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Form 8-K CTS CORP For: Apr 29

April 29, 2021 7:42 AM EDT

 

 

 

Press Release

 

 

 

April 29, 2021

 

FOR IMMEDIATE RELEASE

 

 

 

CTS Announces First Quarter 2021 Results

Strong Sales and Earnings despite challenging supply chain environment

 

Lisle, Ill. - CTS Corporation (NYSE: CTS) today announced first quarter 2021 results.

Sales were $128.4 million, up 25% year-over-year. Sales to transportation customers increased 23%, and sales to other end markets grew 27%. The Sensor Scientific acquisition added $1.8 million of sales in the first quarter of 2021.

Net earnings were $12.0 million or $0.37 per diluted share versus $3.8 million or $0.12 per diluted share in the first quarter of last year.

Adjusted diluted EPS was $0.46, up from $0.19 in the first quarter of 2020.

Free cash flow was $18.5 million, up from $7.4 million in the first quarter of 2020.

New business wins were $156 million.

 

“We achieved strong results in the quarter supported by robust customer demand. I am proud of our global teams for their performance despite significant supply chain headwinds,” said Kieran O’Sullivan, CEO of CTS Corporation. “Our recently acquired business, Sensor Scientific, performed well in the quarter. Our strategic focus is on organic growth and to leverage our strong balance sheet for key acquisitions to drive long term shareholder value.”

2021 Guidance

Management remains mindful of supply chain uncertainties in this pandemic environment and is updating its 2021 guidance for sales from $430 – $490 million to $445 – $500 million, and for adjusted earnings per diluted share from $1.20 – $1.60 to $1.35 – $1.70.

www.ctscorp.com

 


 

Conference Call

As previously announced, the Company has scheduled a conference call at 10:00 a.m. (EST) today to discuss the first quarter financial results. The dial-in number is 888-207-0293 (334-323-9869, if calling from outside the U.S.).  The passcode is 303804.  There will be a replay of the conference call available from 1:00 p.m. (EST) on Thursday, April 29, 2021 through 1:00 p.m. (EST) on Thursday, May 13, 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 1559327. 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: [email protected]
###

 

www.ctscorp.com

 


 

 

 

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED

(In thousands of dollars, except per share amounts)

 

 

Three Months Ended

 

 

 

March 31,    

2021

 

 

March 31,

2020

 

Net sales

 

$

128,427

 

 

$

103,075

 

Cost of goods sold

 

 

85,836

 

 

 

70,176

 

Gross margin

 

 

42,591

 

 

 

32,899

 

Selling, general and administrative expenses

 

 

18,325

 

 

 

16,759

 

Research and development expenses

 

 

5,687

 

 

 

7,408

 

Restructuring charges

 

 

81

 

 

 

240

 

Operating earnings

 

 

18,498

 

 

 

8,492

 

Other (expense) income:

 

 

 

 

 

 

 

 

Interest expense

 

 

(555

)

 

 

(851

)

Interest income

 

 

202

 

 

 

331

 

Other expense, net

 

 

(3,356

)

 

 

(1,982

)

Total other expense, net

 

 

(3,709

)

 

 

(2,502

)

Earnings before income taxes

 

 

14,789

 

 

 

5,990

 

Income tax expense

 

 

2,799

 

 

 

2,182

 

Net earnings

 

$

11,990

 

 

$

3,808

 

Earnings per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.37

 

 

$

0.12

 

Diluted

 

$

0.37

 

 

$

0.12

 

Basic weighted – average common shares outstanding:

 

 

32,319

 

 

 

32,466

 

Effect of dilutive securities

 

 

301

 

 

 

327

 

Diluted weighted – average common shares outstanding:

 

 

32,620

 

 

 

32,793

 

Cash dividends declared per share

 

$

0.04

 

 

$

0.04

 

 

 

www.ctscorp.com

 


 

 

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of dollars)

 

 

(Unaudited)

 

 

 

 

 

 

 

March 31,

2021

 

 

December 31,

2020

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

103,392

 

 

$

91,773

 

Accounts receivable, net

 

 

81,571

 

 

 

80,981

 

Inventories, net

 

 

47,558

 

 

 

45,870

 

Other current assets

 

 

14,115

 

 

 

14,607

 

Total current assets

 

 

246,636

 

 

 

233,231

 

Property, plant and equipment, net

 

 

94,848

 

 

 

97,437

 

Operating lease assets, net

 

 

23,620

 

 

 

23,281

 

Other Assets

 

 

 

 

 

 

 

 

Prepaid pension asset

 

 

56,502

 

 

 

56,642

 

Goodwill

 

 

109,468

 

 

 

109,497

 

Other intangible assets, net

 

 

76,931

 

 

 

79,121

 

Deferred income taxes

 

 

24,192

 

 

 

24,250

 

Other

 

 

2,468

 

 

 

2,590

 

Total other assets

 

 

269,561

 

 

 

272,100

 

Total Assets

 

$

634,665

 

 

$

626,049

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

53,315

 

 

$

50,489

 

Operating lease obligations

 

 

3,271

 

 

 

3,294

 

Accrued payroll and benefits

 

 

12,688

 

 

 

12,978

 

Accrued expenses and other liabilities

 

 

37,436

 

 

 

38,171

 

Total current liabilities

 

 

106,710

 

 

 

104,932

 

Long-term debt

 

 

50,000

 

 

 

54,600

 

Long-term operating lease obligations

 

 

23,510

 

 

 

23,163

 

Long-term pension obligations

 

 

7,290

 

 

 

7,466

 

Deferred income taxes

 

 

6,892

 

 

 

7,010

 

Other long-term obligations

 

 

4,547

 

 

 

5,196

 

Total Liabilities

 

 

198,949

 

 

 

202,367

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

Shareholders’ Equity

 

 

 

 

 

 

 

 

Common stock

 

 

313,008

 

 

 

311,190

 

Additional contributed capital

 

 

39,616

 

 

 

41,654

 

Retained earnings

 

 

549,977

 

 

 

539,281

 

Accumulated other comprehensive loss

 

 

(94,363

)

 

 

(95,921

)

Total shareholders’ equity before treasury stock

 

 

808,238

 

 

 

796,204

 

Treasury stock

 

 

(372,522

)

 

 

(372,522

)

Total shareholders’ equity

 

 

435,716

 

 

 

423,682

 

Total Liabilities and Shareholders’ Equity

 

$

634,665

 

 

$

626,049

 

 

 

www.ctscorp.com

 


 

 

CTS CORPORATION AND SUBSIDIARIES

OTHER SUPPLEMENTAL INFORMATION - UNAUDITED

 

Earnings Per Share

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

 

 

Three Months Ended

 

 

 

March 31,

2021

 

 

March 31,

2020

 

GAAP diluted earnings per share

 

$

0.37

 

 

$

0.12

 

Tax affected charges to reported diluted earnings per share:

 

 

 

 

 

 

 

 

Foreign currency loss

 

0.04

 

 

 

0.04

 

Non-cash pension expense

 

0.04

 

 

 

0.01

 

Environmental charges

 

0.01

 

 

 

 

Discrete tax items

 

 

 

 

 

0.02

 

Adjusted diluted earnings per share

 

$

0.46

 

 

$

0.19

 

 

Free Cash Flow

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

 

 

 

Three Months Ended

 

(in thousands)

 

March 31,

2021

 

 

March 31,

2020

 

Net cash provided by operating activities

 

$

20,110

 

 

$

11,927

 

Capital expenditures

 

 

(1,638

)

 

 

(4,570

)

Free cash flow

 

$

18,472

 

 

$

7,357

 

 

Additional Information

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

 

 

 

Three Months Ended

 

(in thousands)

 

March 31,

2021

 

 

March 31,

2020

 

Depreciation and amortization expense

 

$

6,800

 

 

$

6,532

 

Stock-based compensation expense

 

$

1,219

 

 

$

228

 

 

Non-GAAP Financial Measures

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

CTS adjusts for these items because they are discrete events, which have a significant impact on comparable GAAP financial measures and could distort an evaluation of our normal operating performance.

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.

www.ctscorp.com

 


 

 

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.

We recommend that investors consider both actual and adjusted measures in evaluating the performance of CTS with peer companies.

 

www.ctscorp.com

 



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