10-Q 1 ttmi-20240401.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

Form 10-Q

 

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

For the quarterly period ended April 1, 2024

Or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to____________

Commission File Number: 000-31285

 

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.)

200 East Sandpointe, Suite 400, Santa Ana, California 92707

(Address of principal executive offices)

(714) 327-3000

(Registrant’s telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value

TTMI

Nasdaq Global Select Market

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 No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes No

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

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

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

As of May 2, 2024, there were outstanding 101,776,192 shares of the registrant’s Common Stock, $0.001 par value.

 


 

TTM TECHNOLOGIES, INC.

Form 10-Q

For the Quarter Ended April 1, 2024

TABLE OF CONTENTS

 

Page

PART I: FINANCIAL INFORMATION

 

3

Item 1. Financial Statements (unaudited)

 

3

Consolidated Condensed Balance Sheets as of April 1, 2024 and January 1, 2024

 

3

Consolidated Condensed Statements of Operations for the quarters ended April 1, 2024 and April 3, 2023

 

4

Consolidated Condensed Statements of Comprehensive Income (Loss) for the quarters ended April 1, 2024 and April 3, 2023

 

5

Consolidated Condensed Statements of Stockholders' Equity for the quarters ended April 1, 2024 and April 3, 2023

 

6

Consolidated Condensed Statements of Cash Flows for the quarters ended April 1, 2024 and April 3, 2023

 

7

Notes to Consolidated Condensed Financial Statements

 

8

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

 

20

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

25

Item 4. Controls and Procedures

 

26

PART II: OTHER INFORMATION

 

27

Item 1. Legal Proceedings

 

27

Item 1A. Risk Factors

 

27

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

27

Item 3. Defaults Upon Senior Securities

 

27

Item 4. Mine Safety Disclosures

 

27

Item 5. Other Information

 

27

Item 6. Exhibits

 

28

SIGNATURES

 

29

2


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

TTM TECHNOLOGIES, INC.

Consolidated Condensed Balance Sheets

As of April 1, 2024 and January 1, 2024

 

 

As of

 

 

 

April 1, 2024

 

 

January 1, 2024

 

 

 

(Unaudited)

 

 

 

(In thousands, except par value)

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

440,388

 

 

$

450,208

 

Accounts receivable, net

 

 

367,537

 

 

 

413,557

 

Contract assets

 

 

320,514

 

 

 

292,050

 

Inventories

 

 

220,515

 

 

 

213,075

 

Receivable from sale of Shanghai E-MS (SH E-MS) property

 

 

 

 

 

6,737

 

Prepaid expenses and other current assets

 

 

57,160

 

 

 

54,060

 

Total current assets

 

 

1,406,114

 

 

 

1,429,687

 

Property, plant, and equipment, net

 

 

825,834

 

 

 

807,667

 

Operating lease right-of-use assets

 

 

83,847

 

 

 

86,286

 

Goodwill

 

 

702,735

 

 

 

702,735

 

Definite-lived intangibles, net

 

 

222,946

 

 

 

236,711

 

Deposits and other non-current assets

 

 

57,334

 

 

 

60,577

 

Total assets

 

$

3,298,810

 

 

$

3,323,663

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

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

 

$

2,625

 

 

$

3,500

 

Accounts payable

 

 

348,913

 

 

 

334,609

 

Contract liabilities

 

 

117,381

 

 

 

126,508

 

Accrued salaries, wages, and benefits

 

 

88,549

 

 

 

98,561

 

Other current liabilities

 

 

113,739

 

 

 

140,806

 

Total current liabilities

 

 

671,207

 

 

 

703,984

 

Long-term debt, net of discount and issuance costs

 

 

913,888

 

 

 

914,336

 

Operating lease liabilities

 

 

77,485

 

 

 

80,786

 

Other long-term liabilities

 

 

115,122

 

 

 

113,518

 

Total long-term liabilities

 

 

1,106,495

 

 

 

1,108,640

 

Commitments and contingencies (Note 14)

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Common stock, $0.001 par value; 300,000 shares authorized; 111,550 and 111,282
   shares issued as of April 1, 2024 and January 1, 2024, respectively;
   
101,776 and 102,108 shares outstanding as of April 1, 2024 and
   January 1, 2024, respectively

 

 

112

 

 

 

111

 

Treasury stock – common stock at cost; 9,774 and 9,174 shares as of April 1, 2024
   and January 1, 2024, respectively

 

 

(132,425

)

 

 

(123,091

)

Additional paid-in capital

 

 

887,749

 

 

 

880,963

 

Retained earnings

 

 

792,589

 

 

 

782,123

 

Accumulated other comprehensive loss

 

 

(26,917

)

 

 

(29,067

)

Total stockholders’ equity

 

 

1,521,108

 

 

 

1,511,039

 

Total liabilities and stockholders' equity

 

$

3,298,810

 

 

$

3,323,663

 

 

See accompanying notes to consolidated condensed financial statements.

3


 

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Operations

For the Quarters Ended April 1, 2024 and April 3, 2023

 

 

 

Quarter Ended

 

 

 

April 1, 2024

 

 

April 3, 2023

 

 

 

(Unaudited)

 

 

 

(In thousands, except per share data)

 

Net sales

 

$

570,113

 

 

$

544,437

 

Cost of goods sold

 

 

466,394

 

 

 

458,314

 

Gross profit

 

 

103,719

 

 

 

86,123

 

Operating expenses:

 

 

 

 

 

 

Selling and marketing

 

 

20,294

 

 

 

21,302

 

General and administrative

 

 

43,670

 

 

 

35,073

 

Research and development

 

 

7,321

 

 

 

7,085

 

Amortization of definite-lived intangibles

 

 

11,429

 

 

 

21,964

 

Restructuring charges

 

 

3,938

 

 

 

4,167

 

Total operating expenses

 

 

86,652

 

 

 

89,591

 

Operating income (loss)

 

 

17,067

 

 

 

(3,468

)

Other (expense) income:

 

 

 

 

 

 

Interest expense

 

 

(12,324

)

 

 

(12,807

)

Gain on sale of subsidiary

 

 

 

 

 

1,339

 

Other, net

 

 

9,326

 

 

 

1,198

 

Total other expense, net

 

 

(2,998

)

 

 

(10,270

)

Income (loss) before income taxes

 

 

14,069

 

 

 

(13,738

)

Income tax (provision) benefit

 

 

(3,603

)

 

 

7,924

 

Net income (loss)

 

$

10,466

 

 

$

(5,814

)

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

Basic earnings (loss) per share

 

$

0.10

 

 

$

(0.06

)

Diluted earnings (loss) per share

 

 

0.10

 

 

 

(0.06

)

 

See accompanying notes to consolidated condensed financial statements.

4


 

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Comprehensive Income (Loss)

For the Quarters Ended April 1, 2024 and April 3, 2023

 

 

 

Quarter Ended

 

 

 

April 1, 2024

 

 

April 3, 2023

 

 

 

(Unaudited)

 

 

 

(In thousands)

 

Net income (loss)

 

$

10,466

 

 

$

(5,814

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

Pension obligation adjustments, net

 

 

 

 

 

1

 

Foreign currency translation adjustments, net

 

 

(802

)

 

 

30

 

Derecognition of foreign currency translation adjustments
     due to sale of subsidiary

 

 

 

 

 

(6,627

)

Net unrealized gain (loss) on cash flow hedges:

 

 

 

 

 

 

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

 

 

3,819

 

 

 

(680

)

Amounts realized in the statement of operations, net

 

 

(867

)

 

 

5

 

Net

 

 

2,952

 

 

 

(675

)

Other comprehensive income (loss), net of tax

 

 

2,150

 

 

 

(7,271

)

Comprehensive income (loss), net of tax

 

$

12,616

 

 

$

(13,085

)

 

See accompanying notes to consolidated condensed financial statements.

5


 

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Stockholders’ Equity

For the Quarters Ended April 1, 2024 and April 3, 2023

 

 

 

Common Stock

 

 

Treasury Stock

 

 

Additional
Paid-In

 

 

Retained

 

 

Accumulated
Other
Comprehensive

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Loss

 

 

Equity

 

 

 

(Unaudited)

 

 

 

(In thousands)

 

Balance, January 1, 2024

 

 

111,282

 

 

$

111

 

 

 

(9,174

)

 

$

(123,091

)

 

$

880,963

 

 

$

782,123

 

 

$

(29,067

)

 

$

1,511,039

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,466

 

 

 

 

 

 

10,466

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,150

 

 

 

2,150

 

Issuance of common stock for
   performance-based
   restricted stock units

 

 

227

 

 

 

1

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Issuance of common stock for
   restricted stock units

 

 

41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchases of common stock

 

 

 

 

 

 

 

 

(600

)

 

 

(9,334

)

 

 

 

 

 

 

 

 

 

 

 

(9,334

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,787

 

 

 

 

 

 

 

 

 

6,787

 

Balance, April 1, 2024

 

 

111,550

 

 

$

112

 

 

 

(9,774

)

 

$

(132,425

)

 

$

887,749

 

 

$

792,589

 

 

$

(26,917

)

 

$

1,521,108

 

 

 

 

Common Stock

 

 

Treasury Stock

 

 

Additional
Paid-In

 

 

Retained

 

 

Accumulated
Other
Comprehensive

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Loss

 

 

Equity

 

 

 

(Unaudited)

 

 

 

(In thousands)

 

Balance, January 2, 2023

 

 

109,598

 

 

$

110

 

 

 

(7,370

)

 

$

(98,659

)

 

$

858,077

 

 

$

800,841

 

 

$

(24,790

)

 

$

1,535,579

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,814

)

 

 

 

 

 

(5,814

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,271

)

 

 

(7,271

)

Issuance of common stock for
   performance-based
   restricted stock units

 

 

337

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for
   restricted stock units

 

 

21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,240

 

 

 

 

 

 

 

 

 

5,240

 

Balance, April 3, 2023

 

 

109,956

 

 

$

110

 

 

 

(7,370

)

 

$

(98,659

)

 

$

863,317

 

 

$

795,027

 

 

$

(32,061

)

 

$

1,527,734

 

 

See accompanying notes to consolidated condensed financial statements.

6


 

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Cash Flows

For the Quarters Ended April 1, 2024 and April 3, 2023

 

 

 

Quarter Ended

 

 

 

April 1, 2024

 

 

April 3, 2023

 

 

 

(Unaudited)

 

 

 

(In thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income (loss)

 

$

10,466

 

 

$

(5,814

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation of property, plant, and equipment

 

 

24,696

 

 

 

25,253

 

Amortization of definite-lived intangible assets

 

 

13,765

 

 

 

27,772

 

Amortization of debt discount and issuance costs

 

 

518

 

 

 

726

 

Deferred income taxes

 

 

1,104

 

 

 

(1,867

)

Stock-based compensation

 

 

6,787

 

 

 

5,240

 

Gain on sale of subsidiary

 

 

 

 

 

(1,339

)

Other

 

 

(1,465

)

 

 

(1,050

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

46,020

 

 

 

64,595

 

Contract assets

 

 

(28,464

)

 

 

18,591

 

Inventories

 

 

(7,440

)

 

 

(9,045

)

Prepaid expenses and other current assets

 

 

(5,103

)

 

 

1,875

 

Accounts payable

 

 

7,275

 

 

 

(34,578

)

Contract liabilities

 

 

(9,127

)

 

 

22,724

 

Accrued salaries, wages, and benefits

 

 

(10,012

)

 

 

(29,279

)

Other current liabilities

 

 

(5,125

)

 

 

(28,726

)

Net cash provided by operating activities

 

 

43,895

 

 

 

55,078

 

Cash flows from investing activities:

 

 

 

 

 

 

Proceeds from sale of SH E-MS property

 

 

6,737

 

 

 

34,733

 

Purchase of property, plant, and equipment and other assets

 

 

(49,342

)

 

 

(31,002

)

Proceeds from sale of property, plant, and equipment and other assets

 

 

46

 

 

 

295

 

Proceeds from sale of subsidiary, net of cash disposed

 

 

 

 

 

5,601

 

Net cash (used in) provided by investing activities

 

 

(42,559

)

 

 

9,627

 

Cash flows from financing activities:

 

 

 

 

 

 

Repayment of long-term debt borrowing

 

 

(1,750

)

 

 

(50,000

)

Repurchases of common stock

 

 

(9,334

)

 

 

 

Net cash used in financing activities

 

 

(11,084

)

 

 

(50,000

)

Effect of foreign currency exchange rates on cash and cash equivalents

 

 

(72

)

 

 

(2

)

Net (decrease) increase in cash and cash equivalents

 

 

(9,820

)

 

 

14,703

 

Cash and cash equivalents at beginning of period

 

 

450,208

 

 

 

402,749

 

Cash and cash equivalents at end of period

 

$

440,388

 

 

$

417,452

 

Supplemental cash flow information:

 

 

 

 

 

 

Cash paid, net for interest

 

$

19,579

 

 

$

19,589

 

Cash paid, net for income taxes

 

 

4,313

 

 

 

13,207

 

Supplemental disclosure of noncash investing activities:

 

 

 

 

 

 

Property, plant, and equipment recorded in accounts payable and other current liabilities

 

$

68,990

 

 

$

25,418

 

 

See accompanying notes to consolidated condensed financial statements.

7


 

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 manufacturer of technology solutions including mission systems, radio frequency (RF) components/RF microwave/microelectronic assemblies, and quick-turn and technologically advanced printed circuit boards (PCB). The Company provides time-to-market and volume production of advanced technology products and offers a one-stop design, engineering, and manufacturing solution to customers. This solution allows the Company to align technology developments with the diverse needs of the Company’s customers and to enable them to reduce the time required to develop new products and bring them to market.

The Company serves a diversified customer base in various markets throughout the world, including aerospace and defense, data center computing, automotive, medical, industrial and instrumentation related products, and networking. The Company’s customers include original equipment manufacturers (OEMs), electronic manufacturing services (EMS) providers, original design manufacturers (ODMs), distributors, and government agencies (both domestic and allied foreign governments).

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 (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. These consolidated condensed financial statements should 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 preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated condensed financial statements and accompanying notes. Due, in part, to the conflict between Russia and Ukraine, and the conflict in Israel and the Gaza Strip, the global economy and financial markets have been volatile. The Company has considered information available to it as of the date of issuance of these financial statements and is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or a revision to the carrying value of its assets or liabilities. The actual results the Company experienced may differ materially and adversely from its estimates. The Company uses a 52/53 week fiscal calendar with the fourth quarter ending on the Monday nearest December 31.

Recently Issued Accounting Standards Not Yet Adopted

In March 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements, to remove various references to concepts statements from the Accounting Standards Codification (ASC). These amendments clarify guidance, simplify wording or structure of guidance, and other minor improvements. The amendments are effective for fiscal years beginning after December 15, 2024, applied prospectively, with early adoption and retrospective application permitted. The impact of the adoption of the amendments in this update is not expected to be material to the Company's consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. The update will be effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements not yet issued or made available for issuance. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements and related disclosures, but expects additional disclosures upon adoption.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements and related disclosures, but expects additional disclosures upon adoption.

8


 

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the Securities and Exchange Commission’s Disclosure Update and Simplification Initiative, which modifies the disclosure or presentation requirements of a variety of topics in the ASC in response to the SEC’s Release No. 33-10532, Disclosure Update and Simplification Initiative, and align the ASC requirements with the SEC’s regulations. For entities subject to the SEC's existing disclosure requirements, the effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective. Early adoption is prohibited. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements and related disclosures.

(2) Share Repurchase Program

On May 3, 2023, the Company's Board of Directors authorized and approved a share repurchase program (2023 Repurchase Program), under which the Company may repurchase up to $100,000 in value of the Company’s outstanding shares of common stock from time to time through May 3, 2025. The Company may repurchase shares through open market purchases, privately-negotiated transactions, or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended (Exchange Act), which sets certain restrictions on the method, timing, price, and volume of open market stock repurchases. In addition, the Company adopted one trading plan in accordance with Rule 10b5-1 of the Exchange Act to facilitate certain purchases that may be effected under the share repurchase program. The timing, manner, price, and amount of any repurchases will be determined at the Company’s discretion, and the share repurchase program may be suspended, terminated, or modified at any time for any reason. The repurchase program does not obligate the Company to acquire any specific number of shares.

During the quarter ended April 1, 2024, the Company repurchased 600 shares of common stock for a total cost of approximately $9,334 (including commissions). As of April 1, 2024, the remaining amount in value available to be repurchased under the 2023 Repurchase Program was approximately $66,234.

(3) Significant Customers and Concentration of Credit Risk

Financial instruments that are potentially subject to concentrations of credit risk are primarily cash and cash equivalents and accounts receivable.

The Company had cash and cash equivalents held by its foreign subsidiaries of $203,019 and $195,928 as of April 1, 2024 and January 1, 2024, respectively. The Company maintains its cash and cash equivalents with major financial institutions and such balances exceed Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk on cash and cash equivalents.

In the normal course of business, the Company extends credit to its customers. Some customers to whom the Company extends credit are located outside the United States. The Company performs on-going 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, 2024, there was one customer that accounted for 11% of the Company's accounts receivable. There were no customers that accounted for 10% or more of the Company’s accounts receivable as of January 1, 2024.

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 the quarter ended April 1, 2024, two customers collectively accounted for approximately 22% of the Company's net sales. For the quarter ended April 3, 2023, one customer accounted for approximately 12% of the Company's net sales.

9


 

(4) Revenues

As of April 1, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations for long-term contracts was $385,265. The Company expects to recognize revenue on approximately 49% of the remaining performance obligations for the Company’s long-term contracts over the next 12 months with the remaining amount expected to be recognized thereafter.

For contracts in which anticipated total costs exceed the total expected revenue, an estimated loss is recognized in the period when identifiable. A provision for the entire amount of the estimated loss is recorded on a cumulative basis. The estimated remaining costs to complete for loss contracts as of April 1, 2024 and January 1, 2024 were $34,044 and $25,213, respectively.

Revenue recognized for the quarter ended April 1, 2024 from amounts recorded as contract liabilities as of January 1, 2024 was $18,214. Revenue recognized for the quarter ended April 3, 2023 from amounts recorded as contract liabilities as of January 2, 2023 was $18,508.

Revenue from products and services transferred to customers over time and at a point in time accounted for 96% and 4%, respectively, of the Company’s revenue for the quarters ended April 1, 2024 and April 3, 2023.

Disaggregated revenue by principal end markets with reportable segments was as follows:

 

 

 

Quarter Ended April 1, 2024

 

 

 

PCB

 

 

RF and Specialty Components
(RF&S Components)

 

 

Total

 

 

 

(In thousands)

 

End Markets:

 

 

 

 

 

 

 

 

 

Aerospace and Defense

 

$

264,776

 

 

$

 

 

$

264,776

 

Automotive

 

 

73,617

 

 

 

 

 

 

73,617

 

Data Center Computing

 

 

119,377

 

 

 

59

 

 

 

119,436

 

Medical/Industrial/Instrumentation

 

 

78,793

 

 

 

734

 

 

 

79,527

 

Networking

 

 

25,278

 

 

 

7,479

 

 

 

32,757

 

Total

 

$

561,841

 

 

$

8,272

 

 

$

570,113

 

 

 

 

Quarter Ended April 3, 2023

 

 

 

PCB

 

 

RF&S Components

 

 

Total

 

 

 

(In thousands)

 

End Markets:

 

 

 

 

 

 

 

 

 

Aerospace and Defense

 

$

232,292

 

 

$

 

 

$

232,292

 

Automotive

 

 

93,467

 

 

 

 

 

 

93,467

 

Data Center Computing

 

 

57,870

 

 

 

 

 

 

57,870

 

Medical/Industrial/Instrumentation

 

 

100,768

 

 

 

917

 

 

 

101,685

 

Networking

 

 

49,714

 

 

 

9,409

 

 

 

59,123

 

Total

 

$

534,111

 

 

$

10,326

 

 

$

544,437

 

 

10


 

(5) Composition of Certain Consolidated Condensed Financial Statement Captions

 

 

 

As of

 

 

 

April 1, 2024

 

 

January 1, 2024

 

 

 

(In thousands)

 

Inventories:

 

 

 

 

 

 

Raw materials

 

$

167,375

 

 

$

165,666

 

Work-in-process

 

 

51,408

 

 

 

45,494

 

Finished goods

 

 

1,732

 

 

 

1,915

 

Inventories

 

$

220,515

 

 

$

213,075

 

 

 

 

 

 

 

Property, plant, and equipment, net:

 

 

 

 

 

 

Land and land use rights

 

$

71,131

 

 

$

71,131

 

Buildings and improvements

 

 

520,117

 

 

 

512,148

 

Machinery and equipment

 

 

1,050,565

 

 

 

986,527

 

Furniture and fixtures and other

 

 

10,301

 

 

 

10,157

 

Construction-in-progress

 

 

49,740

 

 

 

90,940

 

Property, plant, and equipment, gross

 

 

1,701,854

 

 

 

1,670,903

 

Less: Accumulated depreciation

 

 

(876,020

)

 

 

(863,236

)

Property, plant, and equipment, net

 

$

825,834

 

 

$

807,667

 

 

 

 

 

 

 

Other current liabilities:

 

 

 

 

 

 

Accrued capital expenditures

 

$

14,714

 

 

$

35,026

 

Sales return and allowances

 

 

12,656

 

 

 

12,301

 

Accrued facility operating costs

 

 

8,617

 

 

 

10,172

 

Operating leases

 

 

8,373

 

 

 

8,433

 

Warranty

 

 

8,191

 

 

 

10,557

 

Housing fund

 

 

7,742

 

 

 

7,749

 

Income taxes payable

 

 

5,625

 

 

 

5,466

 

Accrued professional fees

 

 

3,241

 

 

 

3,276

 

Interest

 

 

1,856

 

 

 

9,399

 

Restructuring

 

 

879

 

 

 

1,179

 

Derivative liabilities

 

 

24

 

 

 

297

 

Other

 

 

41,821

 

 

 

36,951

 

Other current liabilities

 

$

113,739

 

 

$

140,806

 

 

 

 

 

 

 

Other long-term liabilities:

 

 

 

 

 

 

Deferred income taxes

 

$

46,021

 

 

$

44,238

 

Customer deposits

 

 

29,105

 

 

 

29,820

 

Finance leases

 

 

12,602

 

 

 

12,799

 

Defined benefit pension plan liability

 

 

792

 

 

 

836

 

Derivative liabilities

 

 

 

 

 

1,476

 

Other

 

 

26,602

 

 

 

24,349

 

Other long-term liabilities

 

$

115,122

 

 

$

113,518

 

 

11


 

(6) Goodwill

Goodwill by reportable segment was as follows:

 

 

PCB

 

 

RF&S Components

 

 

Total

 

 

 

(In thousands)

 

As of April 1, 2024 and January 1, 2024

 

 

 

 

 

 

 

 

 

Goodwill

 

$

810,235

 

 

$

177,200

 

 

$

987,435

 

Accumulated impairment losses

 

 

(171,400

)

 

 

(113,300

)

 

 

(284,700

)

 Carrying amount

 

$

638,835

 

 

$

63,900

 

 

$

702,735

 

 

(7) Definite-lived Intangibles

The components of definite-lived intangibles were as follows:

 

 

 

Gross
Amount

 

 

Accumulated
Amortization

 

 

Net
Carrying
Amount

 

 

Weighted
Average
Amortization
Period

 

 

 

(In thousands)

 

 

(In years)

 

As of April 1, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

$

416,230

 

 

$

(232,258

)

 

$

183,972

 

 

 

11.2

 

Technology

 

 

66,650

 

 

 

(29,613

)

 

 

37,037

 

 

 

8.2

 

Backlog

 

 

13,000

 

 

 

(11,375

)

 

 

1,625

 

 

 

2.0

 

Trade names

 

 

2,500

 

 

 

(2,188

)

 

 

312

 

 

 

2.0

 

Total

 

$

498,380

 

 

$

(275,434

)

 

$

222,946

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of January 1, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

$

416,230

 

 

$

(222,766

)

 

$

193,464

 

 

 

11.2

 

Technology

 

 

66,650

 

 

 

(27,278

)

 

 

39,372

 

 

 

8.2

 

Backlog

 

 

13,000

 

 

 

(9,750

)

 

 

3,250

 

 

 

2.0

 

Trade names

 

 

2,500

 

 

 

(1,875

)

 

 

625

 

 

 

2.0

 

Total

 

$

498,380

 

 

$

(261,669

)

 

$

236,711

 

 

 

 

Definite-lived intangibles are amortized using the straight-line method of amortization over the useful life. Amortization expense was $13,765 and $27,772 for the quarters ended April 1, 2024 and April 3, 2023, respectively. For the quarters ended April 1, 2024 and April 3, 2023, $2,336 and $5,808, respectively, of amortization expense was included in cost of goods sold. The Company recorded amortization expense of $18,114 related to the acquired identifiable intangible assets of Telephonics during the quarter ended April 3, 2023 (of which $10,744 corresponded to the fiscal year ended January 2, 2023). For the quarter ended April 3, 2023, $4,425 of amortization expense related to the acquired identifiable intangible assets of Telephonics was included in cost of goods sold (of which $2,950 corresponded to the fiscal year ended January 2, 2023).

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

 

 

 

(In thousands)

 

Remaining 2024

 

$

31,127

 

2025

 

 

36,897

 

2026

 

 

36,897

 

2027

 

 

34,543

 

2028

 

 

30,997

 

Thereafter

 

 

52,485

 

Total

 

$

222,946

 

 

12