CTS(US:CTS)2025-10-28 18:06Financial Performance - Net sales for Q3 2025 were $142,970, an increase of $10,586 or 8.0% from Q3 2024, with diversified end markets up by $15,070 or 21.7%[111] - Gross margin for Q3 2025 was $55,341, a 12.5% increase from Q3 2024, with gross margin percentage rising from 37.2% to 38.7%[112] - Net earnings for Q3 2025 were $13,687, a decrease of 24.3% from $18,084 in Q3 2024, with diluted earnings per share falling from $0.59 to $0.46[111] - For the nine months ended September 30, 2025, net sales were $404,047, an increase of $15,751 or 4.1% from the same period in 2024[118] - Gross margin for the nine months ended September 30, 2025 was $154,320, a 9.7% increase from $140,651 in 2024, with gross margin percentage rising from 36.2% to 38.2%[119] Expenses - SG&A expenses in Q3 2025 were $27,222, representing 19.0% of net sales, up from $22,509 or 17.0% in Q3 2024[113] - R&D expenses for Q3 2025 were $6,901, or 4.8% of net sales, compared to $5,031 or 3.8% in Q3 2024, reflecting continued investment in product development[114] - SG&A expenses for the nine months ended September 30, 2025 were $73,922, or 18.3% of net sales, compared to $66,100 or 17.0% in 2024[120] - R&D expenses for the nine months ended September 30, 2025 were $19,416, or 4.8% of net sales, up from $17,718 or 4.6% in 2024[121] Restructuring and Charges - Restructuring charges for the nine months ended September 30, 2025 were $1,028, or 0.3% of net sales, down from $3,657 or 0.9% in 2024[122] Interest and Taxes - Interest expense increased to $3,398 million for the nine months ended September 30, 2025, compared to $2,942 million in 2024, primarily due to higher borrowings for the SyQwest acquisition[123] - Interest income decreased to $1,603 million in 2025 from $3,800 million in 2024, attributed to lower investments in high-yield deposit accounts following the SyQwest acquisition[123] - Effective tax rate rose to 22.5% for the nine months ended September 30, 2025, up from 17.4% in 2024, due to a change in the mix of earnings taxed at higher rates[124] Cash Flow and Debt - Cash and cash equivalents increased to $110,296 million as of September 30, 2025, from $94,334 million at December 31, 2024, with a significant portion held outside the United States[126] - Net cash provided by operating activities was $72,893 million for the nine months ended September 30, 2025, compared to $73,335 million in 2024[127][128] - Net cash used in investing activities decreased significantly to $12,542 million in 2025 from $134,455 million in 2024, primarily due to the SyQwest acquisition payments in 2024[129] - Net cash used in financing activities increased to $47,404 million in 2025 from $7,494 million in 2024, driven by treasury stock purchases and debt payments[130][131] - Total long-term debt was $90,700 million as of September 30, 2025, down from $92,300 million at December 31, 2024[126] - The company maintains a total credit facility of $400,000 million, with $307,660 million available as of September 30, 2025, subject to covenant restrictions[132][135] Customer Concentration - Significant customers include Toyota Motor Corporation, accounting for 11.5% of total net sales in the nine months ended September 30, 2025, and Cummins Inc. at 8.7%[138]