (20,553)  (19,781)  (38,353)  (41,688) 
 Other, net   455   3,007   2,502   2,957   2,650  
                
 Income (Loss) from continuing operations before income taxes  4,879   11,446   (1,097)  3,782   20,070  
 Income tax benefit (provision)  4,467   1,047   (2,123)  2,344   (1,339) 
                
 Net income (loss) from continuing operations  9,346   12,493   (3,220)  6,126   18,731  
 Income (loss) from discontinued operations, net of income taxes  183,464   (9,069)  2,046   185,510   (18,559) 
 Net income (loss) $192,810  $3,424  $(1,174) $191,636  $172  
                
 * Reclassified Research and development expenses as a separate line item from General and administrative expenses       
                
 Earnings (loss) per share:           
  Basic earnings (loss) per share from continuing operations $0.09  $0.12  $(0.03) $0.06  $0.18  
  Basic earnings (loss) per share from discontinued operations  1.72   (0.09)  0.02   1.75   (0.18) 
   Basic earnings (loss) per share $1.81  $0.03  $(0.01) $1.81  $0.00  
                
  Diluted earnings (loss) per share from continuing operations $0.09  $0.12  $(0.03) $0.06  $0.18  
  Diluted earnings (loss) per share from discontinued operations  1.70   (0.09)  0.02   1.72   (0.18) 
   Diluted earnings (loss) per share $1.79  $0.03  $(0.01) $1.78  $0.00  
                
                
 Weighted-average shares used in computing per share amounts:           
  Basic   106,295   105,470   105,686   105,990   104,893  
  Diluted  107,485   132,045   105,686   107,431   105,860  
                
                
 Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:       
                
 Net income  9,346   12,493     6,126   18,731  
  Add back items: interest expense, net of tax  -   2,780     -   -  
 Adjusted net income  9,346   15,273     6,126   18,731  
 Weighted-average shares outstanding  106,295   105,470     105,990   104,893  
 Dilutive effect of convertible debt  -   25,938     -   -  
 Dilutive effect of warrants  -   -     -   -  
 Dilutive effect of performance-based stock units, restricted stock units & stock options  1,190   637     1,441   967  
 Diluted shares  107,485   132,045     107,431   105,860  
 Earnings per share:           
  Basic earnings per share from continuing operations $0.09  $0.12    $0.06  $0.18  
  Basic earnings (loss) per share from discontinued operations  1.72   (0.09)    1.75   (0.18) 
   Basic earnings per share $1.81  $0.03    $1.81  $0.00  
                
  Diluted earnings per share from continuing operations $0.09  $0.12    $0.06  $0.18  
  Diluted earnings (loss) per share from discontinued operations  1.70   (0.09)    1.72   (0.18) 
   Diluted earnings per share $1.79  $0.03    $1.78  $0.00  
                
SELECTED BALANCE SHEET DATA            
      June 29, 2020 December 30, 2019      
 Cash and cash equivalents, including restricted cash $694,668  $379,818        
 Accounts and notes receivable, net  414,329   503,598        
 Contract assets  287,281   254,600        
 Inventories  122,847   113,753        
 Current assets held for sale  -   67,572        
 Total current assets  1,871,912   1,342,684        
 Property, plant and equipment, net  660,866   678,201        
 Operating lease right of use asset  21,993   22,173        
 Non-current assets held for sale  -   425,597        
 Other non-current assets  1,039,900   1,092,278        
 Total assets  3,594,671   3,560,933        
                
 Short-term debt, including current portion of long-term debt $649,975  $249,975        
 Accounts payable  351,819   329,866        
 Current liabilities held for sale  -   185,391        
 Total current liabilities  1,197,457   946,666        
 Debt, net of discount  832,834   1,225,962        
 Non-current liabilities held for sale  -   1,530        
 Total long-term liabilities  951,649   1,335,230        
 Total equity  1,445,565   1,279,037        
 Total liabilities and equity  3,594,671   3,560,933        
                
                
SUPPLEMENTAL DATA           
      Second Quarter First Quarter First Two Quarters
       2020   2019   2020   2020  2019* 
 Gross margin  17.6%  17.6%  16.3%  17.0%  18.0% 
 Operating margin  4.0%  5.5%  3.3%  3.7%  5.6% 
                
 End Market Breakdown, including Mobility:           
      Second Quarter First Quarter     
       2020   2019   2020      
                
  Aerospace/Defense  31%  28%  30%     
  Automotive  12%  16%  12%     
  Cellular Phone  3%  6%  11%     
  Computing/Storage/Peripherals  13%  15%  14%     
  Medical/Industrial/Instrumentation  20%  15%  16%     
  Networking/Communications  19%  17%  14%     
  Other   2%  3%  3%     
                
                
                
                
                
 Stock-based Compensation, including Mobility:           
      Second Quarter First Quarter     
       2020   2019   2020      
  Amount included in:           
   Cost of goods sold $620  $569  $850      
   Selling and marketing  291   383   451      
   General and administrative  1,690   2,611   3,477      
   Research & Development  46   39   57      
   Total stock-based compensation expense $2,647  $3,602  $4,835      
                
                
 Operating Segment Data:           
      Second Quarter First Quarter     
  Net sales:  2020   2019   2020      
  PCB  $520,067  $466,960  $467,430      
  E-M Solutions  50,231   59,917   30,216      
   Total net sales $570,298  $526,877  $497,646      
                
  Operating segment income:           
  PCB  $80,056  $62,463  $61,626      
  E-M Solutions  (15,577)  863   (4,329)     
  Corporate  (30,538)  (22,561)  (30,170)     
   Total operating segment income  33,941   40,765   27,127      
  Amortization of definite-lived intangibles  (10,945)  (11,773)  (10,945)     
   Total operating income  22,996   28,992   16,182      
  Total other expense  (18,117)  (17,546)  (17,279)     
  Income (Loss) from continuing operations before income taxes   $4,879  $11,446  $(1,097)     
                
RECONCILIATIONS1           
                
      GAAP December 30, 2019 Mobility balances December 30, 20192 Combined December 30, 2019     
 Cash and cash equivalents, including restricted cash $379,818  $20,336  $400,154      
 Accounts and notes receivable, net  503,598   66   503,664      
 Contract assets  254,600   33,635   288,235      
 Inventories  113,753   8,266   122,019      
 Current assets held for sale  67,572   (67,572)  -      
 Total current assets  1,342,684   -   1,342,684      
 Property, plant and equipment, net  678,201   344,728   1,022,929      
 Operating lease right of use asset  22,173   1,983   24,156      
 Non-current assets held for sale  425,597   (425,597)  -      
 Other non-current assets  1,092,278   78,886   1,171,164      
 Total assets  3,560,933   -   3,560,933      
                
 Short-term debt, including current portion of long-term debt $249,975  $-  $249,975      
 Accounts payable  329,866   153,700   483,566      
 Current liabilities held for sale  185,391   (185,391)  -      
 Total current liabilities  946,666   -   946,666      
 Debt, net of discount  1,225,962   -   1,225,962      
 Non-current liabilities held for sale  1,530   (1,530)  -      
 Total long-term liabilities  1,335,230   -   1,335,230      
 Total equity  1,279,037   -   1,279,037      
 Total liabilities and equity  3,560,933   -   3,560,933      
                
                
      Second Quarter First Quarter First Two Quarters
       2020   2019   2020   2020  2019* 
 Non-GAAP revenue reconciliation3:           
  GAAP revenue $570,298  $526,877  $497,646  $1,067,944  $1,063,322  
  Revenue from discontinued operations  30,777   106,161   113,174   143,951   189,916  
  Non-GAAP revenue $601,075  $633,038  $610,820  $1,211,895  $1,253,238  
                
 Non-GAAP gross profit reconciliation4:           
  GAAP gross profit $100,430  $92,848  $81,342  $181,772  $191,674  
  Gross profit from discontinued operations  2,402   (8,233)  4,749   7,151   (18,374) 
  Add back item:           
   Amortization of definite-lived intangibles  1,384   1,180   1,383   2,767   2,359  
   Accelerated Depreciation  2,397   -   -   2,397   -  
   Stock-based compensation  620   569   850   1,470   1,275  
  Non-GAAP gross profit $107,233  $86,364  $88,324  $195,557  $176,934  
  Non-GAAP gross margin  17.8%  13.6%  14.5%  16.1%  14.1% 
                
 Non-GAAP operating income reconciliation5:           
  GAAP operating income $22,996  $28,992  $16,182  $39,178  $59,108  
  Operating income (loss) from discontinued operations  976   (12,148)  1,441   2,417   (24,774) 
  Add back items:           
   Amortization of definite-lived intangibles   11,079   12,447   11,620   22,699   30,452  
   Accelerated Depreciation   2,754   -   -   2,754   -  
   Stock-based compensation   2,647   3,602   4,835   7,482   7,528  
  Restructuring, acquisition-related, and other charges    14,273   4,351   1,596   15,869   5,454  
  Non-GAAP operating income $54,725  $37,244  $35,674  $90,399  $77,768  
  Non-GAAP operating margin  9.1%  5.9%  5.8%  7.5%  6.2% 
                
 Non-GAAP net income and EPS reconciliation6:           
  GAAP net income (loss) $9,346  $12,493   (3,220) $6,126  $18,731  
  Net income (loss) from discontinued operations  183,464   (9,069)  2,046   185,510   (18,559) 
  Add back items:           
   Amortization of definite-lived intangibles   11,079   12,447   11,620   22,699   30,452  
   Accelerated Depreciation   2,754   -   -   2,754   -  
   Gain on sales of the Mobility business unit   (248,863)  -   -   (248,863)  -  
   Stock-based compensation   2,647   3,602   4,835   7,482   7,528  
   Non-cash interest expense   3,604   3,467   3,553   7,157   7,335  
   (Gain) on sale of assets   (274)  (235)  (233)  (507)  (3,306) 
   Restructuring, acquisition-related, and other charges   13,969   4,351   1,596   15,565   5,454  
   Income taxes7   55,613   (5,789)  (593)  55,020   (9,939) 
  Non-GAAP net income $33,339  $21,267  $19,604  $52,943  $37,696  
  Non-GAAP earnings per diluted share $0.31  $0.20  $0.18  $0.49  $0.36  
                
 Non-GAAP diluted number of shares8:           
  Diluted shares  107,485   132,045   107,378   107,431   105,860  
  Dilutive effect of convertible debt  -   (25,938)  -   -   -  
  Non-GAAP diluted number of shares  107,485   106,107   107,378   107,431   105,860  
                
 Adjusted EBITDA reconciliation9:           
  GAAP net income (loss) $9,346  $12,493  $(3,220) $6,126  $18,731  
  Net income (loss) from discontinued operations  183,464   (9,069)  2,046  $185,510  $(18,559) 
  Add back items:           
   Income tax provision (benefit)   61,498   (2,829)  2,865   64,363   (4,306) 
   Interest expense   18,572   20,871   20,004   38,576   42,559  
   Amortization of definite-lived intangibles   11,079   12,447   11,620   22,699   30,452  
   Gain on sales of the Mobility business unit   (248,863)  -   -   (248,863)  -  
   Depreciation expense   28,871   41,235   42,632   71,503   82,837  
   Stock-based compensation   2,647   3,602   4,835   7,482   7,528  
   (Gain) on sale of assets   (274)  (235)  (233)  (507)  (3,306) 
   Restructuring, acquisition-related, and other charges    13,969   4,351   1,596   15,565   5,454  
  Adjusted EBITDA $80,309  $82,866  $82,145  $162,454  $161,390  
  Adjusted EBITDA margin  13.4%  13.1%  13.4%  13.4%  12.9% 
                
 Free cash flow reconciliation, including Mobility:           
  Operating cash flow  118,996   86,123   27,913   146,909   123,047  
  Capital expenditures, net  (22,370)  (34,741)  (32,451)  (54,821)  (63,187) 
  Free cash flow $96,626  $51,382  $(4,538) $92,088  $59,860  
                


TTM Consolidated       
End Markets1Q 192Q 193Q 194Q 19FY20191Q 202Q 20
Aerospace/Defense27%28%24%26%26%30%31%
Automotive17%16%17%14%16%12%12%
Cellular Phones7%6%19%16%13%11%3%
Computing/Storage/Periph13%15%12%14%13%14%13%
Medical/Industrial/Inst15%15%13%13%14%16%20%
Networking/Communications18%17%13%15%15%14%19%
Other3%3%2%2%3%3%2%
        
Mobility Business Unit      
End Markets1Q 192Q 193Q 194Q 19FY20191Q 202Q 20
Aerospace/Defense0%0%0%0%0%0%0%
Automotive5%6%3%2%4%3%4%
Cellular Phones48%41%73%65%60%56%54%
Computing/Storage/Periph28%36%14%19%22%22%25%
Medical/Industrial/Inst7%5%2%3%4%3%4%
Networking/Communications5%5%4%6%5%6%5%
Other7%7%4%5%5%10%8%
        
SZ + SH-EMS       
End Markets1Q 192Q 193Q 194Q 19FY20191Q 202Q 20
Aerospace/Defense0%1%0%0%0%0%0%
Automotive56%58%74%59%63%49%54%
Cellular Phones0%0%0%0%0%0%0%
Computing/Storage/Periph0%0%0%0%0%0%0%
Medical/Industrial/Inst22%23%11%19%18%23%14%
Networking/Communications21%18%16%22%19%29%35%
Other1%0%-1%0%0%-1%-3%
        
TTM, excluding Mobility, SZ & SH E-MS     
End Markets1Q 192Q 193Q 194Q 19FY20191Q 202Q 20
Aerospace/Defense33%36%36%37%35%38%33%
Automotive17%15%15%15%15%13%11%
Cellular Phones0%-1%1%0%0%1%0%
Computing/Storage/Periph12%12%12%13%12%12%13%
Medical/Industrial/Inst16%17%18%17%17%18%21%
Networking/Communications20%19%16%17%18%16%19%
Other2%2%2%1%3%2%3%
        


Select Non-GAAP income statement data
TTM Proforma Excluding Mobility, SZ & SH-EMSQ1-19AQ2-19AQ3-19AQ4-19AFY 2019AQ1-20AQ2-20A
Sales500.4486.0479.7506.01,972.1483.4548.9
Gross Profit97.791.282.2100.1371.286.0105.6
Gross Margin19.5%18.8%17.1%19.8%18.8%17.8%19.2%
Op Income52.246.233.849.4179.837.754.4
OM10.4%9.5%7.0%9.8%9.1%7.8%9.9%
EBITDA70.070.659.570.5270.563.576.4
EBITDA %14.0%14.5%12.4%13.9%13.7%13.1%13.9%
        
TTM ConsolidatedQ1-19AQ2-19AQ3-19AQ4-19AFY 2019AQ1-20AQ2-20A
Sales620.2633.0716.8719.32,689.3610.8601.1
Gross Profit90.686.4106.0126.8409.788.3107.2
Gross Margin14.6%13.6%14.8%17.6%15.2%14.5%17.8%
Op Income40.537.254.072.4204.135.754.7
Operating Margin6.5%5.9%7.5%10.1%7.6%5.8%9.1%
EBITDA78.582.9103.5111.3376.282.180.3
EBITDA %12.7%13.1%14.4%15.5%14.0%13.4%13.4%
        
MobilityQ1-19AQ2-19AQ3-19AQ4-19AFY 2019AQ1-20AQ2-20A
Sales83.8106.1182.6183.5556.0113.230.8
Gross Profit(10.1)(8.2)18.624.324.54.72.4
Gross Margin-12.1%-7.8%10.2%13.2%4.4%4.2%7.8%
Op Income(11.9)(10.3)15.921.014.72.11.1
Operating Margin-14.2%-9.7%8.7%11.4%2.6%1.9%3.6%
EBITDA6.09.236.938.590.621.93.8
EBITDA %7.2%8.7%20.2%21.0%16.3%19.3%12.3%
        
        
SZ + SH-EMSQ1-19AQ2-19AQ3-19AQ4-19AFY 2019AQ1-20AQ2-20A
Sales36.040.954.529.8161.214.221.4
Gross Profit3.03.45.22.313.9(2.4)(0.3)
Gross Margin8.3%8.3%9.5%7.7%8.6%-16.7%-1.4%
Op Income2.01.24.32.09.5(3.8)(0.8)
Operating Margin5.6%2.9%7.9%6.7%5.9%-26.8%-3.8%
EBITDA2.53.17.12.014.7(3.6)0.1
EBITDA %6.9%7.6%13.0%6.7%9.1%-25.4%0.4%


 1 This information provides a reconciliation of non-GAAP balance sheet data to the financial information in our consolidated condensed balance sheet and non-GAAP revenue, non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP EPS, and adjusted EBITDA to the financial information in our consolidated condensed statements of operations. 
 
 2 Excludes the estimated gain on sale of Mobility. 
 
 3 Non-GAAP revenue includes revenue from discontinued operations. 
 
 4 Non-GAAP gross profit and gross margin measures include discontinued operations and exclude amortization of intangibles, accelerated depreciation due to the closure of two EM-Solutions plants, and stock-based compensation expense. 
 
 5 Non-GAAP operating income and operating margin measures include discontinued operations and exclude amortization of intangibles, accelerated depreciation due to the closure of two EM-Solutions plants, stock-based compensation expense, gain on sale of assets, acquisition-related costs, restructuring and other charges. 
 
 6 This information provides non-GAAP net income and non-GAAP EPS, which are non-GAAP financial measures. Management believes that both measures -- which include discontinued operations and add back amortization of intangibles, accelerated depreciation due to the closure of two EM-Solutions plants, stock-based compensation expense, non-cash interest expense on debt (before consideration of capitalized interest), gain on sale of assets, acquisition-related costs, restructuring and other charges as well as the associated tax impact of these charges and discrete tax items -- provide additional useful information to investors regarding the Company's ongoing financial condition and results of operations. 
 
 7 Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate. 
 
 8 Non-GAAP diluted number of shares used in computing non-GAAP earnings per share excludes the dilutive effect of convertible debt. 
 
 9 Adjusted EBITDA is defined as earnings, including discontinued operations, before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, acquisition-related costs, restructuring and other charges. We present adjusted EBITDA to enhance the understanding of our operating results, and it is a key measure we use to evaluate our operations. In addition, we provide our adjusted EBITDA because we believe that investors and securities analysts will find adjusted EBITDA to be a useful measure for evaluating our operating performance and comparing our operating performance with that of similar companies that have different capital structures and for evaluating our ability to meet our future debt service, capital expenditures, and working capital requirements. However, adjusted EBITDA should not be considered as an alternative to cash flows from operating activities as a measure of liquidity or as an alternative to net income as a measure of operating results in accordance with accounting principles generally accepted in the United States of America. 
 


Contact:
Sameer Desai,
Senior Director, Corporate Development & Investor Relations
Sameer.desai@ttmtech.com
714-327-3050