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8-K - 8-K - CTS CORPa15-9866_18k.htm

Exhibit 99.1

 

GRAPHIC

newsrelease

CTS CORPORATION  Elkhart, Indiana 46514 · 574-523-3800

 

April 27, 2015

FOR RELEASE:  Immediately

 

CTS ANNOUNCES FIRST QUARTER 2015 RESULTS

 

1Q 2015 Earnings on Track; Strong New Business Awards;

Expands Share Buyback Program

 

Elkhart, IN. CTS Corporation (NYSE: CTS) announced 1st quarter 2015 results.

 

·                  Sales were $98.3 million, down 2.4% compared to the first quarter of 2014, driven primarily by an unfavorable currency impact of $2.3 million as the US Dollar appreciated against the Euro and Chinese Renminbi.

·                  GAAP earnings were $6.3 million, or $0.19 per diluted share, compared to $5.1 million, or $0.15 per diluted share from continuing operations in the first quarter of 2014.

·                  Adjusted EPS was $0.20, compared to $0.19 in the first quarter of 2014.

·                  Currency impacted net earnings unfavorably by $1.7 million due to balance sheet translation of assets denominated in European currencies.

 

First quarter sales to automotive customers declined $3.7 million year-over-year primarily due to unfavorable currency impact of $2.3 million. Sales of electronic components increased $1.3 million year-over-year. CTS received $192 million in new business awards in the first quarter.

 

“We continued to execute well in the first quarter of 2015 although currency impacted our top line and earnings unfavorably,” said Kieran O’Sullivan, CEO of CTS Corporation. “We recorded our strongest new business awards since we began reporting in the second quarter of 2013. We are following our strategic plan and transitioning our focus to Sense | Connect | Move.”

 

CTS is expanding its share buyback program by $25 million. Including the remaining portion of the previous authorization, the total program has increased to approximately $32 million.

 



 

2015 Guidance

 

Management reaffirms its guidance for full year 2015 sales in the range of $400 to $430 million and adjusted earnings per diluted share in the range of $0.98 to $1.10. Currency continues to be a concern and may unfavorably impact Management’s guidance by 2-3% on sales and 5-8 cents on earnings.

 

Conference Call

 

As previously announced, the Company has scheduled a conference call on Tuesday, April 28 2015 at 11:00 a.m. (EDT).  The dial-in number for the conference call is 888-500-6950 (719-325-2464, if calling from outside the U.S.). The conference I.D. number is 1987752. There will be a replay of the conference call from 2:00 p.m. (EDT) on Tuesday, April 28, 2015 through 2:00 p.m. (EDT) on Tuesday, May 12, 2015. The telephone number for the replay is 888-203-1112 (719-457-0820, if calling from outside the U.S.). The access code is 1987752. Also, please note that a live audio webcast of the conference call will be available and can be accessed directly from the website of CTS Corporation www.ctscorp.com.

 

About CTS

 

CTS is a leading designer and manufacturer of electronic components and sensors 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.”

 

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. Examples of factors that may affect future operating results and financial condition include, but are not limited to: changes in the economy generally and in respect to the businesses in which CTS operates; unanticipated issues in integrating acquisitions; the results of actions to reposition our businesses; 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 disasters or other events; the ability to protect our intellectual property; pricing pressures and demand for our products; unanticipated developments that could occur with respect to contingencies such as litigation and environmental matters as well as any product liability claims; and risks associated with our international operations, including trade and tariff barriers, exchange rates and political and geopolitical risks. Many of these, and other, risks and uncertainties are discussed in further detail in Item 1A. of the 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, 1142 West Beardsley Avenue, Elkhart, IN 46514

 

Telephone 574-523-3800

 


 


 

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED

(In thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

 

March 29,

 

March 30,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Net sales

 

$

98,311

 

$

100,706

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Cost of goods sold

 

66,175

 

70,091

 

Selling, general and administrative expenses

 

15,711

 

13,641

 

Research and development expenses

 

5,199

 

5,626

 

Restructuring and impairment charges

 

738

 

503

 

 

 

 

 

 

 

Operating earnings

 

10,488

 

10,845

 

 

 

 

 

 

 

Other (expense) income :

 

 

 

 

 

Interest expense

 

(588

)

(613

)

Interest income

 

788

 

564

 

Other

 

(1,684

)

(1,771

)

Total other (expense) income

 

(1,484

)

(1,820

)

 

 

 

 

 

 

Earnings before income taxes

 

9,004

 

9,025

 

 

 

 

 

 

 

Income tax expense

 

2,717

 

3,945

 

 

 

 

 

 

 

Net earnings

 

$

6,287

 

$

5,080

 

 

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

Basic

 

$

0.19

 

$

0.15

 

 

 

 

 

 

 

Diluted

 

$

0.19

 

$

0.15

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

0.040

 

$

0.040

 

 

 

 

 

 

 

Average common shares outstanding:

 

 

 

 

 

Basic

 

33,411

 

33,708

 

 

 

 

 

 

 

Diluted

 

33,935

 

34,280

 

 



 

CTS CORPORATION AND SUBSIDIARIES

OTHER SUPPLEMENTAL INFORMATION

 

Earnings per Share

 

The following table reconciles GAAP diluted earnings per share to adjusted diluted earnings per share for the Company:

 

 

 

Three Months Ended

 

 

 

March 29,

 

March 30,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

GAAP diluted earnings per share

 

$

0.19

 

$

0.15

 

 

 

 

 

 

 

Tax affected charges to reported diluted earnings per share:

 

 

 

 

 

Restructuring and related charges

 

0.01

 

0.02

 

Tax asset write-off related to restructuring

 

 

0.02

 

Adjusted diluted earnings per share

 

$

0.20

 

$

0.19

 

 

Additional Information

 

The following table includes other financial information not presented in the preceding financial statements.

 

 

 

Three Months Ended

 

$ In thousands

 

March 29,

 

March 30,

 

Expense

 

2015

 

2014

 

Depreciation and Amortization

 

$

4,065

 

$

4,248

 

Equity Based Compensation

 

$

1,520

 

$

779

 

 


 


 

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.

 

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.

 



 

CTS Corporation and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(In thousands of dollars)

 

 

 

March 29,

 

December 31,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

138,333

 

$

134,508

 

Accounts receivable, net

 

67,056

 

56,894

 

Inventories

 

28,580

 

27,887

 

Other current assets

 

20,741

 

21,112

 

Total current assets

 

254,710

 

240,401

 

 

 

 

 

 

 

Property, plant and equipment, net

 

70,462

 

71,414

 

Other Assets

 

 

 

 

 

Prepaid pension asset

 

34,304

 

32,099

 

Goodwill

 

32,047

 

32,047

 

Indefinite-lived intangible asset

 

690

 

690

 

Other intangible assets, net

 

34,929

 

35,902

 

Deferred income taxes

 

42,586

 

43,120

 

Other

 

1,469

 

1,253

 

Total other assets

 

146,025

 

145,111

 

Total Assets

 

$

471,197

 

$

456,926

 

 

 

 

 

 

 

Accounts payable

 

$

44,168

 

$

43,343

 

Accrued payroll and benefits

 

9,211

 

11,283

 

Accrued liabilities

 

29,471

 

25,356

 

Total current liabilities

 

82,850

 

79,982

 

 

 

 

 

 

 

Long-term debt

 

83,200

 

75,000

 

Post retirement obligations

 

2,963

 

3,049

 

Other long-term obligations

 

9,050

 

9,106

 

Shareholders’ equity

 

 

 

 

 

Common stock

 

300,706

 

299,892

 

Additional contributed capital

 

39,554

 

39,153

 

Retained earnings

 

385,100

 

380,145

 

Accumulated other comprehensive loss

 

(104,165

)

(104,233

)

Total shareholders’ equity before treasury stock

 

621,195

 

614,957

 

Treasury stock

 

(328,061

)

(325,168

)

Total shareholders’ equity

 

293,134

 

289,789

 

Total Liabilities and Shareholders’ Equity

 

$

471,197

 

$

456,926