UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 21, 2015
TTM TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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0-31285 |
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91-1033443 |
(State or other Jurisdiction
of Incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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1665 Scenic Avenue, Suite 250
Costa Mesa, California |
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92626 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Registrants telephone number, including area code: (714) 327-3000
(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01. |
Regulation FD Disclosure. |
Beginning on April 21, 2015, executives of TTM
Technologies, Inc. (the Company) will present information about the Company, including the information described in the slides furnished as Exhibit 99.1 to this Current Report on Form 8-K, to various potential lenders in connection with
the proposed financing arrangements related to the Companys proposed acquisition of Viasystems Group, Inc. (Viasystems).
The information in this Current Report (including the exhibit) is furnished pursuant to Item 7.01 and shall not be deemed to be
filed for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. This Current Report will not be deemed an admission as to the materiality of any
information in this Current Report that is required to be disclosed solely by Regulation FD.
The Company does not have, and expressly
disclaims, any obligation to release publicly any updates or any changes in its expectations or any change in events, conditions, or circumstances on which any forward-looking statement is based.
Item 9.01. |
Financial Statements and Exhibits. |
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Exhibit No. |
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Description |
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99.1 |
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Slides presented to potential lenders, dated April 21, 2015 |
Forward-Looking Statements
Certain
statements in this communication may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company cautions you that such statements are simply predictions and actual events
or results may differ materially. These statements reflect the Companys current expectations, and the Company 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 Company statements will not be realized. Further, these statements involve risks and uncertainties, many of which are beyond the Companys control, which could cause actual results to
differ materially from the forward-looking statements. These risks and uncertainties include, but are not limited to, general market and economic conditions, including interest rates, currency exchange rates and consumer spending, the ability of the
Company and Viasystems to consummate the proposed Merger and realize anticipated synergies, demand for the Companys products, market pressures on prices of the Companys products, warranty claims, changes in product mix, contemplated
significant capital expenditures and related financing requirements, and the Companys dependence upon a small number of customers. Additional factors that may cause results to differ materially from those described in the forward-looking
statements are set forth in the Annual Report on Form 10-K of the Company for the year ended December 29, 2014, which was filed with the SEC on February 27, 2015, under the heading Item 1A. Risk Factors and in the
Companys other filings made with the SEC available at the SECs website at www.sec.gov.
The Company does not undertake any
obligation to update any such forward-looking 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 and Viasystems use 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 by TTM 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. Adjusted EBITDA is
defined by Viasystems as earnings before interest expense, income taxes, depreciation and amortization, stock-based compensation, restructuring and impairment charges, costs relating to
acquisitions and equity registrations, and other non-recurring items. Adjusted EBITDA is not a recognized financial measure under U.S. GAAP, and it 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 Boards of Directors, lenders, and management of TTM and Viasystems use
adjusted EBITDA primarily as an additional measure of operating performance for matters including executive compensation and competitor comparisons. The use of this non-GAAP measure provides an indication of each companys ability to
service debt, and management considers it an appropriate measure to use because of the companies leveraged positions.
Adjusted
EBITDA has certain material limitations, primarily due to the exclusion of certain amounts that are material to each companys 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.
The companies use adjusted EBITDA to provide meaningful supplemental information regarding operating performance and profitability by
excluding from EBITDA certain items that each company believes are not indicative of its ongoing operating results or will not impact future operating cash flows, which include stock-based compensation expense, gain on sale of assets, asset
impairments, restructuring, costs related to acquisitions, and other charges.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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Date: April 21, 2015 |
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TTM TECHNOLOGIES, INC. |
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By: |
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/s/ Todd B. Schull |
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Todd B. Schull |
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Executive Vice President, Chief Financial
Officer, Treasurer and Secretary |
EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1 |
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Slides presented to potential lenders, dated April 21, 2015 |
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Exhibit 99.1
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Lenders Presentation
April 2015
Transaction and earnings update
Timing:
acquisition expected to close in Q2 2015 after regulatory approvals
TTM and Viasystems have continued
to perform well with strong Q4 2014:
TTM Q4 2014 update:
Net sales up 7% Y-o-Y and up 13% sequentially
Adj. EBITDA up 4% Y-o-Y and up 39% sequentially 1
Capex declined by $3mm and cash increased by $30mm compared to Q3 2014
Viasystems Q4 2014 update:
Net sales up 2% Y-o-Y and up 3% sequentially
Adj. EBITDA1 up 2% Y-o-Y and up 8% sequentially 1
Capex declined by $23mm and cash increased by $17mm compared to Q4 2013
Q1 2015 guidance: TTM expects to be on the high end of previously disclosed guidance
Net sales of approximately $329mm vs. $292mm in Q1 2014
Non-GAAP earnings of approximately $0.13 vs. $0.01 in Q1 20142
Adj. EBITDA of approximately $42mm vs. $29mm in Q1 20142
Debt financing update: current financing structure of $775mm 1st lien term loan B and $175mm 2nd lien term loan to
result in lower pro forma leverage profile of less than 3.4x
TTM and Viasystems have generated cash and
have paid down debt
1 Please refer to Adjusted EBITDA reconciliation in Appendix
2 Reconciliation of Q1 non-GAAP data is not available without unreasonable efforts and thus has not been included herein
in compliance with applicable regulations
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Overview of TTM end markets
Core supplier to a
wide range of high-end networking products
4G LTE network build out in China
Increasing IP traffic fueling infrastructure spend by service providers
Focus on rapidly growing smart phone segment
Growing business with leading and emerging smart phone manufacturers
Growth in emerging economies
Age and fuel economy
driving airline fleet replacement
Defense modernization continues to drive key programs and product
development
Approved defense budget restores some visibility and ordering
Significant penetration in tablet segment
Growth in mobile devices and tablets driving PCB complexity
Increasing demand for cloud services driving infrastructure products
Emerging use of advanced technologies in medical segment
Medical MRI and ultrasound imaging, fluid analysis, laser surgery, patient monitoring
Instrumentation semiconductor test equipment, network analyzers, GPS
Industrial power grid controls, robotics, sensors
Growing supplier to automotive and transportation markets
Select consumer products (media devices, cameras)
Networking / Communications Medical / Industrial / InstrumentationNetworking / Communications
Cellular Phone
Aerospace / Defense
Computing / Storage /
Peripherals
Other1
2013 PCB TAM
2013 SAM
$4.7
$3.5 $9.6 $2.7 $1.1 $1.8
($ billions) 33% 9%
6%% of TTMs 2014 net sales
Aerospace / Defense
Source: TTM filings, Prismark
Partners and TTM estimates
Note: Total Available Market (TAM) represents end-market demand as a
whole. Serviceable Available Market (SAM) represents those customers within the TAM that TTM can specifically target using existing sales channels
1 Other includes consumer, automotive and transportation markets
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Overview of Viasystems end markets
Extended parts
approval process
Stringent quality standards
Significant scale required by volume production
Increasing data / voice / video volume
$189
$151
Source: Prismark; Viasystems provided
1 Sales
breakdown between Industrial & Medical unavailable. Industrial & Medical combined comprised 24% of Viasystems 2014 net sales ($ billions)
% of Viasystems 2014 sales
33%
17%
Server / Data Storage
Enterprise datacenter
spending demand
New datacom customers
$104
15%
Industrial
Demand for alternative energy
Opportunity in the
automated test equipment market
New customers and cross-selling opportunities
$129
24%1
Medical
Development of increasingly complex medical devices
$96
24%1
Military / Aerospace
Cross-selling opportunities
China production in aerospace
$128
Source: Prismark; Viasystems provided
1 Sales breakdown between Industrial & Medical unavailable. Industrial & Medical combined comprised 24% of Viasystems 2014 net sales
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Increases end market diversification
2014 net
sales by end market1
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Aerospace/ Defense 13% Automotive 17% Cellular Phone 12% Computing/ Storage/ Peripherals 11% Medical/ Industrial/ Instrumentation 16%
Networking/
Communications
29% Other 2%
Aerospace/
Defense
11% Automotive 33% Computing/ Storage/ Peripherals 7% Medical/ Industrial/ Instrumentation 24% Networking/ Communications 25%
Aerospace/
Defense
16%
Automotive
3%
Cellular Phone
23%
Computing/
Storage/
Peripherals
13% Medical/ Industrial/ Instrumentation 9% Networking/ Communications 33% Other (mostly Consumer) 3%
Note: TTM and Viasystems end market
breakdown reclassified for illustrative purposes
1 Viasystems end market categorization was developed by TTM based on information obtained during the due diligence process. See Slide 12 for historical Viasystems presentation of end
markets
Combination reduces impact of seasonality
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7 Generates significant cost savings opportunities
Expected cost savings of $55 million annualized run rate within 12 months following consummation of the merger 1 Cost
savings
$mm %
Labor2
Non-labor2
Plant operating efficiencies
Rationalizing overlapping functional areas and shared services
Salesforce realignment
Maximize overhead
efficiencies
Avoid duplicative efforts
Service provider contract rationalization
Optimize manufacturing resources
Align assets to
maximize efficiency
$22 40%
$20 36%
$13 24%
$55 100%
TOTAL:
1 Costs to achieve estimated at $26mm
2 Excludes labor and/or non-labor savings from any plant operating efficiencies
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TTM Q4 2014 earnings highlights and Q1 2015 guidance
Q4 2014 highlights
($ millions) Net sales
Y-o-Y % growth
Adj. EBITDA1
Y-o-Y % growth
Capex Cash
Q1 2015 guidance
($ millions except EPS) Net
sales
Y-o-Y % growth
Adj. EBITDA2
Y-o-Y % growth
Non-GAAP earnings2,3
Y-o-Y % growth
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2013 Q4
$366.1 58.4 23.1
Q3 $345.3
2.0%
43.6
3.0%
29.5
2014
Q4 $390.9
6.8%
60.5
3.6%
26.2
Strong net sales
Adj. EBITDA
improvement
Controlled capex
Strong cash flow generation
Q1 2014A
$291.9
$29.1
$0.01
Previous guidance Q1 2015E $310.0 - 330.0
Not provided
$0.06 - 0.12
New guidance Q1 2015E $329
12.7% $42
44.3%
$0.13
1300%
New estimates suggest a
~$13mm Y-o-Y
improvement in TTM adj. EBITDA
1 Please refer to adjusted EBITDA reconciliation in Appendix; 2 Reconciliation
of Q1 non-GAAP data is not available without unreasonable efforts and thus have not been included herein in compliance with applicable regulations; 3 Per diluted share
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Capital expenditure breakdown
FY2012
FY2013
FY2014
Total: $120mm2 Total: $109mm
Total: $65mm
48%
52% 58%
42%
All other capex
Capacity additions / special
projects1 Total: $140mm 57% 43% Total: $103mm
All other capex
Investments in advanced technology 41% 59%
Total: $110mm
All other capex
Investments in advanced technology All other capex
Investments in advanced technology
All other capex Capacity additions / special
projects1 All other capex Capacity additions / special projects1 1 Viasystems special projects include $54mm for 2012 and $23mm for 2013 primarily related to Zhongshan PRC capacity expansion to accept transfer of HZ operation after 3Q12 closure,
Guangzhou PRC recovery from 3Q12 fire and Anaheim, CA factory relocation; 2Pro forma for DDi acquisition which includes $11mm of DDi capex during Jan-May 2012; Source: TTM & Viasystems filings; Capex % breakdown provided by TTM &
Viasystems
49% 51% For FY2014,
cash flow capex was $110mm while actual purchases of capex were $70mm
For TTM, there is a 12 18 month
lag between the procurement (receipt of equipment) and the actual cash flow of capex
TTM will continue to
invest in advanced technology, although, not to the extent of FY2012 and FY2013. For FY2015, total cash flow capex is expected to be $100mm of which $45mm is for advanced technology. For FY2015, procurement capex is expected to be $70mm of which
$22mm will be investments in advanced technology
Excludes Viasystems capex projections for FY2015
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Sources & uses and pro forma capitalization
Sources & uses ($ millions)
Sources TTM cash Viasystems cash
Equity component
of Merger consideration U.S. ABL Facility Asia ABL Facility 1st Lien Term Loan B Facility 2nd Lien Term Loan Facility
$179 72 115 79 0 775 175
$1,396
Uses
Merger consideration1 $362 Repayment of existing Viaystems debt 610 Call premium and accrued interest on Viasystems 2019 notes2 59 Refinance existing TTM debt and accrued interest 275
Refinance existing TTM convertible senior notes due May 2015 32 Estimated fees & expenses3 58
$1,396
1 The equity portion of the Merger Consideration and Merger Consideration were calculated using a stock price
of $7.53 as of December 31, 2014; 2Assumes call premium and accrued interest date of May 1, 2015 settlement date (accrued interest calculated from November 1, 2014 through May 1, 2015) 3 Includes legal, accounting, rating agency, financing and other
fees and expenses
Existing and pro forma capitalization ($ millions)
Cash & Cash Equivalents
Existing Chinese $90mm RC due Mar-2016 Existing Chinese term loan due Sep-2016 U.S. ABL Facility Asia ABL Facility 1st Lien Term Loan B Facility
Total 1st lien secured debt
Net 1st lien secured debt 2nd Lien Term Loan Facility
Total secured debt
Net secured debt
Existing uncommitted Chinese RC due Dec-2014 Existing 1.75% convert. senior notes due Dec-2020 Existing 3.25% convert.
senior notes due May-2015
Total debt
Net debt
Noncontrolling interest Total
stockholders equity2 Book capitalization FY 2014 Pro forma Adj. EBITDA1
Actual Pro forma % of pro forma xAdj.
EBITDA
1
Dec-14 Dec-14 book cap. w/ cost savings $279 $100
0 - 274 -
- 79
- 0
- 775
274 854 40.4% 2.4x
(5) 754 35.7% 2.1x
- 175
274 1,029 48.7% 2.8x
(5) 929 44.0% 2.6x
0 0 250 250
32 -
556 1,279 60.5% 3.5x
277 1,179 55.8% 3.3x
- 4 0.2% 0.0x 715 831 39.3% 2.3x 1,272 2,114 100.0% 5.8x $362
1 Assumes run rate $55mm of annualized cost savings and excludes costs to achieve such cost savings and taxes. Tax impact expected to be minimal due to existing NOLs. Assumes FY2014 TTM
and Viasystems Adjusted EBITDA of $166mm and $141mm, respectively; 2 Pro forma book equity is adjusted for $115mm equity issuance
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