Equity Investors Cashing Out of TTM After Big Run-up

Orange County Business Journal, Jun 14-Jun 20, 2004 by Lyster, Michael

QLogic Leases Elbow Room Next to Aliso Viejo Headquarters; AST Alum Ng Hired at EMI

TECHNOLOGY

Two investors in TTM Technologies Inc. are cashing in on the Santa Ana-based circuit board maker's run-up on Wall Street this year.

Private equity investors Thayer Capital Partners of Washington, D.C. and Boca Raton, Fla.-based Brockway Moran & Partners Inc. have notified the securities and Exchange Commission that they plan to sell 4.4 million TTM shares.

The investors are set to sell the shares from "time to time," according to an SEC filing.

TTM's shares are up some 175% in the past 12 months. The company makes circuit boards for Cisco Systems Inc., Broadcom Corp., Intel Corp., General Electric Co., IBM Corp. and other big names.

TTM is similar to Anaheim-based DDi Corp.-both companies specialize in making circuit boards on short notice, from 10 days to 24 hours.

TTM, DDi and other quick-turnaround board makers are the early beneficiaries of the technology rally.

As demand for computers, networking gear and other products picks up, companies are turning to TTM, DDi and other rapid-fire electronics makers to meet demand, rather than signing long-term deals for circuit boards.

In the first quarter, TTM saw sales rise 46% to $58 million from a year earlier. Quick-turnaround orders made up 24% of the company's business in the quarter.

TTM posted an operating profit of $10.4 million for the quarter, versus an operating loss of $1.3 million a year earlier.

The company projects more gains ahead: "Based on input from customers, we expect second-half volumes to exceed first-half levels," Chief Executive Kent Alder said in a release on the first-quarter results.

Thayer Capital and Brockway Moran & Partners played a part in bringing TTM to Santa Ana. TTM moved from Redmond, Wash, to Orange County last year after 2002's buy of Advanced Circuits Inc., a unit of Honey well International Inc. that had a plant in Santa Ana.

The seeds of TTM were sown when Thayer bought Washington's Pacific Circuits Inc. in 1998. Then, with Brockway, Thayer bought Power Circuits Inc. of Santa Ana later that year. The two companies were combined to create TTM, which went public in 2000.

The 4.4 million shares planned for sale by the two investors counted a market value of about $50 million as of last week.

TTM counted a recent market value of $460 million.

QLogic Expands

QLogic Corp. has taken an extra 36,667 square feet of office space next to its headquarters in Aliso Viejo.

The maker of networking devices for data storage needs the room to accommodate growth, according to QLogic spokesman Steve Sturgeon.

The new space is in Town Center Corporate Park in Aliso Viejo, where QLogic already has its headquarters. Terms of the lease weren't disclosed. QLogic plans to move into the new space in September.

Gary Allen and Doug Matthews of Grubb & Ellis Co. represented landlord Aliso Viejo Town Center Corp. Park LLC.

TDK Holding Up After WD Loss

Japan's TDK Corp. said sales of its heads for disk drives are holding up, despite losing Lake Forest-based Western Digital Corp. as a customer.

Western Digital is shifting from buying heads for its drives to producing them itself.

TDK's head sales are flat from a year earlier, President Hajime Sawabe told Reuters late last month. The company had predicted a 5% decline because of Western Digital's move.

"Because of Western Digital, we expected a decline in sales, and indeed sales to Western Digital are falling," Sawabe told Reuters. "But overall head sales are holding at around year-ago levels."

Western Digital's move is the result of its buy last year of what was left of bankrupt Fremont-based Read-Rite Corp., a maker of heads that read and write data on drives.

Gateway Puts Off Analysts

Gateway Inc., which plans to move from Poway to the Irvine Spectrum this summer, has postponed an analyst meeting originally set for this week.

The computer maker now says it will meet with analysts in September in New York instead of Irvine. Gateway said it needs more time to finalize its new strategy.

The added time should allow Gateway to better brief analysts on its distribution plans, cost cutting and other issues, the company said.

"It could be a sign that Gateway's negotiations with retailers to reintroduce the Gateway brand on retail store shelves is taking longer than planned," Bear Stearns analyst Andy Neff wrote in a note to clients, according to a Reuters report.

Gateway is in the midst of a major transition under new boss Wayne Inouye. Earlier this year, Gateway bought Irvine-based eMachines Inc., where Inouye oversaw a turnaround in the past few years.

Now he's calling the shots at Gateway, including the headquarters move.

AST Alum at EMI

Thomas Ng, a principal engineer for defunct Irvine computer maker AST Research Inc., has signed on at Express Manufacturing Inc., the Santa Ana contract electronics maker.

Ng is EMI's director of engineering, over seeing the company's engineering service group.

Before coming to EMI, Ng worked for Irvine-based Zandiant Technologies Inc., which came out of Japan's Clarion Co. and doesn't exist anymore.