News
Cash from operations exceeded $9 million for the quarter. TTM ended the year with cash and short-term investments of $58.5 million and no outstanding debt.
Sequentially, net sales fell 5% ($3 million), the result of lower orders
due to capacity constraints at the circuit board maker's Chippewa Falls facility.
For the quarter, quickturn business made up 26% of net sales, down 1 point from last year. Gross margin decreased to 24.6%, compared to 26.1% last year and 28.4% sequentially. Gross margin was affected by a raw materials price increase, pricing pressure, lower operating efficiency and mix changes, the company said.
For the year, net revenues rose 33% to $240.6 million and net income
was up nearly 400%, to $28.3 million. The 2004 results included a
restructuring charge of $855,000 and a $1.2 million reversal of a tax
valuation allowance.
For its first quarter 2005, TTM guided for revenues of $59 million
to $62 million.
In a statement, Kent Alder, president and CEO, said, "While we
expect business conditions to remain relatively stable, the benefits of our
capacity expansion at Chippewa Falls should offset the seasonal slowdown in
quickturn typically experienced in the first quarter of the year."
In a statement, chief executive Bruce McMaster said, "We believe that the discontinuation of our UK-based business is a positive development for our shareholders. It provides a resolution to the liquidity challenges that have beset that business, enables us to cease reporting that business as an ongoing operation, and permits us to concentrate our efforts on the North American market. "
McMaster said DDi will focus on growing a value-added reseller services business recently begun in the U.S.
The U.K. operations carried heavy debt even before their acquisition
by DDi in 2000, McMaster said. The company, which is operating on slim
cash reserves, "could not justify" the large amounts of cash needed to
restructure.
DDi Europe will be placed into administration, a move that permits DDi Corp. to remove $38 million of the
UK-based indebtedness from its books.
In recent quarters, DDi Europe has contributed approximately one-third of
DDi Corp.'s consolidated net sales, which totaled about $285 million for the 12 months ended last September.
In a research note, Deutsche Bank said Cisco's performance and outlook are behind its "cautious view" of the EMS sector. The maker of networking gear is one of the largest customers of the EMS industry.
Cisco's sales were up 1.5% sequentially, but below Street expectations of $6.13 billion. Year-on-year revenue forecasts are decelerating, from 12% in January
to 8 to 10% for the current quarter.
The combination of slowing end demand, contracting component lead times and relatively high inventory levels across the communications infrastructure market continues
Cisco said its internal book-to-bill ratio for communications infrastructure gear is below 1.0, the benchmark for growth. "We continue to believe the recent softness across the supply chain reflects slowing end-demand and customers' inventory reduction efforts," DB wrote.
"Look for Cisco to work inventory levels lower in future quarters in response
to softer end market demand and improved component availability. This will likely translate into soft near-term demand for EMS suppliers," DB wrote.
The EMS makers which stand to be most affected include Celestica (more than 10% of revenue comes from Cisco), Solectron (14%) and Jabil (15%).
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