What changed in this filing

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Item 1A. Risk Factors

2020-08-06 compared with 2020-05-07 · 22 added, 20 removed, 644 unchanged (6% of the section changed)

10 unchanged sentences

Disruptions in our product shipments or impacts on our manufacturing in affected regions over a prolonged period could have a material adverse impact on our business and our financial results.

On March 11, 2020, the World Health Organization announced that infections of the COVID-19 had become a pandemic, and on March 13, 2020, the U.S.

On March 11, 2020, the World Health Organization announced that COVID-19 infections had become a pandemic, and on March 13, 2020, the U.S.

President announced a National Emergency relating to the disease.

18 unchanged sentences

We continue to consider additional opportunities to make foreign investments and construct new foreign facilities.

For the quarter ended March 30, 2020, we generated approximately 48% of our net sales from non-U.S.

For the quarter ended June 29, 2020, we generated approximately 50% of our net sales from non-U.S.

operations, and a significant portion of our manufacturing material was provided by international suppliers during this period.

27 unchanged sentences

government imposed sanction laws and regulations.

Our operations in China subject us to risks and uncertainties relating to the laws and regulations of China.

Our operations in China and Hong Kong subject us to risks and uncertainties relating to the laws and regulations of China and Hong Kong.

Under its current leadership, the government of China has been pursuing economic reform policies, including the encouragement of foreign trade and investment.

No assurance can be given, however, that the government of China will continue to pursue such policies, that such policies will be successful if pursued, or that such policies will not be significantly altered from time to time, particularly in light of the increasingly tense trade climate with the United States.

Despite progress in developing its legal system, China does not have a comprehensive and highly developed system of laws, particularly with respect to foreign investment

activities and foreign trade.

Despite progress in developing its legal

system, China does not have a comprehensive and highly developed system of laws, particularly with respect to foreign investment activities and foreign trade.

Enforcement of existing and future laws and contracts is uncertain, and implementation and interpretation thereof may be inconsistent.

1 unchanged sentence

Further, any litigation in China may be protracted and may result in substantial costs and diversion of resources and management’s attention.

Also, the evolving landscape of the interrelation between China and Hong Kong may have an adverse impact on our operations in Hong Kong and may impact our ability to attract and maintain necessary talent in that area.

In addition, though changes in government policies and rules are timely published or communicated, there is usually no indication of the duration of any grace period before which full implementation and compliance will be required.

30 unchanged sentences

the inability to consummate a potential divestiture due to regulatory constraints;

the separation of business infrastructure involved in a potential dives ti ture may create disruption in our business;

the separation of business infrastructure involved in a potential divestiture may create disruption in our business;

the tax burden related to the divestiture may be larger than expected;

31 unchanged sentences

ABL), and $30.0 million outstanding under a $150.0 million Asia Asset-Based Lending Credit Agreement (Asia ABL).

We and a number of our direct and indirect subsidiaries also have various credit facilities and letters of credit.

We and a number of our direct and indirect

subsidiaries also have various credit facilities and letters of credit.

Such agreements also contain certain financial covenants which require us to maintain, under the occurrence of certain events, a consolidated fixed charge coverage ratio.

17 unchanged sentences

If our goodwill or other intangible assets become impaired in the future, we would be required to record a non-cash charge to earnings, which may be material and would also reduce our stockholders’ equity.

As of March 30, 2020, our consolidated condensed balance sheet included $1,021.3 million of goodwill and definite-lived intangible assets.

As of June 29, 2020, our consolidated condensed balance sheet included $1,010.3 million of goodwill and definite-lived intangible assets.

We periodically evaluate whether events and circumstances have occurred, such that the potential for reduced expectations for future cash flows coupled with further decline in the market price of our stock and market capitalization may indicate that the remaining balance of goodwill and definite-lived intangible assets may not be recoverable.

45 unchanged sentences

Additionally, our OEM customers often direct a significant portion of their purchases through a relatively limited number of EMS companies.

Sales to EMS companies represented approximately 35% and 37% of our net sales for the quarters ended March 30, 2020 and April 1, 2019, respectively.

Sales to EMS companies represented approximately 38% and 36% of our net sales for the quarters ended June 29, 2020 and July 1, 2019, respectively.

Our contractual relationship is often with the EMS companies, who are obligated to pay us for

4 unchanged sentences

A small number of customers are responsible for a significant portion of our sales.

Our five largest OEM customers accounted for approximately 28% and 27% of our net sales for the quarters ended March 30, 2020 and April 1, 2019, respectively.

Our five largest OEM customers accounted for approximately 27% and 31% of our net sales for the quarters ended June 29, 2020 and July 1, 2019, respectively.

Sales attributed to OEMs include both direct sales as well as sales that the OEMs place through EMS providers.

34 unchanged sentences

The contracts between our direct customers and the government end user are subject to political and budgetary constraints and processes, changes in short-range and long-range strategic plans, the timing of contract awards, the congressional budget authorization and appropriation processes, the government’s ability to terminate contracts for convenience or for default, as well as other risks, such as contractor suspension or debarment in the event of certain violations of legal and regulatory requirements.

For the quarter ended March 30, 2020, aerospace and defense sales accounted for approximately 37% of our total net sales.

For the quarter ended June 29, 2020, aerospace and defense sales accounted for approximately 33% of our total net sales.

The substantial majority of aerospace and defense sales are related to both U.S.

75 unchanged sentences

other than the U.S.

dollar (primarily the RMB).

dollar (primarily the Renminbi (RMB)).

Fluctuations in the exchange rates between the U.S.

110 unchanged sentences

We may also become subject to additional collective bargaining agreements in the future if more employees or segments of our workforce become unionized, including any of our employees in the United States.

We are subject to the requirements of the National Industrial Security Program Operating Manual for our facility security clearance, which is a prerequisite to our ability to perform on classified contracts for the U.S.

We are subject to the requirements of the National Industrial Security Program Operating Manual (NISPOM) for our facility security clearance, which is a prerequisite to our ability to perform on classified contracts for the U.S.

A facility security clearance is required in order to be awarded and perform on classified contracts for the Department of Defense and certain other agencies of the U.S.

As a cleared entity, we must comply with the requirements of the National Industrial Security Program Operating Manual (NISPOM), and any other applicable U.S.

As a cleared entity, we must comply with the requirements of the NISPOM, and any other applicable U.S.

government industrial security regulations.

9 unchanged sentences

We expect competition to continue, which could result in price reductions, reduced gross margins, and loss of market share.

Our principal PCB and substrate competitors include AT&S (Austria Technologie & Systemtechnik Aktiengesellschaft), BoardTek Electronics Corporation, Chin-Poon Industrial Co., Ltd., ISU Petasys Co., Ltd., Suzhou Dongshan Precision Manufacturing Co., Ltd., Sanmina Corporation, Tripod Technology Corporation, Unimicron Technology Corporation, and WUS Printed Circuit Co., Ltd.

Our principal E-M Solutions competitors include Amphenol Corporation, Flex Ltd., Jabil Inc., and Sanmina Corporation.

33 unchanged sentences

In the event one or more of our facilities is closed on a temporary or permanent basis as a result of a natural disaster, required maintenance or other event, our operations could be significantly disrupted.

Such events could delay or prevent product manufacturing and shipment for the time required to transfer production or repair, rebuild or replace the affected manufacturing facilities.

Such events could delay or prevent product manufacturing and shipment for the time required to transfer production or repair, rebuild or replace the affected manufacturing

This time frame could be lengthy and result in significant expenses for repair and related costs.

14 unchanged sentences

The prominence of EMS companies as our customers could reduce our gross margins, potential sales, and OEM customers.

Sales to EMS companies represented approximately 35% and 37% of our net sales for the quarters ended March 30, 2020 and April 1, 2019, respectively.

Sales to EMS companies represented approximately 38% and 36% of our net sales for the quarters ended June 29, 2020 and July 1, 2019, respectively.

Sales to EMS providers include sales directed by OEMs as well as orders placed with us at the EMS providers’ discretion.

125 unchanged sentences

These rules impose diligence and disclosure requirements regarding the use of “conflict minerals” mined from the Democratic Republic of Congo and neighboring countries.

While these new rules continue to be the subject of ongoing litigation and, as a result, uncertainty, we submitted a conflict minerals report on Form SD with the SEC for the past five years, most recently on May 24, 2019.

While these new rules continue to be the subject of ongoing litigation and, as a result, uncertainty, we submitted a conflict minerals report on Form SD with the SEC for the past seven years, most recently on May 29, 2020.

Compliance with these rules results in additional costs and expenses, including costs and expenses incurred for due diligence to determine and verify the sources of any conflict minerals used in our products, in addition to the costs and expenses of remediation and other changes to products, processes, or sources of supply as a consequence of such verification efforts.

4 unchanged sentences

If we are not able to meet customer requirements, such customers may choose to disqualify us as a supplier, which could impact our sales and the value of portions of our inventory.

Equity Interests Purchase Agreement, dated as of January 20, 2020, by and among TTM Technologies, Inc., TTM Technologies China Limited and AKMMeadville Electronics (Xiamen) Co., Ltd.

Registrant’s Certificate of Incorporation, as amended May 12, 2016 (1)

11 unchanged sentences

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

Incorporated by reference to the Registrant’s Current Report on Form 8-K as filed with the Commission on January 22, 2020.

Incorporated by reference to the Registrant’s Current Report on Form 8-K as filed with the Commission on June 6, 2011 and to the Registrant’s Form 8-K as filed with the Commission on May 18, 2016.

4 unchanged sentences

/s/ Thomas T.

August 6, 2020

President and Chief Executive Officer

August 6, 2020

Executive Vice President and Chief Financial Officer

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors