CTS
$26.72
Cts
$.09
.34%
Earnings Details
3rd Quarter September 2018
Thursday, October 25, 2018 8:00:00 AM
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Summary

CTS Raises Guidance

Cts (CTS) reported 3rd Quarter September 2018 earnings of $0.39 per share on revenue of $118.9 million. The consensus earnings estimate was $0.36 per share on revenue of $118.0 million. Revenue grew 11.9% on a year-over-year basis.

The company said it expects 2018 earnings of $1.49 to $1.56 per share on revenue of $465.0 million to $470.0 million. The company's previous guidance was earnings of $1.40 to $1.55 per share on revenue of $450.0 million to $465.0 million and the current consensus earnings estimate is $1.45 per share on revenue of $459.0 million for the year ending December 31, 2018.

CTS Corp is a designer and manufacturer of electronic components and sensors to OEMs in the automotive, communications, medical, defense and aerospace, industrial and computer markets. The Company manufactures products in North America, Europe and Asia.

Results
Reported Earnings
$0.39
Earnings Whisper
-
Consensus Estimate
$0.36
Reported Revenue
$118.9 Mil
Revenue Estimate
$118.0 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CTS Announces Third Quarter 2018 Results

Strong sales and earnings

LISLE, Ill., Oct. 25, 2018 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS) today announced third quarter 2018 results.

  • Sales were $118.9 million, up 11.9% year-over-year. Sales to transportation customers increased 9.6%, and sales of electronic components increased 15.9%.
  • Net earnings were $10.2 million or $0.30 per diluted share, up from $9.6 million or $0.29 per diluted share in the third quarter of 2017.
  • Adjusted EPS was $0.39 per diluted share, up from $0.31 in the third quarter of 2017.
  • Total Booked Business was $1.832 billion at the end of the third quarter of 2018, an increase of $32 million from the second quarter of 2018.

“We are pleased to see continued improvement in our performance,” said Kieran O’Sullivan, CEO of CTS Corporation. “Our strategic goal to diversify and expand regionally is gaining traction, and we are delivering strong sales growth in several of our non-transportation end markets.”

2018 Guidance

Management is increasing full year guidance. 2018 sales are expected to be in the range of $465 to $470 million, up from $450 to $465 million.  Adjusted earnings per diluted share for 2018 are expected to be in the range of $1.49 to $1.56, up from $1.40 to $1.55.

Conference Call

As previously announced, the Company has scheduled a conference call at 11:00 a.m. (EDT) today to discuss the third quarter financial results.  The dial-in number is 866-519-2796 (323-794-2095, if calling from outside the U.S.).  The passcode is 785028. There will be a replay of the conference call from 2:00 p.m. (EDT) today through 2:00 p.m. (EDT) on Thursday, November 8, 2018.  The telephone number for the replay is 888-203-1112 (719-457-0820, if calling from outside the U.S.).  The replay passcode is 8989573.  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 Nine Months Ended
 September 30, September 30, September 30, September 30,
 2018 2017 2018 2017
Net sales$118,859  $106,243  $350,410  $312,083 
Cost of goods sold76,777  68,705  228,082  204,527 
Gross Margin42,082  37,538  122,328  107,556 
Selling, general and administrative expenses18,450  15,915  55,441  46,970 
Research and development expenses6,517  6,380  19,500  18,432 
Restructuring charges997  1,435  3,364  2,942 
Loss on sale of assets  697  2  698 
Operating earnings16,118  13,111  44,021  38,514 
Other income (expense):       
Interest expense(489) (773) (1,601) (2,209)
Interest income413  363  1,367  914 
Other (expense) income, net(1,687) 1,258  (2,557) 2,889 
Total other (expense) income(1,763) 848  (2,791) 1,594 
Earnings before income taxes14,355  13,959  41,230  40,108 
Income tax expense4,144  4,340  12,262  12,039 
Net earnings$10,211  $9,619  $28,968  $28,069 
Earnings per share:       
Basic$0.31  $0.29  $0.88  $0.85 
Diluted$0.30  $0.29  $0.86  $0.84 
        
Basic weighted – average common shares outstanding:33,087  32,935  33,038  32,876 
Effect of dilutive securities562  456  542  475 
Diluted weighted – average common shares outstanding33,649  33,391  33,580  33,351 
        
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, December 31,
 2018 2017
ASSETS   
Current Assets   
Cash and cash equivalents$103,754  $113,572 
Accounts receivable, net79,030  70,584 
Inventories, net41,960  36,596 
Other current assets14,254  12,857 
Total current assets238,998  233,609 
Property, plant and equipment, net96,670  88,247 
Other Assets   
Prepaid pension asset61,382  57,050 
Goodwill71,057  71,057 
Other intangible assets, net61,869  66,943 
Deferred income taxes17,369  20,694 
Other2,247  2,096 
Total other assets213,924  217,840 
Total Assets$549,592  $539,696 
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Current Liabilities   
Accounts payable$52,177  $49,201 
Accrued payroll and benefits13,183  11,867 
Accrued liabilities40,300  41,344 
Total current liabilities105,660  102,412 
Long-term debt50,000  76,300 
Long-term pension obligations6,918  7,201 
Deferred income taxes4,744  3,802 
Other long-term obligations6,065  6,176 
Total Liabilities173,387  195,891 
Commitments and Contingencies   
Shareholders’ Equity   
Common stock303,641  304,777 
Additional contributed capital44,740  41,084 
Retained earnings445,160  420,160 
Accumulated other comprehensive loss(74,080) (78,960)
Total shareholders’ equity before treasury stock719,461  687,061 
Treasury stock(343,256) (343,256)
Total shareholders’ equity376,205  343,805 
Total Liabilities and Shareholders’ Equity$549,592  $539,696 


CTS CORPORATION AND SUBSIDIARIES

OTHER SUPPLEMENTAL INFORMATION

Earnings Per Share

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

Additional Information

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

 Three Months Ended Nine Months Ended
 September
30, 2018
 September
30, 2017
 September
30, 2018
 September
30, 2017
GAAP diluted earnings per share$0.30  $0.29  $0.86  $0.84 
        
Tax affected adjustments to reported diluted earnings per share:       
Restructuring charges0.02  0.03  0.08  0.05 
Foreign currency loss (gain)0.04  (0.02) 0.06  (0.06)
Transaction costs      0.01 
Non-recurring costs of tax improvement initiatives0.01    0.03   
Non-recurring environmental charge    0.02   
Loss on sale of facilities, net of expenses  0.01    0.01 
Decrease in the recognition of foreign valuation allowance      (0.01)
Discrete tax items0.02    0.07   
Adjusted diluted earnings per share$0.39  $0.31  $1.12  $0.84 

Additional Information

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

 Three Months Ended Nine Months Ended
 September
30, 2018
 September
30, 2017
 September
30, 2018
 September
30, 2017
Depreciation and amortization expense$5,388  $5,388  $16,349  $15,061 
Stock-based compensation expense$1,918  $827  $4,104  $2,514 

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.

CTS_logo_rgb.jpg

Source: CTS Corporation