Financial Performance - Net sales for Q3 2024 were $132,424, a decrease of $2,128 or 1.6% from Q3 2023, primarily due to a 17.1% decline in sales to the transportation market[107]. - For the nine months ended September 30, 2024, net sales were $388,336, down $37,392 or 8.8% from the same period in 2023, with a 16.6% decline in transportation market sales[113]. - Gross margin increased to $49,788 in Q3 2024, up $3,387 or 7.3% from Q3 2023, with gross margin percentage rising from 34.5% to 37.6%[108]. - Gross margin for the nine months ended September 30, 2024 was $141,250, a decrease of $7,545 or 5.1% from the prior year, driven by lower sales volumes[114]. Expenses - SG&A expenses were $22,509 or 17.0% of net sales in Q3 2024, compared to $18,666 or 13.9% in Q3 2023, reflecting a rise in costs[109]. - R&D expenses decreased to $5,031 or 3.8% of net sales in Q3 2024 from $6,321 or 4.7% in Q3 2023, mainly due to timing of non-recurring engineering expense reimbursement[109]. - Restructuring charges were $773 or 0.6% of net sales in Q3 2024, significantly down from $3,226 or 2.4% in Q3 2023, reflecting cost structure alignment efforts[110]. Taxation - The effective income tax rate decreased to 16.8% in Q3 2024 from 25.4% in Q3 2023, attributed to a mix of earnings taxed at lower rates[112]. - The effective income tax rate decreased from 21.4% for the nine months ended September 30, 2023, to 17.4% for the same period in 2024[119]. Cash Flow and Debt - Total cash and cash equivalents decreased from $163,876 at December 31, 2023, to $94,875 at September 30, 2024, with $86,181 held outside the United States[120]. - Net cash provided by operating activities increased to $73,335 for the nine months ended September 30, 2024, compared to $56,742 for the same period in 2023[121]. - Net cash used in investing activities was $(134,456) for the nine months ended September 30, 2024, primarily due to the SyQwest acquisition[122]. - Net cash used in financing activities decreased to $(7,494) for the nine months ended September 30, 2024, from $(39,937) in the same period of 2023[123]. - Total long-term debt rose from $67,500 at December 31, 2023, to $102,700 at September 30, 2024[120]. Acquisitions - The company acquired SyQwest for $121.9 million, enhancing its position in the defense market, funded by cash and borrowings[106]. - The company acquired SyQwest for $121.9 million, enhancing its capabilities in the defense market[126]. Customer Concentration - Significant customers included Cummins Inc. at 13.0% and Toyota Motor Corporation at 12.1% of total net sales for the nine months ended September 30, 2024[128]. Financing and Liquidity - The company has $295,660 available under its Revolving Credit Facility as of September 30, 2024[124]. - The company plans to pursue additional equity and debt financing to enhance liquidity and fund acquisitions[120].

Financial Data and Key Metrics Changes - Third quarter revenue was $132 million, down 1.6% from the same quarter in 2023 [5] - Adjusted earnings per share (EPS) for the quarter was $0.63, up 17% year-over-year [6] - Adjusted gross margin improved by 416 basis points to 38.6% compared to the previous year [16] Business Line Data and Key Metrics Changes - Diversified medical, aerospace and defense, and industrial sales increased by 18%, while transportation sales decreased by 17% year-over-year [5] - Medical sales were up 3% from the same period in 2023, with bookings in medical markets up 19% year-over-year [6][7] - Aerospace and defense sales increased by 89% year-over-year, with a 56% increase excluding the SyQwest acquisition [7][8] Market Data and Key Metrics Changes - Book-to-bill ratio improved to 1 from 0.92 in the same quarter last year, indicating positive trends in the industrial end market [5] - Industrial bookings were up 17% year-over-year, reflecting gradual recovery [6] - Transportation sales were $63 million, down approximately 17% from the same period last year [10] Company Strategy and Development Direction - The company continues to focus on its diversification strategy, with revenue from diversified markets accounting for approximately 52% of overall revenue [2] - The strategy includes moving from a component supplier to a supplier of sensors, transducers, and subsystems, particularly in the defense sector [10] - The company aims to expand its customer base and range of applications in medical, industrial, aerospace, and defense markets [14] Management's Comments on Operating Environment and Future Outlook - Management anticipates softness in the medical market in the fourth quarter due to inventory adjustments but expects overall market growth moving into next year [9][14] - The defense sector is expected to remain solid, supported by a strong backlog of orders [14] - The transportation market is facing challenges, particularly in China, with expectations of continued softness in commercial vehicle-related revenue throughout 2024 [15] Other Important Information - The SyQwest acquisition contributed $3.6 million in revenue during the quarter and is expected to reach $10 million to $14 million for the year [25][33] - The company generated $35 million in operating cash flow in the third quarter, up from $22 million in the same quarter of 2023 [18] - The company repurchased 245,000 shares totaling approximately $12 million during the quarter [19] Q&A Session Summary Question: Gross margin performance - Management attributed the gross margin improvement to a favorable mix change and continuous improvement initiatives [21][22][23] Question: R&D spending fluctuations - R&D spending fluctuations were primarily due to the timing of customer reimbursements [24] Question: SyQwest's contribution - SyQwest's integration is progressing well, with sales of $3.6 million in the quarter, and it is expected to be accretive to gross margin and EBITDA [25][26] Question: Market expectations for 2025 - Management indicated uncertainty in the transportation market but positive expectations for industrial and defense sectors [27][28] Question: Opportunities with local Chinese OEMs - The company is selectively working with local Chinese OEMs and sees potential in electrification solutions [30][31] Question: Debt repayment strategy - The company plans to focus on M&A and share buybacks before prioritizing debt repayment [37]

LISLE, Ill., Oct. 29, 2024 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS), a leading global designer and manufacturer of custom engineered solutions that "Sense, Connect and Move," today announced third quarter 2024 results. "We delivered improved earnings and generated stronger cash flow in the third quarter. Margins expanded as we made progress on operational improvements," said Kieran O'Sullivan, CEO of CTS Corporation. "Near term market conditions remain challenging. We continue to advance our diversif ...

LISLE, Ill., Oct. 14, 2024 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS) will release its earnings for the third quarter 2024 at approximately 8:00 a.m. (ET) on Tuesday, October 29, 2024. A conference call to discuss third quarter 2024 results with management is scheduled for Tuesday, October 29, 2024 at 10:00 a.m. (ET). The dial-in numbers for access from the U.S. are: +1-833-470-1428 (Toll-Free) and +1-404-975-4839 (Local), if calling from outside the U.S., please refer to Global Dial In Numbers to iden ...

LISLE, Ill., Sept. 06, 2024 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS), announced today that Kieran O'Sullivan, President and Chief Executive Officer, will participate in the Sidoti Small Cap Conference on September 18, 2024, at 4 p.m. (EDT). The conference will be held virtually. You may access a live webcast of the event using this link. More information and access to the event can be found on the Sidoti Conference website. https://sidoti.com/events/september-sidoti-small-cap-virtual-conference-2024 ...

Blue Biofuels Inc. Achieves Major Milestone in Commercializing Cellulose-to-Sugar (CTS) Technology with Cellulosic Ethanol from Multiple Feedstocks Palm Beach Gardens, FL, Sept. 03, 2024 (GLOBE NEWSWIRE) -- Blue Biofuels Inc. (OTC: BIOF) is pleased to announce another significant advancement of its proprietary Cellulose-to-Sugar (CTS) technology. The company has successfully produced cellulosic ethanol in high yields from multiple biomass feedstocks, showing the flexibility of its patented process. This ach ...

TORONTO and GATINEAU, QC, Aug. 6, 2024 /PRNewswire/ - Converge Technology Solutions Corp. ("Converge" or the "Company") (TSX: CTS) is pleased to announce its participation in the Canaccord Genuity 44th Annual Growth Conference. The conference will take place in Boston, MA and brings together institutional investors from across the globe with some of the best and most promising growth companies in core sectors - Technology, Healthcare & Life Sciences, Sustainability, Industrials, and Consumer & Retail. Shaun ...

Critical Accounting Policies and Estimates 31 Significant Customers | --- | --- | --- | --- | --- | |------------------------------|------------------------------------|-----------------------------|------------------------------------|---------------------------| | | Three Months \nJune 30, 2024 | Ended \nJune 30, 2023 | Six Months \nJune 30, 2024 | Ended \nJune 30, 2023 | | Cummins Inc. | 13.1 % | 18.6 % | 13.4 % | 16.4 % | | Toyota Motor Corporation | 11.9 % | 12.6 % | 12.6 % | 11.7 % | Forward‑Looking S ...

Financial Data and Key Metrics Changes - The company reported sales of $130 million in Q2 2024, a decline of 10% from Q2 2023, but an increase of 4% sequentially [15][81] - Adjusted diluted earnings per share were $0.54, down 10% year-over-year and up 14% sequentially [28][81] - Adjusted gross margin in Q2 was 35.8%, an improvement of 80 basis points from the previous year, but down 45 basis points sequentially due to one-time charges [11][81] Business Line Data and Key Metrics Changes - Aerospace and defense sales increased by 33% year-over-year and 41% sequentially, with strong order backlogs [8] - Non-transportation sales were up 4% year-over-year and 11% sequentially, while transportation sales decreased by 22% year-over-year and 3% sequentially [15][26] - Medical markets saw a 6% sequential increase and a 4% year-over-year increase in sales [16] Market Data and Key Metrics Changes - North American light vehicle market is expected to be in the range of 15.5 million to 16 million units, while European production is forecasted at 17 million units, showing some softness [9] - China volumes are expected to be around 28 million units, with electric vehicle penetration rates softening in some regions [9] Company Strategy and Development Direction - The acquisition of SyQwest is aimed at strengthening the company's position in the defense market and diversifying its customer base [7][12] - The company anticipates continued growth in defense and medical markets, while expecting more modest growth in industrial and distribution sectors [18][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects for the aerospace and defense market, bolstered by the SyQwest acquisition [8][18] - The company expects a challenging environment in the transportation sector, particularly in commercial vehicles, with a more modest growth outlook for the second half of 2024 [19][37] Other Important Information - The company generated $20 million in operating cash flow in Q2 2024, with a cash balance of $161 million as of June 30, 2024 [87] - The SyQwest acquisition is expected to add $10 million to $14 million in revenue for the remainder of the year [16] Q&A Session Summary Question: Will the SyQwest transaction be accretive, neutral, or dilutive to EPS? - Management indicated it will be accretive in 2025, with a small unfavorable impact in 2024 in the range of $0.04 to $0.05 [1][2] Question: What are the expectations for transportation sales in the second half of the year? - Management expects a decrease in transportation sales, particularly in the commercial vehicle market, with a challenging outlook for the remainder of 2024 [35][36] Question: How will the SyQwest acquisition impact operating expenses? - Management stated that clarity on operating expenses will take time as they integrate the business [45] Question: What is the outlook for gross margins in the second half of the year? - Management expects modest improvements in gross margins due to changes in business mix and operational efficiencies [49] Question: Is the company still looking for potential acquisitions post-SyQwest? - Management confirmed they are still open to acquisitions but will focus on integrating SyQwest [41]

| --- | --- | --- | --- | |--------------------------------|-------|-------|-------| | | | | | | CTS Corporation | | | | | | | | | | 2nd Quarter 2024 Earnings Call | | | | | | | | | | July 30, 2024 | | | | 2 CTS refers to the forward-looking measures of book-to-bill ratio and total booked business in this document. Book-to-bill ratio is the ratio of customer orders received to revenues recorded for the same period. Although the book-to-bill ratio reflects firm customer orders, changes such as terminations, ...