CTS Announces Fourth Quarter and Full-Year 2009 Financial Results
ELKHART, Ind.--CTS Corporation today announced fourth quarter 2009 revenues of $133.9 million, 6% higher than third quarter 2009 revenues of $126.6 million. Fourth quarter 2009 net earnings were $4.1 million, or $0.12 per diluted share, including a discrete tax valuation allowance charge of $2.5 million (or $0.07 per diluted share). Excluding this charge, fourth quarter non-GAAP adjusted net earnings were $6.6 million, or $0.19 per diluted share, compared to third quarter 2009 net earnings of $4.5 million, or $0.13 per diluted share.
Components and Sensors segment revenues increased 17% from the third quarter of 2009, driven by a 24% improvement in automotive product shipments with improved market share, as the global markets began to recover. Sales of electronic component products increased 5% over the third quarter of 2009 primarily from higher demand for wireless infrastructure applications. EMS segment sales decreased 3% from the third quarter of 2009 primarily due to lower sales in the defense and aerospace market. Components and Sensors segment sales were 49% of total CTS sales in the fourth quarter, compared to 44% in the third quarter, contributing to the sequential earnings improvement.
Although total sales in the fourth quarter 2009 decreased 18% from the same period last year, sales in automotive sensors and actuators increased 44%, reflecting the global market recovery for light vehicles. Adjusted fourth quarter 2009 diluted earnings per share of $0.19 increased 36% over the fourth quarter 2008.
Full-year 2009 revenue was $499.0 million, a 28% decrease from 2008 full-year revenue, reflecting the impact of the global recession. The Company implemented a number of cost saving actions in late 2008 and 2009 to manage through the negative economic environment, finishing the year with three consecutive sequential quarter-to-quarter improvements in both sales and operating earnings. Fourth quarter 2009 cash flow from operations was $12.5 million driving full-year cash flow from operations to $46.6 million, which is significantly improved from $34.1 million for full-year 2008. Full-year capital expenditures were $6.5 million, compared to $17.6 million in 2008. Total debt, as a percentage of total capitalization, was 17.0% at year-end 2009, compared to 22.4% at year-end 2008.
Commenting on fourth quarter 2009 results, Vinod M. Khilnani, CTS Chairman and Chief Executive Officer, stated, “We are pleased to continue the momentum established earlier this year through our growth and cost structure initiatives. The Company continued generating strong cash flow and improving operating profitability. CTS ended the year further diversifying its geographic customer base by winning strategic new business in key Asian markets. CTS achieved a record of winning over $300 million of new business across all our key product lines and continued to capture design wins for electronic component products.”
The full-year 2009 net loss of $34.1 million, or $1.01 per share, included four non-operating discrete items: a non-cash charge for goodwill impairment of $33.2 million, or $0.98 per diluted share, restructuring charges of $2.2 million, or $0.05, an international cash repatriation-related tax charge, primarily non-cash, of $9.1 million, or $0.27 per diluted share, and a discrete tax valuation charge of $2.5 million, or $0.07 per diluted share. Full-year net earnings in 2008 was $28.1 million, or $0.81 per diluted share. Included in 2008 results were two non-operating discrete items: a favorable net tax credit of $0.14 per share and a negative $0.10 per share impact from restructuring and related costs. Excluding these non-operating items, adjusted earnings per share in 2009 were $0.36, compared to adjusted earnings per share in 2008 of $0.77.
Based on an easing of the current recession, yet taking a cautious view of the economic indicators in 2010, management anticipates full-year 2010 sales to increase in the range of 10% to 15% over 2009 and diluted earnings per share to be in the range of $0.45 to $0.53. This estimate includes reinstatement of certain temporary salary and benefit reductions in 2009, and increase in the research and development activities to support new product introductions, including the launch of sensor and actuator products for diesel and commercial market applications. First quarter results are expected to show normal seasonality with gradual improvements during the year.
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SEGMENT INFORMATION (Dollars in millions) |
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Fourth Quarter | Fourth Quarter | Third Quarter | |||||||||
| 2009 | 2008 | 2009 | ||||||||||
| Segment | Segment | Segment | ||||||||||
| Net | Operating | Net | Operating | Net | Operating | |||||||
| Sales | Earnings | Sales | Earnings | Sales | Earnings | |||||||
| Components and Sensors | $65.5 | $7.6 | $58.0 | $1.9 | $55.8 | $4.1 | ||||||
| Electronics Manufacturing Services (EMS) | 68.4 | 0.7 | 104.8 | 4.0 | 70.8 | 2.2 | ||||||
| Segment Operating Earnings | 8.3 | 5.9 | 6.3 | |||||||||
| Expenses not allocated to business segments: | ||||||||||||
| - Restructuring and related charges | (2.1 | ) | ||||||||||
| Total | $133.9 | $8.3 | $162.8 | $3.8 | $126.6 | $6.3 | ||||||
Components & Sensors: Components and Sensors fourth quarter 2009 sales increased $9.6 million, or 17%, from the third quarter of 2009 reflecting a 24% increase in global automotive sensor product demand. Electronic component product demand increased 5% primarily in sales of infrastructure applications. Segment operating earnings increased $3.5 million from the third quarter, driven primarily by higher sales volume and improved margins.
Components and Sensors fourth quarter 2009 sales increased $7.5 million, or 13%, from the fourth quarter of 2008. Automotive sensor and actuator product sales improved by $13.6 million, or 44%, partially offset by 23% lower sales of electronic component products. Segment operating earnings of $7.6 million were favorable by $5.7 million to the fourth quarter of 2008 due to higher sales volumes and cost control initiatives.
EMS: EMS fourth quarter 2009 sales declined $2.3 million, or 3%, from third quarter 2009 levels, primarily reflecting lower demand in the defense and aerospace market. Segment operating earnings of $0.7 million decreased $1.5 million from the third quarter 2009, primarily due to unfavorable product mix and lower sales.
EMS fourth quarter 2009 sales decreased $36.4 million, or 35%, from the fourth quarter of 2008 reflecting lower sales across all markets from the global recession. Segment operating earnings decreased $3.3 million from the fourth quarter of 2008 on lower volumes, partially offset by reduced operating expenses.
Conference Call
As previously announced, the Company has scheduled a conference call on Thursday, January 28, 2010 at 11:00 a.m. EST. Those interested in participating may dial 800-288-8960 (612-332-0107, if calling from outside the U.S.). No access code is needed. There will be a replay of the conference call available from 1:30 p.m. EST on Thursday, January 28, 2010, through 11:59 p.m. EST on Thursday, February 4, 2010. The telephone number for the replay is 800-475-6701 (320-365-3844, if calling from outside the U.S.). The access code is 142812. There will also be a live audio webcast of the conference call which can be accessed directly from the Web sites of CTS Corporation (www.ctscorp.com), StreetEvents (www.StreetEvents.com), Netscape (www.netscape.com), Compuserve (www.compuserve.com) and others. AOL subscribers will have access through the Personal Finance section of AOL.
About CTS
CTS is a leading designer and manufacturer of electronic components and sensors and a provider of electronics manufacturing services (EMS) to OEMs in the automotive, communications, medical, defense and aerospace, industrial and computer markets. CTS manufactures products in North America, Europe and Asia. CTS' stock is traded on the NYSE under the ticker symbol "CTS.” To find out more, visit the CTS Web site at www.ctscorp.com.
Safe Harbor Statement
This press release 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. 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, including, without limitation: changes in the economy generally and in respect to the businesses in which CTS operates, including those resulting from the current global financial and credit crisis; pricing pressures and reduction in demand for CTS’ products, especially if economic conditions do not recover or continue to worsen in CTS’ served markets, including but not limited to: the automotive, computer equipment or communications markets; disruption, uncertainty or volatility in the credit markets that could adversely impact the availability of credit already arranged by CTS and the availability and cost of credit in the future; the financial condition of our customers, including the ability of customers (especially those that may be highly leveraged and those with inadequate liquidity) to maintain their credit availability or ongoing viability; risks associated with CTS’ international operations, including trade and tariff barriers; currency fluctuations and their effects on our results of operations and financial position; changes in performance of equity and debt markets that could affect the valuation of the assets in CTS’ pension plans and the accounting for pension assets, liabilities and expenses; political and geopolitical risks; rapid technological change in the automotive, communications and computer industries; reliance on key customers; and CTS’ ability to protect its intellectual property. For more detailed information on the risks and uncertainties associated with CTS’ business, see the reports CTS files with the SEC, available at http://www.ctscorp.com/investor_relations/investor.htm. CTS undertakes no obligation to publicly update its forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes.
| CTS CORPORATION AND SUBSIDIARIES | ||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) - UNAUDITED | ||||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||
| Dec 31 | Dec 31 | Dec 31 | Dec 31 | |||||||||||||||
| 2009 | 2008* | 2009 | 2008* | |||||||||||||||
| Net sales | $ | 133,888 | $ | 162,827 | $ | 498,982 | $ | 691,707 | ||||||||||
| Costs and expenses: | ||||||||||||||||||
| Cost of goods sold | 102,941 | 133,081 | 400,142 | 554,634 | ||||||||||||||
| Selling, general and administrative expenses | 18,761 | 19,134 | 67,119 | 82,370 | ||||||||||||||
| Research and development expenses | 3,927 | 4,730 | 14,154 | 18,306 | ||||||||||||||
| Restructuring and impairment charges | - | 2,102 | 2,243 | 5,567 | ||||||||||||||
| Goodwill impairment | - | - | 33,153 | - | ||||||||||||||
| Operating earnings / (loss) | 8,259 | 3,780 | (17,829 | ) | 30,830 | |||||||||||||
| Other (expense) / income: | ||||||||||||||||||
| Interest expense | (226 | ) | (1,216 | ) | (1,722 | ) | (6,193 | ) | ||||||||||
| Other | (126 | ) | 347 | (863 | ) | 1,618 | ||||||||||||
| Total other expense | (352 | ) | (869 | ) | (2,585 | ) | (4,575 | ) | ||||||||||
| Earnings / (loss) before income taxes | 7,907 | 2,911 | (20,414 | ) | 26,255 | |||||||||||||
| Income tax expense / (benefit) | 3,764 | (2,072 | ) | 13,636 | (1,807 | ) | ||||||||||||
| Net earnings / (loss) | $ | 4,143 | $ | 4,983 | $ | (34,050 | ) | $ | 28,062 | |||||||||
| Net earnings / (loss) per share: | ||||||||||||||||||
| Basic | $ | 0.12 | $ | 0.15 | $ | (1.01 | ) | $ | 0.83 | |||||||||
| Diluted | $ | 0.12 | $ | 0.15 | $ | (1.01 | ) | $ | 0.81 | |||||||||
| Cash dividends declared per share | $ | 0.03 | $ | 0.03 | $ | 0.12 | $ | 0.12 | ||||||||||
| Average common shares outstanding: | ||||||||||||||||||
| Basic | 33,892 | 33,711 | 33,823 | 33,728 | ||||||||||||||
| Diluted | 34,621 | 36,840 | 33,823 | 37,864 | ||||||||||||||
| *The Statement of Earnings for the three and twelve months ended December 31, 2008 was adjusted from the previously filed 2008 10-K to comply with the provisions of Accounting Standards Codification ("ASC") 470-20, "Debt with Conversion and Other Options." | ||||||||||||||||||
| CTS Corporation and Subsidiaries | |||||||||
| Condensed Consolidated Balance Sheets - Unaudited | |||||||||
| (In thousands of dollars) | |||||||||
| December 31, | December 31, | ||||||||
| 2009 | 2008 * | ||||||||
| Cash and cash equivalents | $ | 51,167 | $ | 44,628 | |||||
| Accounts receivable, net | 71,718 | 94,175 | |||||||
| Inventories, net | 54,348 | 70,867 | |||||||
| Other current assets | 16,502 | 16,172 | |||||||
| Total current assets | 193,735 | 225,842 | |||||||
| Property, plant & equipment, net | 81,120 | 90,756 | |||||||
| Other assets | 132,802 | 171,844 | |||||||
| Total Assets | $ | 407,657 | $ | 488,442 | |||||
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Notes payable and current portion of long-term debt |
$ | - | $ | - | |||||
| Accounts payable | 52,344 | 71,285 | |||||||
| Other accrued liabilities | 38,172 | 41,956 | |||||||
| Total current liabilities | 90,516 | 113,241 | |||||||
| Long-term debt | 50,400 | 79,988 | |||||||
| Other obligations | 19,287 | 17,740 | |||||||
| Shareholders' equity | 247,454 | 277,473 | |||||||
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Total Liabilities and Shareholders' Equity |
$ | 407,657 | $ | 488,442 | |||||
| *The Balance Sheet at December 31, 2008 was adjusted from the previously filed 10-K to comply with the provisions of ASC 470-20, "Debt with Conversion and Other Options." | |||||||||
| CTS CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - AS ADJUSTED (UNAUDITED) | |||||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| Dec 31 | Dec 31 | Dec 31 | Dec 31 | ||||||||||||||||
| 2009 | 2008* | 2009 | 2008* | ||||||||||||||||
| Adjusted | Adjusted | Adjusted | Adjusted | ||||||||||||||||
| Net sales | $ | 133,888 | $ | 162,827 | $ | 498,982 | $ | 691,707 | |||||||||||
| Costs and expenses: | |||||||||||||||||||
| Cost of goods sold | 102,941 | 133,114 | 400,142 | 554,116 | |||||||||||||||
| Selling, general and administrative expenses | 18,761 | 19,134 | 67,119 | 82,370 | |||||||||||||||
| Research and development expenses | 3,927 | 4,730 | 14,154 | 18,306 | |||||||||||||||
| Adjusted operating earnings | 8,259 | 5,849 | 17,567 | 36,915 | |||||||||||||||
| Other (expense) / income: | |||||||||||||||||||
| Interest expense | (226 | ) | (1,216 | ) | (1,722 | ) | (6,193 | ) | |||||||||||
| Other | (126 | ) | 347 | (863 | ) | 1,618 | |||||||||||||
| Total other expense | (352 | ) | (869 | ) | (2,585 | ) | (4,575 | ) | |||||||||||
| Adjusted earnings before income taxes | 7,907 | 4,980 | 14,982 | 32,340 | |||||||||||||||
| Adjusted income tax expense | 1,264 | 210 | 2,937 | 5,886 | |||||||||||||||
| Adjusted net earnings | $ | 6,643 | $ | 4,770 | $ | 12,045 | $ | 26,454 | |||||||||||
| Adjusted net earnings per share: | |||||||||||||||||||
| - | - | ||||||||||||||||||
| Diluted | $ | 0.19 | $ | 0.14 | $ | 0.36 | $ | 0.77 | |||||||||||
| Cash dividends declared per share | $ | 0.03 | $ | 0.03 | $ | 0.12 | $ | 0.12 | |||||||||||
| Average common shares outstanding: | |||||||||||||||||||
| Diluted | 34,621 | 36,840 | 33,823 | 37,864 | |||||||||||||||
| *The Statement of Earnings for the three and twelve months ended December 31, 2008 was adjusted from the previously filed 2008 10-Q to comply with the provisions of Accounting Standards Codification 470-20, "Debt with Conversion and Other Options." | |||||||||||||||||||
| See reconciliation and explanation of net earnings / (loss) to adjusted net earnings attached. | |||||||||||||||||||
| CTS CORPORATION AND SUBSIDIARIES | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - AS ADJUSTED (UNAUDITED) | ||||||||||
| (In thousands, except per share amounts) | ||||||||||
| Three Months Ended | ||||||||||
| December 31 | September 27 | |||||||||
| 2009 | 2009 | |||||||||
| Adjusted | GAAP** | |||||||||
| Net sales | $ | 133,888 | $ | 126,565 | ||||||
| Costs and expenses: | ||||||||||
| Cost of goods sold | 102,941 | 100,380 | ||||||||
| Selling, general and administrative expenses | 18,761 | 16,494 | ||||||||
| Research and development expenses | 3,927 | 3,408 | ||||||||
| Adjusted operating earnings | 8,259 | 6,283 | ||||||||
| Other (expense) / income: | ||||||||||
| Interest expense | (226 | ) | (239 | ) | ||||||
| Other | (126 | ) | (390 | ) | ||||||
| Total other expense | (352 | ) | (629 | ) | ||||||
| Adjusted earnings before income taxes | 7,907 | 5,654 | ||||||||
| Adjusted income tax expense | 1,264 | 1,173 | ||||||||
| Adjusted net earnings | $ | 6,643 | $ | 4,481 | ||||||
| Adjusted net earnings per share: | ||||||||||
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| Diluted | $ | 0.19 | $ | 0.13 | ||||||
| Cash dividends declared per share | $ | 0.03 | $ | 0.03 | ||||||
| Average common shares outstanding: | ||||||||||
| Diluted | 34,621 | 34,513 | ||||||||
| ** There were no one-time events that required adjustments to the Statement of Earnings for the three months ended September 27, 2009. | ||||||||||
| See reconciliation and explanation of net earnings to adjusted net earnings attached. | ||||||||||
| CTS CORPORATION AND SUBSIDIARIES | ||||||||||||||||
| OTHER SUPPLEMENTAL INFORMATION | ||||||||||||||||
| Full Year Earnings per Share | ||||||||||||||||
| The following table reconciles projected GAAP earnings / (loss) per share to adjusted projected earnings per share for the Company: | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| Dec 31 | Dec 31 | Dec 31 | Dec 31 | |||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| GAAP net earnings/(loss) per share | $ | 0.12 | $ | 0.15 | $ | (1.01 | ) | $ | 0.81 | |||||||
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Tax affected charges to reported diluted loss per share: |
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| Tax expense due to cash repatriation | - | - | 0.27 | - | ||||||||||||
| NOL valuation allowance related to Asian unit | 0.07 | (0.05 | ) | 0.07 | (0.14 | ) | ||||||||||
| Restructuring charge | - | 0.04 | 0.05 | 0.10 | ||||||||||||
| Goodwill impairment | - | - | 0.98 | - | ||||||||||||
| Adjusted earnings per share | $ | 0.19 | $ | 0.14 | $ | 0.36 | $ | 0.77 | ||||||||
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Adjusted earnings per share is a non-GAAP financial measure. The most directly comparable GAAP financial measure is diluted earnings / (loss) per share. CTS calculates adjusted earnings per share to exclude the per share impact of tax expense associated with our cash repatriation and restructuring and goodwill impairment charges and an additional tax valuation allowance related to one of our foreign units. We exclude the impact of 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 adjusted earnings per share measures to evaluate overall performance, establish plans and perform strategic analysis. Using adjusted earnings per share measures avoids distortion in the evaluation of operating results by eliminating the impact of events which are not related to normal operating performance. Because adjusted earnings per share measures are based on the exclusion 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 adjusted earnings per share measures are useful to its management, investors and stakeholders in that they: |
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| - provide a truer measure of CTS' operating performance, | ||||||||||||||||
| - reflect the results used by management in making decisions about the business, and | ||||||||||||||||
| - help review and project CTS' performance over time. | ||||||||||||||||
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We recommend that investors consider both actual and adjusted earnings per share measures in evaluating the performance of CTS with peer companies. |
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| Debt / Capitalization | ||||||||||||||||
| The following table represents the calculation of total debt to shareholder's equity: | ||||||||||||||||
| (in thousands) | December 31 | December 31 | ||||||||||||||
| 2009 | 2008* | |||||||||||||||
| Notes payable | $ | - | $ | - | ||||||||||||
| Current portion of long-term debt | - | - | ||||||||||||||
| Long-term debt | 50,400 | 79,988 | ||||||||||||||
| Total debt | 50,400 | 79,988 | ||||||||||||||
| Total shareholders' equity | 247,454 | 277,473 | ||||||||||||||
| Total capitalization | $ | 297,854 | $ | 357,461 | ||||||||||||
| Total debt to capitalization | 16.9 | % | 22.4 | % | ||||||||||||
| * Adjustments have been made from previous filings to comply with the provisions of ASC 470-20, "Debt with Conversion and Other Options." | ||||||||||||||||
| Segment Operating Earnings | ||||||||||||||||
| Segment operating earnings is a non-GAAP financial measure outside the context of the Accounting Standards Codification ("ASC") 280 required reconciliation in the notes to the Company's financial statements. The most comparable GAAP term is operating earnings. Segment operating earnings always exclude the effects of charges for restructuring and goodwill impairment when they are incurred by the Company. Segment operating earnings exclude interest expense, and other non-operating income and income taxes according to how a particular segment is measured. CTS' management provides the segment operating earnings measure to provide consistency between segment information in its earnings release and the business segment discussion in the notes to its financial statements. | ||||||||||||||||
| CTS CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||||||
| RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) - UNAUDITED TO CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - AS ADJUSTED (UNAUDITED) | ||||||||||||||||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Twelve Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
| December 31 | December 31 | December 31 | December 31 | |||||||||||||||||||||||||||
| 2009 | Adjustments | Note | 2009 | 2009 | Adjustments | Note | 2009 | |||||||||||||||||||||||
| (GAAP) | Adjusted | (GAAP) | Adjusted | |||||||||||||||||||||||||||
| Net sales | $ | 133,888 | $ | 133,888 | $ | 498,982 | $ | 498,982 | ||||||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||||||
| Cost of goods sold | 102,941 | 102,941 | 400,142 | 400,142 | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | 18,761 | 18,761 | 67,119 | 67,119 | ||||||||||||||||||||||||||
| Research and development expenses | 3,927 | 3,927 | 14,154 | 14,154 | ||||||||||||||||||||||||||
| Restructuring and impairment charges | - | - | 2,243 | (2,243 | ) | A | - | |||||||||||||||||||||||
| Goodwill Impairment | - | - | 33,153 | (33,153 | ) | B | - | |||||||||||||||||||||||
| Operating earnings / (loss) | 8,259 | - | 8,259 | (17,829 | ) | 35,396 | 17,567 | |||||||||||||||||||||||
| Other expense: | ||||||||||||||||||||||||||||||
| Interest expense | (226 | ) | (226 | ) | (1,722 | ) | (1,722 | ) | ||||||||||||||||||||||
| Other | (126 | ) | (126 | ) | (863 | ) | (863 | ) | ||||||||||||||||||||||
| Total other expense | (352 | ) | (352 | ) | (2,585 | ) | (2,585 | ) | ||||||||||||||||||||||
| Earnings / (loss) before income taxes | 7,907 | - | 7,907 | (20,414 | ) | 35,396 | 14,982 | |||||||||||||||||||||||
| Income tax expense / (benefit) | 3,764 | (2,500 | ) | C | 1,264 | 13,636 | (10,699 | ) | C | 2,937 | ||||||||||||||||||||
| Net (loss) / earnings | $ | 4,143 | $ | 2,500 | $ | 6,643 | $ | (34,050 | ) | $ | 46,095 | $ | 12,045 | |||||||||||||||||
| Net (loss) / earnings per share: | ||||||||||||||||||||||||||||||
| Basic | $ | 0.12 | $ | 0.07 | $ | 0.19 | $ | (1.01 | ) | $ | 1.37 | $ | 0.36 | |||||||||||||||||
| - | - | |||||||||||||||||||||||||||||
| Diluted | $ | 0.12 | $ | 0.07 | $ | 0.19 | $ | (1.01 | ) | $ | 1.37 | $ | 0.36 | |||||||||||||||||
| Cash dividends declared per share | $ | 0.03 | $ | 0.03 | $ | 0.12 | $ | 0.12 | ||||||||||||||||||||||
| Average common shares outstanding: | ||||||||||||||||||||||||||||||
| Basic | 33,892 | 33,892 | 33,823 | 33,823 | ||||||||||||||||||||||||||
| Diluted | 34,621 | 34,621 | 33,823 | 33,823 | ||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||
| A. | This adjustment pertains to restructuring charges that occurred in the first quarter of 2009 as a result of a company-wide restructuring plan. | |||||||||||||||||||||||||||||
| B. | This adjustment pertains to the impairment of the carrying value of goodwill. | |||||||||||||||||||||||||||||
| C. | The following table presents the tax components related to Notes A, B and C above: | |||||||||||||||||||||||||||||
| YTD 2009 | 4th QTR 2009 | |||||||||||||||||||||||||||||
| Tax benefit related to first quarter restructuring charges | $ | 673 | $ | - | ||||||||||||||||||||||||||
| Tax benefit related to first quarter goodwill impairment charges | 205 | - | ||||||||||||||||||||||||||||
| Tax expense related to additional NOL valuation allowance | (2,500 | ) | (2,500 | ) | ||||||||||||||||||||||||||
| Tax expense related to one-time cash repatriation event | (9,077 | ) | - | |||||||||||||||||||||||||||
| $ | (10,699 | ) | $ | (2,500 | ) | |||||||||||||||||||||||||
| CTS CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||||||||
| RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED TO CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - AS ADJUSTED (UNAUDITED) | |||||||||||||||||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Twelve Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
| December 31 | December 31 | December 31 | December 31 | ||||||||||||||||||||||||||||
| 2008 | Adjustments | Note | 2008 | 2008 | Adjustments | Note | 2008 | ||||||||||||||||||||||||
| (GAAP) | Adjusted | (GAAP) | Adjusted | ||||||||||||||||||||||||||||
| Net sales | $ | 162,827 | $ | 162,827 | $ | 691,707 | $ | 691,707 | |||||||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||||||||||
| Cost of goods sold | 133,081 | 33 | B | 133,114 | 554,634 | (518 | ) | A | 554,116 | ||||||||||||||||||||||
| Selling, general and administrative expenses | 19,134 | 19,134 | 82,370 | 82,370 | |||||||||||||||||||||||||||
| Research and development expenses | 4,730 | 4,730 | 18,306 | 18,306 | |||||||||||||||||||||||||||
| Restructuring and impairment charges | 2,102 | (2,102 | ) | A | - | 5,567 | (5,567 | ) | A | - | |||||||||||||||||||||
| Operating earnings | 3,780 | 2,069 | 5,849 | 30,830 | 6,085 | 36,915 | |||||||||||||||||||||||||
| Other (expense) / income: | |||||||||||||||||||||||||||||||
| Interest expense | (1,216 | ) | (1,216 | ) | (6,193 | ) | (6,193 | ) | |||||||||||||||||||||||
| Other | 347 | 347 | 1,618 | 1,618 | |||||||||||||||||||||||||||
| Total other expense | (869 | ) | (869 | ) | (4,575 | ) | (4,575 | ) | |||||||||||||||||||||||
| Earnings before income taxes | 2,911 | 2,069 | 4,980 | 26,255 | 32,340 | ||||||||||||||||||||||||||
| Income tax (benefit) / expense | (2,072 | ) | (2,282 | ) | C | 210 | (1,807 | ) | 7,693 | C | 5,886 | ||||||||||||||||||||
| Net earnings | $ | 4,983 | $ | (213 | ) | $ | 4,770 | $ | 28,062 | $ | (1,608 | ) | $ | 26,454 | |||||||||||||||||
| Net earnings per share: | |||||||||||||||||||||||||||||||
| Basic | $ | 0.15 | $ | (0.01 | ) | $ | 0.14 | $ | 0.83 | $ | (0.04 | ) | $ | 0.79 | |||||||||||||||||
| - | - | ||||||||||||||||||||||||||||||
| Diluted | $ | 0.15 | $ | (0.01 | ) | $ | 0.14 | $ | 0.81 | $ | (0.04 | ) | $ | 0.77 | |||||||||||||||||
| Cash dividends declared per share | $ | 0.03 | $ | 0.03 | $ | 0.12 | $ | 0.12 | |||||||||||||||||||||||
| Average common shares outstanding: | |||||||||||||||||||||||||||||||
| Basic | 33,711 | 33,711 | 33,728 | 33,728 | |||||||||||||||||||||||||||
| Diluted | 36,840 | 36,840 | 37,864 | 37,864 | |||||||||||||||||||||||||||
| Notes: | |||||||||||||||||||||||||||||||
| A. | This adjustment pertains to restructuring (including related) and impairment charges that occurred in the third and fourth quarters of 2008 as a result of a company-wide restructuring plan. | ||||||||||||||||||||||||||||||
| B. | This represents a reversal of an accrued cost related to restructuring that was charged to cost of goods sold in the third quarter of 2008. | ||||||||||||||||||||||||||||||
| C. | The following table presents the tax components related to Notes A, B and C above: | ||||||||||||||||||||||||||||||
| Three months | Twelve months | ||||||||||||||||||||||||||||||
| ended | ended | ||||||||||||||||||||||||||||||
| Dec 31, 2008 | Dec 31, 2008 | ||||||||||||||||||||||||||||||
| Tax benefit related to restructuring charges | $ | 743 | $ | 2,190 | |||||||||||||||||||||||||||
| Tax benefit due to change in Canada tax law | 1,355 | 1,355 | |||||||||||||||||||||||||||||
| Tax benefit related to release of valuation allowance | 184 | 4,148 | |||||||||||||||||||||||||||||
| $ | 2,282 | $ | 7,693 | ||||||||||||||||||||||||||||