Loading, Please Wait...

CST: 20/10/2019 07:21:34   

CTS Announces Second Quarter 2019 Results

86 Days ago

Delivering growth in a challenging environment

LISLE, Ill., July 25, 2019 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS) today announced second quarter 2019 results.

  • Sales were $120.7 million, up 2.3% year-over-year. Sales to the transportation end market increased 8.7%, and sales to other end markets decreased 8.6%.
  • Net earnings were $11.9 million or $0.36 per diluted share, compared to $7.2 million or $0.21 in the second quarter of 2018.
  • Adjusted EPS was $0.40 per diluted share, up from $0.39 in the second quarter of 2018.
  • Total Booked Business was $1.875 billion, up 4.2% compared to the second quarter of 2018.

“Despite a challenging first half of the year, we delivered modest revenue and profit growth,” said Kieran O’Sullivan, CEO of CTS Corporation. “The fundamentals of the business remain sound. We are prioritizing our strategic initiatives and are focused on improving operational execution.”

2019 Guidance
Management is narrowing its 2019 guidance for sales from $460 - $500 million to $470 - $490 million, and for adjusted earnings per diluted share from $1.50 - $1.70 to $1.55 - $1.65.

Conference Call
As previously announced, the Company has scheduled a conference call at 11:00 a.m. (EDT) today to discuss the second quarter financial results.  The dial-in number is 800-309-1256 (720-543-0314, if calling from outside the U.S.).  The passcode is 092198. There will be a replay of the conference call from 2:00 p.m. (EDT) today through 2:00 p.m. (EDT) on Thursday, August 8, 2019.  The telephone number for the replay is 888-203-1112 (719-457-0820, if calling from outside the U.S.).  The replay passcode is 9390168.  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 EARNINGS - UNAUDITED
(In thousands of dollars, except per share amounts)

  Three Months Ended   Six Months Ended
  June 30,   June 30,   June 30,   June 30,
  2019   2018   2019   2018
Net sales $ 120,684     $ 118,021     $ 238,308     $ 231,551  
Cost of goods sold 79,480     76,208     156,490     151,305  
Gross Margin 41,204     41,813     81,818     80,246  
Selling, general and administrative expenses 17,036     19,621     34,597     36,993  
Research and development expenses 6,257     6,476     13,048     12,983  
Restructuring charges 911     1,172     2,995     2,367  
Gain on sale of assets (83 )       (122 )    
Operating earnings 17,083     14,544     31,300     27,903  
Other income (expense):              
Interest expense (467 )   (571 )   (933 )   (1,112 )
Interest income 440     472     872     954  
Other expense, net (1,107 )   (2,874 )   (1,010 )   (870 )
Total other expense, net (1,134 )   (2,973 )   (1,071 )   (1,028 )
Earnings before income taxes 15,949     11,571     30,229     26,875  
Income tax expense 4,006     4,362     6,867     8,118  
Net earnings $ 11,943     $ 7,209     $ 23,362     $ 18,757  
Earnings per share:              
Basic $ 0.36     $ 0.22     $ 0.71     $ 0.57  
Diluted $ 0.36     $ 0.21     $ 0.70     $ 0.56  
               
Basic weighted – average common shares outstanding: 32,799     33,051     32,803     33,014  
Effect of dilutive securities 406     513     422     513  
Diluted weighted – average common shares outstanding: 33,205     33,564     33,225     33,527  
               
Cash dividends declared per share $ 0.04     $ 0.04     $ 0.08     $ 0.08  


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

  (Unaudited)    
  June 30,   December 31,
  2019   2018
ASSETS      
Current Assets      
Cash and cash equivalents $ 105,578     $ 100,933  
Accounts receivable, net 84,876     79,518  
Inventories, net 43,154     43,486  
Other current assets 16,811     15,422  
Total current assets 250,419     239,359  
Property, plant and equipment, net 99,878     99,401  
Operating lease assets, net 23,846      
Other Assets      
Prepaid pension asset 56,331     54,100  
Goodwill 71,057     71,057  
Other intangible assets, net 56,805     60,180  
Deferred income taxes 19,596     22,201  
Other 2,769     2,043  
Total other assets 206,558     209,581  
Total Assets $ 580,701     $ 548,341  
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current Liabilities      
Accounts payable $ 50,942     $ 51,975  
Operating lease obligations 2,076      
Accrued payroll and benefits 9,901     14,671  
Accrued liabilities 33,396     37,347  
Total current liabilities 96,315     103,993  
Long-term debt 50,000     50,000  
Long-term operating lease obligations 24,702      
Long-term pension and other post-retirement obligations 6,363     6,510  
Deferred income taxes 3,823     3,990  
Other long-term obligations 3,953     5,919  
Total Liabilities 185,156     170,412  
Commitments and Contingencies      
Shareholders’ Equity      
Common stock 307,775     306,697  
Additional contributed capital 41,786     42,820  
Retained earnings 499,585     478,847  
Accumulated other comprehensive loss (95,903 )   (97,739 )
Total shareholders’ equity before treasury stock 753,243     730,625  
Treasury stock (357,698 )   (352,696 )
Total shareholders’ equity 395,545     377,929  
Total Liabilities and Shareholders’ Equity $ 580,701     $ 548,341  


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   Six Months Ended
       
  June 30,
2019
  June 30,
2018
  June 30,
2019
  June 30,
2018
GAAP diluted earnings per share $ 0.36     $ 0.21     $ 0.70     $ 0.56  
               
Tax affected charges to reported diluted earnings per share:              
Restructuring charges 0.02     0.03     0.07     0.06  
Foreign currency loss 0.02     0.07     0.01     0.02  
Non-recurring costs of tax improvement initiatives     0.01         0.02  
Non-recurring environmental charge     0.02         0.02  
Non-cash pension expense         0.01      
Discrete tax items     0.05         0.05  
Adjusted diluted earnings per share $ 0.40     $ 0.39     $ 0.79     $ 0.73  

Additional Information

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

  Three Months Ended   Six Months Ended
       
  June 30,
2019
  June 30,
2018
  June 30,
2019
  June 30,
2018
Depreciation and amortization expense $ 5,995     $ 5,478     $ 11,919     $ 10,961  
Stock-based compensation expense $ 1,579     $ 1,263     $ 2,793     $ 2,186  

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.

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

Is your business listed correctly on America’s largest city directory network of 1,000 portals?