TTM Technologies Inc. (NASDAQ:TTMI) Q4 2014 Earnings Conference Call - Final Transcript
Feb 04, 2015 • 04:30 pm ET
Good day and welcome to the TTM Technologies, Inc., Fourth Quarter and Fiscal Year 2014 Results Call. Today's conference is being recorded.
At this time, I would like to turn the conference over to Tony Righetti with The Blueshirt Group. Please go ahead.
Thank you, operator. (Forward-Looking Cautionary Statements)
In addition to financial measures prepared in accordance with GAAP, we will discuss on this call certain non-GAAP financial measures, such as adjusted EBITDA. Such measures should not be considered as a substitute for GAAP and we direct you to the reconciliation included in the company's press release, which was filed with the SEC and is available on TTM's website at www.ttmtech.com.
I would like to turn the call over to Tom Edman, TTM's CEO. Please go ahead, Tom.
Thank you, Tony. Good afternoon and thank you for joining us for our fourth quarter and fiscal year 2014 conference call. I will begin with a review of our business and then provide an update on our announced agreement to acquire Viasystems. Todd Schull, our CFO, will follow with a discussion of our financial performance. We will then open the call to your questions.
Let me start with a review of highlights from the fourth quarter. Net sales in the fourth quarter were $390.9 million. GAAP net income was $13.9 million or $0.17 per diluted share.
Non-GAAP net income was $23.2 million or $0.28 per diluted share. For the fiscal year 2014, net sales were $1.33 billion. GAAP net income was $14.7 million or $0.18 per diluted share. Non-GAAP net income was $39.3 million or $0.47 per diluted share. Fourth quarter revenue came in slightly above our guidance range and non-GAAP earnings were at the upper end of our expectations.
Our fourth quarter revenue and non-GAAP operating income were up sequentially and on a year-over-year basis. We were pleased to see better-than-expected sales in our cellular phone end market in Q4. As anticipated, demand for smartphones continue to improve during the quarter and operationally we executed well with solid yield performance. The stronger demand for smartphones weighted our mix towards advanced HDI or high density interconnect and rigid-flex PCBs, resulting in a sequential increase in gross and operating margins.
During the fourth quarter, our advanced technology work, which includes HDI, rigid-flex and substrate, accounted for approximately 51% of our company's revenue. This compares to approximately 44% in the third quarter. Increasing the percentage of our business coming from advanced technologies continues to be a key strategy for TTM, as these products offer better revenue and profit growth opportunities.
Our blended capacity utilization in Asia-Pacific was 93%, compared to 80% last quarter. We experienced a decline in utilization levels in North America, which operated at 47% during the fourth quarter compared to 54% in the third quarter. The decline was largely due to an incremental increase in plating capacity at our Wisconsin plant, as we made this investment to ease a technology bottleneck.
Now moving on to our end markets. Overall, the fundamentals underlying