TTMI 10-Q Quarter ended July 1, 2013

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

For the quarterly period ended July 1, 2013

Commission File Number: 0-31285

TTM TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

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):

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 August 1, 2013: 82,628,048

Table of Contents

TABLE OF CONTENTS

1

Table of Contents

TTM TECHNOLOGIES, INC.

See accompanying notes to consolidated condensed financial statements.

2

Table of Contents

TTM TECHNOLOGIES, INC.

For the Quarter and Two Quarters Ended July 1, 2013 and June 25, 2012

See accompanying notes to consolidated condensed financial statements.

3

Table of Contents

TTM TECHNOLOGIES, INC.

Consolidated Condensed Statements of Comprehensive Income

For the Quarter and Two Quarters Ended July 1, 2013 and June 25, 2012

See accompanying notes to consolidated condensed financial statements.

4

Table of Contents

TTM TECHNOLOGIES, INC.

For the Two Quarters Ended July 1, 2013 and June 25, 2012

See accompanying notes to consolidated condensed financial statements.

5

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 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 second quarters ended July 1, 2013 and June 25, 2012 each contained 91 days. The two quarters ended July 1, 2013 and June 25, 2012 contained 182 and 177 days, respectively.

(2) Noncontrolling Interest Holdings

On June 17, 2013, the Company completed the sale of its 70.2% controlling equity interest in Dongguan Shengyi Electronics Ltd. (SYE) to its noncontrolling partner, Shengyi Technology Co. Ltd. (Sytech), for 702,000 Chinese RMB or $114,495. The Company recognized a gain on the sale of SYE of $17,917 and recorded a receivable for the total consideration in the amount of $114,495. Consideration net of cash sold was $67,146. In connection with the SYE transaction, the Company was also required to settle an intercompany balance owed to SYE in the amount of $40,670, which the Company paid in cash during the quarter ended July 1, 2013.

Additionally, the Company acquired Sytech’s 20.0% noncontrolling equity interest in Dongguan Meadville Circuits Ltd. (DMC) for 180,000 Chinese RMB or $29,358. The Company recorded a payable for the purchase price amount of $29,358 as well as an increase to additional paid-in capital for the difference between the purchase price and the carrying value of the noncontrolling interest for $70.

The total cash expected to be received in the third quarter of 2013 is approximately $80,000 (net proceeds of $85,137 less transaction related taxes). Both SYE and DMC plants manufacture conventional PCBs and are located in Dongguan, China.

(3) Inventories

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

6

Table of Contents

TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

(4) Definite-lived Intangibles

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

The July 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 $2,327 and $4,120 for the quarters ended July 1, 2013 and June 25, 2012, respectively, and $4,655 and $8,065 for the two quarters ended July 1, 2013 and June 25, 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:

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

7

Table of Contents

TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

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

At July 1, 2013 and December 31, 2012, the remaining unamortized debt issuance costs included in other non-current assets was $2,345 and $2,755, respectively, and is amortized to interest expense over the term of the Company’s credit agreement entered into in September 2012 (Credit Agreement) using the effective interest rate method. At July 1, 2013, the remaining amortization period for the unamortized debt issuance costs was 3.0 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. The Company incurred commitment fees related to unused borrowing availability under the Revolver facility of $95 and $41 for the quarter ended July 1, 2013 and June 25, 2012, respectively, and $191 and $98 for the two quarters ended July 1, 2013 and June 25, 2012, respectively. As of July 1, 2013, the Term Loan under the Credit Agreement of $370,000, of which $48,100 is due for repayment in March 2014 and is included as short-term debt and $321,900 is included as long-term debt, was outstanding; none of the Revolver under the Credit Agreement, and $52,679 of the Letters of Credit Facility under the Credit Agreement were outstanding. Available borrowing capacity under the Revolving Loan was $90,000 at July 1, 2013.

Additionally, the Company is party to a revolving loan credit facility with a lender in the People’s Republic of China (PRC). Under this arrangement, the lender has made available to the Company approximately $46,800 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 July 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.

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 July 1, 2013 and December 31, 2012, the following summarizes the liability and equity components of the Convertible Notes:

8

Table of Contents

TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

At July 1, 2013 and December 31, 2012, remaining unamortized debt issuance costs included in other non-current assets were $1,419 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 July 1, 2013, the remaining amortization period for the unamortized Convertible Note discount and debt issuance costs was 1.9 years.

The components of interest expense resulting from the Convertible Notes for the quarter and two quarters ended July 1, 2013 and June 25, 2012 are as follows:

For the quarter and two quarters ended July 1, 2013 and June 25, 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 40.5% and 34.7% for the quarters ended July 1, 2013 and June 25, 2012, respectively. The Company’s tax rate increased during the second quarter ended July 1, 2013 primarily due to the gain on sale of assets as discussed in Note 2, and the increase in income earned in higher tax jurisdictions.

The Company’s effective tax rate was 33.3% and 30.3% for the two quarters ended July 1, 2013 and June 25, 2012, respectively. The Company’s tax rate increased during the two quarters ended July 1, 2013 primarily due to the gain on sale of assets as discussed in Note 2 and an increase in income earned in higher tax jurisdictions, offset by the recognition of discrete tax benefits resulting from the extension of federal research and development credit laws, and from the approval of a research and development deduction in China.

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 the Company, 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.

(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.

In 2011, 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, which expired on April 16, 2013. 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 during the quarter and two quarters ended June 25, 2012 and the interest rate swap increased interest expense by $676 and $1,285, respectively. The Company did not designate this interest rate swap as a cash flow hedge for the quarter and two quarters ended July 1, 2013 as the borrowings attributable to this interest rate swap were paid in full in September 2012. The change in the fair value of this interest rate swap is recorded as other, net in the consolidated condensed statement of operations.

9

Table of Contents

TTM TECHNOLOGIES, INC.

Notes to Consolidated Condensed Financial Statements – (Continued)

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 July 1, 2013 and December 31, 2012 was approximately $29,698 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:

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: