CTS Corporation (NYSE: CTS) today announced that it has completed the sale and leaseback of its Singapore facility for proceeds in excess of the underlying book value.
CTS received net cash proceeds of approximately $17.5 million. An estimated $10 million of the total $14.5 million pre-tax gain will be recognized in the fourth quarter with the residual gain recorded as a deferred liability on the balance sheet. The transaction includes a lease agreement with an initial term of three years, plus renewal options.
“As stated in our third quarter earnings release, CTS is taking a number of initiatives in 2012 to improve its manufacturing efficiency and has reduced its global manufacturing floor space requirements. As a result, the sale and leaseback transaction for the Singapore facility has brought in significant cash proceeds to fund future growth initiatives and reduce operating costs going forward,” said Vinod M. Khilnani, CTS Chairman and Chief Executive Officer.
CTS sold its 159,000 square foot Singapore facility and leased back approximately 57,000 square feet for its streamlined electronic components operation. CTS has been manufacturing high quality electronic components in the Singapore facility since 1979.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.