CTS Announces First Quarter 2018 Results

CTS Announces First Quarter 2018 Results

Strong sales and earnings growth

LISLE, Ill., April 26, 2018 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE:CTS)
today announced first quarter 2018 results.

  * Sales were $113.5 million, up 13.4% year-over-year. Sales to automotive
    customers increased 11.9%, and sales of electronic components increased
    16.2%. The Noliac acquisition, completed in May 2017, added $2.6 million
    of sales in the first quarter of 2018.
  * Net earnings were $11.5 million or $0.34 per diluted share compared to
    $8.5 million or $0.25 per diluted share in the first quarter of 2017.
  * Adjusted EPS was $0.34 per diluted share, up 31% from $0.26 in the first
    quarter of 2017.
  * Total Booked Business was $1.762 billion at the end of the first quarter
    of 2018, an increase of $25 million from the fourth quarter of 2017.

“We had a good start to 2018, delivering strong sales and earnings growth, and
increasing total booked business,” said Kieran O’Sullivan, CEO of CTS
Corporation. “We are pleased that our revenue growth strategies are starting
to gain traction, and we see continued opportunities to improve operational
results.”

2018 Guidance

Management reaffirms its prior 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. (EDT) today to discuss the first quarter financial results. The dial-in
number is 866-564-7440 (719-325-2120, if calling from outside the U.S.).  The
passcode is 970409. There will be a replay of the conference call from 2:00
p.m. (EDT) today through 2:00 p.m. (EDT) on Thursday, May 10, 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 8486171. 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,     March 31,
                                                     2018          2017
Net sales                                            $ 113,530     $ 100,154  
Cost of goods sold                                   75,097        65,930     
Gross Margin                                         38,433        34,224     
Selling, general and administrative expenses         17,372        15,248     
Research and development expenses                    6,507         6,003      
Restructuring charges                                1,195         777        
Operating earnings                                   13,359        12,196     
Other income (expense):                                             
Interest expense                                     (541      )   (684      )
Interest income                                      482           253        
Other income, net                                    2,004         460        
Total other income                                   1,945         29         
Earnings before income taxes                         15,304        12,225     
Income tax expense                                   3,756         3,741      
Net earnings                                         $ 11,548      $ 8,484    
Earnings per share:                                                 
Basic                                                $ 0.35        $ 0.26     
Diluted                                              $ 0.34        $ 0.25     
                                                                    
Basic weighted – average common shares outstanding:  32,975        32,802     
Effect of dilutive securities                        540           560        
Diluted weighted – average common shares outstanding 33,515        33,362     
                                                                    
Cash dividends declared per share                    $ 0.04        $ 0.04     
                                                                              

                       CTS CORPORATION AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                          (In thousands of dollars)

                                                 (Unaudited)    
                                                 March 31,     December 31,
                                                 2018          2017
ASSETS                                                          
Current Assets                                                  
Cash and cash equivalents                        $ 121,383     $  113,572  
Accounts receivable, net                         69,948        70,584      
Inventories, net                                 37,941        36,596      
Other current assets                             13,266        12,857      
Total current assets                             242,538       233,609     
Property, plant and equipment, net               90,685        88,247      
Other Assets                                                    
Prepaid pension asset                            58,494        57,050      
Goodwill                                         71,057        71,057      
Other intangible assets, net                     65,246        66,943      
Deferred income taxes                            18,428        20,694      
Other                                            2,244         2,096       
Total other assets                               215,469       217,840     
Total Assets                                     $ 548,692     $  539,696  
LIABILITIES AND SHAREHOLDERS’ EQUITY                            
Current Liabilities                                             
Accounts payable                                 $ 51,937      $  49,201   
Accrued payroll and benefits                     8,497         11,867      
Accrued liabilities                              42,027        41,344      
Total current liabilities                        102,461       102,412     
Long-term debt                                   74,000        76,300      
Long-term pension obligations                    7,148         7,201       
Deferred income taxes                            3,398         3,802       
Other long-term obligations                      5,953         6,176       
Total Liabilities                                192,960       195,891     
Commitments and Contingencies                                   
Shareholders’ Equity                                            
Common stock                                     305,722       304,777     
Additional contributed capital                   39,681        41,084      
Retained earnings                                430,388       420,160     
Accumulated other comprehensive loss             (76,803   )   (78,960    )
Total shareholders’ equity before treasury stock 698,988       687,061     
Treasury stock                                   (343,256  )   (343,256   )
Total shareholders’ equity                       355,732       343,805     
Total Liabilities and Shareholders’ Equity       $ 548,692     $  539,696  
                                                                           

                       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:

Additional Information

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

                                               Three Months Ended
                                               March 31, 2018   March 31, 2017
GAAP diluted earnings per share                $   0.34         $   0.25    
                                                                 
Tax affected adjustments to reported diluted                     
earnings per share:
Restructuring charges                          0.03             0.02        
Foreign currency gains                         (0.04      )     (0.01      )
Non-recurring costs of tax improvement         0.01             —           
initiatives
Adjusted diluted earnings per share            $   0.34         $   0.26    
                                                                            

Additional Information

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

                                      Three Months Ended
                                      March 31, 2018   March 31, 2017
Depreciation and amortization expense $   5,483        $   4,708    
Stock-based compensation expense      $   923          $   880      
                                                                    

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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