CTS Announces Fourth Quarter and Full Year 2021 Results
CTS Announces Fourth Quarter and Full Year 2021 Results
Delivering Solid Growth and Diversification
Lisle, Ill. – 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 2021 results.
“We delivered strong growth across all end markets despite a challenging macroeconomic environment. Importantly, we also further advanced our diversification strategy, which was underscored by a 25% increase in non-transportation revenues over the previous year, while at the same time winning record new business across end markets,” said Kieran O’Sullivan, CEO of CTS Corporation.
“We enter 2022 with a goal to continue our progress on profitable growth and diversification. The investments we’ve made in the business combined with our strong balance sheet and disciplined capital allocation approach will enable us to capitalize on future growth opportunities and continue to return value to our shareholders.”
Fourth Quarter 2021 Results
- Sales were $132.5 million, up 8% year-over-year. Sales to non-transportation end markets increased 25%, and sales to the transportation end market decreased 3% over the same period.
- Net income was $9.2 million, or $0.28 per diluted share, compared to $14.9 million, or $0.46 per diluted share, in the fourth quarter of 2020. The lower net income was due to increased foreign exchange expense and a higher tax rate.
- Adjusted diluted EPS was $0.49, up from $0.43 in the fourth quarter of 2020.
- Adjusted EBITDA margin was 20.9% compared to 21.4% in the fourth quarter of 2020.
- Operating cash flow was $26.0 million, compared to $26.4 million in the fourth quarter of 2020.
- New business wins were $185 million, up from $104 million in the fourth quarter of 2020.
Full Year 2021 Results
- Sales were $512.9 million, up 21% year-over-year. Sales to non-transportation end markets increased 25%, and sales to the transportation end market increased 18% over the same period.
- Net loss was $41.9 million, or $(1.30) per diluted share, versus net earnings of $34.7 million, or $1.06 per diluted share, in 2020. The 2021 net earnings were impacted by non-cash charges of $96.6 million, net of taxes related to the previously disclosed termination of the U.S. pension plan.
- Adjusted diluted EPS was $1.93, up from $1.12 in 2020.
- Adjusted EBITDA margin was 21.0% compared to 18.3% for 2020.
- Operating cash flow was $86.1 million, up from $76.8 million in 2020.
- New business wins were $694 million, up from $442 million in 2020.
CTS expects full year 2022 sales to be in the range of $525 – $550 million and adjusted diluted EPS in the range of $2.00 – $2.25.
Conference Call and Supplemental Materials
As previously announced, the Company has scheduled a conference call at 10:00 a.m. (EST) today to discuss the fourth quarter and full year 2021 financial results. The dial-in number for the U.S. and Canada is 844-200-6205 (+1 929-526-1599, if calling from outside the U.S.). The passcode is 160107. 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 the Investors section of the website of CTS Corporation at
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, and transportation markets. For more information, visit www.ctscorp.com.
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 CTS’ 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 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: the ultimate impact of the COVID-19 pandemic on CTS’ business, results of operations or financial condition; changes in the economy generally 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 industry, 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; and risks associated with CTS’ 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 CTS’ Annual Report on Form 10-K and other filings made with the SEC. CTS undertakes no obligation to publicly update its forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes.
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’ management believes that non-GAAP financial measures can be useful to investors in analyzing CTS’ financial performance and results of operations over time. CTS recommends that investors consider both actual and adjusted measures in evaluating the performance of CTS with peer companies.
The information included in this press release includes the non-GAAP financial measures of adjusted operating earnings, adjusted EBITDA, adjusted net earnings, adjusted diluted earnings per share, debt to capitalization ratio, controllable working capital ratio, and free cash flow. Many of these non-GAAP financial measures exclude the effect of certain expenses and income not related directly to the underlying performance of CTS’ fundamental business operations.
CTS believes that adjusted operating earnings, adjusted EBITDA, 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 or were not part of CTS’ business operations during a comparable period.
CTS believes that the debt to capitalization ratio is a measurement of financial leverage and provides an insight into the financial structure of CTS and its financial strength. CTS believes the controllable working capital ratio provides an objective measure of the efficiency with which CTS manages its short-term capital needs. CTS believes that free cash flow is a useful measure of its ability to generate cash.
CTS believes that these non-GAAP financial measures are commonly used by financial analysts and others in the industries in which CTS operates, and thus further provide useful information to investors. Note that CTS’ definitions of these non-GAAP financial measures may differ from those terms as defined or used by other companies.
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.
Vice President and Chief Financial Officer
4925 Indiana Avenue
Lisle, IL 60532 USA
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Condensed Consolidated Statements of Earnings – Unaudited
Condensed Consolidated Balance Sheets