Form 10-Q
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

Form 10-Q

 

 

 

x

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 1, 2013

Commission File Number: 0-31285

 

 

TTM TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

DELAWARE   91-1033443

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

1665 Scenic Avenue Suite 250, Costa Mesa, California 92626

(Address of principal executive offices)

(714) 327-3000

(Registrant’s telephone number, including area code)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

 

¨

  

Accelerated filer

 

x

Non-accelerated filer

 

¨  (Do not check if a smaller reporting company)

  

Smaller reporting company

 

¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes  ¨    No  x

Number of shares of common stock, $0.001 par value, of registrant outstanding at May 1, 2013: 82,597,255

 

 

 


Table of Contents

TABLE OF CONTENTS

 

 

     Page  

PART I: FINANCIAL INFORMATION

  

Item 1. Financial Statements

  

Consolidated Condensed Balance Sheets as of April 1, 2013 and December 31, 2012

     2   

Consolidated Condensed Statements of Operations for the quarters ended April 1, 2013 and March  26, 2012

     3   

Consolidated Condensed Statements of Comprehensive Income for the quarters ended April  1, 2013 and March 26, 2012

     4   

Consolidated Condensed Statements of Cash Flows for the quarters ended April 1, 2013 and March  26, 2012

     5   

Notes to Consolidated Condensed Financial Statements

     6   

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     18   

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     25   

Item 4. Controls and Procedures

     25   

PART II: OTHER INFORMATION

  

Item 1. Legal Proceedings

     26   

Item 1A. Risk Factors

     26   

Item 6. Exhibits

     27   

SIGNATURES

     28   

 

1


Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TTM TECHNOLOGIES, INC.

Consolidated Condensed Balance Sheets

 

     April 1,
2013
     December 31,
2012
 
    

(Unaudited)

(In thousands)

 

ASSETS

     

Current assets:

     

Cash and cash equivalents

   $ 284,091       $ 285,433   

Accounts and notes receivable, net of allowance for bad debts of $1,736 in 2013 and $1,680 in 2012

     295,042         301,557   

Inventories

     150,621         146,012   

Prepaid expenses and other current assets

     30,658         32,610   
  

 

 

    

 

 

 

Total current assets

     760,412         765,612   

Property, plant and equipment, net

     833,621         833,678   

Goodwill and definite-lived intangibles, net

     46,713         49,104   

Deposits and other non-current assets

     29,729         28,568   
  

 

 

    

 

 

 

Total Assets

   $ 1,670,475       $ 1,676,962   
  

 

 

    

 

 

 

LIABILITIES AND EQUITY

     

Current liabilities:

     

Short-term debt, including current portion of long-term debt

   $ 78,104       $ 30,004   

Accounts payable

     163,497         186,745   

Accounts payable due to related parties

     28,210         34,520   

Accrued salaries, wages and benefits

     42,820         43,282   

Equipment payable

     55,628         44,289   

Other accrued expenses

     31,115         31,040   
  

 

 

    

 

 

 

Total current liabilities

     399,374         369,880   
  

 

 

    

 

 

 

Convertible senior notes, net of discount

     159,213         157,533   

Long-term debt

     321,907         370,008   

Other long-term liabilities

     27,050         26,711   
  

 

 

    

 

 

 

Total long-term liabilities

     508,170         554,252   
  

 

 

    

 

 

 

Commitments and contingencies (Note 12)

     

Equity:

     

Common stock, $0.001 par value; 200,000 shares authorized, 82,460 and 81,937 shares issued and outstanding in 2013 and 2012, respectively

     82         82   

Additional paid-in capital

     547,403         546,029   

Retained earnings

     51,073         45,921   

Statutory surplus reserve

     15,166         15,166   

Accumulated other comprehensive income

     48,594         46,749   
  

 

 

    

 

 

 

Total TTM Technologies, Inc. stockholders’ equity

     662,318         653,947   

Noncontrolling interest

     100,613         98,883   
  

 

 

    

 

 

 

Total equity

     762,931         752,830   
  

 

 

    

 

 

 

Total Liabilities and Equity

   $ 1,670,475       $ 1,676,962   
  

 

 

    

 

 

 

See accompanying notes to consolidated condensed financial statements.

 

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Table of Contents

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Operations

For the Quarters Ended April 1, 2013 and March 26, 2012

 

 

     Quarter Ended  
     April 1,
2013
    March 26,
2012
 
    

(Unaudited)

(In thousands, except
per share data)

 

Net sales

   $ 325,392      $ 300,499   

Cost of goods sold

     274,662        244,021   
  

 

 

   

 

 

 

Gross profit

     50,730        56,478   
  

 

 

   

 

 

 

Operating expenses:

    

Selling and marketing

     9,190        8,622   

General and administrative

     26,558        22,135   

Amortization of definite-lived intangibles

     2,328        3,916   
  

 

 

   

 

 

 

Total operating expenses

     38,076        34,673   
  

 

 

   

 

 

 

Operating income

     12,654        21,805   
  

 

 

   

 

 

 

Other income (expense):

    

Interest expense

     (6,278     (6,417

Other, net

     1,001        1,587   
  

 

 

   

 

 

 

Total other expense, net

     (5,277     (4,830
  

 

 

   

 

 

 

Income before income taxes

     7,377        16,975   

Income tax provision

     (784     (4,643
  

 

 

   

 

 

 

Net income

     6,593        12,332   

Less: Net (income) loss attributable to the noncontrolling interest

     (1,441     263   
  

 

 

   

 

 

 

Net income attributable to TTM Technologies, Inc. stockholders

   $ 5,152      $ 12,595   
  

 

 

   

 

 

 

Earnings per share attributable to TTM Technologies, Inc. stockholders:

    

Basic earnings per share

   $ 0.06      $ 0.15   
  

 

 

   

 

 

 

Diluted earnings per share

   $ 0.06      $ 0.15   
  

 

 

   

 

 

 

See accompanying notes to consolidated condensed financial statements.

 

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Table of Contents

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Comprehensive Income

For the Quarters Ended April 1, 2013 and March 26, 2012

 

     Quarter Ended  
     April 1,
2013
    March 26,
2012
 
     (Unaudited)  
     (In thousands)  

Net income

   $ 6,593      $ 12,332   

Other comprehensive income, net of tax:

    

Foreign currency translation adjustments, net

     2,533        1,474   

Net unrealized gains (losses) on cash flow hedges:

    

Unrealized (loss) gain on effective cash flow hedges during the period, net

     (381     927   

Less: reclassification to earnings, net of tax

     —          (45
  

 

 

   

 

 

 

Net

     (381     882   
  

 

 

   

 

 

 

Unrealized gains (losses) on available for sale securities:

    

Unrealized (loss) gain on available for sale securities during period

     (18     41   

Less: gains realized in net earnings

     —          (912
  

 

 

   

 

 

 

Net

     (18     (871
  

 

 

   

 

 

 

Other comprehensive income, net of tax

     2,134        1,485   
  

 

 

   

 

 

 

Comprehensive income, net of tax

     8,727        13,817   

Less: comprehensive (income) loss attributable to the noncontrolling interest

     (1,730     42   
  

 

 

   

 

 

 

Comprehensive income attributable to TTM Technologies, Inc. stockholders

   $ 6,997      $ 13,859   
  

 

 

   

 

 

 

See accompanying notes to consolidated condensed financial statements.

 

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Table of Contents

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Cash Flows

For the Quarters Ended April 1, 2013 and March 26, 2012

 

     Quarter Ended  
     April 1,
2013
    March 26,
2012
 
     (Unaudited)  
     (In thousands)  

Cash flows from operating activities:

    

Net income

   $ 6,593      $ 12,332   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation of property, plant and equipment

     23,137        19,064   

Amortization of definite-lived intangible assets

     2,328        3,945   

Amortization of convertible notes discount, debt discount and debt issuance costs

     2,054        1,835   

Income tax benefit from restricted stock units released and common stock options exercised

     —          (613

Deferred income taxes

     1,257        2,119   

Stock-based compensation

     2,330        2,205   

Net (gain) loss on sale of property, plant and equipment

     (116     853   

Net gain on sale of securities

     —          (816

Net unrealized (gain) loss on derivative assets and liabilities

     (439     31   

Unrealized foreign currency exchange loss

     —          214   

Changes in operating assets and liabilities:

    

Accounts and notes receivable, net

     745        22,875   

Inventories

     (4,609     (3,870

Prepaid expenses and other current assets

     1,917        (4,121

Accounts payable

     (24,971     (14,520

Accrued salaries, wages and benefits and other accrued expenses

     141        (8,029
  

 

 

   

 

 

 

Net cash provided by operating activities

     10,367        33,504   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchase of property, plant and equipment and equipment deposits

     (11,669     (26,701

Proceeds from sale of property, plant and equipment and assets held for sale

     128        113   

Proceeds from sale of securities

     —          2,898   
  

 

 

   

 

 

 

Net cash used in investing activities

     (11,541     (23,690
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from long-term debt

     —         69,803   

Repayment of long-term debt

     —         (52,501

Proceeds from exercise of stock options

     —         49   

Excess tax benefits from stock awards exercised or released

     —          613   
  

 

 

   

 

 

 

Net cash provided by financing activities

     —         17,964   
  

 

 

   

 

 

 

Effect of foreign currency exchange rates on cash and cash equivalents

     (168     (66
  

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents

     (1,342     27,712   

Cash and cash equivalents at beginning of period

     285,433        196,052   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 284,091      $ 223,764   
  

 

 

   

 

 

 

Noncash transactions:

    

Property, plant and equipment recorded in equipment payable

   $ 71,544     $ 65,983   

See accompanying notes to consolidated condensed financial statements.

 

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Table of Contents

TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

(Dollars and shares in thousands, except per share data)

(1) Nature of Operations and Basis of Presentation

TTM Technologies, Inc. (the Company or TTM) is a leading global provider of time-critical and technologically complex printed circuit board (PCB) products and backplane assemblies (PCBs populated with electronic components), which serve as the foundation of sophisticated electronic products. The Company provides advanced technology products and offers a one-stop manufacturing solution to customers from engineering support to prototype development through final volume production. The Company serves a diversified customer base in various markets throughout the world, including manufacturers of networking/communications infrastructure products, touch screen tablets and mobile media devices (cellular phones and smartphones). The Company also serves high-end computing, commercial aerospace, defense, and industrial/medical industries. The Company’s customers include both original equipment manufacturers (OEMs) and electronic manufacturing services (EMS) providers.

The accompanying consolidated condensed financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These consolidated condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial position, the results of operations and cash flows of the Company for the periods presented. It is suggested that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s most recent Annual Report on Form 10-K. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated condensed financial statements and accompanying notes. Actual results could differ materially from those estimates. Beginning January 1, 2013, the Company uses a 13-week fiscal quarter accounting period with the first quarter ending on the last Monday closest to April 1 and the fourth quarter always ending on December 31. The first quarters ended April 1, 2013 and March 26, 2012 contained 91 and 86 days, respectively.

(2) Noncontrolling Interest Holdings

During the quarter ended April 1, 2013, the Company approved a plan, and executed an agreement, with its minority partner, Shengyi Technology Co. Ltd. (Sytech), to sell the Company’s majority interest in Dongguan Shengyi Electronics Ltd., (SYE) for 702 million Chinese RMB (about $113 million) (the SYE Transaction). Additionally, the Company executed an agreement with Sytech, to acquire Sytech’s minority equity interest in Dongguan Meadville Circuits Ltd. (DMC) for 180 million Chinese RMB (about $29 million) (together with the SYE Transaction, the SYE/DMC Transaction). Both plants manufacture conventional PCBs and are located in Dongguan, China. Closing of the SYE/DMC Transaction, which is expected to be completed no later than the end of the third quarter of 2013, is subject to both parties’ board approval, approval by Sytech’s shareholders, approval from certain of the Company’s lenders, and clearance by the appropriate government regulatory agencies in the People’s Republic of China. The Company estimated the gain on the sale of SYE to be between $5 million and $10 million. The total cash expected to be received in this transaction is approximately $40 million (net proceeds of $84 million less repayment of an intercompany loan and transaction related taxes).

(3) Inventories

Inventories as of April 1, 2013 and December 31, 2012 consist of the following:

 

     April 1,
2013
     December 31,
2012
 
     (In thousands)  

Inventories:

     

Raw materials

   $ 47,136       $ 46,893   

Work-in-process

     54,167         45,822   

Finished goods

     49,318         53,297   
  

 

 

    

 

 

 
   $ 150,621       $ 146,012   
  

 

 

    

 

 

 

 

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Table of Contents

TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

 

(4) Definite-lived Intangibles

As of April 1, 2013 and December 31, 2012, the components of definite-lived intangibles were as follows:

 

     Gross
Amount
     Accumulated
Amortization
    Accumulated
Impairment
    Foreign
Currency
Translation
Adjustment
     Net
Carrying
Amount
     Weighted
Average
Amortization
Period
 
     (In thousands)      (years)  

April 1, 2013:

               

Strategic customer relationships

   $ 120,427       $ (62,242   $ (28,935   $ 418       $ 29,668         9.2   

Trade name

     10,302         (5,369     —          10         4,943         6.0   
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    
   $ 130,729       $ (67,611   $ (28,935   $ 428       $ 34,611      
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    
     Gross
Amount
     Accumulated
Amortization
    Accumulated
Impairment
    Foreign
Currency
Translation
Adjustment
     Net
Carrying
Amount
     Weighted
Average
Amortization
Period
 
     (In thousands)      (years)  

December 31, 2012:

               

Strategic customer relationships

   $ 120,427       $ (60,322   $ (28,935   $ 415       $ 31,585         9.2   

Trade name

     10,302         (4,915     —          12         5,399         6.0   

Licensing agreements

     350         (350     —          —           —           3.0   
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    
   $ 131,079       $ (65,587   $ (28,935   $ 427       $ 36,984      
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

The April 1, 2013 and December 31, 2012 definite-lived intangible balances include foreign currency translation adjustments related to foreign subsidiaries which operate in currencies other than the U.S. Dollar.

Definite-lived intangibles are generally amortized using the straight line method of amortization over the useful life, with the exception of the strategic customer relationship intangibles, which are amortized using an accelerated method of amortization based on estimated cash flows. Amortization expense was $2,328 and $3,945 for the quarters ended April 1, 2013 and March 26, 2012, respectively. Amortization expense related to acquired licensing agreements is classified as cost of goods sold.

Estimated aggregate amortization for definite-lived intangible assets for the next five years is as follows:

 

     (In thousands)  

Remaining 2013

   $ 6,989   

2014

     8,372   

2015

     7,483   

2016

     4,124   

2017

     3,901   
  

 

 

 
   $ 30,869   
  

 

 

 

 

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Table of Contents

TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

 

(5) Long-term Debt and Letters of Credit

The following table summarizes the long-term debt of the Company as of April 1, 2013 and December 31, 2012.

 

     Average Effective
Interest Rate
as of
April 1,
2013
  April 1,
2013
    Average Effective
Interest Rate
as of
December 31,
2012
  December 31,
2012
 
         (In thousands)         (In thousands)  

Term loan due September 2016

   2.58%   $ 370,000      2.59%   $ 370,000   

Revolving loan due March 2016

   2.58%     30,000      2.59%     30,000   

Other

   6.00%     11      6.00%     12   
    

 

 

     

 

 

 
       400,011          400,012   

Less: Current maturities

       (78,104       (30,004
    

 

 

     

 

 

 

Long-term debt, less current maturities

     $ 321,907        $ 370,008   
    

 

 

     

 

 

 

The calendar maturities of long-term debt through 2016 and thereafter are as follows:

 

     (In thousands)  

Remaining 2013

   $ 30,003   

2014

     96,204   

2015

     96,204   

2016

     177,600   
  

 

 

 
   $ 400,011   
  

 

 

 

At April 1, 2013 and December 31, 2012, the remaining unamortized debt issuance costs included in other non-current assets was $2,550 and $2,755, respectively, and is amortized to interest expense over the term of the Credit Agreement using the effective interest rate method. At April 1, 2013, the remaining amortization period for the unamortized debt issuance costs was 3.2 years.

The Company is also required to pay a commitment fee of 0.50% per annum on any unused portion of the loan and letters of credit facility granted under the Credit Agreement. For the quarters ended April 1, 2013 and March 26, 2012, the Company incurred $96 and $57, respectively, in commitment fees related to unused borrowing availability under the facility agreements. As of April 1, 2013, the Term Loan of $370,000, of which $48,100 is included as short-term debt and $321,900 is included as long-term debt, was outstanding; $30,000 of the Revolver was outstanding, and $62,268 of the Letters of Credit Facility was outstanding. Available borrowing capacity under the Revolving Loan was $60,000 at April 1, 2013.

Additionally, the Company is party to a revolving loan credit facility with a lender in the PRC. Under this arrangement, the lender has made available to the Company approximately $46,700 in unsecured borrowing with all terms of the borrowing to be negotiated at the time the revolver is drawn upon. There are no commitment fees on the unused portion of the revolver and this arrangement expires in December 2013. As of April 1, 2013, the revolver had not been drawn upon.

Other Letters of Credit

In addition to the letters of credit obtained pursuant to the Credit Agreement, the Company maintains several unused letters of credit for an aggregate amount of $3,454 which expire between December 31, 2013 and February 28, 2014.

(6) Convertible Senior Notes

In 2008, the Company issued 3.25% Convertible Senior Notes (Convertible Notes) due May 15, 2015, in a public offering for an aggregate principal amount of $175,000. The Convertible Notes bear interest at a rate of 3.25% per annum. Interest is payable semiannually in arrears on May 15 and November 15 of each year. The Convertible Notes are senior unsecured obligations and rank equally to the Company’s future unsecured senior indebtedness and senior in right of payment to any of the Company’s future subordinated indebtedness. The liability and equity components of the Convertible Notes are separately accounted for in a manner that reflects the Company’s non-convertible debt borrowing rate when interest costs are recognized.

 

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TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

 

The Company has allocated the Convertible Notes offering costs to the liability and equity components in proportion to the allocation of proceeds and accounted for them as debt issuance costs and equity issuance costs, respectively. At April 1, 2013 and December 31, 2012, the following summarizes the liability and equity components of the Convertible Notes:

 

     April 1,
2013
    December 31,
2012
 
     (In thousands)  

Liability components:

    

Convertible Notes

   $ 175,000      $ 175,000   

Less: Convertible Notes unamortized discount

     (15,787     (17,467
  

 

 

   

 

 

 

Convertible Notes, net of discount

   $ 159,213      $ 157,533   
  

 

 

   

 

 

 

Equity components:

    

Additional paid-in capital:

    

Embedded conversion option — Convertible Notes

   $ 43,000      $ 43,000   

Embedded conversion option — Convertible Notes issuance costs

     (1,413     (1,413
  

 

 

   

 

 

 
   $ 41,587      $ 41,587   
  

 

 

   

 

 

 

At April 1, 2013 and December 31, 2012, remaining unamortized debt issuance costs included in other non-current assets were $1,593 and $1,762, respectively. The debt issuance costs and debt discount are being amortized to interest expense over the term of the Convertible Notes using the effective interest rate method. At April 1, 2013, the remaining amortization period for the unamortized Convertible Note discount and debt issuance costs was 2.1 years.

The components of interest expense resulting from the Convertible Notes for the quarters ended April 1, 2013 and March 26, 2012 are as follows:

 

     For the Quarter Ended  
     April 1,
2013
     March 26,
2012
 
     (In thousands)  

Contractual coupon interest

   $ 1,422       $ 1,422   

Amortization of Convertible Notes debt discount

     1,680         1,545   

Amortization of debt issuance costs

     169         156   
  

 

 

    

 

 

 
   $ 3,271       $ 3,123   
  

 

 

    

 

 

 

For the quarters ended April 1, 2013 and March 26, 2012, the amortization of the Convertible Notes debt discount and debt issuance costs is based on an effective interest rate of 8.37%.

(7) Income Taxes

The Company’s effective tax rate was 10.6% and 27.4% for the quarters ended April 1, 2013 and March 26, 2012, respectively. The Company’s tax rate decreased during the quarter ended April 1, 2013 primarily due to the recognition of discrete tax benefits of $551 from the extension of federal research and development credit laws, and $619 from the approval of research and development deduction in China. The recognition of these discrete tax benefits during the quarter ended April 1, 2013 reduced the effective tax rate from approximately 26.0% to 10.6%. The Company’s effective tax rate is primarily impacted by the U.S. federal income tax rate, apportioned state income tax rates, tax rates in China and Hong Kong, generation of other credits and deductions available to us, and certain non-deductible items. The Company’s effective tax rate will generally differ from the U.S. federal statutory rate of 35% due to favorable tax rates associated with certain earnings from the Company’s operations in lower-tax jurisdictions in China. Certain foreign losses generated are not more than likely to be realizable, and thus, no income tax benefit has been recognized on these losses. The Company’s foreign earnings attributable to the Asia Pacific operating segment will be permanently reinvested in such foreign jurisdictions and, therefore, no deferred tax liabilities for U.S. income taxes on undistributed earnings are recorded.

 

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TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

 

(8) Financial Instruments

Derivatives

Interest Rate Swaps

The Company’s business is exposed to interest rate risk resulting from fluctuations in interest rates on certain variable rate LIBOR debt. Increases in interest rates would increase interest expenses relating to the outstanding variable rate borrowings of certain foreign subsidiaries and increase the cost of debt. Fluctuations in interest rates can also lead to significant fluctuations in the fair value of the debt obligations.

The Company entered into a two-year pay-fixed, receive floating (1-month LIBOR), amortizing interest rate swap arrangement with an initial notional amount of $146,500, for the period beginning April 18, 2011 and ending on April 16, 2013. The interest rate swap applied a fixed interest rate against the first interest payments of a portion of a certain term loan over the term of the interest rate swap.

The notional amount of the interest rate swap decreases to zero over its term, consistent with the Company’s risk management objectives. Under the terms of the interest rate swap, the Company would pay a fixed rate of 2.50% and would receive floating 1-month LIBOR during the swap period. The Company had designated this interest rate swap as a cash flow hedge and, during the quarter ended March 26, 2012, the interest rate swap increased interest expense by $609. The Company no longer designates this interest rate swap as a cash flow hedge as the borrowings attributable to this interest rate swap were paid in full during 2012. The notional value underlying the swap at April 1, 2013 was $77,600. As of April 1, 2013 and December 31, 2012, the fair value of the swap was recorded as a liability of $143 and $620 in other accrued expenses, respectively. The change in the fair value of this interest rate swap is recorded as other, net in the consolidated condensed statement of operations.

Foreign Exchange Contracts

The Company enters into foreign currency forward contracts to mitigate the impact of changes in foreign currency exchange rates and to reduce the volatility of purchases and other obligations generated in currencies other than the functional currencies. The Company’s foreign subsidiaries may at times purchase forward exchange contracts to manage their foreign currency risks in relation to certain purchases of machinery denominated in foreign currencies other than the Company’s foreign functional currency. The notional amount of the foreign exchange contracts at April 1, 2013 and December 31, 2012 was approximately $20,984 and $28,259, respectively. The Company has designated certain of these foreign exchange contracts as cash flow hedges.

The fair values of derivative instruments in the consolidated condensed balance sheet are as follows:

 

          Asset / (Liability) Fair
Value
 
    

Balance Sheet

Location

   April 1,
2013
    December 31,
2012
 
          (In thousands)  

Cash flow derivative instruments designated as hedges:

       

Foreign exchange contracts

   Deposits and other non-current assets    $ —       $ 103  

Foreign exchange contracts

   Other accrued expenses      (51     (34

Foreign exchange contracts

   Other long-term liabilities      (345     (84

Cash flow derivative instruments not designated as hedges:

       

Foreign exchange contracts

   Prepaid expenses and other current assets      —          17   

Foreign exchange contracts

   Other accrued expenses      (853     (831

Interest rate swap

   Other accrued expenses      (143     (620
     

 

 

   

 

 

 
      $ (1,392   $ (1,449
     

 

 

   

 

 

 

 

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TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

 

The following table provides information about the amounts recorded in accumulated other comprehensive income related to derivatives designated as cash flow hedges, as well as the amounts recorded in each caption in the consolidated condensed statement of operations when derivative amounts are reclassified out of accumulated other comprehensive income:

 

        For the Quarter Ended   
          April 1, 2013      March 26, 2012  
          Effective Portion      Ineffective
Portion
     Effective Portion     Ineffective
Portion
 
     Financial
Statement
Caption
   Gain/(Loss)
Recognized in
Other
Comprehensive
Income
    Gain/(Loss)
Reclassified
into
Income
     Gain/(Loss)
Reclassified
into
Income
     Gain/(Loss)
Recognized in
Other
Comprehensive
Income
     Gain/(Loss)
Reclassified
into
Income
    Gain/(Loss)
Recognized
into
Income
 
     (In thousands)  

Cash flow hedge:

                  

Interest rate swap

   Interest expense    $ —       $ —        $ —        $ 369       $ (609 )   $ —    

Foreign currency forward

   Other, net      (381     —          —          618         —         —    
     

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 
      $ (381   $ —         $ —        $ 987       $ (609 )   $ —    
     

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

The following table provides a summary of the activity associated with the designated cash flow hedges reflected in accumulated other comprehensive income for the quarters ended April 1, 2013 and March 26, 2012:

 

     For the Quarter Ended  
     April 1,
2013
    March 26,
2012
 
     (In thousands)  

Beginning balance unrealized loss, net of tax

   $ (15   $ (3,262

Changes in fair value, net of tax

     (381     927   

Reclassification to earnings

     —          (45
  

 

 

   

 

 

 

Ending balance unrealized loss, net of tax

   $ (396   $ (2,380
  

 

 

   

 

 

 

The Company expects that approximately $51 of expense will be reclassified into the statement of operations, net of tax, in the next 12 months.

The net gain (loss) recognized in other, net in the consolidated condensed statement of operations on derivative instruments not designated as hedges is as follows:

 

     For the Quarter Ended  
     April 1,
2013
    March 26,
2012
 
     (In thousands)  

Derivative instruments not designated as hedges:

    

Interest rate swap

   $ 477      $ 100   

Foreign exchange contracts

     (531     242   
  

 

 

   

 

 

 
   $ (54   $ 342   
  

 

 

   

 

 

 

 

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TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

 

Other Financial Instruments

The carrying amount and estimated fair value of the Company’s financial instruments at April 1, 2013 and December 31, 2012 were as follows:

 

                                                       
     April 1, 2013      December 31, 2012  
     Carrying
Amount
     Fair
Value
     Carrying
Amount
     Fair
Value
 
     (In thousands)  

Available for sale securities

   $ 371       $ 371       $ 390       $ 390   

Derivative assets, current

     —           —           17         17   

Derivative liabilities, current

     1,047         1,047         1,485         1,485   

Derivative assets, non-current

     —           —           103         103   

Derivative liabilities, non-current

     345         345         84         84   

Long-term debt

     400,011         394,194         400,012         400,012   

Convertible senior notes

     159,213         174,440         157,533         176,680   

The fair value of available for sale securities was determined using quoted market prices for the securities on an active exchange.

The fair value of the derivative instruments was determined using pricing models developed based on the LIBOR swap rate, foreign currency exchange rates, and other observable market data, including quoted market prices, as appropriate. The values were adjusted to reflect nonperformance risk of both the counterparty and the Company, as necessary.

The fair value of the long-term debt was estimated based on discounting the par value of the debt over its life for the difference between the debt stated interest rate and current market rates for similar debt at April 1, 2013 and December 31, 2012, which are considered Level 2 inputs.

The fair value of the convertible senior notes was estimated based on quoted market prices of the securities on an active exchange, which are considered Level 1 inputs.

At April 1, 2013 and December 31, 2012, the Company’s other financial instruments included cash and cash equivalents, accounts receivable, notes receivable, accounts payable and equipment payables. Due to short-term maturities, the carrying amount of these instruments approximates fair value.

(9) Accumulated Other Comprehensive Income

The following provides a summary of the components of accumulated other comprehensive income, net of tax as of April 1, 2013 and December 31, 2012:

 

                                             
     April 1,
2013
    December 31,
2012
 
     (In thousands)  

Foreign currency translation, net of taxes of $2,984 for 2013 and $2,959 for 2012

   $ 49,021      $ 46,777   

Unrealized losses related to cash flow hedges

     (396     (15

Unrealized losses related to available for sale securities

     (31     (13
  

 

 

   

 

 

 
   $ 48,594      $ 46,749   
  

 

 

   

 

 

 

No amounts were reclassified into income during the quarter ended April 1, 2013.

(10) Significant Customers and Concentration of Credit Risk

In the normal course of business, the Company extends credit to its customers, which are concentrated primarily in the computer, networking, communications and aerospace/defense industries, and most are located outside the United States. The Company performs ongoing credit evaluations of customers, does not require collateral and considers the credit risk profile of the entity from which the receivable is due in further evaluating collection risk.

As of April 1, 2013 and December 31, 2012, the Company’s 10 largest customers in the aggregate accounted for 55% and 54%, respectively, of total accounts receivable.

 

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TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

 

The Company’s customers include both OEMs and EMS companies. The Company’s OEM customers often direct a significant portion of their purchases through EMS companies. While the Company’s customers include both OEM and EMS providers, the Company measures customer concentration based on OEM companies, as they are the ultimate end customers.

For both of the quarters ended April 1, 2013 and March 26, 2012, one customer, Apple, accounted for approximately 14% and 13%, respectively, of the Company’s net sales.

(11) Fair Value Measures

The Company measures at fair value its financial and non-financial assets by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability.

At April 1, 2013 and December 31, 2012, the following financial assets and liabilities were measured at fair value on a recurring basis using the type of inputs shown:

 

     April  1,
2013
     Fair Value Measurements Using:  
        Level 1 Inputs      Level 2 Inputs      Level 3 Inputs  
     (In thousands)  

Money market funds

   $ 132,608       $ 132,608         —          —    

Available for sale securities

     371         371         —          —    

Interest rate swap derivative liabilities

     143         —        $ 143         —    

Foreign exchange derivative liabilities

     1,249         —          1,249         —    
     December  31,
2012
     Fair Value Measurements Using:  
        Level 1 Inputs      Level 2 Inputs      Level 3 Inputs  
     (In thousands)  

Money market funds

   $ 132,242       $ 132,242         —          —    

Available for sale securities

     390         390         —          —    

Foreign exchange derivative assets

     120         —        $ 120         —    

Interest rate swap derivative liabilities

     620         —          620         —    

Foreign exchange derivative liabilities

     949         —          949         —    

There were no transfers of financial assets or liabilities between Level 1 and Level 2 inputs for the quarters ended April 1, 2013 and March 26, 2012.

(12) Commitments and Contingencies

Legal Matters

The Company is subject to various legal matters, which it considers normal for its business activities. While the Company currently believes that the amount of any reasonably possible or probable loss for known matters would not be material to the Company’s financial condition, the outcome of these actions is inherently difficult to predict. In the event of an adverse outcome, the ultimate potential loss could have a material adverse effect on the Company’s financial condition or results of operations in a particular period. The Company has accrued amounts for its loss contingencies which are probable and estimable at April 1, 2013 and December 31, 2012. However, these amounts are not material to the consolidated condensed financial statements of the Company.

Environmental Matters

The process to manufacture PCBs requires adherence to city, county, state, federal and foreign environmental regulations regarding the storage, use, handling and disposal of chemicals, solid wastes and other hazardous materials as well as air quality standards. Management believes that its facilities comply in all material respects with environmental laws and regulations. The Company has in the past received certain notices of violations and has implemented certain required minor corrective activities. There can be no assurance that violations will not occur in the future. The Company does not expect the outcome of the environmental remediation matters, either individually or in the aggregate, to have a material adverse effect on its financial position, results of operations, or cash flows.

 

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TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

 

(13) Earnings Per Share

The following is a reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share for the quarters ended April 1, 2013 and March 26, 2012:

 

     Quarter Ended  
     April 1,
2013
     March 26,
2012
 
     (In thousands, except per share
amounts)
 

Net income attributable to TTM Technologies, Inc. stockholders

   $ 5,152       $ 12,595   
  

 

 

    

 

 

 

Weighted average shares outstanding

     82,150         81,413   

Dilutive effect of performance-based stock units, restricted stock units and stock options

     692         815   
  

 

 

    

 

 

 

Diluted shares

     82,842         82,228   
  

 

 

    

 

 

 

Earnings per share attributable to TTM Technologies, Inc stockholders:

     

Basic

   $ 0.06       $ 0.15   
  

 

 

    

 

 

 

Diluted

   $ 0.06       $ 0.15   
  

 

 

    

 

 

 

For the quarters ended April 1, 2013 and March 26, 2012, performance-based stock units, restricted stock units and stock options to purchase 2,508 and 1,629 shares of common stock, respectively, were not considered in calculating diluted earnings per share because the options’ exercise prices or the total expected proceeds under the treasury stock method for performance-based stock units, restricted stock units or stock options was greater than the average market price of common shares during the period and, therefore, the effect would be anti-dilutive.

Additionally, for the quarter ended April 1, 2013, the effect of 10,963 shares of common stock related to the Company’s Convertible Notes were not included in the computation of dilutive earnings per share because the conversion price of the Convertible Notes and the strike price of the warrants to purchase the Company’s common stock were greater than the average market price of common shares during the quarter, and therefore, the effect would be anti-dilutive.

(14) Stock-Based Compensation

Stock-based compensation expense is recognized in the accompanying consolidated condensed statements of operations as follows:

 

     Quarter Ended  
     April 1,
2013
    March 26,
2012
 
     (In thousands)  

Cost of goods sold

   $ 303      $ 311   

Selling and marketing

     362        114   

General and administrative

     1,665        1,780   
  

 

 

   

 

 

 

Stock-based compensation expense recognized

     2,330        2,205   

Income tax benefit recognized

     (497     (578
  

 

 

   

 

 

 

Total stock-based compensation expense after income taxes

   $ 1,833      $ 1,627   
  

 

 

   

 

 

 

 

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Table of Contents

TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

 

Performance-based Restricted Stock Units

The Company maintains a long-term incentive program for executives that provides for the issuance of performance-based restricted stock units (PRUs), representing hypothetical shares of the Company’s common stock that may be issued. Under the PRU program, a target number of PRUs is awarded at the beginning of each three-year performance period. The number of shares of common stock released at the end of the performance period will range from zero to 2.4 times the target number depending on performance during the period. The performance metrics of the PRU program are based on (a) annual financial targets, which are based on revenue and EBITDA (earnings before interest, tax, depreciation, and amortization expense), each equally weighted, and (b) an overall modifier based on the Company’s total stockholder return (TSR) relative to the S&P SmallCap 600 for PRUs granted in 2011 and 2012, and, for PRUs granted in 2013, a group of peer companies selected by the Company’s compensation committee, over the three-year performance period.

The Company records stock-based compensation expense for PRU awards granted based on management’s periodic assessment of the probability of the PRU awards vesting. For the quarter ended April 1, 2013, management determined that vesting of the PRU awards was probable. PRUs activity for the quarter ended April 1, 2013 was as follows:

 

     Shares  
     (In thousands)  

Outstanding target shares at December 31, 2012

     163   

Granted:

  

Third tranche of 2011 grant

     55   

Second tranche of 2012 grant

     71   

First tranche of 2013 grant

     127   

Forfeitures / cancellations

     (21
  

 

 

 

Outstanding target shares at April 1, 2013

     395   
  

 

 

 

The fair value for PRUs granted is calculated using a Monte Carlo simulation model, as the TSR modifier contains a market condition. For the quarters ended April 1, 2013 and March 26, 2012, the following assumptions were used in determining the fair value:

 

     April  1,
20131
    March  26,
20122
 

Weighted-average fair value

   $ 6.79      $ 12.51   

Risk-free interest rate

     0.3     0.3

Dividend yield

     —         —    

Expected volatility

     49     55

Expected term in months

     25        23   

 

(1)

Reflects the weighted-averages for the third year of the three-year performance period applicable to PRUs granted in 2011, second year of the three-year performance period applicable to PRUs granted in 2012 and first year of the three-year performance period applicable to PRUs granted in 2013

(2)

Reflects the weighted-averages for the third year of the three-year performance period applicable to PRUs granted in 2010, second year of the three-year performance period applicable to PRUs granted in 2011 and first year of the three-year performance period applicable to PRUs granted in 2012

Restricted Stock Units

The Company granted 828 and 657 restricted stock units during the quarters ended April 1, 2013 and March 26, 2012, respectively. The units granted have a weighted-average fair value per unit of $8.27 and $12.00 for the quarters ended April 1, 2013 and March 26, 2012, respectively. The fair value for restricted stock units granted is based on the closing share price of the Company’s common stock on the date of grant.

Stock Options

The Company did not grant any stock option awards during the quarters ended April 1, 2013 and March 26, 2012.

 

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Table of Contents

TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

 

Foreign Employee Share Awards

Prior to the Company’s acquisition from Meadville of the Asia Pacific operating segment in April 2010, there already existed a share award plan comprising of Meadville shares for the employees of the Asia Pacific operating segment. Following the acquisition, the unvested Meadville shares under the plan were converted to an equivalent amount of shares of TTM common stock plus cash. These awards vest over five tranches. Four tranches have vested as of April 1, 2013, and the remaining tranche will vest in 2014. The fair value, after adjustment for estimated forfeiture, that is attributed to post-combination service is recognized as an expense over the remaining vesting period and is included as a component of total stock-based compensation expense. At April 1, 2013 and December 31, 2012, there were approximately 16 and 32 shares in the employee share award grants outstanding, respectively.

Summary of Unrecognized Compensation Costs

The following is a summary of total unrecognized compensation costs as of April 1, 2013:

 

     Unrecognized
Stock-Based
Compensation Cost
     Remaining Weighted
Average
Recognition
Period
     (In thousands)      (years)

PRU awards

   $ 2,475       1.9

RSU awards

     13,294       1.6

Stock option awards

     197       1.1

Foreign employee share awards

     56       0.8
  

 

 

    
   $ 16,022      
  

 

 

    

(15) Segment Information

The operating segments reported below are the Company’s segments for which separate financial information is available and upon which operating results are evaluated by the chief operating decision maker to assess performance and to allocate resources. The Company manages its worldwide operations based on two geographic operating segments: 1) Asia Pacific, which consists of seven PCB fabrication plants, and 2) North America, which consists of seven domestic PCB fabrication plants, including a facility that provides follow-on value-added services primarily for one of the PCB fabrication plants, and one backplane assembly plant in Shanghai, China, which is managed in conjunction with the Company’s U.S. operations. Each segment operates predominantly in the same industry with production facilities that produce similar customized products for its customers and use similar means of product distribution.

 

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Table of Contents

TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

 

The Company evaluates segment performance based on operating segment income, which is operating income before amortization of intangibles. Interest expense and interest income are not presented by segment since they are not included in the measure of segment profitability reviewed by the chief operating decision maker. All inter-segment transactions have been eliminated. Reportable segment assets exclude short-term investments, which are managed centrally.

 

     For the Quarter Ended  
     April 1, 2013     March 26, 2012  
     (In thousands)  

Net Sales:

    

Asia Pacific

   $ 202,583      $ 171,758   

North America

     123,589        130,024   
  

 

 

   

 

 

 

Total sales

     326,172        301,782   

Inter-segment sales

     (780     (1,283
  

 

 

   

 

 

 

Total net sales

   $ 325,392      $ 300,499   
  

 

 

   

 

 

 

Operating Segment Income:

    

Asia Pacific

   $ 11,125      $ 12,825   

North America

     3,857        12,896   
  

 

 

   

 

 

 

Total operating segment income

     14,982        25,721   

Amortization of definite-lived intangibles

     (2,328     (3,916
  

 

 

   

 

 

 

Total operating income

     12,654        21,805   

Total other expense

     (5,277     (4,830
  

 

 

   

 

 

 

Income before income taxes

   $ 7,377      $ 16,975   
  

 

 

   

 

 

 

The Company accounts for inter-segment sales and transfers as if the sale or transfer were to third parties: at arms length and consistent with the Company’s revenue recognition policy. The inter-segment sales for the quarter ended April 1, 2013 and March 26, 2012 are sales from the Asia Pacific operating segment to the North America operating segment.

(16) Related Party Transactions

In the normal course of business, the Company’s foreign subsidiaries purchase laminate and prepreg from related parties. For the quarters ended April 1, 2013 and March 26, 2012, the Company purchased $19,137 and $21,526, respectively, of laminate and prepreg from these related parties.

Additionally, a related party leases employee housing space from a foreign subsidiary of the Company. For the quarters ended April 1, 2013 and March 26, 2012, the net income for these activities was $59 and $48, respectively.

At April 1, 2013 and December 31, 2012, the Company’s consolidated condensed balance sheet included $28,210 and $34,520, respectively, in accounts payable due to, and $25 and $48, respectively, in accounts receivable due from, a related party for the supply and lease arrangements.

 

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Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated condensed financial statements and the related notes and the other financial information included in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of specified factors, including those set forth in Item 1A “Risk Factors” of Part II below and elsewhere in this Quarterly Report on Form 10-Q.

This discussion and analysis should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our annual report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission.

OVERVIEW

We are a leading global provider of time-critical and technologically complex printed circuit board (PCB) products and backplane assemblies (PCBs populated with electronic components), which serve as the foundation of sophisticated electronic products. We provide our customers time-to-market and advanced technology products and offer a one-stop manufacturing solution to customers from engineering support to prototype development through final volume production. We serve a diversified customer base in various markets throughout the world, including manufacturers of networking/communications infrastructure products, touch screen tablets and mobile media devices (cellular phones and smartphones). We also serve high-end computing, commercial aerospace/defense, and industrial/medical industries. Our customers include both original equipment manufacturers (OEMs) and electronic manufacturing services (EMS) providers.

Beginning in the second quarter of 2012, labor expense has increased in our Asia Pacific operating segment due to PRC government-mandated wage increases, additional compensation offered to our labor force as a result of a reduction of overtime hours and increased headcount to compensate for the reduced overtime hours that can be worked that was implemented to meet standards required by some of our global customers. This increased labor expense reduced the gross and operating margins of our Asia Pacific operating segment in the first quarter of 2013. Management believes such wage increases will continue during 2013 and may further reduce gross and operating margins in Asia Pacific.

We anticipate an increase in our effective income tax rate for the second quarter of 2013 mainly due to the absence of discrete tax benefits from research and development credits. Additionally, we continue to monitor certain PRC facilities with full deferred tax valuation allowances for changes in estimated earnings during the 2013 fiscal period.

As a result of the product and customer mix of our Asia Pacific operating segment, a portion of our revenue is subject to seasonal fluctuations. These fluctuations include seasonal patterns in the computer and cellular phone industry, which together have become a significant portion of the end markets we serve. This seasonality typically results in higher net sales in the third and fourth quarters due to end customer demand to meet fourth quarter sales of consumer electronics products. Seasonal fluctuations also include the Chinese New Year holidays in the first quarter, which typically results in lower net sales. As a result of lower net sales in the first quarter of 2013, we experience lower utilization which impacts our gross and operating margins in Asia Pacific.

While our customers include both OEM and EMS companies, we measure customer concentration based on OEM companies as they are the ultimate end customers. Sales to our 10 largest OEM customers accounted for 51% and 49% of our net sales in the first quarter ended April 1, 2013 and March 26, 2012, respectively.

 

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Table of Contents

The following table shows the percentage of our net sales attributable to each of the principal end markets we serve for the periods indicated.

 

     Quarter Ended  

End Markets(1)(3)

   April 1,
2013
    March 26,
2012
 

Aerospace/Defense

     16     17

Cellular Phone(2)

     17        11   

Computing/Storage/Peripherals(2)

     19        24   

Medical/Industrial/Instrumentation/Other

     8        10   

Networking/Communications

     34        32   

Other(2)

     6        6   
  

 

 

   

 

 

 

Total

     100     100
  

 

 

   

 

 

 

 

(1)

Sales to EMS companies are classified by the end markets of their OEM customers.

(2)

Smartphones are included in the Cellular Phone end market, tablet PCs are included in the Computing/Storage/Peripherals end market and other mobile devices such as e-readers are included in the Other end market.

(3)

Certain reclassifications of prior year end market percentages have been made to conform to the current year presentation. Beginning in the first quarter of 2013, we reclassified substrate PCBs, which were included in the Other end market, into the end markets that the substrate PCBs are sold into — predominantly Cellular Phone.

For PCBs, we measure the time sensitivity of our products by tracking the quick-turn percentage of our work. We define quick-turn orders as those with delivery lead times of 10 days or less, which typically captures research and development, prototype, and new product introduction work, in addition to unexpected short-term demand among our customers. Generally, we quote prices after we receive the design specifications and the time and volume requirements from our customers. Our quick-turn services command a premium price as compared to standard lead-time products.

We also deliver a significant percentage of compressed lead-time work with lead times of 11 to 20 days. We typically receive a premium price for this work as well. Purchase orders may be cancelled prior to shipment. We charge customers a fee, based on percentage completed, if an order is cancelled once it has entered production. We derive revenues primarily from the sale of PCBs and backplane assemblies using customer-supplied engineering and design plans. We recognize revenues when persuasive evidence of a sales arrangement exists, the sales terms are fixed or determinable, title and risk of loss have transferred, and collectibility is reasonably assured — generally when products are shipped to the customer. Net sales consist of gross sales less an allowance for returns, which typically has been less than 2% of gross sales. We provide our customers a limited right of return for defective PCBs and backplane assemblies. We record an estimated amount for sales returns and allowances at the time of sale based on historical information.

Cost of goods sold consists of materials, labor, outside services, and overhead expenses incurred in the manufacture and testing of our products as well as stock-based compensation expense. Many factors affect our gross margin, including capacity utilization, product mix, production volume, and yield. We generally do not participate in any significant long-term contracts with suppliers, and we believe there are a number of potential suppliers for the raw materials we use.

Selling and marketing expenses consist primarily of salaries and commissions paid to our internal sales force and independent sales representatives, salaries paid to our sales support staff, stock-based compensation expense as well as costs associated with marketing materials and trade shows. We generally pay higher commissions to our independent sales representatives for quick-turn work, which generally has a higher gross profit component than standard lead-time work.

General and administrative costs primarily include the salaries for executive, finance, accounting, information technology, facilities and human resources personnel, as well as insurance expenses, expenses for accounting and legal assistance, incentive compensation expense, stock-based compensation expense, bad debt expense, gains or losses on the sale or disposal of property, plant and equipment, and acquisition-related expenses.

 

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated condensed financial statements included in this report have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses, and related disclosure of contingent assets and liabilities.

See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 for further discussion of critical accounting policies and estimates. There were no material changes to our critical accounting policies and estimates since December 31, 2012.

RESULTS OF OPERATIONS

There were 91 and 86 days for the quarters ended April 1, 2013 and March 26, 2012, respectively. The following table sets forth the relationship of various items to net sales in our consolidated condensed statement of operations:

 

     Quarter Ended  
     April 1, 2013     March 26, 2012  

Net sales

     100.0     100.0

Cost of goods sold

     84.4        81.2   
  

 

 

   

 

 

 

Gross profit

     15.6        18.8   
  

 

 

   

 

 

 

Operating expenses:

    

Selling and marketing

     2.8        2.9   

General and administrative

     8.2        7.4   

Amortization of definite-lived intangibles

     0.7        1.2   
  

 

 

   

 

 

 

Total operating expenses

     11.7        11.5   
  

 

 

   

 

 

 

Operating income

     3.9        7.3   

Other income (expense):

    

Interest expense

     (1.9     (2.1

Other, net

     0.3        0.4   
  

 

 

   

 

 

 

Total other expense, net

     (1.6     (1.7
  

 

 

   

 

 

 

Income before income taxes

     2.3        5.6   

Income tax provision

     (0.3     (1.5
  

 

 

   

 

 

 

Net income

     2.0        4.1   

Less: Net (income) loss attributable to noncontrolling interest

     (0.4     0.1   
  

 

 

   

 

 

 

Net income attributable to TTM Technologies, Inc. stockholders

     1.6     4.2
  

 

 

   

 

 

 

We manage our worldwide operations based on two geographic operating segments: (1) Asia Pacific, which consists of seven PCB fabrication plants, and (2) North America, which consists of seven domestic PCB fabrication plants, including a facility that provides follow-on value-added services primarily for one of the PCB fabrication plants, and one backplane assembly plant in Shanghai, China, which is managed in conjunction with the Company’s U.S. operations. Each segment operates predominantly in the same industry with production facilities that produce similar customized products for its customers and use similar means of product distribution.

The following table compares net sales by reportable segment for the quarters ended April 1, 2013 and March 26, 2012:

 

     Quarter Ended  
     April 1, 2013     March 26, 2012  
     (In thousands)  

Net Sales:

    

Asia Pacific

   $ 202,583      $ 171,758   

North America

     123,589        130,024   
  

 

 

   

 

 

 

Total sales

     326,172        301,782   

Inter-segment sales

     (780     (1,283
  

 

 

   

 

 

 

Total net sales

   $ 325,392      $ 300,499   
  

 

 

   

 

 

 

 

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Net Sales

Net sales increased $24.9 million, or 8.3%, from $300.5 million for the first quarter of 2012 to $325.4 million for the first quarter of 2013.

Net sales for the Asia Pacific segment, excluding inter-segment sales, increased $31.3 million, or 18.4%, from $170.5 million in the first quarter of 2012 to $201.8 million in the first quarter of 2013. This increase was primarily due to new customer programs in our Cellular Phone end market and greater demand in our Networking/Communications end market, resulting in a 13% increase in PCB shipments from the first quarter of 2012. The average PCB selling price increased by 4%, which was driven by increased layer count and product mix shift.

Net sales for the North America segment decreased $6.4 million, or 4.9%, from $130.0 million in the first quarter of 2012 to $123.6 million in the first quarter of 2013. This decrease was primarily due to lower demand in our Computing/Storage/Peripherals and Medical/Industrial/Instrumentation end markets, offset by an increase in Aerospace/Defense. This decrease was the result of a 16% decline in PCB sales volume partially offset by a 10% increase in the average PCB selling price, primarily due to product mix, and by the 4% increase in demand for backplane assemblies from the first quarter of 2012.

Gross Profit

Gross profit decreased $5.8 million, or 10.3%, from $56.5 million for the first quarter of 2012 to $50.7 million for the first quarter of 2013. Gross margin decreased from 18.8% for the first quarter of 2012 to 15.6% for the first quarter of 2013.

Gross profit for the Asia Pacific segment increased $1.5 million, or 5.0%, from $30.0 million for the first quarter of 2012 to $31.5 million for the first quarter of 2013. Gross margin decreased from 17.6% for the first quarter of 2012 to 15.6% for the first quarter of 2013, primarily due to higher labor costs and increased equipment related expenses.

Gross profit for the North America segment decreased $7.3 million, or 27.5%, from $26.5 million for the first quarter of 2012 to $19.2 million for the first quarter of 2013. Gross margin decreased from 20.4% for the first quarter of 2012 to 15.5% for the first quarter of 2013, primarily due to higher labor expense, higher direct material content and lower cost absorption due to lower production volumes.

Selling and Marketing Expenses

Selling and marketing expenses increased $0.6 million, or 7.0%, from $8.6 million for the first quarter of 2012 to $9.2 million for the first quarter of 2013 primarily due to an increase in labor costs and stock-based compensation expense. As a percentage of net sales, selling and marketing expenses were 2.9% for the first quarter of 2012 as compared to 2.8% for the first quarter of 2013. The decrease in selling and marketing expense as a percentage of net sales is due to higher net sales.

General and Administrative Expense

General and administrative expenses increased $4.5 million from $22.1 million, or 7.4% of net sales, for the first quarter of 2012 to $26.6 million, or 8.2% of net sales, for the first quarter of 2013. The increase in expense primarily relates to higher labor costs in China and an increase in incentive compensation expense.

Other Income (Expense)

Other expense, net increased $0.5 million from $4.8 million for the first quarter of 2012 to $5.3 million for the first quarter of 2013. The increase in other expense, net was primarily due to the absence of a $0.8 million realized gain on available for sale securities during the first quarter of 2012, partially offset by a $0.3 million increase in foreign currency transaction and derivative gains.

 

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Income Taxes

The provision for income taxes decreased $3.8 million from $4.6 million for the first quarter of 2012 to $0.8 million for the first quarter of 2013. Our effective tax rate was 27.4% for the first quarter of 2012 and 10.6% for the first quarter of 2013. The decrease in our effective tax rate is primarily due to impact of discrete tax benefits from the extension of the federal research and development credit laws, and from the approval of research and development deduction in China. The recognition of these discrete tax benefits during the first quarter of 2013 reduced the effective tax rate from approximately 26.0% to 10.6%. Our effective tax rate is primarily impacted by the U.S. federal income tax rate, apportioned state income tax rates, tax rates in China and Hong Kong, generation of other credits and deductions available to us, and certain non-deductible items. Certain foreign losses generated are not more than likely to be realizable, and thus no income tax benefit has been recognized on these losses. Additionally, as of April 1, 2013 and December 31, 2012, we had net deferred income tax assets of approximately $11.3 million and $13.5 million, respectively. Based on our forecast for future taxable earnings, we believe it is more likely than not that we will utilize the deferred income tax assets in future periods.

Liquidity and Capital Resources

Our principal sources of liquidity have been cash provided by operations, the issuance of term and revolving debt and Convertible Notes. Our principal uses of cash have been to finance capital expenditures, meet debt service requirements, fund working capital requirements and finance acquisitions. We anticipate that servicing debt, financing capital expenditures, funding working capital requirements, and acquisitions will continue to be the principal demands on our cash in the future.

As of April 1, 2013, we had net working capital of approximately $361.0 million compared to $395.7 million as of December 31, 2012. This decrease in working capital is primarily attributable to an increase in short-term debt, including current portion of long-term debt as of April 1, 2013.

As of April 1, 2013, we had cash and cash equivalents of approximately $284.1 million, of which approximately $89.2 million was held by our foreign subsidiaries. Of the cash and cash equivalents held by our foreign subsidiaries as of April 1, 2013, $87.8 million was located in Asia and $1.4 million was located in European countries. Cash and cash equivalents located in our Asia Pacific operating segment are expected to remain for use in local operations. Cash and cash equivalents located in our backplane assembly facility in Shanghai, China, as well as in Europe, which are managed in conjunction with our U.S. operations, are expected to be repatriated and will be subject to U.S. income tax. As of April 1, 2013, approximately $13.5 million of cash and cash equivalents was located in our Shanghai, China backplane assembly plant. Other than the cash and cash equivalents located in our Shanghai backplane assembly and our European locations, we do not currently expect to repatriate earnings from our foreign subsidiaries.

Our 2013 capital expenditure plan is expected to total approximately $100 million (of which approximately $83 million relates to our Asia Pacific operating segment). It will fund capital equipment purchases to increase production capacity, especially for advanced HDI substrate and rigid flex PCB manufacturing, expand our technological capabilities, comply with increased environmental regulations and replace aging equipment.

Based on our current level of operations, we believe that cash generated from operations, cash on hand and cash available from borrowings under our existing credit arrangements will be adequate to meet our currently anticipated capital expenditure, debt service, working capital, and acquisition needs for the next 12 months.

During the quarter ended April 1, 2013, we approved a plan, and executed an agreement, with our minority partner, Shengyi Technology Co. Ltd. (Sytech), to sell our majority interest in Dongguan Shengyi Electronics Ltd., (SYE) for 702 million Chinese RMB (about $113 million). (the SYE Transaction). Additionally, we executed an agreement with Sytech, to acquire Sytech’s minority equity interest in Dongguan Meadville Circuits Ltd. (DMC) for 180 million Chinese RMB (about $29 million) (together with the SYE Transaction, the SYE/DMC Transaction). Both plants manufacture conventional PCBs and are located in Dongguan, China. Closing of the SYE/DMC Transaction, which is expected to be completed no later than the end of the third quarter of 2013, is subject to both parties’ board approval, approval by Sytech’s shareholders, approval from certain of our lenders, and clearance by the appropriate government regulatory agencies in the People’s Republic of China. We estimated the gain on the sale of SYE to be between $5 million and $10 million. The total cash expected to be received in this transaction is approximately $40 million (net proceeds of $84 million less repayment of an intercompany loan and transaction related taxes).

 

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Credit Agreement

We are party to a facility agreement (Credit Agreement) consisting of a $370.0 million senior secured Term Loan, a $90.0 million senior secured Revolving Loan and a secured $80.0 million Letters of Credit Facility. The Term Loan and Letters of Credit Facility will mature on September 14, 2016, and the Revolving Loan will mature on March 14, 2016. The Credit Agreement is secured by substantially all of the assets of our Asia Pacific operating segment and is senior to all our other debt, including the Convertible Notes. We have fully and unconditionally guaranteed the full and punctual payment of all obligations of the Asia Pacific operating segment under the Credit Agreement.

Borrowings under the Credit Agreement bear interest at a floating rate of LIBOR (term election by us) plus an interest margin of 2.38%. At April 1, 2013, the weighted average interest rate on the outstanding borrowings under the Credit Agreement was 2.58%.

Borrowings under the Credit Agreement are subject to certain financial and operating covenants that include maintaining maximum total leverage ratios and minimum net worth, current assets, and interest coverage ratios for both us and our Asia Pacific operating segment. In addition, our Credit Agreement includes a covenant that the Principal Shareholders (as defined in the Shareholders Agreement dated April 9, 2010, as amended on September 14, 2012) will not reduce their shareholding below 15 percent of TTM’s issued shares. At April 1, 2013, we were in compliance with the covenants under the Credit Agreement.

We are required to pay a commitment fee of 0.50% per annum on any unused portion of the loan and letters of credit facility granted under the Credit Agreement. We incurred $0.1 million for the quarter ended April 1, 2013. As of April 1, 2013, the Term Loan of $370.0 million, of which $48.1 million is included as short-term debt and $321.9 million is included as long-term debt, was outstanding; $30.0 million of the Revolver was outstanding, and $62.3 million of Letters of Credit were outstanding. Available borrowing capacity under the Revolving Loan was $60.0 million as of April 1, 2013.

Additionally, we are party to a revolving loan credit facility with a lender in the PRC. Under this arrangement, the lender has made available to us approximately $46.7 million in unsecured borrowing with all terms of the borrowing to be negotiated at the time the revolver is drawn upon. There are no commitment fees on the unused portion of the revolver and this arrangement expires in December 2013. As of April 1, 2013, the revolver had not been drawn upon.

Convertible Notes

In 2008 we issued $175.0 million of Convertible Notes. The Convertible Notes bear interest at a rate of 3.25% per annum. Interest is payable semiannually in arrears on May 15 and November 15 of each year. The Convertible Notes are senior unsecured obligations and rank equally to our future unsecured senior indebtedness and senior in right of payment to any of our future subordinated indebtedness.

Other Letters of Credit

In addition to the letters of credit obtained pursuant to the Credit Agreement, we maintain several unused letters of credit totaling $3.5 million which expire between December 31, 2013 and February 28, 2014.

 

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Contractual Obligations and Commitments

The following table provides information on our contractual obligations as of April 1, 2013:

 

 

     Total      Less Than
1 Year
     1 - 3 Years      4 - 5 Years      After
5 Years
 
     (In thousands)  

Contractual Obligations(1)

      

Long-term debt obligations

   $ 400,011       $ 78,104       $ 192,407       $ 129,500       $ —    

Convertible debt obligations

     175,000         —          175,000         —           —    

Interest on debt obligations

     38,643         15,710         21,391         1,542         —    

Interest rate swap liabilities

     143         143         —           —          —    

Foreign currency forward contract liabilities

     1,249         904         345         —          —    

Equipment payables

     69,321         55,628         13,693         —          —    

Purchase obligations

     33,790         19,131         14,659         —          —    

Operating lease commitments

     8,067         2,448         3,060         1,766         793   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total contractual obligations

   $ 726,224       $ 172,068       $ 420,555       $ 132,808       $ 793   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Unrecognized uncertain tax benefits of $2.4 million are not included in the table above as we have not determined when the amount will be paid.

Off Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange traded contracts. As a result, we are not materially exposed to any financing, liquidity, market, or credit risk that could arise if we had engaged in these relationships.

Seasonality

As a result of the product and customer mix of our Asia Pacific operating segment, a portion of our revenue is subject to seasonal fluctuations. These fluctuations include seasonal patterns in the computer and cellular phone industry, which together have become a significant portion of the end markets we serve. This seasonality typically results in higher net sales in the third and fourth quarters due to end customer demand to meet fourth quarter sales of consumer electronics products. Seasonal fluctuations also include the Chinese New Year holidays in the first quarter, which typically results in lower net sales.

Impact of Inflation

We believe that our results of operations are not materially impacted by moderate changes in the inflation rate as we expect that we generally will be able to continue to pass along component price increases to our customers. Severe increases in inflation, however, could affect the global and U.S. economies and have an adverse impact on our business, financial condition and results of operations. In addition, we may not be able to pass along to our major customers significant increases in the costs of gold, copper and other commodities used in our products, which could have a material adverse impact on our gross profit margins.

Recently Issued Accounting Pronouncements

In March 2013, the Financial Accounting Standards Board (FASB) issued an update that would require a parent to release any related cumulative translation adjustment into net income when it ceases to have a controlling financial interest in a subsidiary, group of assets or business within a foreign entity. This update is effective for interim and annual periods beginning after December 15, 2013, with early adoption permitted. We adopted the amendment on January 1, 2013, and our adoption did not have a material impact on our financial statements.

 

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In February 2013, the FASB issued an update that would require that an entity provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under accounting principles generally accepted in the United States of America (U.S. GAAP) to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. This update does not change the current requirements for reporting net income or other comprehensive income in financial statements and is effective for interim and annual periods beginning after December 15, 2012, with early adoption permitted. We adopted the amendment on January 1, 2013, and our adoption did not have a material impact on our financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

In the normal course of business operations we are exposed to risks associated with fluctuations in interest rates and foreign currency exchange rates. We address these risks through controlled risk management that includes the use of derivative financial instruments to economically hedge or reduce these exposures. We do not enter into derivative financial instruments for trading or speculative purposes.

See Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 for further discussion of market risks associated with interest rates and foreign currency exchange. Our exposure to foreign exchange risks has not changed materially since December 31, 2012.

See Liquidity and Capital Resources and Credit Agreement appearing in Item 2 of this Form 10-Q for further discussion of the Company’s financing facilities and capital structure. As of April 1, 2013, approximately 43.9% of our total debt was based on fixed rates, including notional amounts related to interest rate swaps. Based on our borrowings as of April 1, 2013, an assumed 1% change in variable rates would cause our annual interest cost to change by $3.2 million.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), together with management, evaluated the effectiveness of our disclosure controls and procedures as of April 1, 2013 pursuant to Rules 13a-15(e) of the Exchange Act of 1934, as amended (the Exchange Act). Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) were effective such that information relating to the Company, including our consolidated subsidiaries, required to be disclosed in our SEC reports, is recorded, processed, summarized and reported within the time frames specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended April 1, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our CEO and CFO, does not expect that our disclosure controls or our internal controls over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must acknowledge the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all issues and instances of fraud, if any, within the Company have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

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Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become a party to various legal proceedings arising in the ordinary course of our business. There can be no assurance that we will prevail in any such litigation. We believe that the amount of any reasonably possible or probable loss for known matters would not be material to our financial statements; however, the outcome of these actions is inherently difficult to predict. In the event of an adverse outcome, the ultimate potential loss could have a material adverse effect on our financial condition or results of operations and cash flows in a particular period.

Item 1A. Risk Factors

An investment in our common stock involves a high degree of risk. You should carefully consider the factors described below and in Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012, in analyzing an investment in our common stock. If any of the risks in our Annual Report on Form 10-K occurs, our business, financial condition, and results of operations would likely suffer, the trading price of our common stock could fall, and you could lose all or part of the money you paid for our common stock.

In addition, the risk factors and uncertainties could cause our actual results to differ materially from those projected in our forward-looking statements, whether made in this report or the other documents we file with the SEC, or our annual or quarterly reports to stockholders, future press releases, or orally, whether in presentations, responses to questions, or otherwise.

On March 13, 2013, we entered into two agreements with our minority partner, Sytech, to (i) sell our majority interest in SYE to Sytech, and (ii) acquire from Sytech its minority equity interest in DMC. The closing of the SYE/DMC Transaction is expected to be completed no later than the end of the third quarter of 2013, and is subject to both parties’ board approval, approval by Sytech’s shareholders, approval from certain of our lenders, and clearance by the appropriate government regulatory agencies in the People’s Republic of China. In the event we do not complete the SYE/DMC Transaction we may not realize the expected benefits from a disposition of SYE, which include a net of approximately $40 million in cash, improvement in our capacity utilization, and increased profit margins.

 

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Table of Contents

Item 6. Exhibits

 

Exhibit

Number

  

Exhibits

    2.1    English translation of Equity Interest Transfer Agreement, dated March 13, 2013, by and between Shengyi Technology Co., Ltd. and the Registrant
    2.2    English translation of Equity Interest Transfer Agreement, dated March 13, 2013, by and between Shengyi Technology Co., Ltd. and the Registrant*
  10.27    Separation and Release Agreement, dated February 21, 2013, by and between the Registrant and Steven W. Richards
  31.1    CEO Certification Pursuant to Section 302 of the Sarbanes — Oxley Act of 2002.
  31.2    CFO Certification Pursuant to Section 302 of the Sarbanes — Oxley Act of 2002.
  32.1    CEO Certification Pursuant to Section 906 of the Sarbanes — Oxley Act of 2002.
  32.2    CFO Certification Pursuant to Section 906 of the Sarbanes — Oxley Act of 2002.
101.INS    XBRL Instance Document
101.SCH    XBRL Taxonomy Extension Schema Document
101.CAL    XBRL Taxonomy Extension Calculation Linkbase Documents
101.DEF    XBRL Taxonomy Extension Definition Linkbase Documents
101.LAB    XBRL Taxonomy Extension Label Linkbase Documents
101.PRE    XBRL Taxonomy Extension Presentation Linkbase Documents

 

*

The appendices to this exhibit have been omitted in reliance on Item 601(b)(2) of Regulation S-K and will be furnished supplementally to the SEC upon request.

 

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Table of Contents

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 thereunto duly authorized.

 

   

TTM Technologies, Inc.

      /s/    Kenton K. Alder        
    Kenton K. Alder

Dated: May 7, 2013

    Chief Executive Officer
      /s/    Todd B. Schull        
    Todd B. Schull

Dated: May 7, 2013

    Executive Vice President, Chief Financial Officer, Treasurer and Secretary

 

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Table of Contents

EXHIBIT INDEX

 

Exhibit

Number

  

Exhibits

    2.1    English translation of Equity Interest Transfer Agreement, dated March 13, 2013, by and between Shengyi Technology Co., Ltd. and the Registrant
    2.2    English translation of Equity Interest Transfer Agreement, dated March 13, 2013, by and between Shengyi Technology Co., Ltd. and the Registrant*
  10.27    Separation and Release Agreement, dated February 21, 2013, by and between the Registrant and Steven W. Richards
  31.1    CEO Certification Pursuant to Section 302 of the Sarbanes — Oxley Act of 2002.
  31.2    CFO Certification Pursuant to Section 302 of the Sarbanes — Oxley Act of 2002.
  32.1    CEO Certification Pursuant to Section 906 of the Sarbanes — Oxley Act of 2002.
  32.2    CFO Certification Pursuant to Section 906 of the Sarbanes — Oxley Act of 2002.
101.INS    XBRL Instance Document
101.SCH    XBRL Taxonomy Extension Schema Document
101.CAL    XBRL Taxonomy Extension Calculation Linkbase Documents
101.DEF    XBRL Taxonomy Extension Definition Linkbase Documents
101.LAB    XBRL Taxonomy Extension Label Linkbase Documents
101.PRE    XBRL Taxonomy Extension Presentation Linkbase Documents

 

*

The appendices to this exhibit have been omitted in reliance on Item 601(b)(2) of Regulation S-K and will be furnished supplementally to the SEC upon request.

 

29