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10-K – 2026-02-17 – ttmi-20251229.htm
TTM TECHNOLOGIES, INC. Notes to Consolidated Financial Statements — (Continued) (11) Commitments and Contingencies Legal Matters The Company is subject to various legal matters, which it considers normal for its business activities. While the Company currently believes that the amount of any reasonably possible loss for known matters would not be material to the Company’s financial condition, the outcome of these actions is inherently difficult to predict. In the event of an adverse outcome, the ultimate potential loss could have a material adverse effect on the Company’s financial condition or results of operations in a particular period. The Company has accrued amounts for its loss contingencies which are probable and estimable as of December 29, 2025 and December 30, 2024 and included as a component of other current liabilities. However, these amounts are not material to the consolidated financial statements of the Company. Supplier Finance Program Obligations The Company has agreements with financial institutions to facilitate payments to certain suppliers. Under the terms of the agreements, the Company confirms the validity of each supplier invoice to the respective financial institution upon receipt. The supplier receives payment from the financial institution, and the Company pays the financial institution based on the terms negotiated, which generally range fro m 160 days to 360 days . Liabilities associated with these agreements are recorded in accounts payable on the consolidated balance sheets and amounted to $ 12,535 and $ 17,218 as of December 29, 2025 and December 30, 2024, respectively. The details of the outstanding obligations confirmed as valid under the Company’s supplier finance program were as follows: For the Year Ended December 29, 2025 December 30, 2024 (In thousands) Confirmed obligations outstanding at beginning of year $ 17,218 $ 18,832 Invoices confirmed during the year 12,579 22,887 Confirmed invoices paid during the year ( 17,480 ) ( 24,983 ) Effect of foreign currency exchange rates 218 482 Confirmed obligations outstanding at end of year $ 12,535 $ 17,218 (12) Stock-Based Compensation Incentive Compensation Plan The Company maintains the Plan, which allows for issuance of up to 5,100 shares through its latest possible expiration date in May 2033 . The Plan provides for the grant of PRUs, RSUs, stock appreciation rights, and stock options. The exercise price for awards is determined by the Compensation Committee of the Board of Directors. Each award shall vest and expire as determined by the Compensation Committee of the Board of Directors, with PRUs and RSUs generally vesting over three years for employees and one year for non‑employee directors. PRUs and RSUs do not have voting rights. All grants provide for accelerated vesting if there is a change in control, as defined in the Plan. As of December 29, 2025, 843 PRUs, 3,381 RSUs, and 40 stock options were outstanding under the Plan. Included in the 843 PRUs outstanding as of December 29, 2025 are 372 vested but not yet released. Included in the 3,381 RSUs outstanding as of December 29, 2025 are 612 vested but not yet released RSUs associated with non-employee directors. These RSUs vest over one year with release of the underlying shares of common stock deferred until retirement from the Board of Directors (or until one year after retirement in the case of certain prior grants). Performance-based Restricted Stock Units The Company maintains a long-term incentive program for executives that provides for the issuance of PRUs, representing hypothetical shares of the Company’s common stock that may be issued. Under the PRU program, a target number of PRUs is awarded at the beginning of each three-year performance period. The number of shares of common stock released at the end of the performance period depends on performance during the period and may range from zero to 2.4 times the target number for PRUs awarded before 2023 and zero to 2.0 times the target number for PRUs awarded in 2023 and thereafter. For PRUs awarded before 2023, the performance metrics of the PRU program are based on (1) annual financial targets, which are based on revenue and EBITDA, each equally weighted, and (2) an overall modifier based on the Company’s TSR relative to a group of peer companies selected by the Company’s Compensation Committee, over the three year performance period. For PRUs awarded in 2023 and thereafter, the performance metrics of the PRU program are based on (1) annual financial targets, which are based on revenue and EBITDA, each equally weighted, and (2) the three-year TSR performance result, which will be an additive component to the Company’s financial results of the aggregated three-year measurement period. 77 TTM TECHNOLOGIES, INC. Notes to Consolidated Financial Statements — (Continued) Under the PRU program, financial goals with respect to one or more target milestones are set at the beginning of each year and performance is reviewed at the end of that year. The percentage to be applied to each participant’s target award ranges from zero to 160 % for PRUs awarded before 2023 and zero to 200 % for PRUs awarded in 2023 and thereafter, based upon the extent to which the target milestones are achieved. If specific performance threshold levels for the target milestones are met, the amount earned for that element over the three-year performance period will be applied equally for PRUs awarded before 2023 and 80 % for PRUs awarded in 2023 and thereafter, of the participants’ PRU award to determine the number of units earned. At the end of the three-year performance period, the total units earned, if any, are adjusted by the TSR calculation. The TSR calculation is a percentage ranging from zero to 150 % for PRUs awarded before 2023 and zero to 200 % for PRUs awarded in 2023 and thereafter, determined on the Company’s TSR based on stock price changes relative to a group of peer companies selected by the Company’s Compensation Committee for the same three-year period. For outstanding PRU awards granted before 2023, the TSR is used as an overall modifier of the three-year performance period such that the base calculations are multiplied by the TSR modifier, ranging from zero to 150 %, based on the relative performance of the Company’s stock price as compared to its TSR peer group. For PRUs awarded in 2023 and thereafter, the TSR calculation will be applied to 20 % of the participants’ PRU award to determine the number of additional units earned. Recipients of PRU awards generally must remain employed by the Company on a continuous basis through the end of the three‑year performance period in order to receive any amount of the PRUs covered by that award. In events such as death, disability, or retirement, the recipient may be entitled to pro-rata amounts of PRUs as defined in the Plan. Target shares subject to PRU awards do not have voting rights of common stock until earned and issued following the end of the three-year performance period. The Company records stock-based compensation expense for PRU awards granted based on management’s periodic assessment of the annual financial performance goals to be achieved. As of December 29, 2025 , management determined that vesting of the PRU awards was probable. PRU activity for the year ended December 29, 2025 was as follows: Shares Weighted Average Fair Value (In thousands) Outstanding shares as of December 30, 2024 329 $ 20.14 Granted 371 46.12 Vested ( 372 ) 19.82 Forfeited / cancelled 102 31.34 Change in units due to annual performance achievement 52 61.73 Outstanding shares as of December 29, 2025 482 $ 47.26 The fair value of PRUs granted is calculated using a Monte Carlo simulation model, as the TSR modifier contains a market condition. The following assumptions were used in determining the fair value: For the Year Ended December 29, 2025 (1) December 30, 2024 (2) January 1, 2024 (3) Weighted-average fair value $ 46.11 $ 19.51 $ 16.36 Risk-free interest rate 3.99 % 4.42 % 4.46 % Expected volatility 39 % 41 % 42 % (1) Reflects the weighted-averages for the third year of the three-year performance period applicable to PRUs granted in 2023, the second year of the three-year performance period applicable to PRUs granted in 2024, and the first year of the three-year performance period applicable to PRUs granted in 2025. (2) Reflects the weighted-averages for the third year of the three-year performance period applicable to PRUs granted in 2022, the second year of the three-year performance period applicable to PRUs granted in 2023, and the first year of the three-year performance period applicable to PRUs granted in 2024. (3) Reflects the weighted-averages for the third year of the three-year performance period applicable to PRUs granted in 2021, the second year of the three-year performance period applicable to PRUs granted in 2022, and the first year of the three-year performance period applicable to PRUs granted in 2023. The risk-free interest rate for the expected term of PRUs is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is calculated using the Company’s historical stock price. 78 TTM TECHNOLOGIES, INC. Notes to Consolidated Financial Statements — (Continued) Restricted Stock Units RSU activity for the year ended December 29, 2025 was as follows: Shares Weighted Average Grant-Date Fair Value (In thousands) Non-vested RSUs outstanding as of December 30, 2024 3,465 $ 16.47 Granted 1,197 38.03 Vested ( 1,730 ) 15.27 Cancelled ( 163 ) 19.62 Non-vested RSUs outstanding as of December 29, 2025 2,769 $ 26.23 Vested and expected to vest through 2028 as of December 29, 2025 3,381 $ 23.80 The weighted average fair value per unit of RSUs granted was $ 38.03 , $ 19.32 , and $ 13.85 for the years ended December 29, 2025, December 30, 2024, and January 1, 2024, respectively. The total fair value of RSUs vested for the years ended December 29, 2025, December 30, 2024, and January 1, 2024 was $ 63,429 , $ 30,575 , and $ 19,928 , respectively. Stock Options As of December 29, 2025, stock options outstanding w as 40 and no options were granted during the year. This is not material to the consolidated financial statements of the Company. Stock-based Compensation Expense and Unrecognized Compensation Costs Stock-based compensation expense recognized in the accompanying consolidated statements of operations was as follows: For the Year Ended December 29, 2025 December 30, 2024 January 1, 2024 (In thousands) Cost of goods sold $ 12,866 $ 9,342 $ 7,455 Selling and marketing 4,648 3,845 3,205 General and administrative 23,616 15,322 11,088 Research and development 538 1,271 1,139 Total $ 41,668 $ 29,780 $ 22,887 A summary of total unrecognized compensation costs as of December 29, 2025 is as follows: Unrecognized Stock-Based Compensation Cost Remaining Weighted Average Recognition Period (In thousands) (In years) RSU awards $ 55,306 1.5 PRU awards 14,746 1.7 Total $ 70,052 (13) Leases The Company leases some of its manufacturing and assembly plants, sales offices, and equipment under non-cancellable operating leases and finance leases that expire at various dates throug h 2043 . The majority of the Company’s lease arrangements are comprised of fixed payments, and certain leases consist of variable payments based on equipment usage. These variable payments are not included in the measurement of the ROU asset or lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. Certain leases contain renewal provisions at the Company’s option. Most of the leases require the Company to pay for certain other costs such as property taxes and maintenance. Certain leases also contain rent escalation clauses (step rents) that require additional rental amounts in the later years of the term. Rent expense for leases with step rents is recognized on a straight-line basis over the minimum lease term. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. 79 TTM TECHNOLOGIES, INC. Notes to Consolidated Financial Statements — (Continued) The components of lease expense were as follows: For the Year Ended December 29, 2025 December 30, 2024 January 1, 2024 (In thousands) Operating lease cost $ 15,218 $ 14,933 $ 9,527 Variable lease cost 1,290 1,055 930 Short-term lease cost 677 409 311 Finance lease costs: Amortization of right-of-use assets 1,652 1,372 1,374 Interest on lease liabilities 554 354 373 Supplemental cash flow information related to leases was as follows: For the Year Ended December 29, 2025 December 30, 2024 January 1, 2024 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 14,469 $ 13,926 $ 9,039 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 12,700 $ 2,796 $ 77,041 Finance leases 4,682 — — Supplemental balance sheet information related to leases was as follows: As of Balance Sheet Location December 29, 2025 December 30, 2024 (In thousands) Assets: Operating leases Operating lease right-of-use assets $ 80,914 $ 78,252 Finance leases Property, plant, and equipment, net 13,652 10,621 Total lease assets $ 94,566 $ 88,873 Liabilities: Current: Operating leases Other current liabilities $ 8,909 $ 7,556 Finance leases Other current liabilities 1,117 814 Long-term: Operating leases Operating lease liabilities 87,524 77,509 Finance leases Other long-term liabilities 15,829 11,985 Total lease liabilities $ 113,379 $ 97,864 As of December 29, 2025 December 30, 2024 Weighted average remaining lease term (years): Operating leases 11.3 12.5 Finance leases 11.6 11.6 Weighted average discount rate: Operating leases 6.22 % 6.24 % Finance leases 3.70 2.69 80 TTM TECHNOLOGIES, INC. Notes to Consolidated Financial Statements — (Continued) Maturities of lease liabilities for the next five years and thereafter are as follows: Operating Leases Finance Leases (In thousands) 2026 $ 14,537 $ 1,698 2027 12,432 1,717 2028 11,338 1,733 2029 10,389 1,750 2030 10,413 1,780 Thereafter 79,270 12,395 Total lease payments 138,379 21,073 Less: Imputed interest ( 41,946 ) ( 4,127 ) Total $ 96,433 $ 16,946 81