LISLE, Ill., May 01, 2024 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE:CTS), a leading global designer and manufacturer of custom engineered solutions that "Sense, Connect and Move," today announced first quarter 2024 results. "We achieved sales and earnings in line with our expectations. Our teams made progress on operational improvements in the first quarter, which helped offset the unfavorable impact from lower volumes. As anticipated, we are seeing some early signs of recovery in the industrial end market," said Kieran O'Sullivan, CEO of CTS Corporation. "CTS is focused on future growth through continued diversification of our customer base and building our pipeline of opportunities. We remain committed to a disciplined capital structure to support organic growth, strategic acquisitions and returning cash to shareholders." First Quarter 2024 Results Sales were $125.7 million, down 14% year-over-year, and up 1% sequentially compared to the fourth quarter of 2023. Sales to non-transportation end markets decreased 17% year-over-year and were up 7% sequentially. Sales to the transportation end market decreased 10% year-over-year and 4% sequentially. Net income was $11 million, or 9% of sales, down from $18 million, or 13% of sales, in the first quarter of 2023. Earnings per diluted share were $0.36, compared to $0.58 in the first quarter of 2023. Adjusted earnings per diluted share were $0.47, down from $0.61 in the first quarter of 2023. Adjusted EBITDA margin was 20.3%, compared to 21.9% in the first quarter of 2023. Operating cash flow was $18 million up from $11 million in the first quarter of 2023. 2024 Guidance CTS is maintaining its guidance of sales in the range of $530 - $570 million and adjusted diluted EPS to be in the range of $2.10 - $2.35. CTS does not provide reconciliations of forward-looking non-GAAP financial measures, such as estimated adjusted diluted earnings per share, to the most comparable GAAP financial measures on a forward-looking basis because CTS is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, restructuring costs, environmental remediation costs, acquisition-related costs, foreign exchange rates and other non-routine costs. Each of such adjustments has not yet occurred, are out of CTS' control and/or cannot be reasonably predicted. For the same reasons, CTS is unable to address the probable significance of the unavailable information. Conference Call and Supplemental MaterialsAs previously announced, the Company has scheduled a conference call for 10:00 a.m. (ET) today. The dial-in numbers for access from the U.S. are: +1-833-470-1428 (Toll-Free) and +1-404-975-4839 (Local), if calling from outside the U.S., please refer to Global Dial In Numbers to identify the applicable dial-in number for your location. The passcode is 494524. In addition, the Company will be using a supplemental slide presentation that will be referred to during the call. The presentation and a live audio webcast of the conference call will be available and can be accessed directly from CTS' website at https://investors.ctscorp.com/news-events/events-and-presentations/. Any replay, rebroadcast, transcript or other reproduction or transmission of this conference call, other than the replay accessible through the website noted above, has not been authorized by the Company and is strictly prohibited. Investors should be aware that any unauthorized reproduction of this conference call may not be an accurate reflection of its contents. About CTS  CTS Corporation (NYSE:CTS) is a leading designer and manufacturer of products that Sense, Connect and Move. CTS manufactures sensors, actuators and electronic components in North America, Europe and Asia, and provides engineered products to customers in the aerospace/defense, industrial, medical and transportation markets. For more information, visit www.ctscorp.com. Cautionary Statement Regarding Forward-Looking Statements Readers are cautioned that the statements contained in this document regarding expectations of our performance or other matters that may affect our business, results of operations, or financial condition are, or may be deemed to be, "forward-looking statements" as defined by the "safe harbor" provisions in the Private Securities Litigation Reform Act of 1995. Such statements are made in reliance on the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included or incorporated in this document, including statements regarding our strategy, financial position, guidance, funding for continued operations, cash reserves, liquidity, projected costs, plans, projects, awards and contracts, and objectives of management, among others, are forward-looking statements. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "continued," "project," "plan," "goals," "opportunity," "appeal," "estimate," "potential," "predict," "demonstrates," "may," "will," "might," "could," "intend," "shall," "possible," "would," "approximately," "likely," "outlook," "schedule," "on track," "poised," "pipeline," and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements , but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are not guarantees of future performance, conditions or results. 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 CTS' 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: supply chain disruptions; changes in the economy generally, including inflationary and/or recessionary conditions, and in respect to the business in which CTS operates; unanticipated issues in integrating acquisitions; the results of actions to reposition CTS' business; rapid technological change; general market conditions in the transportation, as well as conditions in the industrial, aerospace and defense, and medical markets; reliance on key customers; unanticipated public health crises, natural disasters or other events; environmental compliance and remediation expenses; the ability to protect CTS' intellectual property; pricing pressures and demand for CTS' products; risks associated with CTS' international operations, including trade and tariff barriers, exchange rates and political and geopolitical risks (including, without limitation, the potential impact U.S./China relations and the conflict between Russia and Ukraine may have on our business, results of operations and financial condition); the amount and timing of any share repurchases; and the effect of any cybersecurity incidents on our business. Many of these, and other risks and uncertainties, are discussed in further detail in Item 1A. of CTS' most recent Annual Report on Form 10-K and other filings made with the SEC. CTS undertakes no obligation to publicly update CTS' forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes. Contact Ashish AgrawalVice President and Chief Financial OfficerCTS Corporation4925 Indiana AvenueLisle, IL 60532 USA+1 (630) CTS CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED(In thousands, except per share amounts)   Three Months Ended     March 31,2024     March 31,2023   Net sales $ 125,750     $ 145,994   Cost of goods sold   80,660       94,342   Gross margin   45,090       51,652   Selling, general and administrative expenses   22,260       21,979   Research and development expenses   6,601       6,586   Restructuring charges   1,693       912   Operating earnings   14,536       22,175   Other (expense) income:           Interest expense   (801 )     (694 ) Interest income   1,386       1,063   Other income (expense), net   (1,463 )     165   Total other income (expense), net   (878 )     534   Earnings before income taxes   13,657       22,709   Income tax expense   2,539       4,365   Net earnings $ 11,119     $ 18,344   Earnings per share:           Basic $ 0.36     $ 0.58   Diluted $ 0.36     $ 0.58   Basic weighted – average common shares outstanding:   30,742       31,634   Effect of dilutive securities   251       259   Diluted weighted – average common shares outstanding:   30,993       31,893   Cash dividends declared per share $ 0.04     $ 0.04   CTS CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(In thousands of dollars)   (Unaudited)March 31, 2024     December 31, 2023   ASSETS           Current Assets           Cash and cash equivalents $ 162,425     $ 163,876   Accounts receivable, net   80,663       78,569   Inventories, net   57,784       60,031   Other current assets   17,346       16,873   Total current assets   318,218       319,349   Property, plant and equipment, net   91,626       92,592   Operating lease assets, net   25,290       26,425   Other Assets           Goodwill   156,330       157,638   Other intangible assets, net   99,949       103,957   Deferred income taxes   25,563       25,183   Other   15,864       16,023   Total other assets   297,706       302,801   Total Assets $ 732,840     $ 741,167   LIABILITIES AND SHAREHOLDERS' EQUITY           Current Liabilities           Accounts payable $ 45,609     $ 43,499   Accrued payroll and benefits   13,363       14,585   Operating lease obligations   4,399       4,394   Accrued expenses and other liabilities   32,577       34,561   Total current liabilities   95,948       97,039   Long-term debt   67,500       67,500   Long-term operating lease obligations   23,824       24,965   Long-term pension obligations   4,615       4,655   Deferred income taxes   14,423       14,729   Other long-term obligations   5,245       5,457   Total Liabilities   211,555       214,345   Commitments and Contingencies           Shareholders' Equity           Common stock   321,858       319,269   Additional contributed capital   40,440       45,097   Retained earnings   612,124       602,232   Accumulated other comprehensive loss   2,938       4,264   Total shareholders' equity before treasury stock   977,360       970,862   Treasury stock   (456,075 )     (444,040 ) Total shareholders' equity   521,285       526,822   Total Liabilities and Shareholders' Equity $ 732,840     $ 741,167   CTS CORPORATION AND SUBSIDIARIESOTHER SUPPLEMENTAL INFORMATION - UNAUDITED(In millions of dollars, except percentages and per share amounts) 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 U.S. GAAP. CTS believes that the non-GAAP financial measures presented are commonly used by financial analysts and others in the industries in which CTS operates, and thus further provide useful information to investors. CTS' definitions of these non-GAAP financial measures may differ from those terms as defined or used by other companies. Non-GAAP measures should not be used by investors or third parties as the sole basis for formulating investment decisions, as they may exclude a number of important cash and non-cash recurring items. CTS has presented these non-GAAP financial measures as it believes that the presentation of its financial results that exclude (1) restructuring charges; (2) restructuring-related charges; (3) environmental charges; (4) acquisition-related costs; (5) inventory fair value step-up costs; (6) foreign exchange (gains) losses; (7) non-cash pension expenses (income); and (8) certain discrete tax items are useful and assist in comparing CTS' current operating results with past periods and with the operational performance of other companies in its industry. Included below is a description of the expenses that CTS has determined are not normal, recurring cash operating expenses necessary to operate its business and the rationale for why providing financial measures for its business with such expenses excluded or adjusted is useful to investors as a supplement to the U.S. GAAP measures. Restructuring charges – costs primarily related to workforce reductions, building and equipment relocations, asset impairment charges and other facility closure activities in connection with our continued optimization of our organization. Restructuring-related charges – costs related to restructuring actions that do not qualify as direct restructuring charges under U.S. GAAP. These include duplicative expenses arising from plant consolidation transition activities such as excess rent, utilities, and personnel-related and other costs incurred prior to the start of production at a new location. Environmental charges – costs associated with our non-operating facilities that are unrelated to ongoing operations. Currently, none of these costs and accruals relate to sites that provide revenue generating activities for the Company. Acquisition-related costs – diligence and transaction costs related to acquisitions including related contingent earnout adjustments. Inventory fair value step-up costs – purchase accounting-related inventory costs from acquisitions. Foreign exchange (gains) losses – remeasurement income and expenses for non-U.S. subsidiaries with the U.S. dollar as the functional currency. Non-cash pension expenses (income) – pension income and expenses related to the non-operating U.S. pension and post-retirement life insurance plans, including historical plan settlement activities. Discrete tax items – non-recurring, infrequent, or unusual tax adjustments (e.g., valuation allowances, uncertain tax position changes, unremitted assertion changes and discrete impacts associated with pre-tax non-GAAP items or due to tax law changes, etc.). At times, the reconciliations below have been intentionally rounded to the nearest thousand, or $0.01 for EPS figures, and, therefore, may not sum. Adjusted Gross Margin   Three Months EndedMarch 31,     Twelve Months EndedDecember 31,     2024     2023     2023     2022     2021   Gross margin $ 45.1     $ 51.7     $ 190.9     $ 210.5     $ 184.6                                 Net sales $ 125.7     $ 146.0     $ 550.4     $ 586.9     $ 512.9                                 Gross margin as a % of net sales   35.9 %     35.4 %     34.7 %     35.9 %     36.0 %                               Adjustments to reported gross margin:                             Restructuring-related charges (b)   0.5       —       0.6       —       —   Inventory fair value step-up (b)   —       —       —       4.0       —                                 Adjusted gross margin $ 45.6     $ 51.7     $ 191.5     $ 214.5     $ 184.6                                 Adjusted gross margin as a % of net sales   36.2 %     35.4 %     34.8 %     36.5 %     36.0 % Adjusted Operating Earnings   Three Months EndedMarch 31,     Twelve Months EndedDecember 31,     2024     2023     2023     2022     2021   Operating earnings $ 14.5     $ 22.2     $ 75.1     $ 93.0     $ 76.5                                 Net sales $ 125.7     $ 146.0     $ 550.4     $ 586.9     $ 512.9