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CTS Announces Third Quarter 2021 Results
المصدر: Nasdaq GlobeNewswire / 27 أكتوبر 2021 07:45:00 America/New_York
LISLE, Ill., Oct. 27, 2021 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS) today announced third quarter 2021 results.
- Sales were $122.4 million, up 8% year-over-year. Sales to non-transportation end markets increased 24%, and sales to transportation end market decreased 5%. The Sensor Scientific acquisition added $1.8 million of sales in the third quarter of 2021.
- Net loss was $63.9 million, or $(1.97) per diluted share, versus $11.1 million, or $0.34 per diluted share, in the third quarter of last year. The third quarter net earnings were impacted by a non-cash charge of $76 million, net of taxes related to the previously disclosed termination of the U.S. pension plan.
- Adjusted diluted EPS was $0.46, up from $0.34 in the third quarter of 2020.
- Free cash flow was $17.2 million, down from $22.4 million in the third quarter of 2020.
- New business wins were $179 million.
“We continued to advance our diversification strategy during the third quarter, with non-transportation related revenue closer to 50% of total revenue for the quarter. Further, our third quarter results demonstrated the differentiation of our product portfolio, as well as the richness of our customer base, which allowed us to deliver growth ahead of the industry, despite a challenging supply chain environment. As we look forward, we believe the strong execution of our team, coupled with a robust pipeline will allow us to continue to capitalize on the opportunities in the industrial, medical, aerospace and defense end markets,” said Kieran O’Sullivan, CEO of CTS Corporation.
2021 Guidance
While management remains mindful of supply chain uncertainties, CTS has raised and narrowed its 2021 guidance for sales to $495 – $505 million from $480 – $500 million and for adjusted diluted EPS to $1.85 – $1.95 from $1.70 – $1.90.
Conference Call
As previously announced, the Company has scheduled a conference call at 10:00 a.m. (EST) today to discuss the third quarter financial results. The dial-in number is 800-309-1256 (323-347-3622, if calling from outside the U.S.). The passcode is 572446. A replay of the conference call will be available from 1:00 p.m. (EST) on Wednesday, October 27, 2021 through 1:00 p.m. (EST) on Wednesday, November 10, 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 6028607. 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.comCTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS - UNAUDITED
(In thousands of dollars, except per share amounts)Three Months Ended Nine Months Ended September 30,
2021September 30,
2020September 30,
2021September 30,
2020Net sales $ 122,382 $ 113,777 $ 380,394 $ 301,049 Cost of goods sold 76,720 76,871 244,446 204,677 Gross margin 45,662 36,906 135,948 96,372 Selling, general and administrative expenses 19,922 16,883 59,184 48,310 Research and development expenses 6,454 5,723 18,170 18,653 Restructuring charges 319 1,041 551 1,416 Operating earnings 18,967 13,259 58,043 27,993 Other (expense) income: Interest expense (514 ) (857 ) (1,577 ) (2,617 ) Interest income 230 217 689 852 Other (expense) income, net (108,502 ) 1,617 (132,786 ) (109 ) Total other expense, net (108,786 ) 977 (133,674 ) (1,874 ) (Loss) earnings before income taxes (89,819 ) 14,236 (75,631 ) 26,119 Income tax expense (25,923 ) 3,163 (24,600 ) 6,381 Net (loss) earnings (63,896 ) 11,073 (51,031 ) $ 19,738 Earnings per share: Basic $ (1.97 ) $ 0.34 $ (1.58 ) $ 0.61 Diluted $ (1.97 ) $ 0.34 $ (1.58 ) $ 0.61 Basic weighted – average common shares outstanding: 32,379 32,268 32,365 32,331 Effect of dilutive securities — 241 — 270 Diluted weighted – average common shares outstanding: 32,379 32,509 32,365 32,601 Cash dividends declared per share $ 0.04 $ 0.04 $ 0.12 $ 0.12 CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)(Unaudited) September 30, 2021 December 31, 2020 ASSETS Current Assets Cash and cash equivalents $ 128,527 $ 91,773 Accounts receivable, net 78,210 80,981 Inventories, net 50,867 45,870 Other current assets 19,845 14,607 Total current assets 277,449 233,231 Property, plant and equipment, net 92,533 97,437 Operating lease assets, net 22,456 23,281 Other Assets Prepaid pension asset 50,638 56,642 Goodwill 109,798 109,497 Other intangible assets, net 72,236 79,121 Deferred income taxes 24,663 24,250 Other 2,200 2,590 Total other assets 259,535 272,100 Total Assets $ 651,973 $ 626,049 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Accounts payable $ 48,976 $ 50,489 Operating lease obligations 3,354 3,294 Accrued payroll and benefits 17,069 12,978 Accrued expenses and other liabilities 35,673 38,171 Total current liabilities 105,072 104,932 Long-term debt 50,000 54,600 Long-term operating lease obligations 22,262 23,163 Long-term pension obligations 7,114 7,466 Deferred income taxes 6,907 7,010 Other long-term obligations 3,244 5,196 Total Liabilities 194,599 202,367 Commitments and Contingencies Shareholders’ Equity Common stock 314,351 311,190 Additional contributed capital 40,958 41,654 Retained earnings 484,368 539,281 Accumulated other comprehensive loss (4,842 ) (95,921 ) Total shareholders’ equity before treasury stock 834,835 796,204 Treasury stock (377,461 ) (372,522 ) Total shareholders’ equity 457,374 423,682 Total Liabilities and Shareholders’ Equity $ 651,973 $ 626,049 CTS CORPORATION AND SUBSIDIARIES
OTHER SUPPLEMENTAL INFORMATION - UNAUDITEDEarnings Per Share
The following table reconciles GAAP diluted (loss) earnings per share to adjusted diluted earnings per share for the Company:
Three Months Ended Nine Months Ended September 30,
2021September 30,
2020September 30,
2021September 30,
2020GAAP diluted (loss) earnings per share $ (1.97 ) $ 0.34 $ (1.58 ) $ 0.61 Tax affected charges to reported diluted (loss) earnings per share: Restructuring charges 0.01 0.03 0.02 0.04 Foreign currency (gain) loss 0.03 (0.07 ) 0.04 (0.06 ) Non-cash pension expense 2.54 0.01 3.10 0.04 Environmental charges 0.01 0.01 0.02 0.03 Discrete tax items (0.16 ) 0.02 (0.16 ) 0.03 Adjusted diluted earnings per share $ 0.46 $ 0.34 $ 1.44 $ 0.69 Free Cash Flow
The following table reconciles GAAP operating cash flow to free cash flow for the Company:
Three Months Ended Nine Months Ended September 30,
2021September 30,
2020September 30,
2021September 30,
2020Net cash provided by operating activities $ 21,332 $ 25,573 $ 60,117 $ 49,297 Capital expenditures (4,170 ) (3,196 ) (8,140 ) (10,441 ) Free cash flow $ 17,162 $ 22,377 $ 51,977 $ 38,856 Additional Information
The following table includes other financial information not presented in the preceding financial statements.
Three Months Ended Nine Months Ended September 30,
2021September 30,
2020September 30,
2021September 30,
2020Depreciation and amortization expense $ 6,719 $ 6,676 $ 20,231 $ 19,819 Stock-based compensation expense $ 987 $ 1,119 $ 4,106 $ 2,164 Non-GAAP Financial Measures
From time to time, CTS may use non-GAAP financial measures in discussing CTS’ business. These measures are intended to supplement, not replace, CTS’ presentation of its financial results in accordance with GAAP. CTS’ management believes that non-GAAP financial measures can be useful to investors in analyzing CTS’ financial performance and results of operations over time. CTS recommends that investors consider both actual and adjusted measures in evaluating the performance of CTS with peer companies.
Adjusted Diluted Earnings Per Share
Adjusted diluted earnings per share is a non-GAAP financial measure. The most directly comparable GAAP financial measure is diluted (loss) earnings per share.
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
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.