Continued Progress on Diversification
LISLE, Ill., Feb. 04, 2025 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS), a leading global designer and manufacturer of custom engineered solutions that "Sense, Connect and Move,” today announced fourth quarter and full-year 2024 results.
"We continued diversifying our business, with solid progress in the medical, industrial, and aerospace and defense markets, which now represent more than 50% of our revenue. We also delivered solid profitability improvements and strong cash flow in a challenging operating environment,” said Kieran O'Sullivan, CEO of CTS Corporation. "We expect further growth in our diversified markets in the year ahead, as we add revenue from new programs and as market conditions improve. We are excited about the expansion of our defense capabilities with the SyQwest acquisition. While near-term market conditions are likely to remain challenging in transportation, we are focusing on innovative new products such as our eBrake™ and sensing applications to drive future growth.”
Fourth Quarter 2024 Results
- Sales were $127 million in the fourth quarter of 2024, up 2% year-over-year. Sales to diversified end-markets* increased 28% year-over-year. Sales to the transportation end-market decreased 18% year-over-year. The SyQwest acquisition added $11 million in revenue in the fourth quarter.
- Net income was $14 million, or 11% of sales, compared to $15 million, or 12% of sales, in the fourth quarter of 2023.
- Earnings per diluted share were $0.45, compared to $0.49 in the fourth quarter of 2023.
- Adjusted earnings per diluted share were $0.53, up from $0.47 in the fourth quarter of 2023.
- Adjusted EBITDA margin was 24%, compared to 22% in the fourth quarter of 2023.
- Operating cash flow was $26 million, down from $32 million in the fourth quarter of 2023.
- Sales were $516 million, down 6% year-over-year, mainly driven by softness in the transportation end-market. Sales to the diversified end-markets* increased by 7% compared to the prior year, while sales to the transportation end-market decreased by 17% compared to 2023. The SyQwest acquisition added $14 million in revenue in 2024, in line with expectations.
- Net income was $58 million, or 11% of sales, compared to $61 million, or 11% of sales in 2023.
- Earnings per diluted share were $1.89, compared to $1.92 in 2023.
- Adjusted earnings per diluted share were $2.17, down from $2.22 in 2023.
- Adjusted EBITDA margin was 23%, up from 22% in 2023.
- Operating cash flow was $99 million, up from $89 million in 2023.
CTS expects full-year 2025 sales to be in the range of $520-$550 million and adjusted diluted EPS to be in the range of $2.20-$2.35.
CTS does not provide reconciliations of forward-looking non-GAAP financial measures, such as estimated adjusted diluted earnings per share, to the most comparable GAAP financial measures on a forward-looking basis because CTS is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, restructuring costs, environmental remediation costs, acquisition-related costs, foreign exchange rates and other non-routine costs. Each of such adjustments has not yet occurred, are out of CTS' control and/or cannot be reasonably predicted. For the same reasons, CTS is unable to address the probable significance of the unavailable information.
Conference Call and Supplemental Materials
As previously announced, CTS has scheduled a conference call for 10:00 a.m. (ET) today. The dial-in numbers for access from the U.S. are: +1-833-470-1428 (Toll-Free) and +1-404-975-4839 (Local), if calling from outside the U.S., please refer to Global Dial In Numbers to identify the applicable dial-in number for your location. The passcode is 389682. In addition, CTS will be using a supplemental slide presentation that will be referred to during the call. The presentation and a live audio webcast of the conference call will be available and can be accessed directly from CTS' website at https://investors.ctscorp.com/news-events/events-and-presentations/.
Any replay, rebroadcast, transcript or other reproduction or transmission of this conference call, other than the replay accessible through the website noted above, has not been authorized by CTS and is strictly prohibited. Investors should be aware that any unauthorized reproduction of this conference call may not be an accurate reflection of its contents.
About CTS
CTS Corporation (NYSE: CTS) is a leading designer and manufacturer of products that Sense, Connect and Move. CTS manufactures sensors, actuators and electronic components in North America, Europe and Asia, and provides engineered products to customers in the aerospace/defense, industrial, medical and transportation markets. For more information, visit www.ctscorp.com/.
* Diversified end-markets, previously referred as the "non-transportation” market, includes the industrial, aerospace & defense, and medical end-markets.
Cautionary Statement Regarding Forward-Looking Statements
Readers are cautioned that the statements contained in this document regarding expectations of our performance or other matters that may affect our business, results of operations, or financial condition are, or may be deemed to be, "forward-looking statements” as defined by the "safe harbor” provisions in the Private Securities Litigation Reform Act of 1995. Such statements are made in reliance on the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included or incorporated in this document, including statements regarding our strategy, financial position, guidance, funding for continued operations, cash reserves, liquidity, projected costs, plans, projects, awards and contracts, and objectives of management, among others, are forward-looking statements. Words such as "expect,” "anticipate,” "should,” "believe,” "hope,” "target,” "continued,” "project,” "plan,” "goals,” "opportunity,” "appeal,” "estimate,” "potential,” "predict,” "demonstrates,” "may,” "will,” "might,” "could,” "intend,” "shall,” "possible,” "would,” "approximately,” "likely,” "outlook,” "schedule,” "on track,” "poised,” "pipeline,” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements , but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are not guarantees of future performance, conditions or results. 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 CTS' actual results, performance, or achievements to differ materially from those presented in the forward-looking statements. Examples of factors that may affect future operating results and financial condition include, but are not limited to: supply chain disruptions; changes in the economy generally, including inflationary and/or recessionary conditions and increased tariffs, and in respect to the business in which CTS operates; unanticipated issues in integrating acquisitions, including, without limitation, the integration of SyQwest, LLC; the results of actions to reposition CTS' business; rapid technological change; general market conditions in the transportation, as well as conditions in the industrial, aerospace and defense, and medical markets; reliance on key customers; unanticipated public health crises, natural disasters or other events; environmental compliance and remediation expenses; the ability to protect CTS' intellectual property; pricing pressures and demand for CTS' products; risks associated with CTS' international operations, including trade and tariff barriers, exchange rates and political and geopolitical risks (including, without limitation, the potential impact U.S./China relations and the conflict between Russia and Ukraine may have on our business, results of operations and financial condition); the amount and timing of any share repurchases; and the effect of any cybersecurity incidents on our business. Many of these, and other risks and uncertainties, are discussed in further detail in Item 1A. of CTS' most recent Annual Report on Form 10-K and other filings made with the SEC. CTS undertakes no obligation to publicly update CTS' 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
+1 (630) 577-8800
| CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED (In thousands, except per share amounts) | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||||||||
| Net sales | $ | 127,435 | $ | 124,694 | $ | 515,771 | $ | 550,422 | |||||||
| Cost of goods sold | 79,535 | 82,630 | 326,621 | 359,563 | |||||||||||
| Gross margin | 47,900 | 42,064 | 189,150 | 190,859 | |||||||||||
| Selling, general and administrative expenses | 22,184 | 19,477 | 88,285 | 83,816 | |||||||||||
| Research and development expenses | 5,670 | 5,290 | 23,388 | 24,918 | |||||||||||
| Restructuring charges | 1,040 | 1,041 | 4,697 | 7,074 | |||||||||||
| Operating earnings | 19,006 | 16,256 | 72,780 | 75,051 | |||||||||||
| Other (expense) income: | |||||||||||||||
| Interest expense | (1,294 | ) | (822 | ) | (4,236 | ) | (3,331 | ) | |||||||
| Interest income | 482 | 1,538 | 4,282 | 4,625 | |||||||||||
| Other income (expense), net | (843 | ) | 655 | (1,603 | ) | (1,192 | ) | ||||||||
| Total other income (expense), net | (1,655 | ) | 1,371 | (1,557 | ) | 102 | |||||||||
| Earnings before income taxes | 17,351 | 17,627 | 71,223 | 75,153 | |||||||||||
| Income tax expense | 3,745 | 2,307 | 13,109 | 14,621 | |||||||||||
| Net earnings | $ | 13,606 | $ | 15,320 | $ | 58,114 | $ | 60,532 | |||||||
| Earnings per share: | |||||||||||||||
| Basic | $ | 0.45 | $ | 0.49 | $ | 1.91 | $ | 1.93 | |||||||
| Diluted | $ | 0.45 | $ | 0.49 | $ | 1.89 | $ | 1.92 | |||||||
| Basic weighted - average common shares outstanding: | 30,082 | 31,020 | 30,408 | 31,359 | |||||||||||
| Effect of dilutive securities | 350 | 219 | 309 | 220 | |||||||||||
| Diluted weighted - average common shares outstanding: | 30,432 | 31,239 | 30,717 | 31,579 | |||||||||||
| Cash dividends declared per share | $ | 0.04 | $ | 0.04 | $ | 0.16 | $ | 0.16 | |||||||
| CTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of dollars) | |||||||
| (Unaudited) December 31, 2024 | December 31, 2023 | ||||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 94,334 | $ | 163,876 | |||
| Accounts receivable, net | 77,649 | 78,569 | |||||
| Inventories, net | 53,578 | 60,031 | |||||
| Other current assets | 18,716 | 16,873 | |||||
| Total current assets | 244,277 | 319,349 | |||||
| Property, plant and equipment, net | 94,357 | 92,592 | |||||
| Operating lease assets, net | 22,939 | 26,425 | |||||
| Other Assets | |||||||
| Goodwill | 199,886 | 157,638 | |||||
| Other intangible assets, net | 163,882 | 103,957 | |||||
| Deferred income taxes | 27,591 | 25,183 | |||||
| Other | 13,180 | 16,023 | |||||
| Total other assets | 404,539 | 302,801 | |||||
| Total Assets | $ | 766,112 | $ | 741,167 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 42,629 | $ | 43,499 | |||
| Accrued payroll and benefits | 15,754 | 14,585 | |||||
| Operating lease obligations | 4,719 | 4,394 | |||||
| Accrued expenses and other liabilities | 34,451 | 34,561 | |||||
| Total current liabilities | 97,553 | 97,039 | |||||
| Long-term debt | 91,253 | 67,500 | |||||
| Long-term operating lease obligations | 21,120 | 24,965 | |||||
| Long-term pension obligations | 3,931 | 4,655 | |||||
| Deferred income taxes | 12,743 | 14,729 | |||||
| Other long-term obligations | 8,662 | 5,457 | |||||
| Total Liabilities | 235,262 | 214,345 | |||||
| Commitments and Contingencies | |||||||
| Shareholders' Equity | |||||||
| Common stock | 321,979 | 319,269 | |||||
| Additional contributed capital | 44,662 | 45,097 | |||||
| Retained earnings | 655,493 | 602,232 | |||||
| Accumulated other comprehensive loss | (4,266 | ) | 4,264 | ||||
| Total shareholders' equity before treasury stock | 1,017,868 | 970,862 | |||||
| Treasury stock | (487,018 | ) | (444,040 | ) | |||
| Total shareholders' equity | 530,850 | 526,822 | |||||
| Total Liabilities and Shareholders' Equity | $ | 766,112 | $ | 741,167 | |||
CTS CORPORATION AND SUBSIDIARIES<