Full-year 2011 diluted earnings per share were $0.60 including $0.07 per share for restructuring and certain legal expenses. Excluding these charges, full-year 2011 adjusted earnings per share were $0.67, compared to $0.66 in 2010. Despite the higher overall sales, earnings per share were only slightly higher primarily due to the natural disasters and increased research and development spending for new products.
Management estimates that the full-year lost earnings impact related to the natural disasters net of all insurance recoveries is approximately a $0.02 loss per share.
Other noteworthy events:
- CTS announced a 17% dividend increase to its shareholders. On an annual basis the dividend will now be $0.14 per share compared to the previous rate of $0.12 per share.
- The acquisition of Valpey-Fisher was completed this week. Valpey-Fisher is a U.S. based public company located near Boston, with annual sales of approximately $15 million. Valpey-Fisher is a designer and manufacturer of highly engineered electronic components. This acquisition will expand CTS’ technology and bring strong engineering capabilities and management leadership.
- We repurchased approximately 403,000 shares for $3.6 million, at an average price of $8.86 in 2011, of which approximately 257,000 shares were repurchased in the fourth quarter of 2011. Approximately 574,000 shares remain in our one million share buyback authorization.
- In the fourth quarter, CTS initiated a bank amendment which was completed in early January. This amendment increased the Company’s facility from $150 million to $200 million, while keeping it unsecured and at a more favorable pricing through 2017.
Full-year cash flow from operations was $22.2 million and capital expenditures were $15.6 million. The impact of the natural disasters and new program launch activity kept the inventories higher than our target and thus lowered cash flow in 2011. Management expects working capital and cash flow to improve in 2012.