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TTM Reports Sequential Increase in Q3 Revenue

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 TTM Reports Sequential Increase in Q3 Revenue

TTM Technologies, Inc., a major global PCB manufacturer, has reported results for the third quarter 2014, which ended September 29, 2014. 

Third quarter 2014 highlights include: 

Net sales were $345.3 million. 
GAAP net income was $7.7 million, or $0.09 per diluted share. 
Non-GAAP net income was $11.0 million, or $0.13 per diluted share. 
Announced agreement to acquire Viasystems Group, Inc. 
Third Quarter 2014 Financial Results 

Net sales for the third quarter of 2014 were $345.3 million compared to $297.6 million in the second quarter of 2014 and $338.7 million in the third quarter of 2013. 

GAAP operating income for the third quarter of 2014 was $12.3 million compared to operating income of $3.2 million in the second quarter of 2014 and an operating loss of $1.2 million in the third quarter of 2013. 

GAAP net income for the third quarter of 2014 was $7.7 million, or $0.09 per diluted share. This compares to a GAAP net loss of $3.1 million, or $0.04 per share, in the second quarter of 2014 and GAAP net loss of $7.7 million, or $0.09 per share, in the third quarter of 2013. 

On a non-GAAP basis, net income for the third quarter of 2014 was $11.0 million, or $0.13 per diluted share. This compares to non-GAAP net income of $3.9 million, or $0.05 per diluted share, for the second quarter of 2014 and $11.6 million, or $0.14 per diluted share, for the third quarter of 2013. 

Adjusted EBITDA for the third quarter of 2014 was $43.6 million, or 12.6 percent of net sales, compared to adjusted EBITDA of $32.8 million, or 11.0 percent of net sales, for the second quarter of 2014 and $42.3 million, or 12.5 percent of net sales, for the third quarter of 2013. 

"As expected, we grew revenue and operating income on a sequential basis in the third quarter. We experienced solid demand across all of our end markets, led by a strong revenue ramp in cellular phones and better than expected sales in our networking/communications end market," said Tom Edman, CEO of TTM. "Our operating margins, however, fell short of goal due primarily to an unanticipated five day power outage at our advanced technology facility in Asia Pacific which interrupted our ramp for new products and contributed to our yield shortfall early in the quarter. By the end of the quarter, our productivity and yield levels were back on plan. We anticipate continued improvement in yields and operating performance in the fourth quarter." 

Edman continued, "On September 22, we announced a definitive agreement to acquire Viasystems. We expect the combination will create an industry leader with a broad global footprint and expanded capabilities to serve more customers and end markets. It also accelerates our strategy to diversify our business and reduce the impact of seasonality inherent in the cellular phone end market. The acquisition is expected to close in the first half of 2015, and I'm pleased with the positive feedback that we have received from both customers and employees." 

Business Outlook 

For the fourth quarter of 2014, TTM estimates that revenue will be in the range of $370 million to $390 million, and non-GAAP net income in the range of $0.22 to $0.28 per diluted share. 

The Acquisition of Viasystems 

As previously announced, on September 22, 2014, TTM announced the execution of a definitive agreement under which TTM will acquire all outstanding shares of Viasystems for a combined consideration of $11.33 in cash and 0.706 shares of TTM common stock per Viasystems' share. The parties currently expect to close the transaction in the first half of 2015. The transaction is subject to customary closing conditions, including regulatory approvals and approval by the shareholders of Viasystems. 

TTM has received a fully-underwritten financing commitment from J.P. Morgan, Barclays and RBS to finance the transaction. TTM expects to utilize a new $1.1 billion senior secured credit facility to finance the cash portion of the purchase price, refinance certain debt at each company, and pay for costs associated with the transaction. 

About TTM 

TTM Technologies, Inc. is a major global PCB manufacturer, focusing on quick-turn and technologically advanced PCBs and the backplane and sub-system assembly business. 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.