TTM TECHNOLOGIES INC - FORM 8-K - EX-99.1

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8-K - 8-K - TTM TECHNOLOGIES INC	d124119d8k.htm

Exhibit 99.1

TTM Technologies, Inc., Q2’20

Contact:

Sameer Desai,

Senior Director, Corporate

Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

TTM Technologies, Inc. Reports Fiscal Second Quarter 2020 Results

Santa Ana, CA – July 29, 2020 – TTM Technologies, Inc. (NASDAQ:TTMI), a leading global printed circuit board (“PCB”) and radio frequency (“RF”) components manufacturer, today reported results for the second quarter of fiscal 2020, which ended on June 29, 2020.

On April 19th, TTM completed the previously announced sale of its Mobility business unit. The operating results and related assets and liabilities of the Mobility business under US GAAP are presented as discontinued operations for all periods. To facilitate the comparison of TTM’s results to previously issued guidance, non-GAAP financial information is also provided below which includes approximately three weeks of results for the Mobility business unit as well as results from the previously announced closure of the two E-MS plants. Please refer to the earnings schedule for additional details on exited businesses and continuing operations.

Second Quarter 2020 Highlights

•

GAAP net sales were $570.3 million

•

Non-GAAP net sales were $601.1 million

•

GAAP net income of $192.8 million, or $1.79 per diluted share, inclusive of a net gain on the sale of the Mobility business unit of $183.1 million or $1.70 per diluted share

•

Non-GAAP net income was $33.3 million, or $0.31 per diluted share, inclusive of $0.01 of foreign exchange loss

•

Cash flow from operations of $119.0 million

•

Today repaid $400 million of Term Loan B from cash received from Mobility Business Unit divestiture

Second Quarter 2020 GAAP Financial Results

Net sales from continuing operations for the second quarter of 2020 were $570.3 million, compared to $526.9 million in the second quarter of 2019 and $497.6 million in the first quarter of 2020.

GAAP operating income from continuing operations for the second quarter of 2020 was $23.0 million, compared to $29.0 million in the second quarter of 2019 and $16.2 million in the first quarter of 2020.

GAAP net income for the second quarter of 2020 was $192.8 million, or $1.79 per diluted share and includes an estimated net gain of $183.1 million from the sale of the Mobility business. This compares to net income of $3.4 million, or $0.03 per diluted share in the second quarter of 2019, and net loss of $1.2 million, or ($0.01) per diluted share, in the first quarter of 2020.

Second Quarter 2020 Non-GAAP Financial Results

Net sales for the second quarter of 2020 were $601.1 million, compared to $633.0 million in the second quarter of 2019 and $610.8 million in the first quarter of 2020.

On a non-GAAP basis, net income for the second quarter of 2020 was $33.3 million, or $0.31 per diluted share. This compares to non-GAAP net income of $21.3 million, or $0.20 per diluted share, for the second quarter of 2019 and $19.6 million, or $0.18 per diluted share, in the first quarter of 2020.

Adjusted EBITDA for the second quarter of 2020 was $80.3 million, or 13.4 percent of net sales, compared to adjusted EBITDA of $82.9 million, or 13.1 percent of net sales, for the second quarter of 2019 and $82.1 million, or 13.4 percent of net sales, for the first quarter of 2020.

TTM Technologies, Inc., Q2’20

Contact:

Sameer Desai,

Senior Director, Corporate

Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

“In the second quarter, TTM demonstrated excellent operational execution and overcame COVID-19 related challenges to deliver revenue and earnings above the previously guided range. All of our manufacturing facilities continue to remain operational and I want to recognize all of our employees for their tremendous efforts in support of our customers during these challenging times,” said Tom Edman, CEO of TTM. “The diversified mix of end markets that we serve enabled TTM to grow revenues and outperform earnings expectations despite weakness in the automotive and commercial aerospace end markets. Finally, TTM has shown financial discipline, bringing our net debt to EBITDA ratio to 2.1, following the receipt of proceeds from the sale of the Mobility Business Unit and subsequent repayment of our Term loan.”

Business Outlook

Looking ahead, we believe that we will continue to experience COVID-19 related impacts on our end markets as well as inefficiencies with our own production. Taking this into consideration, TTM estimates that revenue for the third quarter of 2020 will be in the range of $470 million to $510 million, and non-GAAP net income will be in the range of $0.16 to $0.22 per diluted share. This guidance no longer includes the Mobility Business Unit but continues to include the E-MS business unit while that business winds down.

Live Webcast/Conference Call

TTM will host a conference call and webcast to discuss second quarter 2020 results and the third quarter 2020 outlook on Wednesday, July 29, 2020, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The conference call will include forward-looking statements.

Telephone access is available by dialing domestic 800-367-2403 or international 334-777-6978 (ID 9715005). The conference call also will be webcast on TTM’s website at www.ttm.com.

To Access a Replay of the Webcast

The replay of the webcast will remain accessible for one week following the live event on TTM’s website at www.ttm.com.

About TTM

TTM Technologies, Inc. is a leading global printed circuit board manufacturer, focusing on quick-turn and volume production of technologically advanced PCBs and backplane assemblies as well as a global designer and manufacturer of high-frequency radio frequency (RF) and microwave components and assemblies. TTM stands for time-to-market, representing how TTM’s time-critical, one-stop manufacturing services enable customers to shorten the time required to develop new products and bring them to market. Additional information can be found at www.ttm.com.

Forward-Looking Statements

This release contains forward-looking statements that relate to future events or performance. TTM cautions you that such statements are simply predictions and actual events or results may differ materially. These statements reflect TTM’s current expectations, and TTM does not undertake to update or revise these forward looking statements, even if experience or future changes make it clear that any projected results expressed or implied in this or other TTM statements will not be realized. Further, these statements involve risks and uncertainties, many of which are beyond TTM’s control, which could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties include, but are not limited to, the impact of COVID-19, general market and economic conditions, including interest rates, currency exchange rates and consumer spending, demand for TTM’s products, market pressures on prices of TTM’s products, warranty claims, changes in product mix, contemplated

TTM Technologies, Inc., Q2’20

Contact:

Sameer Desai,

Senior Director, Corporate

Development & Investor Relations

Sameer.desai@ttmtech.com

714-327-3050

significant capital expenditures and related financing requirements, TTM’s dependence upon a small number of customers and other factors set forth in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC.

About Our Non-GAAP Financial Measures

This release includes information about TTM’s adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share, all of which are non-GAAP financial measures. TTM presents non-GAAP financial information to enable investors to see TTM through the eyes of management and to provide better insight into TTM’s ongoing financial performance.

A material limitation associated with the use of the above non-GAAP financial measures is that they have no standardized measurement prescribed by GAAP and may not be comparable to similar non-GAAP financial measures used by other companies. TTM compensates for these limitations by providing full disclosure of each non-GAAP financial measure and reconciliation to the most directly comparable GAAP financial measure. However, the non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

With respect to the Company’s outlook for non-GAAP net income per diluted share, we are unable to predict with reasonable certainty or without unreasonable effort certain items that may affect a comparable measure calculated and presented in accordance with GAAP. Our expected non-GAAP net income per diluted share excludes primarily the future impact of restructuring actions, impairment charges, unusual gains and losses, and tax adjustments. These reconciling items are highly variable and difficult to predict due to various factors outside of management’s control and could have a material impact on our future period net income per diluted share calculated and presented in accordance with GAAP. Accordingly, a reconciliation of non-GAAP net income per diluted share to a comparable measure calculated and presented in accordance with GAAP is not available without unreasonable effort and has not been provided.

- Tables Follow -

TTM TECHNOLOGIES, INC.

Selected Unaudited Financial Information

(In thousands, except per share data)


	Second Quarter						First Quarter			First Two Quarters
	2020			2019*			2020			2020			2019*
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Net sales	$	570,298		$	526,877		$	497,646		$	1,067,944		$	1,063,322
Cost of goods sold		469,868			434,029			416,304			886,172			871,648

Gross profit		100,430			92,848			81,342			181,772			191,674

Operating expenses:
Selling and marketing		15,969			16,898			16,169			32,138			34,458
General and administrative		33,309			29,137			34,339			67,648			58,987
Research and development		5,181			4,496			4,762			9,943			9,212
Amortization of definite-lived intangibles		9,561			10,593			9,562			19,123			26,745
Restructuring charges		13,414			2,732			328			13,742			3,164

Total operating expenses		77,434			63,856			65,160			142,594			132,566

Operating income		22,996			28,992			16,182			39,178			59,108

Interest expense		(18,572	)		(20,553	)		(19,781	)		(38,353	)		(41,688	)
Other, net		455			3,007			2,502			2,957			2,650


Income (Loss) from continuing operations before income taxes		4,879			11,446			(1,097	)		3,782			20,070
Income tax benefit (provision)		4,467			1,047			(2,123	)		2,344			(1,339	)


Net income (loss) from continuing operations		9,346			12,493			(3,220	)		6,126			18,731
Income (loss) from discontinued operations, net of income taxes		183,464			(9,069	)		2,046			185,510			(18,559	)

Net income (loss)	$	192,810		$	3,424		$	(1,174	)	$	191,636		$	172

* Reclassified Research and development expenses as a separate line item from General and administrative expenses

Earnings (loss) per share:
Basic earnings (loss) per share from continuing operations	$	0.09		$	0.12		$	(0.03	)	$	0.06		$	0.18
Basic earnings (loss) per share from discontinued operations		1.72			(0.09	)		0.02			1.75			(0.18	)

Basic earnings (loss) per share	$	1.81		$	0.03		$	(0.01	)	$	1.81		$	0.00

Diluted earnings (loss) per share from continuing operations	$	0.09		$	0.12		$	(0.03	)	$	0.06		$	0.18
Diluted earnings (loss) per share from discontinued operations		1.70			(0.09	)		0.02			1.72			(0.18	)

Diluted earnings (loss) per share	$	1.79		$	0.03		$	(0.01	)	$	1.78		$	0.00

Weighted-average shares used in computing per share amounts:
Basic		106,295			105,470			105,686			105,990			104,893
Diluted		107,485			132,045			105,686			107,431			105,860
Reconciliation of the denominator used to calculate basic earnings per share and diluted earnings per share:
Net income		9,346			12,493						6,126			18,731
Add back items: interest expense, net of tax		—			2,780						—			—

Adjusted net income		9,346			15,273						6,126			18,731
Weighted-average shares outstanding		106,295			105,470						105,990			104,893
Dilutive effect of convertible debt		—			25,938						—			—
Dilutive effect of warrants		—			—						—			—
Dilutive effect of performance-based stock units, restricted stock units & stock options		1,190			637						1,441			967

Diluted shares		107,485			132,045						107,431			105,860

Earnings per share:
Basic earnings per share from continuing operations	$	0.09		$	0.12					$	0.06		$	0.18
Basic earnings (loss) per share from discontinued operations		1.72			(0.09	)					1.75			(0.18	)

Basic earnings per share	$	1.81		$	0.03					$	1.81		$	0.00

Diluted earnings per share from continuing operations	$	0.09		$	0.12					$	0.06		$	0.18
Diluted earnings (loss) per share from discontinued operations		1.70			(0.09	)					1.72			(0.18	)

Diluted earnings per share	$	1.79		$	0.03					$	1.78		$	0.00

SELECTED BALANCE SHEET DATA
	June 29, 2020			December 30, 2019
Cash and cash equivalents, including restricted cash	$	694,668		$	379,818
Accounts and notes receivable, net		414,329			503,598
Contract assets		287,281			254,600
Inventories		122,847			113,753
Current assets held for sale		—			67,572
Total current assets		1,871,912			1,342,684
Property, plant and equipment, net		660,866			678,201
Operating lease right of use asset		21,993			22,173
Non-current assets held for sale		—			425,597
Other non-current assets		1,039,900			1,092,278
Total assets		3,594,671			3,560,933
Short-term debt, including current portion of long-term debt	$	649,975		$	249,975
Accounts payable		351,819			329,866
Current liabilities held for sale		—			185,391
Total current liabilities		1,197,457			946,666
Debt, net of discount		832,834			1,225,962
Non-current liabilities held for sale		—			1,530
Total long-term liabilities		951,649			1,335,230
Total equity		1,445,565			1,279,037
Total liabilities and equity		3,594,671			3,560,933


SUPPLEMENTAL DATA
	Second Quarter						First Quarter			First Two Quarters
	2020			2019			2020			2020			2019*
Gross margin		17.6	%		17.6	%		16.3	%		17.0	%		18.0	%
Operating margin		4.0	%		5.5	%		3.3	%		3.7	%		5.6	%

End Market Breakdown, including Mobility:
	Second Quarter						First Quarter
	2020			2019			2020
Aerospace/Defense		31	%		28	%		30	%
Automotive		12	%		16	%		12	%
Cellular Phone		3	%		6	%		11	%
Computing/Storage/Peripherals		13	%		15	%		14	%
Medical/Industrial/Instrumentation		20	%		15	%		16	%
Networking/Communications		19	%		17	%		14	%
Other		2	%		3	%		3	%


TTM Consolidated																						Mobility Business Unit

End Markets	1Q 19			2Q 19			3Q 19			4Q 19			FY2019			1Q 20			2Q 20			End Markets	1Q 19			2Q 19			3Q 19			4Q 19			FY2019			1Q 20			2Q 20
Aerospace/Defense		27	%		28	%		24	%		26	%		26	%		30	%		31	%	Aerospace/Defense		0	%		0	%		0	%		0	%		0	%		0	%		0	%
Automotive		17	%		16	%		17	%		14	%		16	%		12	%		12	%	Automotive		5	%		6	%		3	%		2	%		4	%		3	%		4	%
Cellular Phones		7	%		6	%		19	%		16	%		13	%		11	%		3	%	Cellular Phones		48	%		41	%		73	%		65	%		60	%		56	%		54	%
Computing/Storage/Periph		13	%		15	%		12	%		14	%		13	%		14	%		13	%	Computing/Storage/Periph		28	%		36	%		14	%		19	%		22	%		22	%		25	%
Medical/Industrial/Inst		15	%		15	%		13	%		13	%		14	%		16	%		20	%	Medical/Industrial/Inst		7	%		5	%		2	%		3	%		4	%		3	%		4	%
Networking/ Communications		18	%		17	%		13	%		15	%		15	%		14	%		19	%	Networking/ Communications		5	%		5	%		4	%		6	%		5	%		6	%		5	%
Other		3	%		3	%		2	%		2	%		3	%		3	%		2	%	Other		7	%		7	%		4	%		5	%		5	%		10	%		8	%

SZ + SH-EMS																						TTM, excluding Mobility, SZ & SH E-MS

End Markets	1Q 19			2Q 19			3Q 19			4Q 19			FY2019			1Q 20			2Q 20			End Markets	1Q 19			2Q 19			3Q 19			4Q 19			FY2019			1Q 20			2Q 20
Aerospace/Defense		0	%		1	%		0	%		0	%		0	%		0	%		0	%	Aerospace/Defense		33	%		36	%		36	%		37	%		35	%		38	%		33	%
Automotive		56	%		58	%		74	%		59	%		63	%		49	%		54	%	Automotive		17	%		15	%		15	%		15	%		15	%		13	%		11	%
Cellular Phones		0	%		0	%		0	%		0	%		0	%		0	%		0	%	Cellular Phones		0	%		-1	%		1	%		0	%		0	%		1	%		0	%
Computing/Storage/Periph		0	%		0	%		0	%		0	%		0	%		0	%		0	%	Computing/Storage/Periph		12	%		12	%		12	%		13	%		12	%		12	%		13	%
Medical/Industrial/Inst		22	%		23	%		11	%		19	%		18	%		23	%		14	%	Medical/Industrial/Inst		16	%		17	%		18	%		17	%		17	%		18	%		21	%
Networking/ Communications		21	%		18	%		16	%		22	%		19	%		29	%		35	%	Networking/ Communications		20	%		19	%		16	%		17	%		18	%		16	%		19	%
Other		1	%		0	%		-1	%		0	%		0	%		-1	%		-3	%	Other		2	%		2	%		2	%		1	%		3	%		2	%		3	%


Stock-based Compensation, including Mobility:
	Second Quarter						First Quarter
	2020			2019			2020
Amount included in:
Cost of goods sold	$	620		$	569		$	850
Selling and marketing		291			383			451
General and administrative		1,690			2,611			3,477
Research & Development		46			39			57

Total stock-based compensation expense	$	2,647		$	3,602		$	4,835

Operating Segment Data:
	Second Quarter						First Quarter
Net sales:		2020			2019			2020
PCB	$	520,067		$	466,960		$	467,430
E-M Solutions		50,231			59,917			30,216

Total net sales	$	570,298			526,877			497,646

Operating segment income:
PCB	$	80,056		$	62,463		$	61,626
E-M Solutions		(15,577	)		863			(4,329	)
Corporate		(30,538	)		(22,561	)		(30,170	)

Total operating segment income		33,941			40,765			27,127
Amortization of definite-lived intangibles		(10,945	)		(11,773	)		(10,945	)

Total operating income		22,996			28,992			16,182
Total other expense		(18,117	)		(17,546	)		(17,279	)

Income (Loss) from continuing operations before income taxes	$	4,879		$	11,446		$	(1,097	)

RECONCILIATIONS¹


	GAAP December 30, 2019		Mobility balances December 30, 2019²			Combined December 30, 2019
Cash and cash equivalents, including restricted cash	$	379,818	$	20,336		$	400,154
Accounts and notes receivable, net		503,598		66			503,664
Contract assets		254,600		33,635			288,235
Inventories		113,753		8,266			122,019
Current assets held for sale		67,572		(67,572	)		—
Total current assets		1,342,684		—			1,342,684
Property, plant and equipment, net		678,201		344,728			1,022,929
Operating lease right of use asset		22,173		1,983			24,156
Non-current assets held for sale		425,597		(425,597	)		—
Other non-current assets		1,092,278		78,886			1,171,164
Total assets		3,560,933		—			3,560,933

Short-term debt, including current portion of long-term debt	$	249,975	$	—		$	249,975
Accounts payable		329,866		153,700			483,566
Current liabilities held for sale		185,391		(185,391	)		—
Total current liabilities		946,666		—			946,666
Debt, net of discount		1,225,962		—			1,225,962
Non-current liabilities held for sale		1,530		(1,530	)		—
Total long-term liabilities		1,335,230		—			1,335,230
Total equity		1,279,037		—			1,279,037
Total liabilities and equity		3,560,933		—			3,560,933


	Second Quarter						First Quarter			First Two Quarters
	2020			2019			2020			2020			2019*
Non-GAAP revenue reconciliation³:
GAAP revenue	$	570,298		$	526,877		$	497,646		$	1,067,944		$	1,063,322
Revenue from discontinued operations		30,777			106,161			113,174			143,951			189,916

Non-GAAP revenue	$	601,075		$	633,038		$	610,820		$	1,211,895		$	1,253,238

Non-GAAP gross profit reconciliation⁴:
GAAP gross profit	$	100,430		$	92,848		$	81,342		$	181,772		$	191,674
Gross profit from discontinued operations		2,402			(8,233	)		4,749			7,151			(18,374	)
Add back item:
Amortization of definite-lived intangibles		1,384			1,180			1,383			2,767			2,359
Accelerated Depreciation		2,397			—			—			2,397			—
Stock-based compensation		620			569			850			1,470			1,275

Non-GAAP gross profit	$	107,233		$	86,364		$	88,324		$	195,557		$	176,934

Non-GAAP gross margin		17.8	%		13.6	%		14.5	%		16.1	%		14.1	%

Non-GAAP operating income reconciliation⁵:
GAAP operating income	$	22,996		$	28,992		$	16,182		$	39,178		$	59,108
Operating income (loss) from discontinued operations		976			(12,148	)		1,441			2,417			(24,774	)
Add back items:
Amortization of definite-lived intangibles		11,079			12,447			11,620			22,699			30,452
Accelerated Depreciation		2,754			—			—			2,754			—
Stock-based compensation		2,647			3,602			4,835			7,482			7,528
Restructuring, acquisition-related, and other charges		14,273			4,351			1,596			15,869			5,454

Non-GAAP operating income	$	54,725		$	37,244		$	35,674		$	90,399		$	77,768

Non-GAAP operating margin		9.1	%		5.9	%		5.8	%		7.5	%		6.2	%

Non-GAAP net income and EPS reconciliation⁶:
GAAP net income (loss)	$	9,346		$	12,493			(3,220	)	$	6,126		$	18,731
Net income (loss) from discontinued operations		183,464			(9,069	)		2,046			185,510			(18,559	)
Add back items:
Amortization of definite-lived intangibles		11,079			12,447			11,620			22,699			30,452
Accelerated Depreciation		2,754			—			—			2,754			—
Gain on sales of the Mobility business unit		(248,863	)		—			—			(248,863	)		—
Stock-based compensation		2,647			3,602			4,835			7,482			7,528
Non-cash interest expense		3,604			3,467			3,553			7,157			7,335
(Gain) on sale of assets		(274	)		(235	)		(233	)		(507	)		(3,306	)
Restructuring, acquisition-related, and other charges		13,969			4,351			1,596			15,565			5,454
Income taxes⁷		55,613			(5,789	)		(593	)		55,020			(9,939	)

Non-GAAP net income	$	33,339		$	21,267		$	19,604		$	52,943		$	37,696

Non-GAAP earnings per diluted share	$	0.31		$	0.20		$	0.18		$	0.49		$	0.36

Non-GAAP diluted number of shares⁸:
Diluted shares		107,485			132,045			107,378			107,431			105,860
Dilutive effect of convertible debt		—			(25,938	)		—			—			—

Non-GAAP diluted number of shares		107,485			106,107			107,378			107,431			105,860

Adjusted EBITDA reconciliation⁹:
GAAP net income (loss)	$	9,346		$	12,493		$	(3,220	)	$	6,126		$	18,731
Net income (loss) from discontinued operations		183,464			(9,069	)		2,046		$	185,510		$	(18,559	)
Add back items:
Income tax provision (benefit)		61,498			(2,829	)		2,865			64,363			(4,306	)
Interest expense		18,572			20,871			20,004			38,576			42,559
Amortization of definite-lived intangibles		11,079			12,447			11,620			22,699			30,452
Gain on sales of the Mobility business unit		(248,863	)		—			—			(248,863	)		—
Depreciation expense		28,871			41,235			42,632			71,503			82,837
Stock-based compensation		2,647			3,602			4,835			7,482			7,528
(Gain) on sale of assets		(274	)		(235	)		(233	)		(507	)		(3,306	)
Restructuring, acquisition-related, and other charges		13,969			4,351			1,596			15,565			5,454

Adjusted EBITDA	$	80,309		$	82,866		$	82,145		$	162,454		$	161,390

Adjusted EBITDA margin		13.4	%		13.1	%		13.4	%		13.4	%		12.9	%

Free cash flow reconciliation, including Mobility:
Operating cash flow		118,996			86,123			27,913			146,909			123,047
Capital expenditures, net		(22,370	)		(34,741	)		(32,451	)		(54,821	)		(63,187	)

Free cash flow	$	96,626		$	51,382		$	(4,538	)	$	92,088		$	59,860

Select Non-GAAP income statement data



TTM Consolidated	Q1-19A			Q2-19A			Q3-19A			Q4-19A			FY 2019A			Q1-20A			Q2-20A
Sales		620.2			633.0			716.8			719.3			2,689.3			610.8			601.1
Gross Profit		90.6			86.4			106.0			126.8			409.7			88.3			107.2
Gross Margin		14.6	%		13.6	%		14.8	%		17.6	%		15.2	%		14.5	%		17.8	%
Op Income		40.5			37.2			54.0			72.4			204.1			35.7			54.7
Operating Margin		6.5	%		5.9	%		7.5	%		10.1	%		7.6	%		5.8	%		9.1	%
EBITDA		78.5			82.9			103.5			111.3			376.2			82.1			80.3
EBITDA %		12.7	%		13.1	%		14.4	%		15.5	%		14.0	%		13.4	%		13.4	%

Mobility	Q1-19A			Q2-19A			Q3-19A			Q4-19A			FY 2019A			Q1-20A			Q2-20A
Sales		83.8			106.1			182.6			183.5			556.0			113.2			30.8
Gross Profit		(10.1	)		(8.2	)		18.6			24.3			24.5			4.7			2.4
Gross Margin		-12.1	%		-7.8	%		10.2	%		13.2	%		4.4	%		4.2	%		7.8	%
Op Income		(11.9	)		(10.3	)		15.9			21.0			14.7			2.1			1.1
Operating Margin		-14.2	%		-9.7	%		8.7	%		11.4	%		2.6	%		1.9	%		3.6	%
EBITDA		6.0			9.2			36.9			38.5			90.6			21.9			3.8
EBITDA %		7.2	%		8.7	%		20.2	%		21.0	%		16.3	%		19.3	%		12.3	%

SZ + SH-EMS	Q1-19A			Q2-19A			Q3-19A			Q4-19A			FY 2019A			Q1-20A			Q2-20A
Sales		36.0			40.9			54.5			29.8			161.2			14.2			21.4
Gross Profit		3.0			3.4			5.2			2.3			13.9			(2.4	)		(0.3	)
Gross Margin		8.3	%		8.3	%		9.5	%		7.7	%		8.6	%		-16.7	%		-1.4	%
Op Income		2.0			1.2			4.3			2.0			9.5			(3.8	)		(0.8	)
Operating Margin		5.6	%		2.9	%		7.9	%		6.7	%		5.9	%		-26.8	%		-3.8	%
EBITDA		2.5			3.1			7.1			2.0			14.7			(3.6	)		0.1
EBITDA %		6.9	%		7.6	%		13.0	%		6.7	%		9.1	%		-25.4	%		0.4	%

TTM Proforma Excluding Mobility, SZ & SH-EMS	Q1-19A			Q2-19A			Q3-19A			Q4-19A			FY 2019A			Q1-20A			Q2-20A
Sales		500.4			486.0			479.7			506.0			1,972.1			483.4			548.9
Gross Profit		97.7			91.2			82.2			100.1			371.2			86.0			105.6
Gross Margin		19.5	%		18.8	%		17.1	%		19.8	%		18.8	%		17.8	%		19.2	%
Op Income		52.2			46.2			33.8			49.4			179.8			37.7			54.4
OM		10.4	%		9.5	%		7.0	%		9.8	%		9.1	%		7.8	%		9.9	%
EBITDA		70.0			70.6			59.5			70.5			270.5			63.5			76.4
EBITDA %		14.0	%		14.5	%		12.4	%		13.9	%		13.7	%		13.1	%		13.9	%

This information provides a reconciliation of non-GAAP balance sheet data to the financial information in our consolidated condensed balance sheet and non-GAAP revenue, non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP EPS, and adjusted EBITDA to the financial information in our consolidated condensed statements of operations.

2	Excludes the estimated gain on sale of Mobility.

3	Non-GAAP revenue includes revenue from discontinued operations.

4	Non-GAAP gross profit and gross margin measures include discontinued operations and exclude amortization of intangibles, accelerated depreciation due to the closure of two EM-Solutions plants, and stock-based compensation expense.

Non-GAAP operating income and operating margin measures include discontinued operations and exclude amortization of intangibles, accelerated depreciation due to the closure of two EM-Solutions plants, stock-based compensation expense, gain on sale of assets, acquisition-related costs, restructuring and other charges.

This information provides non-GAAP net income and non-GAAP EPS, which are non-GAAP financial measures. Management believes that both measures—which include discontinued operations and add back amortization of intangibles, accelerated depreciation due to the closure of two EM-Solutions plants, stock-based compensation expense, non-cash interest expense on debt (before consideration of capitalized interest), gain on sale of assets, acquisition-related costs, restructuring and other charges as well as the associated tax impact of these charges and discrete tax items—provide additional useful information to investors regarding the Company’s ongoing financial condition and results of operations.

7	Income tax adjustments reflect the difference between income taxes based on a non-GAAP tax rate and a forecasted annual GAAP tax rate.

8	Non-GAAP diluted number of shares used in computing non-GAAP earnings per share excludes the dilutive effect of convertible debt.

Adjusted EBITDA is defined as earnings, including discontinued operations, before interest expense, income taxes, depreciation, amortization of intangibles, stock-based compensation expense, gain on sale of assets, acquisition-related costs, restructuring and other charges. We present adjusted EBITDA to enhance the understanding of our operating results, and it is a key measure we use to evaluate our operations. In addition, we provide our adjusted EBITDA because we believe that investors and securities analysts will find adjusted EBITDA to be a useful measure for evaluating our operating performance and comparing our operating performance with that of similar companies that have different capital structures and for evaluating our ability to meet our future debt service, capital expenditures, and working capital requirements. However, adjusted EBITDA should not be considered as an alternative to cash flows from operating activities as a measure of liquidity or as an alternative to net income as a measure of operating results in accordance with accounting principles generally accepted in the United States of America.

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