TTM Technologies, Inc. reports 330% Net Income growth in 2020 while 6.2 pp EBITDA Margin decline from 15.8% to 9.7%
02/03/2021 • About TTM Technologies, Inc. (
$TTMI) • By InTwits
TTM Technologies, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- TTM Technologies, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.2%. At the same time it's a lot of higher than industry average of 3.0%.
- CAPEX is quite volatile: $57m in FY2020, $69m in FY2019, $68m in FY2018, $44m in FY2017, $26m in FY2016
- The company has potentially unprofitable business model: ROIC is 1.1%
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 decreased slightly on 1.3%. Revenue decline showed acceleration in FY20Q4 - it was 2.2% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.2 pp from 15.8% to 9.7% in FY2020.
Gross Margin decreased slightly on 0.63 pp from 17.7% to 17.1% in FY2020. SG&A as a % of Revenue showed almost no change in FY2020.
Net Income margin increased on 6.5 pp from 1.9% to 8.4% in FY2020.
Investments (CAPEX, working capital and M&A)
TTM Technologies, Inc.'s CAPEX/Revenue was 4.9% in FY2020. The company showed small CAPEX/Revenue decline of 0.79 pp from 5.7% in FY2017 to 4.9% in FY2020. It's average level of CAPEX/Revenue for the last three years was 5.6%. Battling declining revenue TTM Technologies, Inc. invested a large share of EBITDA (50.8%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at good ROE (13.0%) while ROIC is low (1.1%). ROIC decreased on 2.9 pp from 4.0% to 1.1% in FY2020. ROE increased on 9.7 pp from 3.3% to 13.0% in FY2020. ROIC stuck to a declining trend at -2.3 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.0x and Debt / EBITDA is 4.3x. Net Debt / EBITDA dropped on 1.3x from 3.3x to 2.0x in FY2020. Debt dropped on 42.1% while cash surged on 18.9%.
TTM Technologies, Inc. has no short term refinancing risk: cash is higher than short term debt (5,544.8%).
Valuation and dividends
TTM Technologies, Inc.'s trades at EV/EBITDA 9.3x and P/E 8.3x.
Management team
Thomas T Edman "Tom" is a the company's CEO. Thomas T Edman "Tom" has spent 7 years with the company. TTM Technologies, Inc.'s CFO is Todd B Schull. Todd B Schull has 8 years tenure at the company.
Financial and operational results
FY ended 12/28/2020
TTM Technologies, Inc. ($TTMI) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 2,533 | 2,659 | 2,847 | 2,133 | 2,105 | -1.3% |
| Gross Profit | 424 | 430 | 457 | 377 | 359 | -4.8% |
| SG&A | 214 | 192 | 233 | 198 | 186 | -6.1% |
| EBITDA | 354 | 387 | 385 | 338 | 204 | -39.8% |
| Net Income | 35 | 124 | 174 | 41 | 178 | 329.9% |
Balance Sheet
|
|---|
| Cash | 256 | 409 | 256 | 380 | 452 | 18.9% |
| Short Term Debt | 111 | 5 | 30 | 257 | 8 | -96.8% |
| Long Term Debt | 909 | 975 | 1,462 | 1,241 | 860 | -30.7% |
Cash flow
|
|---|
| Capex | 85 | 151 | 150 | 143 | 103 | -27.6% |
Ratios
|
|---|
| Revenue growth | 20.9% | 4.9% | 7.1% | -25.1% | -1.3% | |
| EBITDA growth | 65.6% | 9.4% | -0.6% | -12.2% | -39.8% | |
|
|---|
| Gross Margin | 16.7% | 16.2% | 16.1% | 17.7% | 17.1% | -0.6% |
| EBITDA Margin | 14.0% | 14.6% | 13.5% | 15.8% | 9.7% | -6.2% |
| SG&A, % of revenue | 8.4% | 7.2% | 8.2% | 9.3% | 8.9% | -0.5% |
| Net Income Margin | 1.4% | 4.7% | 6.1% | 1.9% | 8.4% | 6.5% |
| CAPEX, % of revenue | 3.4% | 5.7% | 5.3% | 6.7% | 4.9% | -1.8% |
|
|---|
| ROIC | 8.9% | 11.1% | 6.7% | 4.0% | 1.1% | -2.9% |
| ROE | 4.3% | 13.6% | 15.5% | 3.3% | 13.0% | 9.7% |
| Net Debt/EBITDA | 2.2x | 1.5x | 3.2x | 3.3x | 2.0x | -1.3x |
TTM Technologies, Inc. ($TTMI) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 498 | 570 | 514 | 524 | | -7.2% | 8.2% | -3.9% | -2.2% |
| EBITDA | 73 | 65 | -1 | 66 | | -20.5% | -23.2% | -101.0% | -22.2% |
| Net Income | -1 | 193 | -41 | 39 | | - | 5,531.1% | -361.2% | 54.2% |
Balance Sheet
|
|---|
| Cash | 362 | 695 | 413 | 452 | | 53.9% | 144.2% | 30.6% | 18.9% |
| Short Term Debt | 257 | 658 | 258 | 8 | | 3,377.1% | 8,815.6% | 3,500.2% | -96.8% |
| Long Term Debt | 1,244 | 848 | 856 | 860 | | -16.0% | -43.0% | -42.5% | -30.7% |
Ratios
|
|---|
| Gross Margin | 16.3% | 17.6% | 17.4% | 16.8% | | -2.1% | -0.0% | 1.4% | -1.9% |
| EBITDA Margin | 14.7% | 11.4% | -0.1% | 12.6% | | -2.5% | -4.7% | -14.4% | -3.2% |
| Net Income Margin | -0.2% | 33.8% | -8.1% | 7.4% | | 0.4% | 33.2% | -11.0% | 2.7% |
Peers in Electronic Manufacturing Services
Below you can find TTM Technologies, Inc. benchmarking vs. other companies in Electronic Manufacturing Services industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Netlist Inc ($NLST) | - | 95.0% | -12.5% | -22.1% | 81.0% |
| IEC Electronics Corp. ($IEC) | - | -24.1% | 21.2% | 34.3% | 16.4% |
| eMagin Corporation ($EMAN) | - | 3.0% | 19.1% | 1.9% | 10.1% |
| Jabil Inc. ($JBL) | - | 3.9% | 15.9% | 14.4% | 7.8% |
| Plexus Corp. ($PLXS) | - | -1.1% | 13.7% | 10.1% | 7.1% |
| |
|---|
| Median (13 companies) | 4.6% | 1.9% | 9.8% | 9.7% | -8.7% |
|---|
| TTM Technologies, Inc. ($TTMI) | - | 4.9% | 7.1% | -25.1% | -1.3% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Neonode Inc. ($NEON) | 86.9% | 77.1% | 89.2% | 89.7% | 82.0% |
| IPG Photonics Corporation ($IPGP) | 54.9% | 56.6% | 54.8% | 46.1% | 44.9% |
| CTS Corporation ($CTS) | 35.4% | 33.2% | 35.1% | 33.6% | 32.8% |
| TE Connectivity Ltd. ($TEL) | 33.7% | 34.3% | 33.9% | 32.7% | 30.7% |
| RF Industries, Ltd. ($RFIL) | 28.0% | 30.4% | 34.1% | 28.3% | 26.9% |
| |
|---|
| Median (13 companies) | 22.2% | 13.8% | 12.1% | 13.8% | 14.3% |
|---|
| TTM Technologies, Inc. ($TTMI) | 16.7% | 16.2% | 16.1% | 17.7% | 17.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| IPG Photonics Corporation ($IPGP) | 41.8% | 44.7% | 40.9% | 26.8% | 24.0% |
| CTS Corporation ($CTS) | 20.7% | 14.0% | 17.8% | 17.6% | 18.1% |
| TE Connectivity Ltd. ($TEL) | 20.9% | 20.4% | 21.4% | 19.8% | 11.1% |
| IEC Electronics Corp. ($IEC) | 7.4% | 3.8% | 4.3% | 6.6% | 7.5% |
| Plexus Corp. ($PLXS) | 5.7% | 6.9% | 5.8% | 6.1% | 6.5% |
| |
|---|
| Median (12 companies) | 4.8% | 4.5% | 4.7% | 5.8% | 5.3% |
|---|
| TTM Technologies, Inc. ($TTMI) | 14.0% | 14.6% | 13.5% | 15.8% | 9.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| eMagin Corporation ($EMAN) | 6.7% | 6.2% | 8.8% | 4.2% | 8.5% |
| IPG Photonics Corporation ($IPGP) | 12.6% | 9.0% | 11.0% | 10.2% | 7.3% |
| TE Connectivity Ltd. ($TEL) | 5.3% | 5.6% | 6.7% | 5.6% | 4.6% |
| Jabil Inc. ($JBL) | 5.0% | 3.8% | 4.7% | 4.0% | 3.6% |
| CTS Corporation ($CTS) | 5.2% | 4.3% | 6.1% | 4.6% | 3.5% |
| |
|---|
| Median (12 companies) | 2.8% | 2.7% | 2.4% | 1.4% | 2.6% |
|---|
| TTM Technologies, Inc. ($TTMI) | 3.4% | 5.7% | 5.3% | 6.7% | 4.9% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| IEC Electronics Corp. ($IEC) | 16.9% | 3.1% | 6.4% | 12.7% | 14.8% |
| Sanmina Corporation ($SANM) | 14.2% | 13.9% | 7.0% | 16.2% | 13.0% |
| Plexus Corp. ($PLXS) | 8.7% | 10.3% | 9.6% | 12.6% | 12.4% |
| Jabil Inc. ($JBL) | 12.3% | 9.3% | 12.5% | 16.1% | 10.8% |
| CTS Corporation ($CTS) | 18.1% | 9.8% | 14.8% | 11.8% | 9.2% |
| |
|---|
| Median (13 companies) | 6.2% | 4.2% | 6.4% | 11.8% | 7.3% |
|---|
| TTM Technologies, Inc. ($TTMI) | 8.9% | 11.1% | 6.7% | 4.0% | 1.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SMTC Corporation ($SMTX) | 1.0x | - | 11.3x | 3.8x | 4.2x |
| TE Connectivity Ltd. ($TEL) | 1.4x | 1.3x | 1.1x | 1.1x | 2.7x |
| IEC Electronics Corp. ($IEC) | 2.0x | 5.6x | 4.9x | 3.6x | 2.1x |
| Jabil Inc. ($JBL) | 1.0x | 0.8x | 1.0x | 0.9x | 1.4x |
| Plexus Corp. ($PLXS) | -1.2x | -1.5x | -0.7x | 0.3x | -0.0x |
| |
|---|
| Median (10 companies) | -0.0x | -0.1x | -0.2x | 0.1x | -0.1x |
|---|
| TTM Technologies, Inc. ($TTMI) | 2.2x | 1.5x | 3.2x | 3.3x | 2.0x |
