TTM TECHNOLOGIES INC

Current report

We have manufacturing facilities and serve customers outside the United States and are subject to the risks characteristic of international operations, including tariffs.

Current report

We have significant manufacturing operations in China, elsewhere in Asia and Canada and recently-added facilities in Switzerland and Germany, as well as sales offices located in Asia and Europe. We continue to pursue acquisitions of foreign companies, such as the pending acquisitions of Ophir Optics and other companies in Europe, and consider additional opportunities to make foreign investments and construct new foreign facilities.

Current report

In addition, for the quarter and three quarters ended September 28, 2026, we generated approximately 63% and 59% of our net sales from non-U.S. operations, respectively, and a significant portion of our manufacturing material was provided by international suppliers during this period. The United States’ trade policies and those of foreign countries are subject to change which could adversely affect our ability to purchase and sell goods and materials without significant tariffs, taxes, or duties that may be imposed on the materials we purchase or the goods we sell, thereby increasing the cost of such materials and potentially decreasing our margins. Further, our revenues could be impacted if our customers’ ability to sell their goods is reduced by such tariffs, taxes, or duties. Both the U.S. and Chinese governments have included PCBs among items subjected to tariffs imposed on imports from such countries, which may negatively impact our revenue and profitability. In addition, we are subject to risks relating to significant international operations, including but not limited to: managing international operations and longer payment cycles; imposition of governmental controls, unstable regulatory environments, and government or political unrest; limitations on imports or exports and/or increases in duties and taxation levied on our products; inflation or changes in political and economic conditions; labor unrest, rising wages, difficulties in staffing, geographical labor shortages, and compliance with employment laws; conflict or war between nations over territory that impacts the electronics supply chain leading to potential trade restrictions to and from the nations involved, including Russia, Ukraine, and China; language, communication, and cultural barriers, as well as time zone differences; potentially adverse tax consequences; expropriation of private enterprises; strained trade relationships between the United States and its trading partners, including trade tariffs which could create competitive pricing risk; and government imposed sanction laws and regulations.

Current report

We have pursued and intend to continue to pursue acquisitions and divestitures of assets and businesses and may encounter risks associated with these activities, including with regard to the integration of acquired businesses. If we are unable to manage our growth effectively, our business, financial condition, and results of operations could be materially adversely affected.

Current report

As part of our business strategy, we have increased our focus on pursuing acquisitions of businesses, technologies, assets, or product lines that complement or expand our business, such as our recent acquisitions of STG and Epiq, and our proposed acquisitions of Ophir Optics and other companies in Europe, and potential divestitures, such as our sale of Shanghai Backplane Assembly.

Current report

Acquisitions of high-technology companies and assets are inherently risky, and no assurance can be given that our prior or future acquisitions will be successful. Failure to manage and successfully integrate acquisitions we make could have a material adverse effect on our business, financial condition, and results of operations. Even when an acquired company has already developed and marketed products, product enhancements may not be made in a timely fashion. In addition, unforeseen issues might arise with respect to such products after any such acquisition.

Current report

As we continue to experience growth in the scope and complexity of our operations, we may be required to implement additional operating and financial controls and hire and train additional personnel. There can be no assurance that we will be able to do so in the future, and failure to do so could jeopardize our expansion plans and seriously harm our operations.

Current report

In the case of foreign acquisitions and investments, we may face additional challenges associated with integrating operations across different cultures and languages, as well as economic, tax, currency, political, legal, and regulatory risks associated with the countries in which such acquisitions and investments are made.

Current report

Other challenges and risks with regard to acquisitions include that they do not advance our business strategy, that we get an unsatisfactory return on our investment, that they raise new compliance-related obligations and challenges, that they distract management from our other businesses, and that announced transactions may not be completed. We also have limited ability to control or influence third-party sellers, which may impact our ability to realize the anticipated benefits.

Current report

The success of our acquisitions will depend in part on our ability to leverage new businesses to enhance our existing products and services, as well as the acquired companies’ ability to meet our policies and processes in areas such as data governance, privacy, digital safety, responsible AI, and cybersecurity. It may take longer than expected to realize the full economic benefits from acquisitions, such as increased revenue or enhanced efficiencies, or the benefits may ultimately be smaller than we expected. We have recorded, and may in the future be required to record, a significant charge in our consolidated financial statements during the period in which any impairment of our goodwill or amortizable intangible assets is determined, negatively affecting our results of operations. In addition, an acquisition may be subject to challenge even after it has been completed. These events could adversely affect our business, operations, financial condition, and results of operations.

Current report

We have substantial outstanding indebtedness, and our outstanding indebtedness could adversely impact our liquidity and flexibility in obtaining additional financing, our ability to fulfill our debt obligations, and our financial condition and results of operations.

Current report

We have incurred, and may continue to incur, substantial debt in connection with our operations and acquisition strategy. As a result, we have, and expect to continue to have, significant debt service obligations with respect to the RCF, Incremental Facilities, Amended Term Loan Facility, the Senior Notes due 2029, the Senior Notes due 2034, and other debt instruments. 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.

Current report

Our high level of debt could have important consequences to our business. For example, it could:

Current report

make it more difficult for us to satisfy all of our debt obligations, which could in turn result in an event of default on such indebtedness;

Current report

require us to use a substantial portion of our cash flow from operations for debt service payments, thereby reducing the availability of cash for working capital, capital expenditures, acquisitions, and other general corporate purposes;

Current report

impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions and other investments, or general corporate purposes, which may limit our ability to execute our business strategy;

Current report

diminish our ability to withstand a downturn in our business, the industries in which we operate or the economy generally, or restrict us from exploiting business opportunities or making acquisitions;

Current report

limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate or the general economy;

Current report

increase our vulnerability to general adverse economic and industry conditions, including movements in interest rates, which could result in increased borrowing costs;

Current report

limit management’s discretion in operating our business; and

Current report

place us at a competitive disadvantage as compared to our competitors that have less debt as it could limit our ability to capitalize on future business opportunities and to react to competitive pressures or adverse changes.

Current report

Subject to the limits contained in the Third Amended and Restated Credit Agreement, the indentures governing the Senior Notes due 2029 and the Senior Notes due 2034 and our other debt instruments, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, the risks related to our high level of debt could intensify.

Current report

In addition, the Third Amended and Restated Credit Agreement, the indentures governing the Senior Notes due 2029 and Senior Notes due 2034 and our other debt instruments contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all our debt and limit management’s discretion in operating our business.

Current report

Our RCF, Incremental Facilities, and Amended Term Loan Facility are subject to interest at a floating rate of Term SOFR plus a margin, and as a result, we have exposure to interest rate risk. Increases in interest rates increase our cost of borrowing and/or potentially make it more difficult to refinance our existing indebtedness, if necessary. We endeavored to mitigate this risk by entering into a four‑year pay-fixed, receive-floating (1-month CME Term SOFR) interest rate swap arrangement in March 2023. The swap has a notional amount of $250.0 million for the period beginning April 1, 2023 and ending on April 1, 2027. Under the terms of the interest rate swap, we pay a fixed rate of 3.49% against the first interest payments of a portion of our Term SOFR-based debt and receive floating 1-month CME Term SOFR during the swap period. Although we have taken measures to mitigate our risk to interest rate increases, our swap instruments may not be wholly effective in mitigating this risk or otherwise provide an effective hedge against all interest rate volatility. See Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk and Interest Rate Risks, in our Annual Report on Form 10-K for the fiscal year ended December 29, 2025 for further information.

Current report

Servicing our debt requires a significant amount of cash and we may not be able to generate sufficient cash to service all of our debt and may be forced to take other actions to satisfy our obligations under our debt, which may not be successful.

Current report

Based on certain parameters defined in the Third Amended and Restated Credit Agreement, including a Consolidated First Lien Leverage Ratio, we may be required to make an additional principal payment on an annual basis if our Consolidated First Lien Leverage Ratio is greater than 2.00:1.00.

Current report

Our ability to make scheduled payments on or to refinance our debt obligations and to fund planned capital expenditures and expansion efforts depends on our ability to generate cash in the future and our financial condition and operating performance.

Current report

If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and be forced to reduce or delay investments and capital expenditures, dispose of material assets or operations, seek additional capital (which could include obtaining additional equity capital on terms that may be onerous or highly dilutive), or restructure or refinance our indebtedness. We may not be able to affect any such alternative measures and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. Additionally, the Third Amended and Restated Credit Agreement, the indentures governing the Senior Notes due 2029 and Senior Notes due 2034, and other debt instruments restrict our ability to effect such alternative measures to repay other indebtedness when it becomes due.

Current report

We conduct certain of our operations through our subsidiaries, and repayment of our indebtedness may be dependent on their generation of cash flow and ability to make such cash available to us. Our subsidiaries do not have any obligation to, and may not be able or permitted to, pay amounts due on our indebtedness unless they are guarantors of our indebtedness. While the Third Amended and Restated Credit Agreement, the indentures governing the Senior Notes due 2029 and Senior Notes due 2034, and other debt instruments limit the ability of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to qualifications and exceptions. Additionally, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries.

Current report

Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our financial position and results of operations and our ability to satisfy our obligations under our indebtedness. If we cannot make scheduled payments on our debt, we will be in default and holders of the Senior Notes due 2029 or of the Senior Notes due 2034 could declare all outstanding principal and interest to be due and payable, the lenders under the RCF, Incremental Facilities, and Amended Term Loan Facility, could terminate their commitments to loan money, the lenders could foreclose against the assets securing their borrowings and we could be forced into bankruptcy or liquidation.