CTS Announces Fourth Quarter and Full-Year 2024 Results
CTS reported Q4 2024 results with sales of $127 million, up 2% year-over-year, driven by a 28% increase in diversified end-markets sales, while transportation end-market sales declined 18%. The SyQwest acquisition contributed $11 million in Q4 revenue.
For full-year 2024, sales decreased 6% to $516 million, with diversified end-markets growing 7% while transportation declined 17%. Net income was $58 million (11% of sales), with earnings per diluted share at $1.89. The company achieved an improved adjusted EBITDA margin of 23% and operating cash flow of $99 million.
Looking ahead, CTS provided 2025 guidance with expected sales of $520-$550 million and adjusted diluted EPS of $2.20-$2.35.
CTS ha riportato i risultati del quarto trimestre 2024 con vendite di 127 milioni di dollari, in aumento del 2% rispetto all'anno precedente, grazie a un incremento del 28% nelle vendite nei mercati finali diversificati, mentre le vendite nei mercati dei trasporti sono diminuite del 18%. L'
Per l'anno intero 2024, le vendite sono diminuite del 6% a 516 milioni di dollari, con i mercati finali diversificati che sono cresciuti del 7% mentre il settore dei trasporti è calato del 17%. L'utile netto è stato di 58 milioni di dollari (11% delle vendite), con un utile per azione diluita pari a 1,89 dollari. L'azienda ha raggiunto un migliorato margine EBITDA rettificato del 23% e un flusso di cassa operativo di 99 milioni di dollari.
Guardando al futuro, CTS ha fornito le previsioni per il 2025, con vendite attese tra 520 e 550 milioni di dollari e un EPS diluito rettificato di 2,20-2,35 dollari.
CTS reportó resultados del cuarto trimestre de 2024 con ventas de 127 millones de dólares, un aumento del 2% interanual, impulsado por un incremento del 28% en las ventas de mercados finales diversificados, mientras que las ventas en el mercado de transporte cayeron un 18%. La adquisición de SyQwest contribuyó con 11 millones de dólares a los ingresos del cuarto trimestre.
Para todo el año 2024, las ventas disminuyeron un 6% a 516 millones de dólares, con los mercados finales diversificados creciendo un 7% mientras que el transporte disminuyó un 17%. El ingreso neto fue de 58 millones de dólares (11% de las ventas), con ganancias por acción diluida de 1,89 dólares. La compañía logró un margen EBITDA ajustado mejorado del 23% y un flujo de efectivo operativo de 99 millones de dólares.
Mirando hacia adelante, CTS proporcionó orientación para 2025 con ventas esperadas entre 520 y 550 millones de dólares y un EPS diluido ajustado de 2,20 a 2,35 dólares.
CTS 는 2024년 4분기 매출이 1억 2700만 달러로 지난해 대비 2% 증가했다고 보고했습니다. 이는 다양화된 최종 시장에서 28% 증가에 힘입은 결과이며, 반면 운송 최종 시장 매출은 18% 감소했습니다. SyQwest 인수는 4분기 수익에 1100만 달러를 기여했습니다.
2024년 전체 연도 기준으로는 매출이 6% 감소하여 5억 1600만 달러에 달했고, 다양화된 최종 시장은 7% 성장했으나 운송 부문은 17% 감소했습니다. 순이익은 5800만 달러(매출의 11%)였으며, 희석주당 순이익은 1.89달러였습니다. 회사는 조정된 EBITDA 마진을 23%로 개선하였고, 운영 현금 흐름은 9900만 달러였습니다.
앞으로 CTS는 2025년 가이던스를 제공했으며, 예상 매출은 5억 2000만에서 5억 5000만 달러, 조정된 희석 EPS는 2.20에서 2.35달러로 예상하고 있습니다.
CTS a rapporté des résultats pour le quatrième trimestre de 2024 avec des ventes de 127 millions de dollars, en hausse de 2% par rapport à l'année précédente, grâce à une augmentation de 28% des ventes sur des marchés finaux diversifiés, tandis que les ventes sur le marché du transport ont chuté de 18%. L'acquisition de SyQwest a contribué à hauteur de 11 millions de dollars aux revenus du quatrième trimestre.
Pour l'année complète 2024, les ventes ont diminué de 6% pour atteindre 516 millions de dollars, avec une croissance de 7% des marchés finaux diversifiés, tandis que le transport a diminué de 17%. Le bénéfice net s'est élevé à 58 millions de dollars (11% des ventes), avec un bénéfice par action diluée de 1,89 dollar. L'entreprise a réalisé une marge EBITDA ajustée améliorée de 23% et un flux de trésorerie opérationnel de 99 millions de dollars.
En regardant vers l'avenir, CTS a fourni une prévision pour 2025, avec des ventes attendues entre 520 et 550 millions de dollars et un BPA dilué ajusté de 2,20 à 2,35 dollars.
CTS berichtete über die Ergebnisse des vierten Quartals 2024 mit einem Umsatz von 127 Millionen US-Dollar, was einem Anstieg von 2% im Vergleich zum Vorjahr entspricht, driven durch einen Anstieg von 28% im Umsatz der diversifizierten Endmärkte, während die Umsätze im Transportsektor um 18% zurückgingen. Die Übernahme von SyQwest trug mit 11 Millionen US-Dollar zu den Einnahmen des vierten Quartals bei.
Für das gesamte Jahr 2024 gingen die Verkäufe um 6% auf 516 Millionen US-Dollar zurück, wobei die diversifizierten Endmärkte um 7% wuchsen, während der Transport um 17% zurückging. Der Nettogewinn betrug 58 Millionen US-Dollar (11% des Umsatzes), und der Gewinn pro verwässerter Aktie lag bei 1,89 US-Dollar. Das Unternehmen erzielte eine verbesserte bereinigte EBITDA-Marge von 23% und einen operativen Cashflow von 99 Millionen US-Dollar.
Für die Zukunft gab CTS eine Prognose für 2025 ab, mit einem erwarteten Umsatz zwischen 520 und 550 Millionen US-Dollar und einem bereinigten verwässerten EPS zwischen 2,20 und 2,35 US-Dollar.
- Q4 sales increased 2% year-over-year to $127 million
- Diversified end-markets sales grew 28% in Q4
- Adjusted EBITDA margin improved to 24% in Q4 2024 from 22% in Q4 2023
- Operating cash flow increased to $99 million in 2024 from $89 million in 2023
- SyQwest acquisition contributed $14 million in revenue for 2024
- Transportation end-market sales declined 18% in Q4
- Full-year 2024 sales decreased 6% to $516 million
- Net income decreased to $58 million in 2024 from $61 million in 2023
- Earnings per diluted share declined to $1.89 in 2024 from $1.92 in 2023
- Q4 operating cash flow decreased to $26 million from $32 million year-over-year
Insights
CTS 's Q4 and FY2024 results reveal a compelling transformation story, marked by strategic diversification and operational resilience. The standout metric is the
The margin story is particularly impressive. Q4's adjusted EBITDA margin expansion to
The SyQwest acquisition is proving strategic, contributing
Three key factors support a positive outlook:
- Successful market diversification reducing cyclical exposure
- Margin expansion despite revenue pressures
- Strong cash flow generation enabling strategic investments
However, investors should monitor the pace of transportation market recovery and the integration of SyQwest, as these factors will influence near-term performance. The company's focus on innovative products like eBrake™ could provide additional growth catalysts in the transportation segment once market conditions improve.
Continued Progress on Diversification
LISLE, Ill., Feb. 04, 2025 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS), a leading global designer and manufacturer of custom engineered solutions that “Sense, Connect and Move,” today announced fourth quarter and full-year 2024 results.
“We continued diversifying our business, with solid progress in the medical, industrial, and aerospace and defense markets, which now represent more than
Fourth Quarter 2024 Results
- Sales were
$127 million in the fourth quarter of 2024, up2% year-over-year. Sales to diversified end-markets* increased28% year-over-year. Sales to the transportation end-market decreased18% year-over-year. The SyQwest acquisition added$11 million in revenue in the fourth quarter. - Net income was
$14 million , or11% of sales, compared to$15 million , or12% of sales, in the fourth quarter of 2023. - Earnings per diluted share were
$0.45 , compared to$0.49 in the fourth quarter of 2023. - Adjusted earnings per diluted share were
$0.53 , up from$0.47 in the fourth quarter of 2023. - Adjusted EBITDA margin was
24% , compared to22% in the fourth quarter of 2023. - Operating cash flow was
$26 million , down from$32 million in the fourth quarter of 2023.
Full-Year 2024 Results
- Sales were
$516 million , down6% year-over-year, mainly driven by softness in the transportation end-market. Sales to the diversified end-markets* increased by7% compared to the prior year, while sales to the transportation end-market decreased by17% compared to 2023. The SyQwest acquisition added$14 million in revenue in 2024, in line with expectations. - Net income was
$58 million , or11% of sales, compared to$61 million , or11% of sales in 2023. - Earnings per diluted share were
$1.89 , compared to$1.92 in 2023. - Adjusted earnings per diluted share were
$2.17 , down from$2.22 in 2023. - Adjusted EBITDA margin was
23% , up from22% in 2023. - Operating cash flow was
$99 million , up from$89 million in 2023.
2025 Guidance
CTS expects full-year 2025 sales to be in the range of
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 389682. 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, LLC; 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 Agrawal
Vice President and Chief Financial Officer
CTS Corporation
4925 Indiana Avenue
Lisle, IL 60532 USA
+1 (630) 577-8800
ashish.agrawal@ctscorp.com
| CTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED (In thousands, except per share amounts) | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||||||||
| Net sales | $ | 127,435 | $ | 124,694 | $ | 515,771 | $ | 550,422 | |||||||
| Cost of goods sold | 79,535 | 82,630 | 326,621 | 359,563 | |||||||||||
| Gross margin | 47,900 | 42,064 | 189,150 | 190,859 | |||||||||||
| Selling, general and administrative expenses | 22,184 | 19,477 | 88,285 | 83,816 | |||||||||||
| Research and development expenses | 5,670 | 5,290 | 23,388 | 24,918 | |||||||||||
| Restructuring charges | 1,040 | 1,041 | 4,697 | 7,074 | |||||||||||
| Operating earnings | 19,006 | 16,256 | 72,780 | 75,051 | |||||||||||
| Other (expense) income: | |||||||||||||||
| Interest expense | (1,294 | ) | (822 | ) | (4,236 | ) | (3,331 | ) | |||||||
| Interest income | 482 | 1,538 | 4,282 | 4,625 | |||||||||||
| Other income (expense), net | (843 | ) | 655 | (1,603 | ) | (1,192 | ) | ||||||||
| Total other income (expense), net | (1,655 | ) | 1,371 | (1,557 | ) | 102 | |||||||||
| Earnings before income taxes | 17,351 | 17,627 | 71,223 | 75,153 | |||||||||||
| Income tax expense | 3,745 | 2,307 | 13,109 | 14,621 | |||||||||||
| Net earnings | $ | 13,606 | $ | 15,320 | $ | 58,114 | $ | 60,532 | |||||||
| Earnings per share: | |||||||||||||||
| Basic | $ | 0.45 | $ | 0.49 | $ | 1.91 | $ | 1.93 | |||||||
| Diluted | $ | 0.45 | $ | 0.49 | $ | 1.89 | $ | 1.92 | |||||||
| Basic weighted – average common shares outstanding: | 30,082 | 31,020 | 30,408 | 31,359 | |||||||||||
| Effect of dilutive securities | 350 | 219 | 309 | 220 | |||||||||||
| Diluted weighted – average common shares outstanding: | 30,432 | 31,239 | 30,717 | 31,579 | |||||||||||
| 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, 2024 | December 31, 2023 | ||||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 94,334 | $ | 163,876 | |||
| Accounts receivable, net | 77,649 | 78,569 | |||||
| Inventories, net | 53,578 | 60,031 | |||||
| Other current assets | 18,716 | 16,873 | |||||
| Total current assets | 244,277 | 319,349 | |||||
| Property, plant and equipment, net | 94,357 | 92,592 | |||||
| Operating lease assets, net | 22,939 | 26,425 | |||||
| Other Assets | |||||||
| Goodwill | 199,886 | 157,638 | |||||
| Other intangible assets, net | 163,882 | 103,957 | |||||
| Deferred income taxes | 27,591 | 25,183 | |||||
| Other | 13,180 | 16,023 | |||||
| Total other assets | 404,539 | 302,801 | |||||
| Total Assets | $ | 766,112 | $ | 741,167 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 42,629 | $ | 43,499 | |||
| Accrued payroll and benefits | 15,754 | 14,585 | |||||
| Operating lease obligations | 4,719 | 4,394 | |||||
| Accrued expenses and other liabilities | 34,451 | 34,561 | |||||
| Total current liabilities | 97,553 | 97,039 | |||||
| Long-term debt | 91,253 | 67,500 | |||||
| Long-term operating lease obligations | 21,120 | 24,965 | |||||
| Long-term pension obligations | 3,931 | 4,655 | |||||
| Deferred income taxes | 12,743 | 14,729 | |||||
| Other long-term obligations | 8,662 | 5,457 | |||||
| Total Liabilities | 235,262 | 214,345 | |||||
| Commitments and Contingencies | |||||||
| Shareholders’ Equity | |||||||
| Common stock | 321,979 | 319,269 | |||||
| Additional contributed capital | 44,662 | 45,097 | |||||
| Retained earnings | 655,493 | 602,232 | |||||
| Accumulated other comprehensive loss | (4,266 | ) | 4,264 | ||||
| Total shareholders’ equity before treasury stock | 1,017,868 | 970,862 | |||||
| Treasury stock | (487,018 | ) | (444,040 | ) | |||
| Total shareholders’ equity | 530,850 | 526,822 | |||||
| Total Liabilities and Shareholders’ Equity | $ | 766,112 | $ | 741,167 | |||
CTS CORPORATION AND SUBSIDIARIES
OTHER 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
Adjusted Gross Margin
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2022 | |||||||||||||||
| Gross margin | $ | 47.9 | $ | 42.1 | $ | 189.2 | $ | 190.9 | $ | 210.5 | |||||||||
| Net sales | $ | 127.4 | $ | 124.7 | $ | 515.8 | $ | 550.4 | $ | 586.9 | |||||||||
| Gross margin as a % of net sales | 37.6 | % | 33.7 | % | 36.7 | % | 34.7 | % | 35.9 | % | |||||||||
| Adjustments to reported gross margin: | |||||||||||||||||||
| Restructuring related charges (b) | — | 0.6 | 0.7 | 0.6 | — | ||||||||||||||
| Inventory fair value step-up (b) | 0.7 | — | 2.1 | — | 4.0 | ||||||||||||||
| Adjusted gross margin | $ | 48.6 | $ | 42.6 | $ | 191.9 | $ | 191.4 | $ | 214.5 | |||||||||
| Adjusted gross margin as a % of net sales | 38.1 | % | 34.2 | % | 37.2 | % | 34.8 | % | 36.5 | % | |||||||||
Adjusted Operating Earnings
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2022 | |||||||||||||||
| Operating earnings | $ | 19.0 | $ | 16.3 | $ | 72.8 | $ | 75.1 | $ | 93.0 | |||||||||
| Net sales | $ | 127.4 | $ | 124.7 | $ | 515.8 | $ | 550.4 | $ | 586.9 | |||||||||
| Operating earnings as a % of net sales | 14.9 | % | 13.0 | % | 14.1 | % | 13.6 | % | 15.8 | % | |||||||||
| Adjustments to reported operating earnings: | |||||||||||||||||||
| Restructuring charges (c) | 1.0 | 1.0 | 4.7 | 7.1 | 1.9 | ||||||||||||||
| Restructuring related charges (b) | — | 0.6 | 0.7 | 0.6 | — | ||||||||||||||
| Environmental charges (a) | 1.9 | 0.4 | 1.6 | 3.5 | 2.8 | ||||||||||||||
| Acquisition-related costs (a) | (1.0 | ) | 0.2 | (0.3 | ) | 0.4 | 0.8 | ||||||||||||
| Inventory fair value step-up (b) | 0.7 | — | 2.1 | — | 4.0 | ||||||||||||||
| Total adjustments to reported operating earnings | $ | 2.6 | $ | 2.2 | $ | 8.8 | $ | 11.5 | $ | 9.5 | |||||||||
| Adjusted operating earnings | $ | 21.6 | $ | 18.4 | $ | 81.6 | $ | 86.6 | $ | 102.5 | |||||||||
| Adjusted operating earnings as a % of net sales | 17.0 | % | 14.8 | % | 15.8 | % | 15.7 | % | 17.5 | % | |||||||||
Adjusted EBITDA Margin
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2022 | |||||||||||||||
| Net earnings (loss) | $ | 13.6 | $ | 15.3 | $ | 58.1 | $ | 60.5 | $ | 59.6 | |||||||||
| Net sales | $ | 127.4 | $ | 124.7 | $ | 515.8 | $ | 550.4 | $ | 586.9 | |||||||||
| Net earnings (loss) margin | 10.7 | % | 12.3 | % | 11.3 | % | 11.0 | % | 10.2 | % | |||||||||
| Depreciation and amortization expense | 8.2 | 7.3 | 30.9 | 28.7 | 29.8 | ||||||||||||||
| Interest expense | 1.3 | 0.8 | 4.2 | 3.3 | 2.2 | ||||||||||||||
| Tax expense (benefit) | 3.7 | 2.3 | 13.1 | 14.6 | 21.2 | ||||||||||||||
| EBITDA | 26.8 | 25.7 | 106.4 | 107.2 | 112.7 | ||||||||||||||
| Adjustments to EBITDA: | |||||||||||||||||||
| Restructuring charges (c) | 1.0 | 1.0 | 4.7 | 7.1 | 1.9 | ||||||||||||||
| Restructuring related charges (b) | — | 0.6 | 0.7 | 0.6 | — | ||||||||||||||
| Environmental charges (a) | 1.9 | 0.4 | 1.6 | 3.5 | 2.8 | ||||||||||||||
| Acquisition-related costs (a) | (1.0 | ) | 0.2 | (0.3 | ) | 0.4 | 2.5 | ||||||||||||
| Inventory fair value step-up (b) | 0.7 | — | 2.1 | — | 4.0 | ||||||||||||||
| Non-cash pension and related expense (d) | — | — | 0.2 | — | 4.8 | ||||||||||||||
| Foreign currency (gain) loss (d) | 1.0 | (0.3 | ) | 1.7 | 2.0 | 4.9 | |||||||||||||
| Total adjustments to EBITDA | 3.6 | 1.8 | 10.7 | 13.5 | 20.9 | ||||||||||||||
| Adjusted EBITDA | $ | 30.4 | $ | 27.6 | $ | 117.1 | $ | 120.7 | $ | 133.6 | |||||||||
| Adjusted EBITDA Margin | 23.9 | % | 22.1 | % | 22.7 | % | 21.9 | % | 22.8 | % | |||||||||
Adjusted Net Earnings and Adjusted Diluted Earnings Per Share
| Three Months Ended December 31, | |||||||||||||||
| 2024 | 2024 | 2023 | 2023 | ||||||||||||
| Per share | Per share | ||||||||||||||
| Net earnings (A) | $ | 13.6 | $ | 0.45 | $ | 15.3 | $ | 0.49 | |||||||
| Adjustments to reported net earnings: | |||||||||||||||
| Restructuring charges (c) | 1.0 | 0.03 | 1.0 | 0.03 | |||||||||||
| Restructuring related charges (a) | — | — | 0.6 | 0.02 | |||||||||||
| Environmental charges (a) | 1.9 | 0.06 | 0.4 | 0.01 | |||||||||||
| Acquisition-related costs (a) | (1.0 | ) | (0.03 | ) | 0.2 | 0.01 | |||||||||
| Inventory fair value step-up (b) | 0.7 | 0.02 | — | — | |||||||||||
| Foreign currency (gain) loss (d) | 1.0 | 0.03 | (0.3 | ) | (0.01 | ) | |||||||||
| Total pretax adjustments to reported net earnings | $ | 3.5 | $ | 0.12 | $ | 1.8 | $ | 0.06 | |||||||
| Income tax effect of above adjustments (f) | (0.8 | ) | (0.03 | ) | (0.8 | ) | (0.03 | ) | |||||||
| Total adjustments, tax affected (f)(B) | $ | 2.7 | $ | 0.09 | $ | 1.0 | $ | 0.03 | |||||||
| Tax adjustments: | |||||||||||||||
| Other discrete tax items (e) | — | — | (1.6 | ) | (0.05 | ) | |||||||||
| Total tax adjustments(C) | $ | — | $ | — | $ | (1.6 | ) | $ | (0.05 | ) | |||||
| Adjusted net earnings (A+B+C) and Adjusted net earnings per share | $ | 16.3 | $ | 0.53 | $ | 14.7 | 0.47 | ||||||||
| Net sales | $ | 127.4 | $ | 124.7 | |||||||||||
| Net earnings as a % of net sales | 10.7 | % | 12.3 | % | |||||||||||
| Adjusted net earnings as a % of net sales | 12.8 | % | 11.8 | % | |||||||||||
| Twelve Months Ended December 31, | |||||||||||||||||||||||
| 2024 | 2024 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||||
| Per share | Per share | Per share | |||||||||||||||||||||
| Net earnings (loss) (A) | $ | 58.1 | $ | 1.89 | $ | 60.5 | $ | 1.92 | $ | 59.6 | $ | 1.85 | |||||||||||
| Adjustments to reported net earnings (loss): | |||||||||||||||||||||||
| Restructuring charges (c) | 4.7 | 0.14 | 7.1 | 0.22 | 1.9 | 0.06 | |||||||||||||||||
| Restructuring related charges (a) | 0.7 | 0.02 | 0.6 | 0.02 | — | — | |||||||||||||||||
| Environmental charges (a) | 1.6 | 0.05 | 3.5 | 0.11 | 2.8 | 0.09 | |||||||||||||||||
| Acquisition-related costs (a) | (0.3 | ) | (0.01 | ) | 0.4 | 0.01 | 2.5 | 0.08 | |||||||||||||||
| Inventory fair value step-up (b) | 2.1 | 0.07 | — | — | 4.0 | 0.12 | |||||||||||||||||
| Non-cash pension and related expense (d) | 0.2 | 0.01 | — | — | 4.8 | 0.15 | |||||||||||||||||
| Foreign currency loss (d) | 1.7 | 0.06 | 2.0 | 0.06 | 4.9 | 0.15 | |||||||||||||||||
| Total pretax adjustments to reported net earnings (loss) | $ | 10.7 | $ | 0.34 | $ | 13.5 | $ | 0.42 | $ | 20.9 | $ | 0.65 | |||||||||||
| Income tax effect of above adjustments (f) | (2.2 | ) | (0.07 | ) | (2.4 | ) | (0.07 | ) | (1.6 | ) | (0.05 | ) | |||||||||||
| Total adjustments, tax affected (f)(B) | $ | 8.5 | $ | 0.27 | $ | 11.1 | $ | 0.35 | $ | 19.3 | $ | 0.60 | |||||||||||
| Tax adjustments: | |||||||||||||||||||||||
| Increase in valuation allowances (e) | — | — | — | — | — | - | |||||||||||||||||
| Other discrete tax items (e) | 0.3 | 0.01 | (1.6 | ) | (0.05 | ) | 0.2 | 0.01 | |||||||||||||||
| Total tax adjustments(C) | $ | 0.3 | $ | 0.01 | $ | (1.6 | ) | $ | (0.05 | ) | $ | 0.2 | $ | 0.01 | |||||||||
| Adjusted net earnings (A+B+C) and Adjusted net earnings per share | $ | 66.9 | $ | 2.17 | $ | 70.0 | 2.22 | $ | 79.1 | 2.46 | |||||||||||||
| Net sales | $ | 515.8 | $ | 550.4 | $ | 586.9 | |||||||||||||||||
| Net earnings (loss) as a % of net sales | 11.3 | % | 11.0 | % | 10.2 | % | |||||||||||||||||
| Adjusted net earnings as a % of net sales | 13.0 | % | 12.7 | % | 13.5 | % | |||||||||||||||||
(a) Reflected in selling, general and administrative and other (expense) income, net.
(b) Reflected in cost of goods sold.
(c) Reflected in restructuring charges.
(d) Reflected in other (expense) income, net.
(e) Reflected in income tax expense (income). For 2022, the discrete tax items relate to the net impact to tax expense of expired research and development credits, including the release of associated reserves. For 2023, discrete tax items include adjusting for tax benefits resulting from
(f) We determine the tax effect of non-GAAP adjustments by considering the tax laws and statutory income tax rates applicable in the tax jurisdictions of the underlying non-GAAP adjustments. For all periods presented, we applied the statutory income tax rates to the taxable portion of all of our adjustments. Our acquisition costs and foreign currency gains and losses included in our non-GAAP adjustments were not deductible for income tax purposes; therefore, no statutory income tax rate was applied to such costs.
NOTE: CTS believes that adjusted gross margin, adjusted operating earnings, adjusted EBITDA margin, adjusted net earnings and adjusted diluted earnings per share provide useful information to investors regarding its operational performance because they enhance an investor’s overall understanding of CTS’ core financial performance and facilitate comparisons to historical results of operations, by excluding items that are not related directly to the underlying performance of CTS’ fundamental business operations (such as those items noted above in the paragraph titled “Non-GAAP Financial Measures”) or were not part of CTS’ business operations during a comparable period.
Controllable Working Capital
| December 31, | |||||||||||
| 2024 | 2023 | 2022 | |||||||||
| Net accounts receivable | $ | 77.6 | $ | 78.6 | $ | 90.9 | |||||
| Net inventory | $ | 53.6 | $ | 60.0 | $ | 62.3 | |||||
| Accounts payable | $ | (42.6 | ) | $ | (43.5 | ) | $ | (53.2 | ) | ||
| Controllable working capital | $ | 88.6 | $ | 95.1 | $ | 100.0 | |||||
| Quarter sales | $ | 127.4 | $ | 124.7 | $ | 142.3 | |||||
| Multiplied by 4 | 4 | 4 | 4 | ||||||||
| Annualized sales | $ | 509.7 | $ | 498.8 | $ | 569.1 | |||||
| Controllable working capital as a % of annualized sales | 17.4 | % | 19.1 | % | 17.6 | % | |||||
NOTE: CTS believes the controllable working capital ratio is a useful measure because it provides an objective measure of the efficiency with which CTS manages its short-term capital needs.
Free Cash Flow
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2022 | |||||||||||||||
| Net cash provided by operating activities | $ | 26.0 | $ | 32.1 | $ | 99.3 | $ | 88.8 | $ | 121.2 | |||||||||
| Capital expenditures | (6.1 | ) | (3.5 | ) | (18.6 | ) | (14.7 | ) | (14.3 | ) | |||||||||
| Free cash flow | $ | 19.9 | $ | 28.6 | $ | 80.6 | $ | 74.1 | $ | 106.9 | |||||||||
| Operating cash flow as a percentage of net earnings | 191 | % | 209 | % | 171 | % | 147 | % | 203 | % | |||||||||
| Free cash flow as a percentage of adjusted net earnings | 122 | % | 195 | % | 121 | % | 106 | % | 135 | % | |||||||||
NOTE: CTS believes that free cash flow is a useful measure because it demonstrates the company’s ability to generate cash. Free cash flow is a non-GAAP measure and should be considered in addition to, but not as a substitute for, information contained in the company's condensed consolidated statement of cash flows as a measure of liquidity.
Capital Expenditures
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2022 | |||||||||||||||
| Capital expenditures | $ | 6.1 | $ | 3.5 | $ | 18.6 | $ | 14.7 | $ | 14.3 | |||||||||
| Net sales | $ | 127.4 | $ | 124.7 | $ | 515.8 | $ | 550.4 | $ | 550.4 | |||||||||
| Capex as % of net sales | 4.8 | % | 2.8 | % | 3.6 | % | 2.7 | % | 2.6 | % | |||||||||
Additional Information
The following table includes other financial information not presented in the preceding financial statements.
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2022 | |||||||||||||||
| Depreciation and amortization expense | $ | 8.2 | $ | 7.3 | $ | 30.9 | $ | 28.7 | $ | 29.8 | |||||||||
| Stock-based compensation expense | $ | 1.7 | $ | 0.5 | $ | 5.7 | $ | 5.2 | $ | 7.7 | |||||||||
FAQ
What were CTS 's Q4 2024 revenue and earnings results?
How did CTS's diversified end-markets perform in Q4 2024?
What is CTS's financial guidance for 2025?
How much revenue did the SyQwest acquisition contribute to CTS in 2024?
What was CTS's operating cash flow for full-year 2024?
