CTS Announces Third Quarter 2015 Results
Delivers solid operating results despite soft sales
Addressing legacy environmental issue
- Sales were $90.6 million, down 9.3% compared to the third quarter of 2014, driven primarily by lower volumes and unfavorable foreign exchange impact.
- GAAP loss was $4.8 million, or $0.15 per share, compared to earnings of $8.1 million, or $0.24 per diluted share from continuing operations in the third quarter of 2014.
- GAAP loss includes a non-recurring charge of $14.5 million or $0.28 per diluted share for remediation of a legacy environmental issue, restructuring-related charges of $0.06 and unfavorable foreign tax items of $0.04.
- Adjusted EPS was $0.23, compared to $0.29 in the third quarter of 2014.
Third quarter sales to automotive customers declined $4.5 million year-over-year due to lower sales of older automotive products and unfavorable foreign exchange impact. Sales of electronic components were down $4.8 million primarily driven by lower sales to HDD customers and softness in the telecom infrastructure market. CTS received $95 million in new business awards in the third quarter, bringing the year-to-date new business awards to $455 million.
“We experienced soft volumes and unfavorable foreign exchange impact but delivered solid operating results by focusing on a combination of productivity projects, savings from restructuring actions and cost management. We are continuing our long term growth focus with another quarter of solid new business awards,” said Kieran O’Sullivan, CEO of CTS Corporation. “We are addressing a legacy environmental issue and working closely with the EPA on remediation, while remaining focused on executing our business strategy.We expect sequential sales growth in the fourth quarter of 2015.”
Management expects full year 2015 adjusted earnings per diluted share to be in the range of $0.95 to $1.05, consistent with previous guidance, but full year 2015 sales will be challenged to achieve the low end of the previous guidance range of $390 to $405 million. This includes the unfavorable currency impact at current rates.
As previously announced, the Company has scheduled a conference call on Tuesday, October 27, 2015 at 11:00 a.m. (EDT). The dial-in number for the conference call is 888-438-5535 (719- 325-2402, if calling from outside the U.S.). The conference I.D. number is 788577. There will be a replay of the conference call from 2:00 p.m. (EDT) on Tuesday, October 27, 2015 through 2:00 p.m. (EDT) on Tuesday, November 10, 2015. The telephone number for the replay is 888-203- 1112 (719-457-0820, if calling from outside the U.S.). The access code is 788577. Also, please note that a live audio webcast of the conference call will be available and can be accessed directly from the website of CTS Corporation www.ctscorp.com.
Other Supplemental Information
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.
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 the 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.
CTS (NYSE: CTS) is a leading designer and manufacturer of sensors, actuators and electronic components to OEMs in the aerospace, communications, defense, industrial, information technology, medical and transportation markets. CTS manufactures products in North America, Europe and Asia.
Vice President and Chief Financial Officer
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