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CTS Announces Third Quarter 2012 Financial Results

Stocks in this article: CTS

EMS: EMS third quarter 2012 sales decreased $15.2 million, or 20%, from the third quarter of 2011, resulting from the weak global economy as certain customers delayed orders, particularly in the defense and aerospace and communications markets, the lingering impact of the Thailand flood and the Company’s strategy to exit certain unprofitable accounts. Segment operating earnings before corporate and shared services charges decreased $1.7 million, primarily from lower sales.

EMS third quarter 2012 sales decreased $15.7 million, or 20%, from the second quarter of 2012. Sales demand reflected the weak global economy and decreased across all markets served. The third quarter segment operating earnings before corporate and shared services charges decreased $1.9 million from the second quarter, primarily from lower sales.

Conference Call

As previously announced, the Company has scheduled a conference call on Wednesday, October 24, 2012 at 11:00 a.m. EDT. Those interested in participating may dial 800-230-1093 (612-288-0337, if calling from outside the U.S.). No access code is needed. There will be a replay of the conference call available from 1:30 p.m. EDT on Wednesday, October 24, 2012 through 11:59 p.m. EDT on Wednesday, October 31, 2012. The telephone number for the replay is 800-475-6701 (320-365-3844, if calling from outside the U.S.). The access code is 266791. Also, please note that a live audio webcast of the conference call will be available and can be accessed directly from the Web sites of CTS Corporation www.ctscorp.com, StreetEvents www.streetevents.com, Netscape netscape.aol.com, Compuserve www.compuserve.com and others.

About CTS

CTS is a leading designer and manufacturer of electronic components and sensors and a provider of electronics manufacturing services (EMS) to OEMs in the automotive, communications, medical, defense and aerospace, industrial and computer markets. CTS manufactures products in North America, Europe and Asia. CTS' stock is traded on the NYSE under the ticker symbol "CTS.” To find out more, visit the CTS Web site at www.ctscorp.com.

Safe Harbor Statement

This press release 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. 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 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, including, without limitation: changes in the economy generally and in respect to the businesses in which CTS operates; unanticipated issues in integrating acquisitions; rapid technological change; general market conditions in the automotive, communications and computer industries, as well as conditions in the industrial, defense and aerospace and medical markets; reliance on key customers; unanticipated natural or other events such as the Japan earthquake and floods in Thailand; the ability to protect our intellectual property; pricing pressures and demand for our products; and risks associated with our international operations, including trade and tariff barriers, exchange rates and political and geographical risks. For more detailed information on the risks and uncertainties associated with CTS’ business, see the reports CTS files with the Securities and Exchange Commission available at http://www.ctscorp.com/investor_relations/investor.htm. CTS undertakes no obligation to publicly update its forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes.

             
CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED
(In thousands, except per share amounts)
 
Three Months Ended Nine Months Ended
September 30 October 2 September 30 October 2
2012 2011 2012 2011
 
Net sales $ 137,357 $ 146,070 $ 438,620 $ 444,507
 
Costs and expenses:
Cost of goods sold 110,763 118,610 364,039 360,496
Insurance recovery for business interruption (4,192 ) (1,113 ) (15,242 ) (1,892 )
Selling, general and administrative expenses 19,387 18,343 58,169 55,074
Research and development expenses 4,350 5,163 15,590 14,782
Insurance recovery for property damage - (2,687 ) (1,769 ) (2,687 )
Restructuring charge   245     -     3,384     694  
 
Operating earnings 6,804 7,754 14,449 18,040
 
Other (expense) / income:
Interest expense, net (159 ) (190 ) (528 ) (721 )
Other income / (expense)   763     (65 )   297     1,808  
Total other income / (expense)   604     (255 )   (231 )   1,087  
 
Earnings before income taxes 7,408 7,499 14,218 19,127
 
Income tax expense   1,491     1,636     2,717     4,016  
 
Net earnings $ 5,917   $ 5,863   $ 11,501   $ 15,111  
 
Net earnings per share:
Basic $ 0.17   $ 0.17   $ 0.34   $ 0.44  
Diluted $ 0.17   $ 0.17   $ 0.33   $ 0.43  
 
Cash dividends declared per share $ 0.035   $ 0.03   $ 0.105   $ 0.09  
 
Average common shares outstanding:
Basic 33,923 34,375 34,017 34,347
Diluted 34,471 34,994 34,588 35,026
 
       
CTS CORPORATION AND SUBSIDIARIES
OTHER SUPPLEMENTAL INFORMATION
 

Earnings per Share

 
The following table reconciles GAAP diluted earnings per share to adjusted earnings per share for the Company:
 
Three Months Ended Nine Months Ended
September 30 October 2 September 30 October 2
2012 2011 2012 2011
 
GAAP diluted earnings per share $ 0.17 $ 0.17 $ 0.33 $ 0.43
Tax affected charges to reported diluted
loss per share:
Restructuring and related charges 0.02 - 0.10 0.01
Additional legal costs - - - 0.01
Takata and CEO search costs   0.01   -   0.02   -
Adjusted earnings per share $ 0.20 $ 0.17 $ 0.45 $ 0.45
 
 

Additional Information

 
The following table includes other financial information not presented in the preceding financial statements.
 
Three Months Ended Nine Months Ended
$ In thousands September 30 October 2 September 30 October 2

Expense

2012 2011 2012 2011
Depreciation and Amortization $ 4,937 $ 4,410 $ 14,583 $ 13,176
Equity Based Compensation 1,010 1,002 3,181 3,363
 

Non-GAAP financial measures are discussed below.

 

OTHER SUPPLEMENTAL INFORMATION (continued)

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.

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