CTS Announces Second Quarter 2025 Results
LISLE, Ill., July 24, 2025 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE:CTS), a leading global designer and manufacturer of custom engineered solutions that "Sense, Connect and Move," today announced second quarter 2025 results.
"We delivered another quarter of double-digit sales growth in the diversified end markets and achieved solid profitability with adjusted EBITDA margin expanding 130 basis points. We also generated strong operating cash flow in the quarter," said Kieran O'Sullivan, CEO of CTS Corporation. "Our teams remain focused on diversification as a strategic priority through organic growth and acquisitions."
Second Quarter 2025 Results
Sales were $135 million in the second quarter of 2025, up 4% year-over-year. Sales to diversified end markets increased 13%. Sales to the transportation end market decreased 6%.
Net income was $19 million, or 14% of sales, up from $15 million, or 11% of sales, in the second quarter of 2024.
Diluted EPS was $0.62, up from $0.48 in the second quarter of 2024.
Adjusted diluted EPS was $0.57, up from $0.54 in the second quarter of 2024.
Adjusted EBITDA margin was 23.0%, up from 21.7% in the second quarter of 2024.
Operating cash flow was $28 million, compared to $20 million in the second quarter of 2024.
2025 Guidance
Assuming the continuation of current market conditions, CTS is maintaining its guidance of sales in the range of $520-$550 million and adjusted diluted EPS to be in the range of $2.20-$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 Materials
As previously announced, CTS 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 932754. In addition, CTS 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 CTS 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/.
Diversified end markets, previously referred as the "non-transportation" market, includes the industrial, aerospace & defense, and medical end markets.
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 increased tariffs, and in respect to the business in which CTS operates; unanticipated issues in integrating acquisitions including, without limitation the integration of SyQwest; the funding of contracts by the US Government; 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 impact of tariffs on China, Canada and Mexico, and other nations, the potential impact of U.S./China relations and the impact of the conflicts in Ukraine, and the Middle East 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 Agrawal Vice President and Chief Financial Officer CTS Corporation 4925 Indiana Avenue Lisle, IL 60532 USA +1 (630)
CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED
(In thousands, except per share amounts)
Three Months Ended
Six Months Ended
June 30,2025
June 30,2024
June 30,2025
June 30,2024
Net sales
$
135,309
$
130,162
$
261,078
$
255,912
Cost of goods sold
82,878
83,790
162,099
164,450
Gross margin
52,431
46,372
98,979
91,462
Selling, general and administrative expenses
23,077
21,332
46,700
43,591
Research and development expenses
6,326
6,086
12,515
12,687
Restructuring charges
297
1,190
749
2,884
Operating earnings
22,731
17,764
39,015
32,300
Other (expense) income:
Interest expense
(1,121
)
(833
)
(2,289
)
(1,635
)
Interest income
622
1,441
1,068
2,827
Other income (expense), net
750
(603
)
1,307
(2,066
)
Total other (expense) income, net
251
5
86
(874
)
Earnings before income taxes
22,982
17,769
39,101
31,426
Income tax expense
4,455
3,062
7,210
5,600
Net earnings
$
18,527
$
14,707
$
31,891
$
25,826
Earnings per share:
Basic
$
0.62
$
0.48
$
1.07
$
0.84
Diluted
$
0.62
$
0.48
$
1.06
$
0.84
Basic weighted, average common shares outstanding:
29,739
30,511
29,875
30,627
Effect of dilutive securities
251
219
285
224
Diluted weighted, average common shares outstanding:
29,990
30,730
30,160
30,851
Cash dividends declared per share
$
0.04
$
0.04
$
0.08
$
0.08
CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
(Unaudited) June 30, 2025
December 31, 2024
ASSETS
Current Assets
Cash and cash equivalents
$
99,440
$
94,334
Accounts receivable, net
85,578
77,649
Inventories, net
57,103
52,312
Other current assets
19,629
17,879
Total current assets
261,750
242,174
Property, plant and equipment, net
93,530
94,357
Operating lease assets, net
21,709
22,939
Other Assets
Goodwill
207,547
201,304
Other intangible assets, net
161,785
163,882
Deferred income taxes
26,714
27,591
Other
11,694
13,180
Total other assets
407,740
405,957
Total Assets
$
784,729
$
765,427
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable
$
47,265
$
42,629
Accrued payroll and benefits
4,557
4,719
Operating lease obligations
17,444
15,754
Accrued expenses and other liabilities
31,200
35,361
Total current liabilities
100,466
98,463
Long-term debt
88,000
92,300
Long-term operating lease obligations
19,999
21,120
Long-term pension obligations
3,872
3,931
Deferred income taxes
14,233
12,743
Other long-term obligations
8,002
8,662
Total Liabilities
234,572
237,219
Commitments and Contingencies
Shareholders' Equity
Common stock
324,682
321,979
Additional contributed capital
41,236
44,662
Retained earnings
682,360
652,851
Accumulated other comprehensive loss
12,020
(4,266
)
Total shareholders' equity before treasury stock
1,060,298
1,015,226
Treasury stock
(510,141
)
(487,018
)
Total shareholders' equity
550,157
528,208
Total Liabilities and Shareholders' Equity
$
784,729
$
765,427
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 adjustments; (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 relating to workforce reduction costs, building and equipment relocation costs, asset impairment charges and other facility closure costs 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 US GAAP. These include duplicative expenses incurred due to the plant consolidation related transition activities such as excess rent, utilities, personnel related and other costs prior to start of production at the 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 adjustments, 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 relating 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 EndedJune 30,
Six Months EndedJune 30,
Twelve Months EndedDecember 31,
2025
2024
2025
2024
2024
2023
2022
Gross margin
$
52.4
$
46.4
$
99.0
$
91.5
$
187.6
$
190.9
$
210.5
Net sales
$
135.3
$
130.2
$
261.1
$
255.9
$
514.8
$
550.4
$
586.9
Gross margin as a % of net sales
38.7
%
35.6
%
37.9
%
35.7
%
36.4
%
34.7
%
35.9
%
Adjustments to reported gross margin:
Restructuring-related charges (b)
—
0.2
0.7
0.7
0.6
—
Inventory fair value step-up (b)
—
—
—
—
2.1
—
4.0
Adjusted gross margin
$
52.4
$
46.6
$
99.0
$
92.2
$
190.4
$
191.5
$
214.5
Adjusted gross margin as a % of net sales
38.7
%
35.8
%
37.9
%
36.0
%
37.0
%
34.8
%
36.5
%
Adjusted Operating Earnings
Three Months EndedJune 30,
Six Months EndedJune 30,
Twelve Months EndedDecember 31,
2025
2024
2025
2024
2024
2023
2022
Operating earnings
$
22.7
$
17.8
$
39.0
$
32.3
$
71.2
$
75.1
$
93.0
Net sales
$
135.3
$
130.2
$
261.1
$
255.9
$
514.8
$
550.4
$
586.9
Operating earnings as a % of net sales
16.8
%
13.6
%
14.9
%
12.6
%
13.8
%
13.6
%
15.8
%
