It looks like those falling prices for circuit boards are coming to an end.
In the past few weeks, some Orange County circuit board makers have talked of stabilizing prices for their products after a few quarters of declines.
“We experienced more favorable pricing and steady volume in the (third quarter), which enhanced our operating efficiency and profitability,” said Kent Alder, chief executive of TTM Technologies Inc. in Santa Ana.
Anaheim-based DDi Corp. saw similar trends.
“During the quarter, pricing firmed somewhat in both the quick-turn and longer-lead portions of the business,” said Mikel Williams, DDi’s chief executive, in a statement. “This trend has continued into the fourth quarter.”
Back in May, TTM Technologies, DDi and Anaheim-based Multi-Fineline Electronix Inc. reported flat sales and warned of falling prices.
The pricing turn is good news for a sector that plays a key role in the local technology industry. The largest circuit board makers here employ more than 3,000 people.
Circuit boards house chips and make up the innards of computers, mobile phones and other electronics. They’re low-profit components made either in large batches or on short notice.
Challenges remain for the sector.
DDi has seen the most tumult. In late October the company said its longtime chief executive, Bruce McMaster, had resigned. McMaster had been president since 1991 and chief executive since 1997. The company gave the usual line about him leaving to pursue other opportunities.
Williams, who had served as chief financial officer, took over for McMaster. A search is on for a new financial chief.
During the call with analysts, Williams said he would continue with cost-cutting efforts, which have included shutting down a plant in Arizona. Williams said he’s meeting with customers and doesn’t see any one bolting after McMaster’s exit.
The change in leadership came a few weeks after Nasdaq officials warned DDi it could be delisted because of a low stock price. Shares dipped below $1 in August and now hover around 70 cents.
During the third quarter, the company said sales were up 1% from the second quarter to $46 million, and declined 2% from the year-ago period.
DDi again posted a net loss. It lost more than $28 million during the quarter, though the red ink would have been much smaller without a write-off from discontinued operations.
The numbers were better at TTM. Its third-quarter sales rose 7% to $61 million from the prior quarter but were off 2% from the year-ago period.
Net income for the third quarter of 2005 was $4.1 million, up 24% from the second quarter but down nearly 50% from the year-ago period. Some of that decrease was due to a settlement with disgruntled customers from a few years ago.
TTM’s gross profit margin improved to 23.2% for the third quarter, from 19.3% for the second quarter.
Multi-Fineline, which specializes in a slightly different part of the industry with its flexible circuit boards, had perhaps the best results for the most recent quarter.
The company said sales rose 41% to $357.1 million from a year earlier. Net income rose 45% to $37.2 million compared to a year ago. Multi-Fineline makes circuit boards for wireless phones and handheld devices.
Local Pain
Laguna Hills-based Interchange Corp. didn’t exactly turn in a great quarter.
The company, which provides local Internet search advertising, saw revenue fall 25% to $4.1 million in the third quarter from the year-ago period. Interchange also swung to a loss of $2.8 million from a gain of $288,000 during the year-ago period.
Company executives tried to point to positives, including launching the company’s Local.com site in August. The site lets users search for businesses in their areas.
Interchange said in a statement it “achieved over 6 million page views for the month of October” and expected more in November.
Investors weren’t impressed.
The company’s shares dropped more than 20% in just one day on the news. The company counted a market value of about $55 million last week.
Interchange went public a year ago, bringing some echoes of the dot-com era. The company saw its shares shoot up 340% in the weeks following its offering, leading to a $200 million market value late last year. Some chat board followers of the company touted it as the next Google Inc.
China Display Play
Irvine-based China Media1 Corp. has raised nearly $900,000 in debt from investors.
The company, which sells scrolling poster displays in China, said it had raised money from institutional investors through convertible notes that mature in 2007.
“Securing this institutional financing marks an extremely significant point in the history of China Media1,” said Hanxiong (Adrian) Cai, the company’s chief executive. “As our operations grow in China, we welcome more American institutions as stockholders in our company.”
China Media1’s shares trade on the low-profile over-the-counter-market. The company has announced a few wins recently, including contracts for advertising displays at KinHom Furniture, the largest furniture retailer in China.
