CTS Corporation (NYSE: CTS) announced 4th quarter and full
year 2014 results.
Fourth Quarter 2014 Results
-
Sales were $100.4 million, down 2.0% compared to the fourth quarter of
2013.
-
GAAP earnings were $7.0 million, or $0.21 per diluted share, compared
to $4.1 million, or $0.12 per diluted share from continuing operations
in the fourth quarter of 2013.
-
Adjusted EPS was $0.24, flat with fourth quarter of 2013 from
continuing operations.
Fourth quarter sales to automotive customers declined 2.1%
year-over-year. Sales of electronic components declined 1.7%
year-over-year. CTS received $171 million in new business wins in the
fourth quarter.
Full Year 2014 Results
-
Sales were $404.0 million, down 1.3% compared to 2013.
-
GAAP earnings were $26.5 million, or $0.78 per diluted share, compared
to $2.0 million, or $0.06 per diluted share from continuing operations
in 2013.
-
Adjusted EPS was $0.97 versus $0.75 from continuing operations in 2013.
2014 sales to automotive customers increased 1.0% year-over-year. Prior
year sales to automotive customers included $5.5 million for a special
one-time order. Excluding this order, sales to automotive customers were
up 3.1% in 2014 compared to 2013. Sales of electronic components
declined 5.9% year-over-year. CTS recorded $484 million in new business
wins for the full year 2014.
“We are pleased with the results for 2014. We delivered strong earnings
growth despite softer than anticipated sales,” said Kieran O’Sullivan,
CEO of CTS Corporation. “The fourth quarter new business wins are an
indication of the traction we are getting on driving growth. We expect
2015 growth to be modest until the new business we have won over the
last two years begins to have a more significant impact on sales in 2017
and beyond.”
2015 Guidance
Management expects 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. Results are anticipated to improve sequentially throughout the
year, with a stronger second half. Management is concerned about the
current trends in currency rates, especially the Euro and Chinese
Renminbi. This can impact sales by as much as 2-3% for 2015.
Conference Call
As previously announced, the Company has scheduled a conference call on
Friday, February 6, 2015 at 11:00 a.m. (EST). The dial-in number for the
conference call is 888-287-5563 (719-325-2448, if calling from outside
the U.S.). The conference I.D. number is 6035936. There will be a replay
of the conference call from 2:00 p.m. (EST) on Friday, February 6, 2015
through 2:00 p.m. (EST) on Friday, February 13, 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 6035936. 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; 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.
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|
CTS CORPORATION AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) - UNAUDITED
|
(In thousands, except per share amounts)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
|
100,378
|
|
|
$
|
102,386
|
|
|
$
|
404,021
|
|
|
$
|
409,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
|
67,352
|
|
|
|
72,220
|
|
|
|
274,058
|
|
|
|
288,108
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|
|
|
Selling, general and administrative expenses
|
|
|
15,783
|
|
|
|
17,327
|
|
|
|
59,136
|
|
|
|
69,989
|
|
|
|
Research and development expenses
|
|
|
5,798
|
|
|
|
5,481
|
|
|
|
22,563
|
|
|
|
23,222
|
|
|
|
Restructuring charge
|
|
|
|
1,135
|
|
|
|
2,348
|
|
|
|
5,941
|
|
|
|
10,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
|
|
|
|
10,310
|
|
|
|
5,010
|
|
|
|
42,323
|
|
|
|
17,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(563
|
)
|
|
|
(482
|
)
|
|
|
(2,326
|
)
|
|
|
(3,264
|
)
|
|
|
Interest income
|
|
|
|
827
|
|
|
|
601
|
|
|
|
2,786
|
|
|
|
1,901
|
|
|
|
Other income (expense)
|
|
|
|
(1,817
|
)
|
|
|
1,358
|
|
|
|
(3,435
|
)
|
|
|
1,739
|
|
|
|
|
Total other income (expense)
|
|
|
(1,553
|
)
|
|
|
1,477
|
|
|
|
(2,975
|
)
|
|
|
376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
8,757
|
|
|
|
6,487
|
|
|
|
39,348
|
|
|
|
18,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
1,793
|
|
|
|
2,339
|
|
|
|
12,826
|
|
|
|
16,066
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|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
Earnings from continuing operations
|
|
|
6,964
|
|
|
|
4,148
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|
|
|
26,522
|
|
|
|
1,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
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|
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|
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Loss from discontinued operations, net of tax
|
|
|
-
|
|
|
|
(7,129
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)
|
|
|
-
|
|
|
|
(5,926
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
|
$
|
6,964
|
|
|
$
|
(2,981
|
)
|
|
$
|
26,522
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|
|
$
|
(3,929
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share:
|
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|
|
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|
|
|
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Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
0.21
|
|
|
$
|
0.12
|
|
|
$
|
0.79
|
|
|
$
|
0.06
|
|
|
|
Discontinued operations
|
|
|
|
-
|
|
|
|
(0.21
|
)
|
|
|
-
|
|
|
|
(0.18
|
)
|
|
Net earnings (loss) attributable to CTS Corporation
|
|
$
|
0.21
|
|
|
$
|
(0.09
|
)
|
|
|
0.79
|
|
|
$
|
(0.12
|
)
|
|
|
|
|
|
|
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|
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|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
0.21
|
|
|
$
|
0.12
|
|
|
|
0.78
|
|
|
$
|
0.06
|
|
|
|
Discontinued operations
|
|
|
|
-
|
|
|
|
(0.21
|
)
|
|
|
-
|
|
|
|
(0.18
|
)
|
|
Net earnings (loss) attributable to CTS Corporation
|
|
$
|
0.21
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|
|
$
|
(0.09
|
)
|
|
|
0.78
|
|
|
$
|
(0.12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share
|
|
$
|
0.040
|
|
|
$
|
0.040
|
|
|
$
|
0.160
|
|
|
$
|
0.145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
33,431
|
|
|
|
33,594
|
|
|
|
33,618
|
|
|
|
33,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
33,935
|
|
|
|
34,314
|
|
|
|
34,130
|
|
|
|
34,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CTS CORPORATION AND SUBSIDIARIES
|
OTHER SUPPLEMENTAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings / (Loss) per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles GAAP earnings (loss) per diluted
share to adjusted earnings per share for CTS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
GAAP earnings (loss) per share from continuing operations
|
|
$
|
0.21
|
|
$
|
0.12
|
|
|
$
|
0.78
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax affected charges to reported diluted earnings / (loss) per share:
|
|
|
|
|
|
|
Restructuring and related charges
|
|
|
0.03
|
|
|
0.10
|
|
|
$
|
0.18
|
|
|
0.28
|
CEO transition costs
|
|
|
-
|
|
|
0.03
|
|
|
|
-
|
|
|
0.07
|
Tax impact of cash repatriation
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
0.31
|
Tax asset write-off related to restructuring
|
|
|
-
|
|
|
(0.01
|
)
|
|
|
0.01
|
|
|
0.03
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per share
|
|
$
|
0.24
|
|
$
|
0.24
|
|
|
$
|
0.97
|
|
$
|
0.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table includes other financial information not
presented in the preceding financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
$ In thousands
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
Expense
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Depreciation and Amortization
|
|
$
|
4,249
|
|
$
|
4,492
|
|
|
$
|
16,971
|
|
$
|
21,169
|
Equity Based Compensation
|
|
$
|
821
|
|
$
|
1,078
|
|
|
$
|
2,660
|
|
$
|
4,219
|
|
|
|
|
|
|
|
|
|
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.
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|
|
|
|
|
|
|
CTS Corporation and Subsidiaries
|
Condensed Consolidated Balance Sheets - Unaudited
|
(In thousands of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
134,508
|
|
|
|
$
|
124,368
|
|
Accounts receivable, net
|
|
|
56,894
|
|
|
|
|
62,667
|
|
Inventories
|
|
|
27,887
|
|
|
|
|
32,226
|
|
Other current assets
|
|
|
21,112
|
|
|
|
|
17,008
|
|
|
Total current assets
|
|
|
240,401
|
|
|
|
|
236,269
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
71,414
|
|
|
|
|
74,869
|
|
Other Assets
|
|
|
|
|
|
|
Prepaid pension asset
|
|
|
32,099
|
|
|
|
|
56,396
|
|
|
Goodwill
|
|
|
32,047
|
|
|
|
|
32,047
|
|
|
Indefinite-lived intangible asset
|
|
|
690
|
|
|
|
|
690
|
|
|
Other intangible assets, net
|
|
|
35,902
|
|
|
|
|
40,092
|
|
|
Deferred income taxes
|
|
|
43,120
|
|
|
|
|
38,620
|
|
|
Other
|
|
|
|
1,253
|
|
|
|
|
1,282
|
|
|
|
Total other assets
|
|
|
145,111
|
|
|
|
|
169,127
|
|
|
|
|
Total Assets
|
|
$
|
456,926
|
|
|
|
$
|
480,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
43,343
|
|
|
|
$
|
47,052
|
|
Accrued payroll and benefits
|
|
|
11,283
|
|
|
|
|
20,822
|
|
Accrued liabilities
|
|
|
25,356
|
|
|
|
|
27,246
|
|
|
Total current liabilities
|
|
|
79,982
|
|
|
|
|
95,120
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
75,000
|
|
|
|
|
75,000
|
|
Post retirement obligations
|
|
|
3,049
|
|
|
|
|
7,935
|
|
Other long-term obligations
|
|
|
9,106
|
|
|
|
|
5,481
|
|
Shareholders' equity
|
|
|
|
|
|
|
Common stock
|
|
|
299,892
|
|
|
|
|
297,164
|
|
|
Additional contributed capital
|
|
|
39,153
|
|
|
|
|
39,631
|
|
|
Retained earnings
|
|
|
380,145
|
|
|
|
|
358,997
|
|
|
Accumulated other comprehensive loss
|
|
|
(104,233
|
)
|
|
|
|
(81,897
|
)
|
|
|
|
Total shareholders' equity before treasury stock
|
|
614,957
|
|
|
|
|
613,895
|
|
|
Treasury stock
|
|
|
(325,168
|
)
|
|
|
|
(317,166
|
)
|
|
|
Total shareholders' equity
|
|
|
289,789
|
|
|
|
|
296,729
|
|
|
|
|
Total Liabilities and Shareholders' Equity
|
|
$
|
456,926
|
|
|
|
$
|
480,265
|
|
Copyright Business Wire 2015