Analyst Conference Summary

conference date: August 5, 2010 @ 1:30 PM Pacific Time
for quarter ending: June 30, 2010 (second quarter)

Forward-looking statements

Overview: Quarter is dominated by the acquisition of the larger Meadville PCB (printed circuit board) business. So far, so good.

Basic data (GAAP) :

Revenues were $310.2 million, up 124% sequentially from $138.2 million and up 114% from $144.5 million in the year-earlier quarter.

Net income was $6.7 million, up 49% sequentially from $4.5 million and up 13% from $5.95 million year-earlier.

EPS (earnings per share) were $0.06, down 40% sequentially from $0.10 and down 57% from $0.14 year-earlier.

Guidance:

Q3 revenue estimated between $341 and $357 million. GAAP EPS $0.20 to $0.27; non-GAAP $0.26 to $0.33.

Share count will be about 80.5 million due to shares issued as part of merger.

Conference Highlights:

Record $310.2 million revenue was at high end of guidance. The bulk of the increase was due to adding Meadville on April 9, 2010. So missed the first few days of quarter.

Backlogged orders are solid and capacity utilization is high. Business conditions are healthy and improving across the board.

Non-GAAP numbers: net income $19.9 million, up 131% sequentially from $8.6 million. EPS $0.26, up 37% sequentially from $0.19. EBITDA $32.6 million, up 116% sequentially from $15.1 million. Non-GAAP excludes non-cash and one-time items including Meadville transaction costs.

GAAP charges included $14.6 million for plant closures, impairment, and acquisition costs.

Meadville integration on track and was accretive to non-GAP EPS in the quarter. Continuing to work on best practices globally.

North American segment (old TTM) revenues were $138.9 million, up $0.7 million sequentially. Non-GAAP segment operating income was $14.1 million.

Asia Pacific segment (old Meadville) revenues were $173.1 million. Non-GAAP operating income was $22.4 million. Does not include days in quarter before acquisition.

Cash and equivalents ended at $213.2 million, down $9.7 million sequentially due to use of cash for acquisition. Cash flow from operations was $13.4 million. Free cash flow was negative $2 million due to cap ex. $12.5 million depreciation in quarter. Long-term liabilities $490 million.

Cost of goods sold was $253.2 million, leaving GAAP gross profit of $57.1 million. Operating expenses were $39.7 million including: selling and marketing $9.1 million, general and administration $25.3 million, amortization $4.6 million, restructuring $0.4 million, impairments $0.3 million. Leaving operating income of $17.35 million. Net interest expense $6.3 million. Income tax $4.4 million.

End market analysis has changed due to acquisition.

Networking/communications 32% of revenues.

Computing/storage/server 25% of revenues.

Aerospace/defense 19% of revenues. Revenues were up slightly from Q1.

Cell phones 10% of revenue.

Industrial/medical/instrumentatin 9% of revenue.

Other 5%. Includes automotive, consumer, office, etc.

Largest customers in alphabetical order are Apple, Cisco, Ericson, Huawei and IBM. 28% of sales total. No single 10% customer.

Stock based compensation was $1.6 million.

Q&A:

Combined gross margins? 30% range. Higher in North America, lower in Asia.

Laminate price increases? Costs are pretty stabile, minor increases and decreases.

Stock based compenation expense for Q3? $1.3 million for g&a, $1.75 million overall.

Tax rate? Certain transaction costs were not deductible, resulting in higher rate for Q2. There is a complex interplay of taxes China and U.S. 34% overall for the next two quarters, then possibly lower.

We expect the business to grow faster in Asia than in the U.S.

$335 pro-forma combined full Q2 total revenue for Meadville and TTM. $297 million in Q1.

Seasonality? China Q1 is impacted by New Year holiday, Q3 and Q4 typically strongest. Q2 is typically weakest in Asia Pacific, but this year generally seen not as weak is in normal years.

Computer/storage/server market? All end markets up on dollar basis in Q2 and expected in Q3.

Cell phone business customers? About 50% smartphones, 50% high-end feature phones.The lower end, high volume market is too price-competitive to focus on. TTM's high technology is an enabler for high end smartphones.

Why not more margin leverage as revenues grow? You are seeing some. Because Asian margins are lower, and Asia is growing faster, you don't see as much leverage as otherwise.

Capital expense? We are at 90% capacity generally. We are expanding two Asia facilities and two commercial facilities in U.S.. Q3 $44 million, but then $16 million in Q4.

Pricing trend? Pricing is firm in North America. In Asia prices have been increasing, but costs of labor and materials have also gone up. Improved technology also improves pricing.

Cash generation Q3 and Q4? EBITDA strong in Q3 and 4, we'll have net cash flat in Q3 due to cap ex, but in Q4 strong cash because cap ex ramps down.

$60 to $70 million annual in new revenue capacity is being created with our Asian expansion.

Debt payments? First payment is due in February. We would like to deleverage as quickly as possible, but right now the best use of cash is capacity expansion.

1.17 book to bill in U.S., 1.01 in Asia.

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