CTS Announces Completion of Facility Consolidation; Confirms Expectation of Fourth Quarter Profitability
ELKHART, Ind.--Sept. 18, 2002--CTS Corporation , today announced the completion of the facility consolidation announced in the second quarter of 2001. Undertaken in order to reduce cost and improve efficiency, the initiative included the consolidation of five separate communication component manufacturing facilities into two CTS facilities located in Singapore and Tianjin, China. The consolidation took over one year to complete because of the requirement for customer qualifications at the new locations and the need to carry out the move without disrupting customer deliveries. Benefits expected from the consolidation include:| -- | Reduction in overhead and infrastructure costs. |
| -- | Lower labor rates. |
| -- | Better equipment utilization. |
| -- | Better production surge capability, without the need for capital additions, through 24-hour/7-day week operation. |
| -- | Shorter manufacturing cycle times and reduced inventory. |
| -- | Closer proximity to major communications component customers who increasingly are shifting operations to Asia. |
Commenting on the consolidation program, CTS Chairman and Chief Executive Officer, Donald Schwanz said, "The process has gone smoothly. We are already achieving production yields as good as we had before the transfers and expect to see continued improvement going forward. The consolidation enabled us to reduce infrastructure costs. Through this consolidation and other cost reduction initiatives the Company's breakeven sales volume has been reduced to close to current levels."
CTS reaffirmed its expectation to return to profitability in the fourth quarter of 2002 as a result of the various cost reduction and restructuring initiatives undertaken since the market downturn last year.
Statements about the Company's earnings outlook and its plans, estimates and beliefs concerning the future are forward-looking statements, within the meaning of the Private Securities Litigation Reform Act 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 general market conditions 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 restructurings, consolidation and cost-reduction plans; pricing pressures and demand for the Company's products, especially if economic conditions worsen or do not recover in the key markets for the Company's products; and risks associated with our international operations, including trade and tariff barriers, 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, Europe and Asia. Worldwide sales coverage is accomplished through a network of direct sales personnel, independent manufacturers' representatives and electronic distributors. The Company's stock is traded on the NYSE under the ticker symbol "CTS." To find out more, visit the Company's website at www.ctscorp.com.