CTS Announces Fourth Quarter and Full Year 2017 Results

Tuesday, 06. February 2018 14:00

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 Guidance
Full 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 Call
As 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 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. 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 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 (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  $396,679 
Cost of goods sold78,035  65,723  282,562  256,251 
Gross Margin32,875  35,861  140,431  140,428 
Selling, general and administrative expenses24,973  15,165  71,943  61,624 
Research and development expenses6,714  5,626  25,146  24,040 
Restructuring and impairment charges1,197  873  4,139  3,048 
Loss (gain) on sale of assets10  51  708  (11,450)
Operating earnings(19) 14,146  38,495  63,166 
Other (expense) income:       
Interest expense(1,134) (956) (3,343) (3,702)
Interest income370  223  1,284  1,305 
Other income (expense)928  (2,042) 3,817  (3,524)
Total other income (expense), net164  (2,775) 1,758  (5,921)
Earnings before taxes145  11,371  40,253  57,245 
Income tax expense13,766  3,061  25,805  22,865 
Net (loss) earnings$(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 outstanding32,938  32,760  32,892  32,728 
Effect of dilutive securities  582  528  523 
Diluted weighted-average common shares outstanding32,938  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, net70,584  62,612 
Inventories, net36,596  28,652 
Other current assets12,857  10,638 
Total current assets233,609  215,707 
Property, plant and equipment, net88,247  82,111 
Other Assets   
Prepaid pension asset57,050  46,183 
Goodwill69,046  61,744 
Other intangible assets, net66,943  64,370 
Deferred income taxes20,694  45,839 
Other assets2,096  1,743 
Total other assets215,829  219,879 
Total Assets$537,685  $517,697 
LIABILITIES AND SHAREHOLDERS' EQUITY   
Current Liabilities   
Short-term notes payable$  $1,006 
Accounts payable49,201  40,046 
Accrued payroll and benefits11,867  11,369 
Accrued expenses and other liabilities41,344  45,708 
Total current liabilities102,412  98,129 
Long-term debt76,300  89,100 
Long-term pension obligations7,201  7,006 
Deferred income taxes1,791  2,367 
Other long-term obligations6,176  3,213 
Total Liabilities193,880  199,815 
Commitments and Contingencies   
Shareholders' Equity   
Common stock304,777  302,832 
Additional contributed capital41,084  40,521 
Retained earnings420,160  410,979 
Accumulated other comprehensive loss(78,960) (93,194)
Total shareholders' equity before treasury stock687,061  661,138 
Treasury stock(343,256) (343,256)
Total shareholders' equity343,805  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 charges0.02  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 charge0.26    0.26   
Foreign currency (gain) loss(0.01) 0.05  (0.07) 0.09 
Tax impact related to Tax Cuts and Job Acts0.54    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.

 

Primary Logo

Related Links: CTS Corporation
Author:
Copyright GlobeNewswire, Inc. 2016. All rights reserved.
You can register yourself on the website to receive press releases directly via e-mail to your own e-mail account.