On Feb. 15, quick-turnaround electronics component manufacturer TTM Technologies (NASDAQ:TTMI) released earnings for the fourth quarter ended Dec. 31.

  • This period includes two months of operations from the printed circuit board division of Tyco (NYSE:TYC), which TTM acquired last fall. It's an immediate shot in the arm, revenue-wise, but the margins took a severe hit.
  • Part of the margin letdown results from direct acquisition costs, but the Tyco group always worked in some lower-margin fields than what TTM is used to, such as backplane assembly. TTM's operational discipline should rub off on the new addition over time, but this was a rough quarter.
  • It's not as bad as it looks at first glance, though. The year-ago quarter included an unusual $0.31 per-share gain from a revaluation of the company's tax assets. On the other hand, there was a higher than usual tax provision this quarter -- more than 45% of pre-tax income -- to account for higher than expected tax rates for some of the acquired operations.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$144.3

$63.1

128.5%

Net Profit

$4.9

$19.0

(74.2%)

EPS

$0.12

$0.46

(73.9%)

Diluted Shares

42.4

41.8

1.4%


Get back to basics with a look at the income statement.

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

18.9%

23.8%

(5.0)

Operating Margin

7.8%

17.5%

(9.8)

Net Margin

3.4%

30.2%

(26.8)
*Expressed in percentage points

Margins are the earnings engine. See how they work.

Management Effectiveness

Q4 2006

Q4 2005

Change*

Return on Assets

4.5%

28.9%

(24.4)

Return on Equity

6.9%

32.5%

(25.6)


*Expressed in percentage points

See how management puts its financial tools to work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Invest.

$70.7

$82.4

(14.2%)

Accounts Rec.

$125.7

$38.6

225.4%

Inventory

$67.0

$12.6

433.0%


Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable

$40.0

$11.3

253.8%

Long-Term Debt

$141.5

$0.0

N/A


Learn the ways of the balance sheet.

Cash Flow Highlights

We didn't get a cash flow statement this time. Curses!

Find out why Fools always follow the money.

Cash Conversion Checkup

Q4 2006

Q4 2005

Change

Days in Inventory

31.5

22.8

8.7

Days in Receivables

53.3

55.6

(2.2)

Days Payables Outstanding

20.7

19.7

1.0

Cash Conversion Cycle

64.1

58.7

5.5


Read up on cash conversion metrics.

Related companies:

  • Merix (NASDAQ:MERX)
  • Sanmina-SCI (NASDAQ:SANM)
  • Eltek (NASDAQ:ELTK)
  • DDi (NASDAQ:DDIC)

Related Foolishness:

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Anders Bylund had no position in any company mentioned. Fool rules are here.