CTS(US:CTS)2026-02-10 13:00Financial Performance - Fourth quarter 2025 sales were $137 million, a 9% increase year-over-year, with diversified end-market sales up 16%[5] - Full-year 2025 sales reached $541 million, reflecting a 5% year-over-year growth, while sales to transportation end markets decreased by 7%[5] - Net income for Q4 2025 was $20 million, or 14.4% of sales, compared to $12 million, or 9.1% of sales in Q4 2024[5] - CTS reported a net income of $65 million for the full year 2025, or 12.1% of sales, compared to $56 million, or 10.8% of sales in 2024[5] - Net earnings for 2025 reached $65.3 million, or $2.19 per share, compared to $55.5 million, or $1.80 per share in 2024, reflecting a 17.6% increase in net earnings year-over-year[26] - Net sales for 2025 were $541.3 million, up from $514.8 million in 2024, representing a growth of 5.0%[26] - Adjusted net earnings for 2025 were $66.3 million, or $2.23 per share, compared to $65.3 million, or $2.12 per share in 2024, indicating a 1.5% increase in adjusted net earnings[26] Earnings and Margins - Diluted EPS for Q4 2025 was $0.67, an increase of $0.29 from $0.38 in Q4 2024[5] - Adjusted gross margin for Q4 2025 improved to 39.1%, up 150 basis points from 37.6% in Q4 2024[5] - Gross margin for Q4 2025 was $53.7 million, representing 39.1% of net sales, compared to $46.9 million and 37.1% in Q4 2024[22] - Adjusted operating earnings for Q4 2025 increased to $23.4 million, or 17.1% of net sales, up from $20.7 million and 16.3% in Q4 2024[23] - Adjusted EBITDA for Q4 2025 was $32.6 million, with an EBITDA margin of 23.7%, compared to $29.4 million and 23.2% in Q4 2024[24] - Adjusted gross margin for the twelve months ended December 31, 2025, was $208.2 million, or 38.5% of net sales, compared to $190.4 million and 37.0% in the previous year[22] - Net earnings as a percentage of net sales improved to 12.1% in 2025 from 10.8% in 2024[26] Cash Flow and Capital Expenditures - Operating cash flow for Q4 2025 was $29 million, up $4 million from $25 million in Q4 2024[5] - Free cash flow for 2025 was $86.4 million, an increase from $79.6 million in 2024, showing a growth of 9.1%[32] - Capital expenditures for 2025 totaled $15.7 million, down from $18.6 million in 2024, representing a decrease of 15.6%[33] - Operating cash flow as a percentage of net earnings was 148% in Q4 2025, compared to 216% in Q4 2024[32] Strategic Initiatives - Diversified end-markets now account for 57% of total revenue, indicating progress in strategic priorities[2] - The company expanded its product offerings in the transportation market and secured new business awards during the quarter[2] Other Financial Metrics - Controllable working capital as a percentage of annualized sales decreased to 16.9% in 2025 from 17.3% in 2024[31] - Depreciation and amortization expense for 2025 was $34.5 million, an increase from $30.9 million in 2024[35] - Stock-based compensation expense for 2025 was $4.9 million, down from $5.7 million in 2024[35] - The company reported total adjustments to operating earnings of $0.7 million for Q4 2025, compared to $2.6 million in Q4 2024[23] - Environmental charges for Q4 2025 amounted to $0.8 million, down from $1.9 million in Q4 2024[23] - The company incurred restructuring-related charges of $0.4 million in Q4 2025, consistent with Q4 2024[23]