TTM Technologies IncTTMI
Recorded
TTM Technologies Inc M&A announcement
Review the key takeaways and the transcript of this earnings call.
Period 0Duration32 min
Key takeaways
- TTM Technologies reported a record second quarter with over $1 billion in revenue and a program backlog of $1.7 billion, driven by strong growth in aerospace and defense, medical, industrial, instrumentation, and automotive end markets.
- The company raised its year-end revenue guidance to approximately $4.4 billion, implying strong organic growth expectations for next year and 2027.
- TTM announced the planned acquisition of Epic Solutions for an all-cash purchase price of $1.1 billion, expected to close in the fourth quarter of 2026 subject to regulatory approvals.
- Epic is experiencing strong revenue growth with expected 2026 revenues of $160 million and EBITDA margins in the mid-30s, and the acquisition is expected to be immediately accretive to adjusted EBITDA margins and accretive to non-GAAP diluted EPS by 2028.
- TTM expects to rapidly deleverage post-acquisition from an estimated net leverage of 2.3x at close to a target range of 1.5 to 1.7x within 12 to 18 months.
- Epic's portfolio complements TTM's RF spectrum capabilities, extending coverage from 2 MHz to 40 GHz across components, modules, subsystems, and systems, with applications in communications, military, security, surveillance, radar, electronic warfare, space, missile defense, and GPS.
- Epic supports over ten major programs including Rivet Joint, MQ-9 Reaper, and Golden Dome applications, with approximately 45% of its revenue covered by ten large customers including European players.
- Epic's backlog is about $50 million, with a strong ability to move quickly from design to market and a well-distributed customer base where only one customer accounts for more than 10% of revenue.
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