CTS Corp (CTS, Financial), a prominent player in the electronics industry, designs and manufactures sensors, electronic components, and actuators for various markets, including aerospace, defense, industrial, IT, medical, telecommunications, and transportation. The company derives most of its revenue from the United States, with additional presence in China, Singapore, the Czech Republic, Taiwan, and other countries.
Performance Overview
In Q2 2024, CTS Corp (CTS, Financial) reported sales of $130 million, a 4% sequential increase from Q1 2024 but a 10% decline year-over-year. The company faced challenges in the transportation end market, which saw a 22% year-over-year decrease in sales. However, sales to non-transportation markets increased by 4% year-over-year.
Net income for the quarter was $15 million, representing 11% of sales, up from $13 million or 9% of sales in Q2 2023. Earnings per diluted share were $0.48, compared to $0.41 in the same period last year. Adjusted earnings per diluted share were $0.54, down from $0.59 in Q2 2023.
Financial Achievements and Challenges
Despite the softness in the transportation market, CTS Corp (CTS, Financial) managed to achieve earnings in line with expectations, thanks to operational improvements. The company also completed the acquisition of SyQwest, LLC for $125 million, enhancing its capabilities in underwater acoustic applications for the defense market.
“We achieved earnings in line with our expectations, despite softness in the transportation end market. We made progress on operational improvements, which helped partially offset the unfavorable impact from lower volumes,” said Kieran O’Sullivan, CEO of CTS Corporation.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $130 million | $145 million |
| Net Income | $15 million | $13 million |
| Earnings Per Diluted Share | $0.48 | $0.41 |
| Adjusted Earnings Per Diluted Share | $0.54 | $0.59 |
| Adjusted EBITDA Margin | 21.7% | 21.3% |
| Operating Cash Flow | $20 million | $23 million |
Income Statement Highlights
CTS Corp (CTS, Financial) reported a gross margin of $46.4 million, down from $50.7 million in Q2 2023. Operating earnings were $17.8 million, slightly down from $18.4 million in the same period last year. The company also reported an adjusted EBITDA of $28.2 million, compared to $31.0 million in Q2 2023.
Balance Sheet and Cash Flow
As of June 30, 2024, CTS Corp (CTS, Financial) had total assets of $725.6 million, down from $741.2 million at the end of 2023. The company reported cash and cash equivalents of $161.2 million. Operating cash flow for the quarter was $20 million, down from $23 million in Q2 2023.
2024 Guidance
CTS Corp (CTS, Financial) updated its 2024 guidance, expecting sales in the range of $525 - $540 million and adjusted diluted EPS between $2.05 - $2.25, including the impact of the SyQwest acquisition.
For more detailed information, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from CTS Corp for further details.
