CTS Announces Fourth Quarter and Year-End 2001 Results in Line With Earlier Estimates.Business Editors ELKHART Elkhart, city (1990 pop. 43,627), Elkhart co., N Ind., at the confluence of the Elkhart and St. Joseph rivers; settled 1824, inc. 1877. The city's status as a chief producer of band instruments began in 1875. , Ind IND Investigational new drug Therapeutics A status assigned by the FDA to a drug before allowing its use in humans, exempting it from premarketing approval requirements so that experimental clinical trials may be conducted. See Phase 1.2, 3 studies, Sponsorship. .--(BUSINESS WIRE)--Jan. 28, 2002 CTS (1) (Clear To Send) The RS-232 signal sent from the receiving station to the transmitting station that indicates it is ready to accept data. Contrast with RTS. (2) (Common Type System) The data typing used in . Corporation (NYSE NYSE See: New York Stock Exchange :CTS) today announced results for the fourth quarter and year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2001. Sales for the fourth quarter were $125.8 million with a loss, excluding restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. and related charges, of $5.7 million, or $0.20 per share. Full-year sales were $577.7 million, with a loss, excluding restructuring, impairment and related charges, of $7.3 million, or $0.26 per share, in line with the third quarter conference call estimates. The reported net loss for the fourth quarter, including restructuring, impairment and related charges, was $27.0 million, or $0.93 per share. For the full year of 2001, the reported net loss was $45.4 million, or $1.61 per share. In 2000, the Company had net income of $0.79 per share for the fourth quarter, and $2.92 per share for the full year. The fourth quarter and full-year results, excluding restructuring, impairment and related charges are summarized in the following table:
Summary of Financial Results
Excluding Restructuring, Impairment and Related Charges(a)
(Dollars in millions, expect per share data)
Fourth Quarter Full Year
------------------- --------------------
2001 2000 2001 2000
---- ---- ---- ----
Sales $ 125.8 $ 233.4 $ 577.7 $ 866.5
Earnings (loss) $ ( 5.7) $ 22.8 $ (7.3) $ 83.8
EPS diluted $ ( 0.20) $ 0.79 $ (0.26) $ 2.92
Free cash flow
(from operating and
investing activities) $ 31.6 $( 4.6) $ (1.1) $ (15.5)
(a) For the fourth quarter of 2001, the above amounts exclude
$26.0 million restructuring and asset impairment, and $2.4 million
one-time charges. For the full year of 2001, the above amounts exclude
$50.7 million for the same charges.
During the fourth quarter of 2001, the Company recorded a $22.9 million asset impairment charge to write down excess and obsolete OBSOLETE. This term is applied to those laws which have lost their efficacy, without being repealed, 2. A positive statute, unrepealed, can never be repealed by non-user alone. 4 Yeates, Rep. 181; Id. 215; 1 Browne's Rep. Appx. 28; 13 Serg. & Rawle, 447. equipment taken out of service and certain vacant facilities which are available for sale. The Company also recorded $3.1 million for severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when expense, covering approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 250 employees. In addition, the Company incurred restructuring-related one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. expenses of $2.4 million as part of the previously announced restructuring, primarily for equipment move and retention-related expenses. Those expenses of $2.4 million, which were originally announced last May, are recorded as incurred. "Our fourth quarter results were on target with our most recent estimates, reflecting the ongoing softness in our served markets. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was positive for the quarter and year. During the quarter, we continued our aggressive focus on balance sheet management and cost reduction. Going forward, the restructuring actions taken in the fourth quarter will result in estimated pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern savings of approximately $8 million for the year of 2002," said Donald Donald (Domnall, Domhnall, Dumhnuil, Dónall) is an anglicized version of a Scottish or Irish Gaelic personal name, containing the elements dumno "world" and val "rule", viz. "ruler of the world". Compare Dumnorix. K. Schwanz, CTS' Chairman and Chief Executive Officer. "For full-year 2002, we are looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. revenue growth in the range of 3%-8%, though we are counting on little improvement during the first quarter. Margins should improve through the year as restructuring benefits flow to the bottom line, allowing for full-year earnings per share in the range of $0.20 to $0.30," added Schwanz. General Comments:
-- Receivables decreased by $9.4 million during the quarter. Inventories also
were reduced by $13.8 million during the fourth quarter, contributing to the
reduction of working capital, one of the Company's financial objectives this
year.
-- Cash flow from operations was $28.9 million in the fourth quarter and $65.9
million for the full year of 2001. Free cash flow from operating and investing
activities was $31.6 million for the quarter vs. a cash drain of $4.6 million
in the fourth quarter of 2000.
-- Total debt decreased by $54.8 million during the fourth quarter to $152.5
million. The debt to capitalization ratio improved to 39%, compared to 46% at
the end of the third quarter. For the full year of 2001, debt was reduced by
$42.9 million, and the debt to capitalization of 39% is well under the 44% at
the end of 2000.
-- EBITDA, excluding restructuring, impairment and related charges, was
positive at $5.2 million in the fourth quarter (4% of sales), and $53.9 million
(9% of sales) for the full year.
FOURTH QUARTER RESULTS -- SEGMENT INFORMATION
(Dollars in millions)
Fourth Quarter 2001 Fourth Quarter 2000
------------------- -------------------
Operating
Net Earnings/ Net Operating
Sales (Loss)(b) Sales Earnings
----- ------- ----- --------
Electronic Components $ 62.9 $ (9.1) $ 134.0 $ 24.8
Electronic Assemblies 62.9 3.9 99.4 10.6
-------- ------ -------- -------
Total $ 125.8 $ (5.2) $ 233.4 $ 35.4
======== ====== ======== =======
(b) Excluding restructuring and related charges
Electronic Components: The electronic components segment sales in the fourth quarter of 2001 were down by $71.1 million, or 53% lower than the fourth quarter of 2000, primarily resulting from the continued softness in demand for components serving the wireless handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. and infrastructure equipment markets. Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before (loss) were adversely affected by the lower sales. Electronic Assemblies: The electronic assemblies segment sales decreased by $36.5 million, or 37%, from the fourth quarter of 2000, resulting primarily from the lower demand for integrated interconnect (1) To attach one device to another. (2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. systems serving both the mass data storage systems for the computer equipment market and the infrastructure equipment for the wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. market. Operating earnings were lower than last year as a result of the reduced revenue. However, improvement was realized over the 2001 third quarter as sales increased $1.9 million and operating earnings increased by $2.8 million, resulting from higher integrated interconnect systems revenues and operating improvements in other areas of this business segment. Statements about the Company's earnings outlook and its plans, estimates and beliefs concerning the future are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, based on the Company's current expectations. Actual results may differ materially from those stated in the forward-looking statements due to a variety of factors which could affect the Company's operating results, liquidity and financial condition. We undertake no obligations to publicly update or revise any forward-looking statements. Factors that could impact future results include among others: the impact of the September September: see month. 11 terrorist attacks, the U.S. response to the attacks, and the general slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the communications, computer and automotive markets, and in the overall economy; whether the Company is able to implement measures to improve its financial condition and flexibility; the Company's successful execution of its restructuring, consolidation and cost-reduction plans; pricing pressures and demand for the Company's products, especially if economic conditions worsen wors·en tr. & intr.v. wors·ened, wors·en·ing, wors·ens To make or become worse. worsen Verb to make or become worse worsening adjn or do not recover in the key markets for the Company's products; and risks associated with our international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , including trade and tariff barriers tariff barrier n (COMM) → barrera arancelaria tariff barrier n → barrière douanière tariff barrier tariff n , exchange rates and political risks. Investors are encouraged to examine the Company's SEC filings, which more fully describe the risks and uncertainties associated with the Company's business. CTS Corporation is a leading designer and manufacturer of electronic components and assemblies for the communications, computer and automotive markets. The Company manufactures products in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Asia. The Company's stock is traded on the NYSE
under the ticker symbol Ticker SymbolAn arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors "CTS." To find out more, visit the Company's website at www.ctscorp.com.
CTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) -- UNAUDITED
(In thousands except per share amounts)
Three Months Ended Twelve Months Ended
--------------------- ---------------------
December 31, December 31,
2001 2000 2001 2000
--------- --------- --------- ---------
Net sales $ 125,790 $ 233,394 $ 577,654 $ 866,523
Costs and expenses:
Cost of goods sold 106,544 162,568 466,363 605,598
Selling, general and
administrative
expenses 17,831 25,493 80,214 94,501
Research and
development expenses 7,376 8,524 32,762 32,583
Amortization of
intangibles 1,694 1,408 6,765 5,211
Restructuring and
impairment charge 26,028 -- 40,039 --
--------- --------- --------- ---------
Operating earnings
(loss) (33,683) 35,401 (48,489) 128,630
Other expenses
(income):
Interest expense 3,503 3,623 12,775 13,050
Other (1,183) 141 (773) (1,547)
--------- --------- --------- ---------
Total other expenses 2,320 3,764 12,002 11,503
--------- --------- --------- ---------
Earnings (loss)
before income taxes (36,003) 31,637 (60,491) 117,127
Income tax expense
(benefit) (8,994) 8,858 (15,116) 32,796
--------- --------- --------- ---------
Earnings (loss) from
continuing operations (27,009) 22,779 (45,375) 84,331
Discontinued
operations:
Net loss from
discontinued
operations -- -- -- (529)
--------- --------- --------- ---------
Net earnings (loss) $ (27,009) $ 22,779 $ (45,375) $ 83,802
========= ========= ========= =========
Earnings (loss)
per share:
Basic:
Continuing operations $ (0.93) $ 0.83 $ (1.61) $ 3.05
Discontinued
operations -- -- -- (0.02)
--------- --------- --------- ---------
Net earnings (loss) ($ 0.93) $ 0.83 ($ 1.61) $ 3.03
========= ========= ========= =========
Diluted:
Continuing operations $ (0.93) $ 0.79 $ (1.61) $ 2.94
Discontinued
operations -- -- -- (0.02)
--------- --------- --------- ---------
Net earnings (loss) ($ 0.93) $ 0.79 ($ 1.61) $ 2.92
========= ========= ========= =========
Cash dividends paid
per share $ 0.03 $ 0.03 $ 0.12 $ 0.12
Average common shares
outstanding:
Basic 28,976 27,621 28,231 27,623
Diluted 28,976 28,781 28,231 28,675
CTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) -- UNAUDITED
Excluding Restructuring and Related One-Time Charges
(In thousands except per share amounts)
Three Months Ended Twelve Months Ended
--------------------- ---------------------
December 31, December 31,
2001 2000 2001 2000
--------- --------- --------- ---------
Net sales $ 125,790 $ 233,394 $ 577,654 $ 866,523
Costs and expenses:
Cost of goods sold 104,134 162,568 455,687 605,598
Selling, general and
administrative
expenses 17,831 25,493 80,214 94,501
Research and
development expenses 7,376 8,524 32,762 32,583
Amortization of
intangibles 1,694 1,408 6,765 5,211
Restructuring and
impairment charge -- -- -- --
--------- --------- --------- ---------
Operating earnings
(loss) excluding
restructuring and
related one-time
charges (5,245) 35,401 2,226 128,630
Other expenses
(income):
Interest expense 3,503 3,623 12,775 13,050
Other (1,183) 141 (773) (1,547)
--------- --------- --------- ---------
Total other expenses 2,320 3,764 12,002 11,503
--------- --------- --------- ---------
Earnings (loss)
before income taxes
excluding
restructuring and
related one-time
charges (7,565) 31,637 (9,776) 117,127
Income tax expense
(benefit) (1,891) 8,858 (2,444) 32,796
--------- --------- --------- ---------
Earnings (loss) from
continuing operations
excluding
restructuring and
related one-time
charges (5,674) 22,779 (7,332) 84,331
Discontinued
operations:
Net loss from
discontinued
operations -- -- -- (529)
--------- --------- --------- ---------
Net earnings (loss)
excluding
restructuring and
related one-time
charges $ (5,674) $ 22,779 $ (7,332) $ 83,802
========= ========= ========= =========
Earnings (loss) per
share excluding
restructuring and
related one-time
charges
Basic:
Continuing operations ($ 0.20) $ 0.83 ($ 0.26) $ 3.05
Discontinued
operations -- -- -- (0.02)
--------- --------- --------- ---------
Net earnings (loss) ($ 0.20) $ 0.83 ($ 0.26) $ 3.03
========= ========= ========= =========
Diluted:
Continuing operations ($ 0.20) $ 0.79 ($ 0.26) $ 2.94
Discontinued
operations -- -- -- (0.02)
--------- --------- --------- ---------
Net earnings (loss) ($ 0.20) $ 0.79 ($ 0.26) $ 2.92
========= ========= ========= =========
Cash dividends paid
per share $ 0.03 $ 0.03 $ 0.12 $ 0.12
Average common shares
outstanding:
Basic 28,976 27,621 28,231 27,623
Diluted 28,976 28,781 28,231 28,675
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