U.S. markets open in 2 hours 51 minutes
  • S&P Futures

    3,750.25
    -6.50 (-0.17%)
     
  • Dow Futures

    29,986.00
    +4.00 (+0.01%)
     
  • Nasdaq Futures

    11,487.00
    -54.75 (-0.47%)
     
  • Russell 2000 Futures

    1,758.80
    +0.70 (+0.04%)
     
  • Crude Oil

    89.33
    +0.88 (+0.99%)
     
  • Gold

    1,714.60
    -6.20 (-0.36%)
     
  • Silver

    20.65
    -0.01 (-0.05%)
     
  • EUR/USD

    0.9801
    +0.0006 (+0.0588%)
     
  • 10-Yr Bond

    3.8260
    0.0000 (0.00%)
     
  • Vix

    30.42
    +1.87 (+6.55%)
     
  • GBP/USD

    1.1192
    +0.0023 (+0.2070%)
     
  • USD/JPY

    144.9020
    -0.1660 (-0.1144%)
     
  • BTC-USD

    19,958.86
    -185.01 (-0.92%)
     
  • CMC Crypto 200

    454.22
    -8.90 (-1.92%)
     
  • FTSE 100

    7,010.76
    +13.49 (+0.19%)
     
  • Nikkei 225

    27,116.11
    -195.19 (-0.71%)
     

CTS Announces Third Quarter 2021 Results

·9 min read

Solid Financial Results Driven by Long-Term Diversification of the Business

LISLE, Ill., Oct. 27, 2021 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS) today announced third quarter 2021 results.

  • Sales were $122.4 million, up 8% year-over-year. Sales to non-transportation end markets increased 24%, and sales to transportation end market decreased 5%. The Sensor Scientific acquisition added $1.8 million of sales in the third quarter of 2021.

  • Net loss was $63.9 million, or $(1.97) per diluted share, versus $11.1 million, or $0.34 per diluted share, in the third quarter of last year. The third quarter net earnings were impacted by a non-cash charge of $76 million, net of taxes related to the previously disclosed termination of the U.S. pension plan.

  • Adjusted diluted EPS was $0.46, up from $0.34 in the third quarter of 2020.

  • Free cash flow was $17.2 million, down from $22.4 million in the third quarter of 2020.

  • New business wins were $179 million.

“We continued to advance our diversification strategy during the third quarter, with non-transportation related revenue closer to 50% of total revenue for the quarter. Further, our third quarter results demonstrated the differentiation of our product portfolio, as well as the richness of our customer base, which allowed us to deliver growth ahead of the industry, despite a challenging supply chain environment. As we look forward, we believe the strong execution of our team, coupled with a robust pipeline will allow us to continue to capitalize on the opportunities in the industrial, medical, aerospace and defense end markets,” said Kieran O’Sullivan, CEO of CTS Corporation.

2021 Guidance

While management remains mindful of supply chain uncertainties, CTS has raised and narrowed its 2021 guidance for sales to $495 – $505 million from $480 – $500 million and for adjusted diluted EPS to $1.85 – $1.95 from $1.70 – $1.90.

Conference Call

As previously announced, the Company has scheduled a conference call at 10:00 a.m. (EST) today to discuss the third quarter financial results. The dial-in number is 800-309-1256 (323-347-3622, if calling from outside the U.S.). The passcode is 572446. A replay of the conference call will be available from 1:00 p.m. (EST) on Wednesday, October 27, 2021 through 1:00 p.m. (EST) on Wednesday, November 10, 2021. The telephone number for the replay is 888-203-1112 (719-457-0820, if calling from outside the U.S.). The replay passcode is 6028607. A live audio webcast of the conference call will be available and can be accessed directly from the Investors section of the website of CTS Corporation at www.ctscorp.com.

About CTS

CTS (NYSE: CTS) is a leading designer and manufacturer of products that Sense, Connect, and Move. The company manufactures sensors, actuators, and electronic components in North America, Europe, and Asia, and provides engineered products to customers in the aerospace/defense, industrial, medical, telecommunications/IT, and transportation markets. For more information, visit www.ctscorp.com.

Safe Harbor

This document contains statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, any financial or other guidance, statements that reflect our current expectations concerning future results and events, and any other statements that are not based solely on historical fact. Forward-looking statements are based on management's expectations, certain assumptions and currently available information. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are based on various assumptions as to future events, the occurrence of which necessarily are subject to uncertainties. These forward-looking statements are made subject to certain risks, uncertainties and other factors, which could cause our actual results, performance or achievements to differ materially from those presented in the forward-looking statements. Many of these, and other, risks and uncertainties are discussed in further detail in Item 1A. of CTS’ Annual Report on Form 10-K. We undertake no obligation to publicly update our forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes.

Contact

Ashish Agrawal
Vice President and Chief Financial Officer
CTS Corporation
4925 Indiana Avenue
Lisle, IL 60532
USA
Telephone: +1 (630) 577-8800
E-mail: ashish.agrawal@ctscorp.com

CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS - UNAUDITED
(In thousands of dollars, except per share amounts)

Three Months Ended

Nine Months Ended

September 30,
2021

September 30,
2020

September 30,
2021

September 30,
2020

Net sales

$

122,382

$

113,777

$

380,394

$

301,049

Cost of goods sold

76,720

76,871

244,446

204,677

Gross margin

45,662

36,906

135,948

96,372

Selling, general and administrative expenses

19,922

16,883

59,184

48,310

Research and development expenses

6,454

5,723

18,170

18,653

Restructuring charges

319

1,041

551

1,416

Operating earnings

18,967

13,259

58,043

27,993

Other (expense) income:

Interest expense

(514

)

(857

)

(1,577

)

(2,617

)

Interest income

230

217

689

852

Other (expense) income, net

(108,502

)

1,617

(132,786

)

(109

)

Total other expense, net

(108,786

)

977

(133,674

)

(1,874

)

(Loss) earnings before income taxes

(89,819

)

14,236

(75,631

)

26,119

Income tax expense

(25,923

)

3,163

(24,600

)

6,381

Net (loss) earnings

(63,896

)

11,073

(51,031

)

$

19,738

Earnings per share:

Basic

$

(1.97

)

$

0.34

$

(1.58

)

$

0.61

Diluted

$

(1.97

)

$

0.34

$

(1.58

)

$

0.61

Basic weighted – average common shares outstanding:

32,379

32,268

32,365

32,331

Effect of dilutive securities

241

270

Diluted weighted – average common shares outstanding:

32,379

32,509

32,365

32,601

Cash dividends declared per share

$

0.04

$

0.04

$

0.12

$

0.12

CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)

(Unaudited)

September 30, 2021

December 31, 2020

ASSETS

Current Assets

Cash and cash equivalents

$

128,527

$

91,773

Accounts receivable, net

78,210

80,981

Inventories, net

50,867

45,870

Other current assets

19,845

14,607

Total current assets

277,449

233,231

Property, plant and equipment, net

92,533

97,437

Operating lease assets, net

22,456

23,281

Other Assets

Prepaid pension asset

50,638

56,642

Goodwill

109,798

109,497

Other intangible assets, net

72,236

79,121

Deferred income taxes

24,663

24,250

Other

2,200

2,590

Total other assets

259,535

272,100

Total Assets

$

651,973

$

626,049

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities

Accounts payable

$

48,976

$

50,489

Operating lease obligations

3,354

3,294

Accrued payroll and benefits

17,069

12,978

Accrued expenses and other liabilities

35,673

38,171

Total current liabilities

105,072

104,932

Long-term debt

50,000

54,600

Long-term operating lease obligations

22,262

23,163

Long-term pension obligations

7,114

7,466

Deferred income taxes

6,907

7,010

Other long-term obligations

3,244

5,196

Total Liabilities

194,599

202,367

Commitments and Contingencies

Shareholders’ Equity

Common stock

314,351

311,190

Additional contributed capital

40,958

41,654

Retained earnings

484,368

539,281

Accumulated other comprehensive loss

(4,842

)

(95,921

)

Total shareholders’ equity before treasury stock

834,835

796,204

Treasury stock

(377,461

)

(372,522

)

Total shareholders’ equity

457,374

423,682

Total Liabilities and Shareholders’ Equity

$

651,973

$

626,049

CTS CORPORATION AND SUBSIDIARIES
OTHER SUPPLEMENTAL INFORMATION - UNAUDITED

Earnings Per Share

The following table reconciles GAAP diluted (loss) earnings per share to adjusted diluted earnings per share for the Company:

Three Months Ended

Nine Months Ended

September 30,
2021

September 30,
2020

September 30,
2021

September 30,
2020

GAAP diluted (loss) earnings per share

$

(1.97

)

$

0.34

$

(1.58

)

$

0.61

Tax affected charges to reported diluted (loss) earnings per share:

Restructuring charges

0.01

0.03

0.02

0.04

Foreign currency (gain) loss

0.03

(0.07

)

0.04

(0.06

)

Non-cash pension expense

2.54

0.01

3.10

0.04

Environmental charges

0.01

0.01

0.02

0.03

Discrete tax items

(0.16

)

0.02

(0.16

)

0.03

Adjusted diluted earnings per share

$

0.46

$

0.34

$

1.44

$

0.69

Free Cash Flow

The following table reconciles GAAP operating cash flow to free cash flow for the Company:

Three Months Ended

Nine Months Ended

September 30,
2021

September 30,
2020

September 30,
2021

September 30,
2020

Net cash provided by operating activities

$

21,332

$

25,573

$

60,117

$

49,297

Capital expenditures

(4,170

)

(3,196

)

(8,140

)

(10,441

)

Free cash flow

$

17,162

$

22,377

$

51,977

$

38,856

Additional Information

The following table includes other financial information not presented in the preceding financial statements.

Three Months Ended

Nine Months Ended

September 30,
2021

September 30,
2020

September 30,
2021

September 30,
2020

Depreciation and amortization expense

$

6,719

$

6,676

$

20,231

$

19,819

Stock-based compensation expense

$

987

$

1,119

$

4,106

$

2,164

Non-GAAP Financial Measures

From time to time, CTS may use non-GAAP financial measures in discussing CTS’ business. These measures are intended to supplement, not replace, CTS’ presentation of its financial results in accordance with GAAP. CTS’ management believes that non-GAAP financial measures can be useful to investors in analyzing CTS’ financial performance and results of operations over time. CTS recommends that investors consider both actual and adjusted measures in evaluating the performance of CTS with peer companies.

Adjusted Diluted Earnings Per Share

Adjusted diluted earnings per share is a non-GAAP financial measure. The most directly comparable GAAP financial measure is diluted (loss) earnings per share.

CTS uses an adjusted earnings per share measure to evaluate overall performance, establish plans and perform strategic analysis. Using this measure avoids distortion in the evaluation of operating results by eliminating the impact of events which are not related to normal operating performance. Because this measure is based on the exclusion or inclusion of specific items, they may not be comparable to measures used by other companies which have similar titles. CTS' management compensates for this limitation when performing peer comparisons by evaluating both GAAP and non-GAAP financial measures reported by peer companies. CTS believes that this measure is useful to its management, investors and stakeholders in that it:

  • provides a meaningful measure of CTS' operating performance,

  • reflects the results used by management in making decisions about the business, and

  • helps review and project CTS' performance over time.

Free Cash Flow

Free cash flow is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net cash provided by operating activities. CTS believes free cash flow is a useful measure of its ability to generate cash.