TTM Technologies, Inc. (NASDAQ:TTMI) is a leading global manufacturer of innovative technology solutions, including mission systems, radio frequency (RF) components, RF microwave/microelectronic assemblies, and technologically advanced printed circuit boards (PCBs). With a rich history spanning over two decades, the company has established itself as a trusted partner to a diverse customer base across various end markets.
Business Overview TTM Technologies was founded in 1998 and has since grown to become one of the largest PCB manufacturers globally. The company's success is rooted in its customer-centric approach, commitment to technological innovation, and strategic acquisitions that have expanded its capabilities. In its early years, TTM focused on providing quick-turn and technologically advanced PCB manufacturing services, leveraging expertise in advanced manufacturing techniques such as high-density interconnect (HDI) and rigid-flex PCBs to differentiate itself in the market.
Over time, TTM expanded its capabilities through strategic acquisitions of complementary businesses, allowing it to offer a wider range of products and services. A significant milestone was the acquisition of Anaren in 2018, which enabled TTM to move beyond traditional build-to-print manufacturing and assembly capabilities. This acquisition allowed the company to engage with customers in designing more complete RF solutions, providing cost-effective, ready-for-manufacture, enabling technologies.
The acquisition of Telephonics Corporation in 2022 further diversified TTM's product portfolio and customer base, significantly increasing its presence in the aerospace and defense market. Telephonics brought highly engineered integrated mission system solutions and surveillance and communications products to TTM's offerings, allowing the company to deepen its RF and radar-related engagement with key aerospace and defense customers.
Throughout its history, TTM has faced challenges such as navigating the competitive and volatile electronics industry, managing global supply chain disruptions, and adapting to changing customer requirements. The company has addressed these challenges by continuously investing in its manufacturing capabilities, expanding its product offerings, and maintaining a strong focus on customer service and innovation.
Today, TTM operates a global footprint with 23 specialized facilities across North America and Asia, serving a diversified customer base that includes original equipment manufacturers (OEMs), electronic manufacturing services (EMS) providers, original design manufacturers (ODMs), distributors, and government agencies both domestic and allied foreign governments. The company's core markets include aerospace and defense, data center computing, automotive, medical, industrial and instrumentation, and networking.
Financial Performance and Ratios For the fiscal year ended December 30, 2024, TTM reported net sales of $2.44 billion, a 9.4% increase compared to the prior year. The company's net income for the year stood at $56.3 million, or $0.54 per diluted share. TTM's operating cash flow for the year was $236.9 million, and its free cash flow was $51.2 million.
In the fourth quarter of 2024, TTM generated revenue of $651 million, representing a 14% year-over-year growth. This growth was primarily driven by strength in the aerospace & defense, data center computing, and networking end markets, partially offset by declines in automotive, medical/industrial/instrumentation, and networking segments. Net income for the quarter was $5.17 million.
TTM's financial ratios demonstrate its strong liquidity and solvency position. As of December 30, 2024, TTM had a current ratio of 1.99 and a quick ratio of 1.71, indicating a healthy ability to meet its short-term obligations. The company's debt-to-equity ratio was 0.66, suggesting a balanced capital structure.
Liquidity TTM maintains a robust liquidity position with $503.93 million in cash and cash equivalents. The company has access to $195.57 million under its revolving credit facilities, providing additional financial flexibility. The debt-to-equity ratio stands at a very low 0.0024, indicating minimal leverage.
Operational Highlights and Strategic Initiatives During the fiscal year 2024, TTM continued to execute on its strategic initiatives to enhance its technological capabilities and expand its presence in high-growth end markets. The company achieved a record backlog of approximately $1.56 billion in its aerospace and defense (A&D) segment, driven by strong demand and improved operational execution. This segment now accounts for over 47% of TTM's total revenue, reflecting the company's successful diversification strategy.
In addition, TTM made significant progress in ramping up production at its new state-of-the-art PCB manufacturing facility in Penang, Malaysia, which is designed to serve the growing demand in commercial end markets such as data center computing, networking, and medical/industrial/instrumentation. The company also continued the consolidation of its global manufacturing footprint, closing facilities in Anaheim, California, Santa Clara, California, and Hong Kong, to improve operational efficiency and profitability.
Looking ahead, TTM's strategic focus remains on providing differentiated, high-value technology solutions to its customers. The company is investing in its new advanced technology PCB manufacturing facility in Syracuse, New York, which is expected to commence initial low-rate production in 2026. This facility will strengthen TTM's domestic capability to produce specialized high-technology PCBs, particularly for the aerospace and defense market, in response to increasing national security requirements.
Product Segments TTM operates in two reportable segments: PCB and RF and Specialty Components (RFS Components).
The PCB segment is TTM's largest, generating $2.41 billion in net sales for the year ended December 30, 2024, representing 98.8% of the company's total net sales. This segment's operating income was $348.39 million, with a 14.4% operating margin. The PCB segment offers a wide range of products, from conventional PCBs to advanced technologies such as HDI PCBs, flexible PCBs, rigid-flex PCBs, and substrate-like PCBs (SLPs).
The RFS Components segment generated $37.14 million in net sales, or 1.2% of the company's total net sales, for the year ended December 30, 2024. This segment's operating income was $8.49 million, with a 22.9% operating margin. The RFS Components segment offers products including radar systems, surveillance systems, communications systems, RF and microwave assemblies, passive RF components, advanced ceramic RF components, hi-reliability multi-chip modules, beamforming and switching networks, and custom designed application-specific integrated circuits (ASICs).
Geographic Markets TTM has significant manufacturing operations in China, Asia, and Canada. Approximately 47% of net sales were generated from non-U.S. operations in the most recent fiscal year, highlighting the company's global reach and diversified revenue streams.
Industry Trends The PCB industry is expected to grow at a 5.6% CAGR from 2023 to 2028, driven by recovery from the 2023 market downturn, continued growth in data center and networking end markets, and projected growth in the aerospace & defense end market. The fastest growth is expected in HDI, high layer count boards, and substrates, aligning well with TTM's technological capabilities and market focus.
Guidance For the first quarter of 2025, TTM provided guidance for revenues between $600 million and $640 million, with non-GAAP EPS expected to be in the range of $0.37 to $0.43 per diluted share. The company expects SG&A expense to be about 9.4% of net sales and R&D to be about 1.1% of net sales. Interest expense is anticipated to be approximately $11.2 million, with interest income of approximately $2 million. The effective tax rate is estimated to be between 12% and 17%. TTM expects depreciation of approximately $28.1 million, amortization of intangibles of approximately $9.2 million, stock-based compensation expense of approximately $8.9 million, and non-cash interest expense of approximately $0.5 million.
Risks and Challenges While TTM has demonstrated resilience and adaptability, the company faces several risks and challenges that warrant consideration. The highly competitive nature of the PCB industry, along with the volatility in the electronics industry, can exert pressure on the company's profit margins. Additionally, TTM's global operations expose it to risks associated with currency fluctuations, geopolitical tensions, and supply chain disruptions, which could impact its financial performance.
The company's reliance on a limited number of large customers also presents a concentration risk, as the loss of a significant customer or a decline in their business could adversely affect TTM's results. Furthermore, the company's ongoing investment in new facilities and technology advancements carries execution risks, which could delay the realization of anticipated benefits.
Conclusion TTM Technologies, Inc. has established itself as a leading global manufacturer of innovative technology solutions, leveraging its deep expertise, strategic acquisitions, and continuous investments in R&D. The company's diversified end-market exposure, strong operational execution, and focus on high-growth segments, such as aerospace and defense, position it well to navigate the dynamic industry landscape. While challenges persist, TTM's robust financial position, liquidity, and strategic initiatives suggest its ability to capitalize on emerging opportunities and deliver long-term value for its shareholders. The company's strong performance in recent quarters, coupled with positive industry trends and a solid backlog in key segments, provides a foundation for continued growth and success in the evolving technology solutions market.