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

Sales were $129.6 million, up 54% year-over-year. Sales to transportation customers increased 88%, and sales to other end markets grew 26%. The Sensor Scientific acquisition added $1.6 million of sales in the second quarter of 2021.
Net earnings were $0.9 million or $0.03 per diluted share versus $4.9 million or $0.15 per diluted share in the second quarter of last year. The second quarter net earnings were impacted by a non-cash charge of $20.1 million related to the previously communicated termination of the U.S. pension plan.
Adjusted diluted EPS was $0.52, up from $0.16 in the second quarter of 2020.
Free cash flow was $16.3 million, up from $9.1 million in the second quarter of 2020.
New business wins were $174 million.

"We delivered another quarter of strong sales and earnings in a challenging supply chain environment. I am proud of the execution by our global teams to meet our customers' needs," said Kieran O'Sullivan, CEO of CTS Corporation. "We continue to advance our diversification strategy by growing in the industrial, medical, and aerospace and defense end markets, enhanced by stronger new business wins."

2021 Guidance

While management remains mindful of supply chain uncertainties, CTS is updating its 2021 guidance for sales from $445 – $500 million to $480 – $500 million, and for adjusted diluted EPS from $1.35 – $1.70 to $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 second quarter financial results. The dial-in number is 800-309-1256 (323-347-3622, if calling from outside the U.S.). The passcode is 960176. A replay of the conference call will be available from 1:00 p.m. (EST) on Tuesday, July 27, 2021 through 1:00 p.m. (EST) on Tuesday, August 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 6658189. 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, 2021			June 30, 2020			June 30, 2021			June 30, 2020
Net sales	$	129,585		$	84,197		$	258,012		$	187,272
Cost of goods sold		81,889			57,630			167,725			127,806
Gross margin		47,696			26,567			90,287			59,466
Selling, general and administrative expenses		20,937			14,668			39,262			31,427
Research and development expenses		6,029			5,522			11,716			12,930
Restructuring charges		151			135			232			375
Operating earnings		20,579			6,242			39,077			14,734
Other (expense) income:
Interest expense		(508	)		(909	)		(1,063	)		(1,760	)
Interest income		257			304			459			635
Other (expense) income, net		(20,929	)		256			(24,285	)		(1,726	)
Total other expense, net		(21,180	)		(349	)		(24,889	)		(2,851	)
(Loss) earnings before income taxes		(601	)		5,893			14,188			11,883
Income tax expense		(1,476	)		1,036			1,323			3,218
Net earnings	$	875		$	4,857		$	12,865		$	8,665
Earnings per share:
Basic	$	0.03		$	0.15		$	0.40		$	0.27
Diluted	$	0.03		$	0.15		$	0.39		$	0.27
Basic weighted – average common shares outstanding:		32,397			32,262			32,358			32,364
Effect of dilutive securities		229			242			259			284
Diluted weighted – average common shares outstanding:		32,626			32,504			32,617			32,648
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, 2021			December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents	$	117,397		$	91,773
Accounts receivable, net		80,795			80,981
Inventories, net		48,972			45,870
Other current assets		16,180			14,607
Total current assets		263,344			233,231
Property, plant and equipment, net		93,017			97,437
Operating lease assets, net		23,150			23,281
Other Assets
Prepaid pension asset		56,903			56,642
Goodwill		109,898			109,497
Other intangible assets, net		74,584			79,121
Deferred income taxes		23,949			24,250
Other		2,453			2,590
Total other assets		267,787			272,100
Total Assets	$	647,298		$	626,049
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	47,753		$	50,489
Operating lease obligations		3,360			3,294
Accrued payroll and benefits		14,433			12,978
Accrued expenses and other liabilities		36,765			38,171
Total current liabilities		102,311			104,932
Long-term debt		50,000			54,600
Long-term operating lease obligations		22,953			23,163
Long-term pension obligations		7,199			7,466
Deferred income taxes		6,924			7,010
Other long-term obligations		3,602			5,196
Total Liabilities		192,989			202,367
Commitments and Contingencies
Shareholders' Equity
Common stock		314,341			311,190
Additional contributed capital		40,007			41,654
Retained earnings		549,553			539,281
Accumulated other comprehensive loss		(77,070	)		(95,921	)
Total shareholders' equity before treasury stock		826,831			796,204
Treasury stock		(372,522	)		(372,522	)
Total shareholders' equity		454,309			423,682
Total Liabilities and Shareholders' Equity	$	647,298		$	626,049

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, 2021			June 30, 2020			June 30, 2021		June 30, 2020
GAAP diluted earnings per share	$	0.03		$	0.15		$	0.39	$	0.27
Tax affected charges to reported diluted earnings per share:
Restructuring charges		0.01			0.01			0.01		0.01
Foreign currency (gain) loss		(0.03	)		(0.03	)		0.01		0.01
Non-cash pension expense		0.51			0.01			0.56		0.02
Environmental charges		—			0.02			0.01		0.02
Discrete tax items	—			—			—			0.02
Adjusted diluted earnings per share	$	0.52		$	0.16		$	0.98	$	0.35

Free Cash Flow

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

	Three Months Ended						Six Months Ended
(in thousands)	June 30, 2021			June 30, 2020			June 30, 2021			June 30, 2020
Net cash provided by operating activities	$	18,675		$	11,797		$	38,785		$	23,724
Capital expenditures		(2,332	)		(2,675	)		(3,970	)		(7,245	)
Free cash flow	$	16,343		$	9,122		$	34,815		$	16,479

Additional Information

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

	Three Months Ended				Six Months Ended
(in thousands)	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Depreciation and amortization expense	$	6,712	$	6,611	$	13,512	$	13,143
Stock-based compensation expense	$	1,903	$	817	$	3,122	$	1,045

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 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.

CTS Announces Second Quarter 2021 Results