Analyst Conference Summary

conference date: May 6, 2010 @ 1:30 PM Pacific Time
for quarter ending: March 31, 2010 (first quarter)

Forward-looking statements

Overview: Combination with Meadville in Q2 greatly increases the size of the business. But Q1 sequential decline in revenues, pre-Meadville contrasts with increased GAAP earnings.

Basic data (GAAP) :

Revenues were $138.2 million, down 8% sequentially from $149.9 million and down 7% from $149.0 million in the year-earlier quarter.

Net income was $4.5 million, up 64% sequentially from $2.75 million and up 221% from $1.4 million year-earlier.

EPS (earnings per share) were $0.10, up 100% sequentially from $0.05 and up 233% from $0.03 year-earlier.

Guidance:

Q2 revenue, reflecting Meadville merger, will more than double to a range of $290 to $310 million, with GAAP EPS $0.03 to $0.12 and non-GAAP EPS of $0.16 to $0.25. Diluted share count will increase to about 76.5 million shares (36.3 million issued for Meadville).

Conference Highlights:

North American PCB (Printed Circuit Board) demand strengthened, as did TTM's book to bill ratio at 1.12 and pricing. Meadville combination transaction closed April 9. Combination will help grow business with current customers and attract new customers.

TTM's restructuring helped match its capabilities to demand. The revenue decline was mainly due to the Los Angeles facility closure and a spike in demand at the end of Q4. $2.8 million in charges were taken for plant closures in the quarter.

Non-GAAP numbers: net income $8.6 million, EPS $0.19, ust up sequentially. EBITDA was $15.1 million, up $0.4 million sequentially.

The PCB segment had sales fo $122.9 million and non-GAAP operating income of $10.5 million.

The Backplane Assembly business had sales of $21.7 million, down sequentially from $29.3 million. Segment operating income was $0.2 million. The income decline was largely due to the closure of the Hayward, California facility.

The cash balance ended up $7.2 million to $222.9 million. The final Meadville purchace price was $114 million in cash, 36.3 million TTM shares, and assumption of $433 million of debt. Transactions costs in Q2 around $7.7 million.

Aerospace and Defense market had higher pricing due to mix; was 42% of business. This is a diverse and stable segment.

Networking and communication 33% of revenues, down sequentially due to order timing, but expected more normal in Q2.

Computer market 13% of revenues, nicely up sequentially.

Medical and industrial 12% of revenues, up sequentially.

We will be adding a consumer/cellphone segment in Q2.

Top five customers were BAE, Cisco, Hamilton Sundstrand, Huawei and Raytheon, representing 31% of sales total. No single customer was a >10%.

Cost of goods sold was $111.2 million, leaving gross profit of $27.0 million. Operating expenses of $17.1 million included: $6.7 million selling and marketing, $9.0 million general and administrative, $0.8 million amortization, and $0.5 million impairment of assets. Leaving operating income fo $9.9 million. Other income was negative $2.7 million. Income tax provision was $2.6 million.

The new strategy is to continue to lead with high performance and advanced technologies, while adding high volume capacity in Asia so customers can move seemlessly from prototypes to volume production. End markets will be more diverse with the merger.

Meadville transaction is expected to become accretive in Q3. The Tang family will end up with a 33% to 35% share of TTM, are prohibited from selling shares for 18 months, and must retain 20% of TTM long term.

For 2009, a pro forma combination of TTM and Meadville would have produced revenues of $1.21 billion with net income of $52.6 million.

Meadvilles book to bill ratio in Q1 was 1.2. Capacity expansion is planned within existing plants as plants are running near capacity.

Q&A:

The run rate is higher than Q2 guidance? Yes, because Meadville came in 10 days after the quarter began.

All the purchase accounting inventory changes ($4.5 million) will flush through in Q2, so will have no effect in q3 and after.

We'll have about $2.5 additional Meadville intangible amortization per quarter.

Is there no room for increased Asian production right now, but by Q3 we will have the beginnings of an increase of 15% capacity, maybe 18% by 2011.

Raw material pricing? Laminate prices going up due to glass shortages. We will work with customers to negate our cost increases. In Asia all PCB companies have been raising prices, and value added increases have helped ease margin pressures.

Networking segment down? Just the pull ins, partly from last minute buys from facilities that were closing. Expecting return to normal in PCBs and backplanes in Q2.

Organic TTM growth? Up to about $142 million in Q2. China growth rates will be higher than American growth rate, with driver being exports to global OEMs while local 3g business is slowing down.

Meadville capacity expansion expense to total $70 to $80 million in 2010. TTM side is planning on $15 million capital expense for expansion in 2010. Chinese capacity expansion will be slanted to high density, high layer count end of business.

All of the customers we talked to were in favor of the transaction; many are looking to give new products to TTM as soon as the capacity is available.

Combined depreciation? About $17 to $19 million, but depends on details of purchase accounting.

Interest expense? $4.1 million actual cash interest expense, about $5.5 million GAAP.

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