TTM Technologies, Inc. Net Income jumped on 39.7% and Revenue increased on 7.1%
02/06/2019 • About TTM Technologies, Inc. (
$TTMI) • By InTwits
TTM Technologies, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- TTM Technologies, Inc. is a fast growth stock: 2018 revenue growth was 7.1%, 5 year revenue CAGR was 15.8% at 2018 ROIC 6.7%
- TTM Technologies, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.5%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: $7m in FY2018, $3m in FY2017, $6m in FY2016, $9m in FY2015, $12m in FY2014
- The company has potentially unprofitable business model: ROIC is 6.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.2x while industry average is 3.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
TTM Technologies, Inc.'s Revenue increased on 7.1%. Revenue growth showed slowdown in 18Q4 - it was -3.8% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.0 pp from 14.6% to 13.5% in 2018.
Gross Margin showed almost no change in 2018. During 2014-2018 Gross Margin topped in 2016 at 16.7% and was declining since that time. SG&A as a % of Revenue increased slightly on 0.95 pp from 7.2% to 8.2% in 2018.
Net Income margin increased slightly on 1.4 pp from 4.7% to 6.1% in 2018. During the last 5 years Net Income margin bottomed in 2015 at -1.2% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In 2018 TTM Technologies, Inc. had CAPEX/Revenue of 5.3%. TTM Technologies, Inc. showed small growth in CAPEX/Revenue of 0.50 pp from 4.8% in 2015 to 5.3% in 2018. It's average level of CAPEX/Revenue for the last three years was 4.8%.
Return on investment
The company operates at good ROE (15.5%) while ROIC is low (6.7%). ROIC decreased on 4.3 pp from 11.1% to 6.7% in 2018. ROE increased slightly on 2.0 pp from 13.6% to 15.5% in 2018. During the last 5 years ROIC topped in 2017 at 11.1%. ROE grew at 4.4 pp per annum in 2014-2018.
Leverage (Debt)
Debt level is 3.2x Net Debt / EBITDA and 3.9x Debt / EBITDA. Net Debt / EBITDA jumped on 1.7x from 1.5x to 3.2x in 2018. Debt surged on 52.3% while cash dropped on 37.4%.
TTM Technologies, Inc. has no short term refinancing risk: cash is higher than short term debt (854.5%).
Valuation and dividends
The company's trades at EV/EBITDA 6.4x and P/E 7.0x.
Management team
Thomas T Edman "Tom" is a TTM Technologies, Inc.'s CEO. Thomas T Edman "Tom" is a founder and has spent 5 years with the company. The company's CFO Todd B Schull has spent 4 years with the company.
Financial and operational results
FY ended 12/31/2018
TTM Technologies, Inc. ($TTMI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 1,326 | 2,095 | 2,533 | 2,659 | 2,847 | 7.1% |
| Gross Profit | 195 | 310 | 424 | 430 | 457 | 6.4% |
| SG&A | 138 | 225 | 214 | 192 | 233 | 21.2% |
| EBITDA | 150 | 214 | 354 | 387 | 385 | -0.6% |
| Net Income | 15 | -26 | 35 | 124 | 174 | 39.7% |
Balance Sheet
|
|---|
| Cash | 279 | 259 | 256 | 409 | 256 | -37.4% |
| Short Term Debt | 128 | 157 | 111 | 5 | 30 | 555.3% |
| Long Term Debt | 375 | 1,045 | 909 | 975 | 1,462 | 49.9% |
Cash flow
|
|---|
| Capex | 110 | 100 | 85 | 151 | 150 | -0.8% |
Ratios
|
|---|
| Revenue growth | -3.1% | 58.1% | 20.9% | 4.9% | 7.1% | |
| EBITDA growth | -11.9% | 42.2% | 65.6% | 9.4% | -0.6% | |
|
|---|
| Gross Margin | 14.7% | 14.8% | 16.7% | 16.2% | 16.1% | -0.1% |
| EBITDA Margin | 11.3% | 10.2% | 14.0% | 14.6% | 13.5% | -1.0% |
| SG&A, % of revenue | 10.4% | 10.7% | 8.4% | 7.2% | 8.2% | 1.0% |
| Net Income Margin | 1.1% | -1.2% | 1.4% | 4.7% | 6.1% | 1.4% |
| CAPEX, % of revenue | 8.3% | 4.8% | 3.4% | 5.7% | 5.3% | -0.4% |
|
|---|
| ROIC | 3.7% | 3.8% | 8.9% | 11.1% | 6.7% | -4.3% |
| ROE | 2.1% | -3.4% | 4.3% | 13.6% | 15.5% | 2.0% |
| Net Debt/EBITDA | 1.5x | 4.4x | 2.2x | 1.5x | 3.2x | 1.7x |
TTM Technologies, Inc. ($TTMI) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 664 | 717 | 756 | 711 | | 6.1% | 14.3% | 13.4% | -3.8% |
| EBITDA | 76 | 92 | 114 | 103 | | -20.0% | 5.1% | 30.8% | -12.5% |
| Net Income | 10 | 84 | 27 | 52 | | -69.4% | 308.0% | 25.9% | 6.6% |
Balance Sheet
|
|---|
| Cash | 353 | 204 | 208 | 256 | | 24.6% | -17.4% | -31.1% | -37.4% |
| Short Term Debt | 5 | 41 | 40 | 30 | | -97.1% | -63.2% | 856.0% | 555.3% |
| Long Term Debt | 977 | 1,555 | 1,518 | 1,462 | | 13.5% | 80.1% | 55.9% | 49.9% |
Ratios
|
|---|
| Gross Margin | 13.4% | 16.2% | 17.1% | 17.2% | | -3.4% | 0.9% | 2.6% | -0.6% |
| EBITDA Margin | 11.4% | 12.8% | 15.1% | 14.5% | | -3.7% | -1.1% | 2.0% | -1.4% |
| Net Income Margin | 1.5% | 11.7% | 3.6% | 7.4% | | -3.7% | 8.4% | 0.4% | 0.7% |
Peers in Electronic Manufacturing Servi
Below we provide TTM Technologies, Inc. benchmarking against other companies in Electronic Manufacturing Servi industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| RF Industries, Ltd. ($RFIL) | | 41.9% | -7.8% | -24.0% | 118.4% |
| Alpine 4 Technologies Ltd ($ALPP) | | | 35,893.8% | 5.8% | 71.5% |
| Kemet Corporation ($KEM) | | -1.3% | -10.7% | 3.1% | 58.4% |
| SMTC Corporation ($SMTX) | | -3.5% | -23.9% | -17.1% | 55.2% |
| Deswell Industries, Inc. ($DSWL) | | -7.0% | 17.1% | -0.1% | 36.3% |
| |
|---|
| Median (27 companies) | | 2.6% | 1.2% | 1.9% | 9.8% |
|---|
| TTM Technologies, Inc. ($TTMI) | | 58.1% | 20.9% | 4.9% | 7.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Neonode Inc. ($NEON) | 68.2% | 66.0% | 86.9% | 77.1% | 89.2% |
| Andrea Electronics Corp ($ANDR) | 83.8% | 99.1% | 88.5% | 96.2% | 70.4% |
| Data I/O Corporation ($DAIO) | 53.9% | 52.4% | 55.0% | 58.9% | 59.4% |
| IPG Photonics Corporation ($IPGP) | 54.1% | 54.6% | 54.9% | 56.6% | 54.8% |
| CTS Corporation ($CTS) | 32.2% | 33.2% | 35.4% | 33.2% | 35.1% |
| |
|---|
| Median (27 companies) | 14.5% | 19.4% | 22.2% | 13.8% | 12.1% |
|---|
| TTM Technologies, Inc. ($TTMI) | 14.7% | 14.8% | 16.7% | 16.2% | 16.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| IPG Photonics Corporation ($IPGP) | 41.5% | 42.4% | 41.8% | 44.7% | 40.9% |
| TE Connectivity Ltd. ($TEL) | 19.7% | 19.3% | 20.9% | 20.4% | 21.4% |
| CTS Corporation ($CTS) | 14.7% | 9.0% | 20.7% | 14.0% | 17.8% |
| Methode Electronics, Inc. ($MEI) | 12.6% | 15.4% | 16.5% | 16.5% | 16.1% |
| RF Industries, Ltd. ($RFIL) | 12.4% | 6.7% | -12.1% | 3.1% | 15.9% |
| |
|---|
| Median (27 companies) | 4.4% | 5.2% | 4.8% | 4.5% | 4.7% |
|---|
| TTM Technologies, Inc. ($TTMI) | 11.3% | 10.2% | 14.0% | 14.6% | 13.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Maxwell Technologies, Inc. ($MXWL) | 3.7% | 2.5% | 4.9% | 6.6% | 11.3% |
| IPG Photonics Corporation ($IPGP) | 11.5% | 7.8% | 12.6% | 9.0% | 11.0% |
| eMagin Corporation ($EMAN) | 5.8% | 4.7% | 6.7% | 6.2% | 8.8% |
| TE Connectivity Ltd. ($TEL) | 5.3% | 4.9% | 5.3% | 5.6% | 6.7% |
| CTS Corporation ($CTS) | 3.2% | 2.5% | 5.2% | 4.3% | 6.1% |
| |
|---|
| Median (27 companies) | 2.5% | 2.4% | 2.8% | 2.7% | 2.4% |
|---|
| TTM Technologies, Inc. ($TTMI) | 8.3% | 4.8% | 3.4% | 5.7% | 5.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| RF Industries, Ltd. ($RFIL) | 8.5% | 4.6% | -18.7% | 0.9% | 29.2% |
| IPG Photonics Corporation ($IPGP) | 27.0% | 27.8% | 25.1% | 29.9% | 22.9% |
| Methode Electronics, Inc. ($MEI) | 19.7% | 26.1% | 22.7% | 20.8% | 19.2% |
| TE Connectivity Ltd. ($TEL) | 17.3% | 15.1% | 15.9% | 16.2% | 18.4% |
| Kemet Corporation ($KEM) | -2.8% | 3.8% | 6.2% | 6.9% | 16.9% |
| |
|---|
| Median (29 companies) | 5.0% | 5.3% | 6.2% | 4.2% | 6.4% |
|---|
| TTM Technologies, Inc. ($TTMI) | 3.7% | 3.8% | 8.9% | 11.1% | 6.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpine 4 Technologies Ltd ($ALPP) | | | | 34.1x | 65.7x |
| SigmaTron International, Inc. ($SGMA) | 2.7x | 4.1x | 2.4x | 3.4x | 16.0x |
| SMTC Corporation ($SMTX) | 3.5x | 1.8x | 1.0x | | 11.3x |
| IEC Electronics Corp. ($IEC) | 7.1x | 14.0x | 2.0x | 5.6x | 4.9x |
| Key Tronic Corporation ($KTCC) | 0.2x | 3.4x | 2.6x | 2.5x | 3.9x |
| |
|---|
| Median (22 companies) | -0.5x | -0.9x | -0.0x | -0.1x | -0.2x |
|---|
| TTM Technologies, Inc. ($TTMI) | 1.5x | 4.4x | 2.2x | 1.5x | 3.2x |
