CTS Reports Improved First Quarter 2004 Results - Raises Sales and Earnings Guidance for the Year.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)--April 20, 2004 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 first quarter 2004 revenues of $122.1 million, a 15% increase over the first quarter of 2003. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.07 also improved from the $0.02 earnings per share earned in the 2003 first quarter. The Company reported revenue growth of 29% in its electronics manufacturing services Electronic manufacturing services (EMS) is term used for companies that design, test, manufacture, distribute and provide return/repair services for electronic component and assemblies for original equipment manufacturers (OEMs). business segment compared to last year's first quarter. Stronger than expected sales were driven by robust demand from the communications infrastructure industry, a growing market for the Company's EMS Ems, town, Germany Ems or Bad Ems (bät ĕms), town (1994 pop. 10,130), Rhineland-Palatinate, W Germany, on the Lahn River. products and services. The Company also had year-over-year first quarter revenue growth of 5% in its components and sensors
"We are pleased by the first quarter improvement in sales and the success of the growth initiatives we have put in place over the last couple of years. By focusing on accelerating new product introductions, aggressive expansion of our automotive products business into Asia and new customer development, we have been able to position the Company for growth and further performance improvements as we go forward," commented 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. Schwanz, CTS Chairman and Chief Executive Officer. Based on the strong first quarter results and evidence of continuing recovery in the economy, the Company now believes that top-line revenue growth of 7% to 10% for 2004 is a reasonable expectation, with earnings per share in the $0.43 to $0.47 range. This estimate includes $0.06 per share from the pending gain on the sale of excess land in 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 , expected in the second quarter, and also reflects a $0.05 reduction in pension income this year. General Comments: -- Revenue declined 7.5% in the first quarter of 2004 versus the fourth quarter of last year. The Company believes this was due to normal seasonal patterns. -- Orders for the first quarter were $132.5 million, the highest level since the fourth quarter of 2000. Backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at the end of the first quarter was $80.1 million, the highest level since the third quarter of 2001. -- Total debt net of cash was $48.3 million, $2.2 million lower than 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. 2003 level. -- In early April, the Company completed the sale of its unused Longtan, 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 facility for $16.6 million which approximated book value, plus cost of disposal.
FIRST QUARTER RESULTS - SEGMENT INFORMATION
(Dollars in millions)
First Quarter First Quarter Fourth Quarter
2004 2003 2003
----------------- ----------------- -----------------
Segment Segment Segment
Net Operating Net Operating Net Operating
Sales Earnings Sales Earnings Sales Earnings
------- --------- ------- --------- ------- ---------
Components &
Sensors $63.5 $3.0 $60.3 $0.3 $67.1 $3.8
Electronics
Manufacturing
Services (EMS) 58.6 1.9 45.5 2.3 64.9 3.6
------- --------- ------- --------- ------- ---------
Total $122.1 $4.9 $105.8 $2.6 $132.0 $7.4
======= ========= ======= ========= ======= =========
Components & Sensors: Components and sensors sales increased $3.2 million, or 5%, over the first quarter of 2003, primarily on the strength of new products for the automotive markets. Segment 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 increased on the higher sales, and, as a result of the continuing product mix improvement, ongoing cost improvement initiatives, reductions in depreciation and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. currency exchange. The first quarter components and sensors sales decreased from the fourth quarter of 2003 by $3.6 million, or 5%, impacted by the normal seasonal factors, particularly in components for the mobile communications industry communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. . The segment operating earnings were below fourth quarter 2003 levels due to lower sales. EMS: EMS first quarter 2004 sales increased by $13.2 million, or 29%, over the first quarter of 2003, primarily as a result of demand increases for communications equipment. Segment operating earnings were impacted unfavorably by the currency exchange rates, pricing and start-up Start-up The earliest stage of a new business venture. expenses incurred to expand EMS operations into our 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). facility. Compared to the fourth quarter of 2003, EMS segment sales decreased by $6.3 million, or 10%, primarily due to seasonal factors affecting the computer industry. Segment operating earnings were unfavorably impacted by the lower volume as well as currency exchange rates, pricing and the Singapore start-up expenses incurred during the first quarter 2004. The foregoing 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. These statements are based on management's expectations, certain assumptions and currently available information. Actual results may differ materially from those reflected in the forward-looking statements due to a variety of geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. , economic, health, industry and other factors which could affect the Company's operating results, liquidity and financial condition. 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 sensors, and a provider of EMS products and services for the automotive, computer and communications 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. A
network of direct sales personnel, independent manufacturers'
representatives Manufacturers representatives (reps), also known as sales agents, are independently owned and managed sales companies that are an alternative to hiring a direct sales force. and electronic distributors provides worldwide sales
coverage. 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 CTS Web site at www.ctscorp.com.
CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED
(In thousands, except per share amounts)
Three Months Ended
-------------------
March 28, March 30,
2004 2003
-------- --------
Net sales $122,147 $105,769
Costs and expenses:
Cost of goods sold 97,538 84,686
Selling, general and administrative expenses 14,816 12,848
Research and development expenses 4,884 5,641
-------- --------
Operating earnings 4,909 2,594
Other expenses (income):
Interest expense 1,533 1,972
Other 16 (139)
-------- --------
Total other expenses 1,549 1,833
-------- --------
Earnings before income taxes 3,360 761
Income tax expense 840 190
-------- --------
Net earnings $ 2,520 $ 571
-------- --------
Net earnings per share:
Basic $ 0.07 $ 0.02
-------- --------
Diluted $ 0.07 $ 0.02
-------- --------
Cash dividends declared per share $ 0.03 $ 0.03
Average common shares outstanding:
Basic 35,957 34,020
Diluted 36,243 34,258
CTS Corporation and Subsidiaries
Condensed Consolidated Balance Sheets- Unaudited
(In thousands of dollars)
March 28, December 31,
2004 2003 (a)
---------- -----------
(Unaudited)
Cash and equivalents $ 32,861 $ 25,346
Accounts receivable, net 83,663 72,290
Inventories, net 38,676 31,925
Other current assets 35,595 35,205
---------- ----------
Total current assets 190,795 164,766
---------- ----------
Property, Plant & Equipment, net 118,148 122,481
Other Assets 195,918 195,003
---------- -----------
Total Assets $ 504,861 $ 482,250
========== ==========
Accounts payable $ 59,120 $ 52,252
Other accrued liabilities 51,670 43,437
---------- ----------
Total current liabilities 110,790 95,689
---------- ----------
Long-term debt 81,200 75,880
Other obligations 16,480 16,490
Shareholders' equity 296,391 294,191
---------- -----------
Total Liabilities and
Shareholders' Equity $ 504,861 $ 482,250
========== ==========
(a) The balance sheet at December 31, 2003 has been derived from the
audited financial statements at that date.
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