-
CTS Announces First Quarter 2021 Results
Source: Nasdaq GlobeNewswire / 29 Apr 2021 07:30:01 America/New_York
LISLE, Ill., April 29, 2021 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS) today announced first quarter 2021 results.
- Sales were $128.4 million, up 25% year-over-year. Sales to transportation customers increased 23%, and sales to other end markets grew 27%. The Sensor Scientific acquisition added $1.8 million of sales in the first quarter of 2021.
- Net earnings were $12.0 million or $0.37 per diluted share versus $3.8 million or $0.12 per diluted share in the first quarter of last year.
- Adjusted diluted EPS was $0.46, up from $0.19 in the first quarter of 2020.
- Free cash flow was $18.5 million, up from $7.4 million in the first quarter of 2020.
- New business wins were $156 million.
“We achieved strong results in the quarter supported by robust customer demand. I am proud of our global teams for their performance despite significant supply chain headwinds,” said Kieran O’Sullivan, CEO of CTS Corporation. “Our recently acquired business, Sensor Scientific, performed well in the quarter. Our strategic focus is on organic growth and to leverage our strong balance sheet for key acquisitions to drive long term shareholder value.”
2021 Guidance
Management remains mindful of supply chain uncertainties in this pandemic environment and is updating its 2021 guidance for sales from $430 – $490 million to $445 – $500 million, and for adjusted earnings per diluted share from $1.20 – $1.60 to $1.35 – $1.70.
Conference Call
As previously announced, the Company has scheduled a conference call at 10:00 a.m. (EST) today to discuss the first quarter financial results. The dial-in number is 888-207-0293 (334-323-9869, if calling from outside the U.S.). The passcode is 303804. There will be a replay of the conference call available from 1:00 p.m. (EST) on Thursday, April 29, 2021 through 1:00 p.m. (EST) on Thursday, May 13, 2021. The telephone number for the replay is 888-203-1112 (719-457-0820, if calling from outside the U.S.). The replay passcode is 1559327. 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 March 31,
2021March 31,
2020Net sales $ 128,427 $ 103,075 Cost of goods sold 85,836 70,176 Gross margin 42,591 32,899 Selling, general and administrative expenses 18,325 16,759 Research and development expenses 5,687 7,408 Restructuring charges 81 240 Operating earnings 18,498 8,492 Other (expense) income: Interest expense (555 ) (851 ) Interest income 202 331 Other expense, net (3,356 ) (1,982 ) Total other expense, net (3,709 ) (2,502 ) Earnings before income taxes 14,789 5,990 Income tax expense 2,799 2,182 Net earnings $ 11,990 $ 3,808 Earnings per share: Basic $ 0.37 $ 0.12 Diluted $ 0.37 $ 0.12 Basic weighted – average common shares outstanding: 32,319 32,466 Effect of dilutive securities 301 327 Diluted weighted – average common shares outstanding: 32,620 32,793 Cash dividends declared per share $ 0.04 $ 0.04 CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)(Unaudited) March 31,
2021December 31,
2020ASSETS Current Assets Cash and cash equivalents $ 103,392 $ 91,773 Accounts receivable, net 81,571 80,981 Inventories, net 47,558 45,870 Other current assets 14,115 14,607 Total current assets 246,636 233,231 Property, plant and equipment, net 94,848 97,437 Operating lease assets, net 23,620 23,281 Other Assets Prepaid pension asset 56,502 56,642 Goodwill 109,468 109,497 Other intangible assets, net 76,931 79,121 Deferred income taxes 24,192 24,250 Other 2,468 2,590 Total other assets 269,561 272,100 Total Assets $ 634,665 $ 626,049 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Accounts payable $ 53,315 $ 50,489 Operating lease obligations 3,271 3,294 Accrued payroll and benefits 12,688 12,978 Accrued expenses and other liabilities 37,436 38,171 Total current liabilities 106,710 104,932 Long-term debt 50,000 54,600 Long-term operating lease obligations 23,510 23,163 Long-term pension obligations 7,290 7,466 Deferred income taxes 6,892 7,010 Other long-term obligations 4,547 5,196 Total Liabilities 198,949 202,367 Commitments and Contingencies Shareholders’ Equity Common stock 313,008 311,190 Additional contributed capital 39,616 41,654 Retained earnings 549,977 539,281 Accumulated other comprehensive loss (94,363 ) (95,921 ) Total shareholders’ equity before treasury stock 808,238 796,204 Treasury stock (372,522 ) (372,522 ) Total shareholders’ equity 435,716 423,682 Total Liabilities and Shareholders’ Equity $ 634,665 $ 626,049 CTS CORPORATION AND SUBSIDIARIES
OTHER SUPPLEMENTAL INFORMATION - UNAUDITEDEarnings Per Share
The following table reconciles GAAP diluted earnings per share to adjusted diluted earnings per share for the Company:
Three Months Ended March 31,
2021March 31,
2020GAAP diluted earnings per share $ 0.37 $ 0.12 Tax affected charges to reported diluted earnings per share: Foreign currency loss 0.04 0.04 Non-cash pension expense 0.04 0.01 Environmental charges 0.01 — Discrete tax items — 0.02 Adjusted diluted earnings per share $ 0.46 $ 0.19 Free Cash Flow
The following table reconciles GAAP operating cash flow to free cash flow for the Company:
Three Months Ended (in thousands) March 31,
2021March 31,
2020Net cash provided by operating activities $ 20,110 $ 11,927 Capital expenditures (1,638 ) (4,570 ) Free cash flow $ 18,472 $ 7,357 Additional Information
The following table includes other financial information not presented in the preceding financial statements.
Three Months Ended (in thousands) March 31,
2021March 31,
2020Depreciation and amortization expense $ 6,800 $ 6,532 Stock-based compensation expense $ 1,219 $ 228 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.
Free cash flow is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net cash provided by operating activities. CTS believes free cash flow is a useful measure of its ability to generate cash.
We recommend that investors consider both actual and adjusted measures in evaluating the performance of CTS with peer companies.
