LISLE, Ill., Feb. 06, 2018 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE:CTS) today announced fourth quarter and full year 2017 results.

Fourth Quarter 2017 Results
  • Sales were $110.9 million, up 9.2% year-over-year. Sales to automotive customers increased 7.3%, and sales of electronic components grew 12.7%. The Noliac acquisition, completed in May 2017, added $3.0 million of sales in the fourth quarter of 2017.
  • Net loss was $13.6 million or $0.41 per share, which included a $18.0 million one-time, non-cash charge related to the Tax Cuts and Jobs Act and a $13.4 million one-time, non-cash pension settlement charge.
  • Adjusted diluted EPS was $0.39 compared to $0.29 in the same quarter of 2016.

Full Year 2017 Results
  • Sales were $423.0 million, up 6.6% compared to 2016. Sales to automotive customers increased 4.8%, and sales of electronic components grew 10.2%. The Noliac acquisition added $7.1 million of sales in 2017.
  • Net earnings were $14.4 million or $0.43 per diluted share.
  • Adjusted diluted EPS was $1.23 compared to $1.08 in 2016.
  • Operating cash flow was $58.0 million, up 23% year-over-year.
  • Total booked business grew $219 million in 2017, a 14.4% increase, to $1.737 billion.

"We made progress on several fronts in 2017, growing our total booked business substantially, building momentum in sales growth, improving earnings, and generating strong cash flows," said Kieran O'Sullivan, CEO of CTS Corporation. "We will continue to focus on improving sales and gross margins in 2018."

2018 GuidanceFull year 2018 sales are expected to be in the range of $435 to $455 million. Adjusted earnings per diluted share for 2018 are expected to be in the range of $1.32 to $1.44.

Conference CallAs previously announced, the Company has scheduled a conference call at 11:00 a.m. (EST) today to discuss the fourth quarter and full year financial results. The dial-in number is 877-616-0061 (719-325-4757, if calling from outside the U.S.).  The passcode is 497714. There will be a replay of the conference call from 2:00 p.m. (EST) today through 2:00 p.m. (EST) on Tuesday, February 20, 2018.  The telephone number for the replay is 866-375-1919 (719-457-0820, if calling from outside the U.S.).  The replay passcode is 2515838. 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 CTSCTS (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. CTS provides solutions to OEMs in the aerospace, communications, defense, industrial, information technology, medical, and transportation markets.

For more information, visit www.ctscorp.com.

Safe HarborThis 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.

ContactAshish AgrawalVice President and Chief Financial Officer

CTS Corporation4925 Indiana AvenueLisle, IL 60532USA

Telephone: +1 (630) 577-8800E-mail: ashish.agrawal@ctscorp.com

CTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) - UNAUDITED (In thousands of dollars, except per share amounts)
  Three Months Ended   Twelve Months Ended
  December 31,   December 31,   December 31,   December 31,
  2017   2016   2017   2016
Net sales $ 110,910     $ 101,584     $ 422,993     $ 396,679  
Cost of goods sold 78,035     65,723     282,562     256,251  
Gross Margin 32,875     35,861     140,431     140,428  
Selling, general and administrative expenses 24,973     15,165     71,943     61,624  
Research and development expenses 6,714     5,626     25,146     24,040  
Restructuring and impairment charges 1,197     873     4,139     3,048  
Loss (gain) on sale of assets 10     51     708     (11,450 )
Operating earnings (19 )   14,146     38,495     63,166  
Other (expense) income:              
Interest expense (1,134 )   (956 )   (3,343 )   (3,702 )
Interest income 370     223     1,284     1,305  
Other income (expense) 928     (2,042 )   3,817     (3,524 )
Total other income (expense), net 164     (2,775 )   1,758     (5,921 )
Earnings before taxes 145     11,371     40,253     57,245  
Income tax expense 13,766     3,061     25,805     22,865  
Net (loss) earnings $ (13,621 )   $ 8,310     $ 14,448     $ 34,380  
Net (loss) earnings per share:              
Basic $ (0.41 )   $ 0.25     $ 0.44     $ 1.05  
Diluted $ (0.41 )   $ 0.25     $ 0.43     $ 1.03  
Basic weighted-average common shares outstanding 32,938     32,760     32,892     32,728  
Effect of dilutive securities     582     528     523  
Diluted weighted-average common shares outstanding 32,938     33,342     33,420     33,251  
Cash dividends declared per share $ 0.04     $ 0.04     $ 0.16     $ 0.16  

CTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of dollars)

  (Unaudited)    
  December 31,   December 31,
  2017   2016
ASSETS      
Current Assets      
Cash and cash equivalents $ 113,572     $ 113,805  
Accounts receivable, net 70,584     62,612  
Inventories, net 36,596     28,652  
Other current assets 12,857     10,638  
Total current assets 233,609     215,707  
Property, plant and equipment, net 88,247     82,111  
Other Assets      
Prepaid pension asset 57,050     46,183  
Goodwill 69,046     61,744  
Other intangible assets, net 66,943     64,370  
Deferred income taxes 20,694     45,839  
Other assets 2,096     1,743  
Total other assets 215,829     219,879  
Total Assets $ 537,685     $ 517,697  
LIABILITIES AND SHAREHOLDERS' EQUITY      
Current Liabilities      
Short-term notes payable $     $ 1,006  
Accounts payable 49,201     40,046  
Accrued payroll and benefits 11,867     11,369  
Accrued expenses and other liabilities 41,344     45,708  
Total current liabilities 102,412     98,129  
Long-term debt 76,300     89,100  
Long-term pension obligations 7,201     7,006  
Deferred income taxes 1,791     2,367  
Other long-term obligations 6,176     3,213  
Total Liabilities 193,880     199,815  
Commitments and Contingencies      
Shareholders' Equity      
Common stock 304,777     302,832  
Additional contributed capital 41,084     40,521  
Retained earnings 420,160     410,979  
Accumulated other comprehensive loss (78,960 )   (93,194 )
Total shareholders' equity before treasury stock 687,061     661,138  
Treasury stock (343,256 )   (343,256 )
Total shareholders' equity 343,805     317,882  
Total Liabilities and Shareholders' Equity $ 537,685     $ 517,697  

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:

Additional Information

The following table includes other financial information not presented in the preceding financial statements.
  Three Months Ended   Twelve Months Ended
  December 31, 2017   December 31, 2016   December 31, 2017   December 31, 2016
GAAP diluted earnings per share $ (0.41 )   $ 0.25     $ 0.43     $ 1.03  
               
Tax affected charges to reported diluted earnings per share:              
Restructuring charges 0.02     0.02     0.08     0.06  
Increase in valuation allowance and revaluation of deferred taxes as a result of restructuring activities             0.07  
Tax impact of valuation allowances, credits, and other foreign charges (0.01 )   (0.01 )   (0.02 )   0.03  
Loss (gain) on sale of facilities, net of expenses         0.01     (0.22 )
Transaction costs             0.02  
Lease termination charge             0.02  
Pension settlement charge 0.26         0.26      
Foreign currency (gain) loss (0.01 )   0.05     (0.07 )   0.09  
Tax impact related to Tax Cuts and Job Acts 0.54         0.54      
Tax impact of non-recurring stock compensation change     (0.02 )       (0.02 )
Adjusted diluted earnings per share $ 0.39     $ 0.29     $ 1.23     $ 1.08  
                               

Additional Information

The following table includes other financial information not presented in the preceding financial statements.
  Three Months Ended   Twelve Months Ended
  December 31, 2017   December 31, 2016   December 31, 2017   December 31, 2016
Depreciation and amortization expense $ 5,613     $ 4,982     $ 20,674     $ 18,992  
Stock-based compensation expense $ 1,670     $ 979     $ 4,184     $ 2,738  
                               

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.

 

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