CTS Announces Record Quarterly Results.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)--Oct. 27, 1999-- 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 announced record quarter results for sales, earnings and earnings per share for the fiscal quarter ended October October: see month. 3, 1999. CTS' net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight were $180.2 million for the third quarter of 1999, an increase of 115% over the comparable period last year. Third quarter net earnings increased 95% to $15.9 million, or $0.56 a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $8.2 million, or $0.29 a diluted share, in 1998. "We are very pleased with our performance this quarter," said Joseph P. Walker, Chairman of the Board, President and Chief Executive Officer of CTS. "Our third quarter results also compare favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to the record results we posted in the second quarter of 1999, primarily due to wireless and 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. products," Walker added. Summaries of third quarter and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. (YTD See Year-to-date. YTD See year to date (YTD). ) financial results are as follows: -0-
(Dollars in millions, except per share amounts)
(Per share amounts adjusted for 2:1 stock split)(a)
Third Quarter
--------------------------------
% Change
1999
1999 1998 from 1998
------- -------- ----------
---- ---- ---------
Net sales $ 180.2 $ 83.8 115%
Operating earnings $ 25.9 $ 11.5 125%
Earnings from continuing operations $ 15.9 $ 7.8 104%
---------------------
Diluted earnings per share:
From continuing operations $ 0.56 $ 0.28 100%
---------------------
EBITDA $ 33.8 $ 15.8 114%
Nine Months YTD (b)
-----------------------------
% Change
1999
1999 1998 from 1998
------- -------- ----------
Net sales $ 478.4 $ 277.1 73%
Operating earnings $ 65.8 $ 35.2 87%
Earnings from continuing operations $ 41.3 $ 24.1 71%
---------------------
Diluted earnings per share:
From continuing operations $ 1.44 $ 0.82 76%
---------------------
EBITDA $ 91.0 $ 47.5 92%
(a) All data give effect for the two-for-one stock split on August
12, 1999.
(b) Excludes the effect of a one-time, noncash write-off for acquired
in-process research and development, related to the acquisition of
CTS Wireless in the first quarter of 1999 ($12.9 million pre-tax,
$8.6 million after-tax, or $0.30 a diluted share).
Third Quarter Financial and Segment Information
Net sales and operating earnings of CTS' business segments are as
follows:
Third Quarter 1999 Third Quarter 1998
------------------- ------------------
(Dollars in millions) Net Operating Net Operating
Sales Earnings Sales Earnings
------- -------- ------- --------
Electronic Components $ 135.1 $ 20.2 $ 55.5 $ 9.3
Electronic Assemblies 45.1 5.7 28.3 2.2
------- ------- ------- -------
$ 180.2 $ 25.9 $ 83.8 $ 11.5
------- ------- ------- -------
------- ------- ------- -------
Nine Months 1999 Nine Months 1998
------------------- ----------------
(Dollars in millions) Net Operating Net Operating
Sales Earnings Sales Earnings
-------- -------- ------- --------
Electronic Components $ 373.7 $ 59.2 $ 183.0 $ 28.9
Electronic Assemblies 104.7 6.6 94.1 6.3
------- ------- -------- --------
$ 478.4 65.8 $ 277.1 35.2
------- --------
------- --------
One-time, noncash write-off
for acquired in-process
research and development (12.9) --
------- --------
Operating earnings $ 52.9 $ 35.2
------- --------
------- --------
Electronic components' sales increased $79.6 million (144%) in the third quarter of 1999, primarily due to the addition of wireless components through the acquisition of CTS Wireless. Revenue increases were also experienced in automotive, electrocomponent and resistor resistor, two-terminal electric circuit component that offers opposition to an electric current. Resistors are normally designed and operated so that, with varying levels of current, variations of their resistance values are negligible (see resistance). components. Sales of thermal thermal /ther·mal/ (ther´m'l) pertaining to or characterized by heat. ther·mal adj. 1. Of, relating to, using, producing, or caused by heat. 2. management components, used primarily in personal computers, decreased in the third quarter due to continued pressures from Asian manufacturers. Electronic assemblies' sales increased $16.8 million (59%) in the third quarter of 1999, compared to the 1998 third quarter. Sales of interconnect and cursor (1) The symbol used to point to some element on screen. On Windows, Mac and other graphics-based screens, it is also called a "pointer," and it changes shape as it is moved with the mouse into different areas of the application. control assemblies also increased by 59%. The introduction of RF (radio frequency) integrated modules in 1999 also contributed to the revenue increase. This increase more than offset the revenue loss of flex cable assemblies for the disk drive industry. -- Compared to the second quarter of 1999, the electronic assemblies segment had significant sales growth (47%) and improved operating earnings (423%) in the third quarter, principally as a result of increased sales of interconnect assemblies, as well as the assembly of RF integrated modules for the wireless market. Other financial information follows: Interest bearing debt at October 3, 1999, was $148.8 million versus $56.0 million at December December: see month. 31, 1998. The reason for the increase in debt is the February February: see month. 1999 acquisition of CTS Wireless. Interest bearing debt was $168.0 million at the end of the second quarter. For the nine months ended October 3, 1999, CTS had EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $91.0 million, almost twice as much as in the corresponding period last year. Capital expenditures for the third quarter and nine months of 1999 were $7.4 million and $20.0 million, respectively. CTS estimates that current industry demand for the products of CTS Wireless could add over $255 million of net sales to CTS' 1999 financial results. "We intend to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. CTS' worldwide manufacturing infrastructure and financial strength, as well as continue to invest in our business, to effectively respond to industry capacity constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. and new product and market opportunities, particularly for telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. products," said Joseph P. Walker. "While we cannot be sure that overall product demand will continue at last quarter's levels, we believe that CTS remains on a solid path of sustainable long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. , profitable growth," Walker said. CTS Corporation (NYSE NYSE See: New York Stock Exchange :CTS) designs, manufactures and sells a broad line of electronic components and custom electronic assemblies for OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and customers primarily in the communications equipment, automotive and computer equipment markets worldwide. CTS operates manufacturing facilities in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , Scotland Scotland, political division of Great Britain (1991 pop. 4,957,000), 30,414 sq mi (78,772 sq km), comprising the northern portion of the island of Great Britain and many surrounding islands. , Singapore Singapore (sĭng`gəpôr, sĭng`ə–, sĭng'gəpôr`), officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km). , Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan and China. For additional information on CTS Corporation, visit our website at www.ctscorp.com. The Company's plans, estimates and beliefs concerning the future contained in this press release 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. Actual results may differ materially from those reflected herein due to a variety of factors that could affect the Company's operating results, liquidity and financial condition, such as risks associated with the integration of acquired operations, competitive factors and price pressures, shifts in market demand and general economic conditions, foreign operations and developments and other factors. -0-
CTS Corporation and Subsidiaries
Consolidated Statements of Earnings - Unaudited
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
------------------- --------------------
Oct. 3 Sept. 27 Oct. 3 Sept. 27
1999 1998 1999 (a) 1998
--------- -------- --------- ---------
Net Sales $ 180,203 $ 83,777 $ 478,367 $ 277,111
Costs and expenses:
Cost of goods sold 125,236 57,436 333,527 193,184
Selling, general and
administrative expenses 21,326 11,701 58,787 38,561
Research and development
expenses 6,566 3,022 17,804 9,895
Acquired in-process
research and development -- -- 12,940 --
Amortization of
intangibles 1,147 75 2,448 226
--------- -------- --------- ---------
Operating earnings 25,928 11,543 52,861 35,245
Other expenses (income):
Interest expense 2,856 545 7,077 1,652
Other 298 (167) (1,125) (1,917)
--------- -------- --------- ---------
Total other expenses
(income) 3,154 378 5,952 (265)
--------- -------- --------- ---------
Earnings before income
taxes 22,774 11,165 46,909 35,510
Income tax expense 6,825 3,361 14,307 11,428
--------- -------- --------- ---------
Earnings from continuing
operations 15,949 7,804 32,602 24,082
Discontinued Operations:
Net earnings from
discontinued operations -- 394 -- 2,494
--------- -------- --------- ---------
Net earnings $ 15,949 $ 8,198 $ 32,602 $ 26,576
--------- -------- --------- ---------
--------- -------- --------- ---------
Basic earnings per share:
Continuing operations $ 0.58 $ 0.28 $ 1.19 $ 0.85
Discontinued operations -- 0.02 -- 0.09
--------- -------- --------- ---------
Net earnings $ 0.58 $ 0.30 $ 1.19 $ 0.94
--------- -------- --------- ---------
--------- -------- --------- ---------
Diluted earnings per share:
Continuing operations $ 0.56 $ 0.28 $ 1.14 $ 0.82
Discontinued operations -- 0.01 -- 0.08
--------- -------- --------- ---------
Net earnings $ 0.56 $ 0.29 $ 1.14 $ 0.90
--------- -------- --------- ---------
--------- -------- --------- ---------
Cash dividends
paid per share $ 0.03 $ 0.03 $ 0.09 $ 0.09
--------- -------- --------- ---------
--------- -------- --------- ---------
Average common shares
outstanding:
Basic 27,555 27,338 27,491 28,316
Diluted 28,573 28,404 28,582 29,558
(a) Includes the effect of a one-time, noncash write-off for acquired
in-process research and development, related to the acquisition of CTS
Wireless in the first quarter of 1999 ($12.9 million pre-tax,
$8.6 million after-tax, or $0.30 a diluted share).
Note: Per share amounts reflect the effect of the two-for-one stock
split, which was distributed on August 12, 1999.
CTS Corporation and Subsidiaries
Condensed Consolidated Balance Sheets - Unaudited
(In thousands of dollars)
Oct. 3 Dec. 31
1999 1998
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ASSETS
---------------------------------------------------------------------
Current Assets
Cash and marketable securities $ 9,063 $ 16,273
Accounts receivable - net 115,226 47,043
Inventories - net 68,946 33,322
Other current assets 22,141 21,945
---------- ----------
Total current assets 215,376 118,583
Property, Plant and Equipment,
Net 130,378 67,186
Other Assets 129,246 107,420
---------- ----------
Total Assets $ 475,000 $ 293,189
LIABILITIES AND SHAREHOLDERS'
EQUITY
---------------------------------------------------------------------
Current Liabilities
Current maturities of long-term
obligations $ 12,750 $ 14,000
Accounts payable 62,086 17,412
Accrued liabilities 69,858 50,965
---------- ----------
Total current liabilities 144,694 82,377
Long-term Debt 136,050 42,000
Deferred Income Taxes 27,145 27,145
Postretirement Benefits and Other 14,523 17,828
Shareholders' Equity 152,588 123,839
---------------------------------------------------------------------
Total liabilities and
Shareholders' Equity $ 475,000 $ 293,189
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