CTS(US:CTS)2024-10-29 19:50Financial 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].