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TTM Technologies, Inc. Investor Presentation
March 2016
DisclaimerForward-Looking Statements
Certain statements in this communication may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to TTM’s future business outlook. Actual results may differ materially from these forward-looking statements. Such statements relate to a variety of matters, including but not limited to: the operations of the businesses of TTM Technologies, Inc. (“TTM” or the “Company”). These statements are made on the basis of the current beliefs, expectations and assumptions of the management of TTM regarding future events and are subject to significant risks and uncertainty. Statements regarding our expected performance in the future are forward-looking statements.
It is uncertain whether any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what impact they will have on the results of operations and financial condition of the Company. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements and are set forth in the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q and in the Company’s other filings filed with the Securities and Exchange Commission (the “SEC”) under the heading “Risk Factors” and which are available at the SEC’s website at www.sec.gov.
TTM does not undertake any obligation to update any of theses statements to reflect any new information, subsequent events or circumstances, or otherwise, except as may be required by law.
Use of Non-GAAP Financial Measures
In addition to the financial statements presented in accordance with U.S. GAAP, TTM uses certain non-GAAP financial measures, including “adjusted EBITDA.” The companies present non-GAAP financial information to enable investors to see each company through the eyes of management and to provide better insight into its ongoing financial performance.
Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, asset impairments, restructuring, costs related to acquisitions, and other charges. For a reconciliation of adjusted EBITDA to net income, please see the appendix at the end of this presentation. Adjusted EBITDA is not a recognized financial measure under U.S. GAAP and does not purport to be an alternative to operating income or an indicator of operating performance. Adjusted EBITDA is presented to enhance an understanding of operating results and is not intended to represent cash flows or results of operations. The use of this non-GAAP measure provides an indication of each company’s ability to service debt, and management considers it an appropriate measure to use because of the Company’s leveraged positions.
Adjusted EBITDA has certain material limitations, primarily due to the exclusion of certain amounts that are material to each Company’s consolidated results of operations, such as interest expense, income tax expense, and depreciation and amortization. In addition, adjusted EBITDA may differ from the adjusted EBITDA calculations reported by other companies in the industry, limiting its usefulness as a comparative measure.
Data Used in This Presentation
Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
Third Party Information
This presentation has been prepared by the Company and includes information from other sources believed by the Company to be reliable. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of any of the opinions and conclusions set forth herein based on such information. This presentation may contain descriptions or summaries of certain documents and agreements, but such descriptions or summaries are qualified in their entirety by reference to the actual documents or agreements. Unless otherwise indicated, the information contained herein speaks only as of the date hereof and is subject to change, completion or amendment without notice.
1
• A leading global PCB manufacturer - $2.6B in Pro-forma revenue in 2015
• Acquisition of Viasystems expands end markets and customer base
• Leader in automotive, aerospace and defense, networking and telecom, and
advanced mobile devices
• Leveraging advanced technology position for new applications in automotive
• Disciplined integration planning process focused on improving operational
execution and delivering $55M in annualized synergies
• Solid cash flow to delever post-acquisition balance sheet
‒ $183 million of free cash flow generated in 2015
2
TTM Differentiated Leadership Position
Global Footprint
3
910
Legacy TTM
13 8
9
14
Legacy Viasystems
5
4
6
1
3
2
11
7
13
12
1
10
4
6
3
2
8712
11
Stafford Springs, CT
12 Guangzhou, China
13 Shanghai, China
Shanghai, China8
Advanced TechnologyHigh Mix / Low Volume
11 Forest Grove, OR
12 Toronto, Canada
4 Chippewa Falls, WI
6 Logan, UT
Volume Production - Conventional
9 Guangzhou, China
10 Huiyang, China
11 Dongguan, China
8 Zhongshan, China
Aerospace / Defense
6 North Jackson, OH
5 Denver, CO
7 Sterling, VA
Cleveland, OH4
1 Stafford, CT
3 San Diego, CA
2 Santa Clara, CA
QTA
5 Santa Ana, CA
7 Hong Kong, China
1 Anaheim, CA
2 Milpitas, CA
San Jose, CA3
Custom Assembly
9 Shanghai, China
10
13 Juarez, Mexico
15 Shenzhen, China
14 Shanghai, China
5
TTM Facilities
15
World PCB Outlook
4
Region2014 ($bn)
2019F ($bn)
14/19F CAGR
China $26.1 $33.6 5.2%
SE Asia, S. Korea $19.5 $23.3 3.6%
Japan $6.6 $5.0 (5.4%)
Americas $3.0 $2.9 (0.5%)
Europe $2.2 $2.1 (1.5%)
World $57.4 $66.9 3.1%
Source: Prismark Partners – World PCB Report, April 2000, May 2015
• The worldwide PCB market is expected to grow approximately 3 percent through 2019 with the majority of growth occurring in Asia
• ~50% of the world PCB production will be generated from China/HK in 2019
$3.6
$26.1 $33.6
$8.5
$19.5
$23.3
$11.3
$6.6
$5.0
$10.9
$3.0
$2.9
$6.7
$2.2
$2.1
$0
$10
$20
$30
$40
$50
$60
$70
$80
2000 2014 2019 F
$B China SE Asia, S. Korea Japan Americas Europe
$40.9
$57.4
$66.9
3,176
2,539 2,483
2,130
1,562 1,523 1,493 1,414 1,3911,159
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Nippon Mektron TTM Zhen Deng Unimicron SEMCO Young Poong Ibiden Sumitomo Tripod Daeduck
Creates a Leading Global Player
5
2014 Top 10 world PCB manufacturers by revenue ($ millions)
Note: TTM revenue is pro forma including Viasystems 2014 revenueSource: NT Information, July 2015; Prismark Partners May 2015
Top 10 represent ~33% of 2014 total world PCB output$M
• A leading supplier to commercial aerospace & defense contractors
• A major supplier to the high growth automotive end market
• Core supplier to wide range of high-end networking products addressing increasing bandwidth demands
• A strong position in advanced mobile device market
Flex 1-2 Sided 4-6 Low 8-16 Mid 18+ High Microvia (HDI) Substrates Rigid-Flex
World 15% 14% 25% 11% 2% 13% 15% 5%
TTM 1% 5% 22% 24% 15% 25% 2% 6%
0%
10%
20%
30%
40% World TTM
Focused on Growth in Advanced Technology
6
Source: Prismark Partners, May2015; Company reports FY2014
Advanced Technologies
• PCB Technologies
– High Reliability
– Advanced HDI & Rigid-Flex
– High Layer Count
• Product Examples
– Automotive braking & engine controls, aerospace & defense systems
– Automotive infotainment & advanced mobile devices
– Telecom base stations & networking line cards
PCB Product Types (% of Total Production Value)
Aerospace & Defense14%
Automotive18%
Cellular Phones17%
Computing / Storage / Peripherals
13%
Medical / Industrial /
Instrumentation14%
Networking / Communications
22%
Other2%
Pro Forma Revenue
Diversified End Markets - Full Year 2015
7
2015 Pro Forma Net Sales $2,602mm
End Market
(PCB Growth Rates)SAM $mm
2014 – 2019 CAGR
Automotive $2,589 6% - 8%
Networking/Communications $5,278 3% - 6%
Computing/Storage/Peripherals $5,666 5% - 8%
Cellular Phone $6,454 5% - 8%
Aerospace/Defense $1,752 2% - 4%
Medical/Industrial/Instrument $2,524 4% - 6%
Other (Consumer) $3,885 3% - 5%
Sources: Prismark Partners May 2015, BPA March 2015, Electronic Outlook Corporation Q3 2015, Company estimates
Top 5 OEM Customers
(alphabetical order)
Alcatel-Lucent
Apple
Bosch
Cisco
Huawei
Top 5 customers ~34%
Pro Forma 2015
Revenue
$3.6$3.9
$4.1$4.5
$4.9
2010 2011 2012 2013 2014
74.179.7
83.587.3 89.7
2010 2011 2012 2013 2014
8
New High Growth Automotive End Market
Source: NTI & Electronic Outlook Corporation – November 2015
Advantages of Automotive End Market
Note: Market units for fuel efficiency, safety, informatics applications and ECU. Market value for electronic devices such as semiconductors or connectors.Source: TTM company data, Wards, Anfavea, AEB, JAMA, JAPA, CAAM, SIAM, GAIKINDO, TMT, TSR, Marklines, Gartner, JEITA, Bishop, Citi Research estimates
Auto shipment (millions units)
• Strong unit growth forecast
• Content per vehicle increasing
• A leader in core automotive requirements
• Opportunities for TTM’s advanced technology
‒ RF radar
‒ Rigid-Flex
‒ HDI
PCB usage - automotive electronics ($ billions)
Integration Update
• One TTM focus– Executing to customers’ needs– Delivering quick wins for new organization: cross selling, technology
opportunities, best practices– Optimizing total plant utilization, profitability and customer focus
• Synergies– Target of $55M (annualized) in the first 12 months– Implemented $30M of annualized cost savings through Q4’15– Announced the planned closure of three N.A. plants in Sept. 2015
• $16.5M in annual cost savings
– Announced new global operating model in Dec. 2015 • $10M in annual cost savings
– Total implemented and announced synergies-to-date: ~$45 million
• Leverage– Announced plan to repay between $70 and $80 million of debt in Q1’16
9
Strategic Initiatives
10
Complete integration of Viasystems
Continued focus on delivering advanced technology to broad base of customers across diverse end markets
Drive operational excellence through global best practice sharing, yield improvement and rapid new product ramps
Manage balance sheet for growth and risk- use free cash flow to deleverage the balance sheet
1111
Financial Overview
12
TTM Operating Performance
Revenue Gross margin1
Adjusted EBITDA2 Non-GAAP EPS3
1 Adjusted for stock-based compensation expense, inventory markup and PP&E step up2 Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based
compensation expense, gain on sale of assets, inventory markup, acquisition-related costs, asset impairments, restructuring and other charges3 Adjusted for amortization of intangibles, stock-based compensation expense, non-cash interest expense on debt, gain on sale of assets,
inventory markup, acquisition-related costs, asset impairments, restructuring and other charges as well as the associated tax impact of these
charges and discrete tax items
Note: Refer to reconciliations in Appendix
12
$1,349 $1,368 $1,326
$2,095
2012 2013 2014 2015
Revenue FY ($mm)
$191 $181 $166
$286
14.1% 13.3%12.5%
13.6%
0.0%
5.0%
10.0%
15.0%
20.0%
2012 2013 2014 2015
Adj. EBITDA margin
$226$219 $196
$327
16.8%16.0%
14.8%
15.6%
2012 2013 2014 2015
Gross profit FY ($mm) Gross margin
$0.85$0.62
$0.47
$0.87
2012 2013 2014 2015
EPS FY ($mm) Adj. EBITDA FY ($mm)
13
TTM Non-GAAP Income Statement¹
13
1 Non-GAAP results add back amortization of intangibles, stock-based compensation expense, non-cash interest expense on debt , gain on sale of assets, inventory
markup, acquisition-related costs, asset impairments, restructuring and other charges as well as the associated tax impact of these charges and discrete tax items .
Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on
sale of assets, inventory markup, acquisition-related costs, asset impairments, restructuring and other charges. Adjusted operating cash flow adds back payment of
accreted interest on convertible senior notes and payment of acquisition-related costs.2 Pro forma for Viasystems acquisition3 Leverage is defined as debt (net of discount) less cash divided by EBITDA
$ Millions (except where noted) Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Target Model
Legacy TTM $291.9 $297.6 $345.3 $390.9 $329.2 $352.2 $368.8 $381.0
Legacy Viasystems - - - - - 93.2 283.2 287.9 5% - 7%
Total Revenue 291.9 297.6 345.3 390.9 329.2 445.4 652.0 668.9 Annual Growth
Gross Profit 38.8 38.8 49.3 68.7 51.8 68.8 97.7 109.213.3% 13.0% 14.3% 17.6% 15.7% 15.5% 15.0% 16.3%
Operating Income 8.8 9.2 17.9 34.6 18.4 29.2 45.0 53.4 10%3.0% 3.1% 5.2% 8.9% 5.6% 6.6% 6.9% 8.0%
TTM Technologies Net Income 1.2 3.9 11.0 23.2 10.8 14.9 23.8 31.50.4% 1.3% 3.2% 5.9% 3.3% 3.3% 3.7% 4.7%
Earnings Per Share $0.01 $0.05 $0.13 $0.28 $0.13 $0.17 $0.24 $0.31($ per Diluted Share)
Adjusted EBITDA 29.1 32.8 43.6 60.5 42.5 59.7 87.6 95.810.0% 11.0% 12.6% 15.5% 12.9% 13.4% 13.4% 14.3%
Adjusted Operating Cash Flow 46.7 (11.8) 43.8 54.5 72.1 47.6 21.3 141.416.0% -4.0% 12.7% 13.9% 21.9% 10.7% 3.3% 21.1%
Free Cash Flow 17.9 (35.8) 14.3 28.3 49.3 23.9 (9.0) 118.46.1% -12.0% 4.2% 7.2% 15.0% 5.4% -1.4% 17.7%
Leverage3
1.3 1.6 1.5 1.3 1.0 3.12
3.12
2.72
14
TTM Balance Sheet Highlights
14
($ in Millions) December 29, 2014 December 28, 2015
AssetsCash and Cash Equivalents, Including Restricted Cash $279.0 $262.6
Accounts and Notes Receivable, Net 307.9 454.0
Inventories 145.2 268.9
Property, Plant and Equipment, Net 754.7 1,103.1
All Other Assets 114.5 582.7
Total Assets $1,601.3 $2,671.3
Liabilities and EquityAccounts Payable 217.3 347.9
Convertible Senior Notes, Net 228.9 204.6
Debt, Net of Discount 273.8 997.4
All Other Liabilities 165.8 294.7
Total Liabilities 885.8 1,844.6
Total Equity 715.5 826.7
Total Liabilities and Equity $1,601.3 $2,671.3
15
Investment Summary
15
Well positioned in high growth segments of the PCB market
Viasystems transaction enables opportunities for end market and customer expansion
A leader in the automotive, aerospace & defense, networking & telecomand advanced mobile device markets as well as in advanced technology PCBs
Strong financial performance in 2015 plus target synergies of $55 million(annualized) in the first 12 months
Healthy balance sheet and solid cash flow to fund growth and delever the balance sheet
16
Appendix
17
TTM Non-GAAP Income Statement¹
17
1 Non-GAAP results add back amortization of intangibles, stock-based compensation expense, non-cash interest expense, acquisition-related costs, asset
impairments, restructuring and other infrequent items as well as the associated tax impact of these items and out of period tax items. Adjusted EBITDA is
defined as earnings before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, acquisition-related
costs, asset impairments, restructuring and other infrequent items. Adjusted operating cash flow adds back payment of accreted interest on convertible senior
notes and payment of acquisition-related costs.
$ Millions (except where noted) 2012 2013 2014 2015
Legacy TTM $1,348.7 $1,368.2 $1,325.7 $1,431.2
Legacy Viasystems - - - 664.3
Total Revenue 1,348.7 1,368.2 1,325.7 2,095.5
Gross Profit 226.1 218.9 195.6 327.516.8% 16.0% 14.8% 15.6%
Operating Income 101.4 83.8 70.6 146.07.5% 6.1% 5.3% 7.0%
TTM Technologies Net Income 69.8 51.3 39.3 81.15.2% 3.7% 3.0% 3.9%
Earnings Per Share ($ per diluted share) 0.85 0.62 0.47 0.87
Adjusted EBITDA 190.6 181.3 166.0 285.714.1% 13.3% 12.5% 13.6%
Adjusted Operating Cash Flow 182.6 99.1 133.2 282.413.5% 7.2% 10.0% 13.5%
1818
Reconciliations$ Millions (except where noted) Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
GAAP Gross Profit $38.5 $38.6 $49.1 $68.5 $51.6 $61.2 $89.1 $108.3
Add back items:
Inventory markup and PP&E step up - - - - - 7.4 8.2 0.6
Stock-based compensation 0.3 0.2 0.2 0.2 0.2 0.2 0.3 0.3
Non-GAAP Gross Profit 38.8 38.8 49.3 68.7 51.8 68.8 97.7 109.2
GAAP Operating Income (Loss) 4.5 3.2 12.3 26.6 8.3 (7.1) 23.6 36.5Add back items:
Amortization of intangibles 2.2 2.2 2.0 1.9 1.9 3.9 6.4 6.7
Stock-based compensation 2.1 1.9 2.0 1.8 2.0 2.3 2.7 2.6
Gain on sale of assets - - - - (2.5) - - -
Acquisition-related costs - - 1.6 4.3 8.2 22.6 2.1 1.5
Inventory markup and PP&E step up - - - - - 7.4 8.2 0.6
Impairments and restructuring charges - 1.9 - - 0.5 0.1 2.0 5.4
Non-GAAP Operating Income 8.8 9.2 17.9 34.6 18.4 29.2 45.0 53.4
GAAP TTM Technologies Net Income (Loss) (3.8) (3.1) 7.7 13.9 3.4 (36.6) (2.2) 9.5Add back items:
Amortization of intangibles 2.2 2.2 2.0 1.9 1.9 3.9 6.4 6.7
Stock-based compensation 2.1 1.9 2.0 1.8 2.0 2.3 2.7 2.6
Non-cash interest expense 2.6 2.5 2.5 2.6 2.6 3.3 4.8 4.9
Gain on sale of assets - - - - (2.5) - - -
Acquisition-related costs - - 1.63 4.30 8.2 22.6 2.1 1.5
Inventory markup and PP&E step up - - - - - 7.4 8.2 0.6
Impairments, restructuring and other infrequent items 0.5 1.9 0.0 0.0 0.6 0.9 2.0 5.4
Income taxes (2.4) (1.5) (4.8) (1.3) (5.4) 11.1 (0.1) 0.3
Non-GAAP TTM Technologies Net Income 1.2 3.9 11.0 23.2 10.8 14.9 23.8 31.5
Non-GAAP EPS ($ per diluted share) $0.01 $0.05 $0.13 $0.28 $0.13 $0.17 $0.24 $0.31
GAAP Net Income (Loss) (3.8) (3.1) 7.7 13.9 3.4 (36.6) (2.1) 9.7Add back items:
Income tax provision (benefit) (1.8) 0.5 0.4 8.6 (1.4) 16.6 8.7 10.6
Interest expense 6.2 5.9 6.0 5.7 5.8 12.8 21.0 20.2
Amortization of intangibles 2.2 2.2 2.0 1.9 1.9 3.9 6.4 6.7
Depreciation expense 23.7 23.5 23.9 24.3 24.5 29.8 40.1 39.1
Stock-based compensation 2.1 1.9 2.0 1.8 2.0 2.3 2.7 2.6
Gain on sale of assets - - - - (2.5) - - -
Acquisition-related costs - - 1.6 4.3 8.2 22.6 2.1 1.5
Inventory markup - - - - - 7.4 6.8 -
Impairments, restructuring and other infrequent items 0.5 1.9 - - 0.6 0.9 2.0 5.4
Adjusted EBITDA 29.1 32.8 43.6 60.5 42.5 59.7 87.6 95.8
Operating Cash Flow 45.4 (11.8) 43.8 52.4 67.4 15.5 14.7 139.8
Add back items:
Payment of accreted interest on convertible sr. notes 1.3 - - - - 8.7 - -
Payment of acquisition-related costs - - - 2.1 4.7 23.4 6.6 1.5
Adjusted Operating Cash Flow 46.7 (11.8) 43.8 54.5 72.1 47.6 21.3 141.4
19
Reconciliations
19
$ Millions (except where noted) 2012 2013 2014 2015
GAAP Gross Profit $225.0 $217.8 $194.7 $310.1Add back item:
Inventory markup and PP&E step up - - - 16.2
Stock-based compensation 1.1 1.1 0.9 1.1
Non-GAAP Gross Profit 226.1 218.9 195.6 327.5
GAAP Operating Income (Loss) (142.0) 69.1 46.5 61.3Add back items:
Amortization of intangibles 14.7 9.4 8.4 18.9
Stock-based compensation 10.3 9.0 7.8 9.7
Impairment and restructuring 218.4 14.2 1.9 7.9
Inventory markup and PP&E step up - - - 16.2
Other infrequent items - (17.9) 6.0 32.0
Non-GAAP Operating Income 101.4 83.8 70.6 146.0
GAAP TTM Technologies Net Income (Loss) (174.6) 21.9 14.7 (25.9)Add back items:
Amortization of intangibles 14.7 9.4 8.4 18.9
Stock-based compensation 10.3 9.0 7.8 9.7
Non-cash interest expense 7.9 8.4 10.2 15.6
Impairment and restructuring 218.4 14.2 1.9 8.7
Inventory markup and PP&E step up - - - 16.2
Other infrequent items 5.5 (7.2) 6.5 32.0
Income tax effects (12.4) (4.4) (10.2) 5.9
Non-GAAP TTM Technologies Net Income 69.8 51.3 39.3 81.1
Non-GAAP EPS ($ per diluted share) 0.85 0.62 0.47 0.87
GAAP Net Income (Loss) (181.1) 23.9 14.7 (25.6)Add back items:
Income tax provision 12.7 15.9 7.6 34.6
Interest expense 25.8 24.0 23.8 59.8
Amortization of intangibles 14.7 9.4 8.4 18.9
Depreciation expense 84.3 92.1 95.3 133.5
Stock-based compensation 10.3 9.0 7.8 9.7
Gain on sale of assets - (17.9) - (2.5)
Inventory markup - - - 14.2
Impairments, restructuring and other infrequent items 223.9 24.9 8.4 43.1
Adjusted EBITDA 190.6 181.3 166.0 285.7
Operating Cash Flow 182.6 71.4 129.8 237.5Add back items:
Payment of accreted interest on convertible senior notes - 27.7 1.3 8.7
Payment of acquisition-related costs - - 2.1 36.2
Adjusted Operating Cash Flow 182.6 99.1 133.2 282.4
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