Cts Corporation · NYSE:CTS
Cts — Investor Presentation (October 2020)
21 slides from Cts's investor presentation, Oct 29, 2020
Slide 1: October 2020 Investor Presentation
October 2020 Investor Presentation
Slide 2: Forward-looking statements
This presentation contains statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, any financial or other guidance, statements that reflect ou
Slide 3: Solid Foundation With Opportunities For Growth
Solid Foundation With Opportunities For Growth Sales/Technical Office Manufacturing Facility Note: Sales by region and end market based on trailing twelve months sales as of September 30, 2020 We aim to be a leading provider of sensing and motion devices as well as connectivity components, enabling
Slide 4: Broad Product Portfolio Around Targeted Strategy
Broad Product Portfolio Around Targeted Strategy Controls Pedals Piezoelectric Products Position Sensors Switches Temperature Sensors Transducers EMI/RFI Filters Frequency Control Products RF Filters Specialty Capacitors Specialty Resistors Piezoelectric Products Rotary Actuators
Slide 5: Transportation
Transportation Motorcycles Light Vehicles Electric/Hybrid Vehicles Commercial Vehicles/Off-Road Market Sectors Key Customers Relevant Products Accelerator Pedals Position Sensors Temperature Sensors Current Sensors Smart Actuator
Slide 6: Industrial
Industrial Piezoelectric Components Transducers Sensors & Controls Switches EMI/RFI Filters Temperature Sensors Flow Metering Inkjet Print Heads HVAC Systems Market Sectors Commercial Sonar Key Customers Relevant Products
Slide 7: Medical
Medical Piezoelectric Components Sensors & Controls Switches Frequency Control Products EMI/RFI Filters Equipment Control Panel Ultrasonic Imaging Therapeutic Ultrasound Market Sectors Dental Equipment Key Customers Relevant Products
Slide 8: Aero & Defense
Aero & Defense Piezoelectric Components Transducers RF Filters Temperature Sensors Frequency Control Products Relevant Products Market Sectors Key Customers Sonobuoys Hydrophones Torpedo/Missile Control Airplane Communications
Slide 9: Telecom & IT
Telecom & IT Piezoelectric Components RF Filters EMI/RFI Filters Frequency Control Products Relevant Products Market Sectors Key Customers Macro Cell Base Stations Small Cell Base Stations Satellite Communication Wireline/ Network Switching
Slide 10: End Markets Growing Mid-Single Digits
End Markets Growing Mid-Single Digits Transportation Industrial Medical Aero & Defense Telecom & IT SAM $1.9B Booked Business, Share Gains Actuators – Asia/EU customers Sensors for Electric/Hybrid Inductive Accelerator Pedals Increased Sensor Content 3D and textile printing Applications in flow, lev
Slide 11: Strategic M&A Approach
Strategic M&A Approach Expand Product Range Broaden Geographic Reach Enhance Technology Portfolio Strengthen Customer Relationships Case Study: Successfully Built Broad Piezoelectric Ceramic Growth Platform Single Crystal Technology Double-Digit Growth 2016 Bulk Technology Single-Digit Growth Pre 20
Slide 12: Balanced Capital Deployment Approach
Balanced Capital Deployment Approach Capital Structure Leverage = 1.0x - 2.5x EBITDA Operating Cash Flow Return Capital to Shareholders ~4% of Sales* 20-40% of Free Cash Flow 12-15% of Sales 60-80% of Free Cash Flow Growth Acquisitions Investment Dividends & Buybacks *4.6% in 2019 Not adjusted for C
Slide 13: Financial Performance Trend
Financial Performance Trend Adjusted Earnings Per Share Sales ($ Millions) Due to ongoing market uncertainties, management has withdrawn its guidance for 2020
Slide 14: Financial Framework
Financial Framework 2012 2019 Long-Term Target Range Gross Margin 30.0% 33.6% 34-37% SG&A Expense 20.7% 15.0% 13-15% R&D Expense 6.9% 5.5% 5-7% CapEx 2.6% 4.6% ~4% Targeting 10% Annual Growth (Organic + Inorganic) Not adjusted for Covid-19 impact
Slide 15: Adjusting In Response To Impact Of COVID-19
Adjusting In Response To Impact Of COVID-19 Adequate Liquidity Strong cash & debt availability ($ Millions) $300 $132 $106 Borrowed Total Facility Borrowed $50 million in Q1 2020 to build cash buffer Well within debt covenant limits Continued covenant compliance expected Actions Prioritize employee
Slide 16: Appendix
Appendix cis
Slide 17: CTS Core Values
CTS Core Values cis 4 Play to Win © Simplicity ro Responsiveness & Solution Oriented
Slide 18: Financial Summary
($ Millions, except percentages and Adjusted Diluted EPS) Financial Summary Note: See Regulation G reconciliations from GAAP to Non-GAAP measures and adjustments. Net Sales Adjusted Diluted EPS Operating Cash Flow Total Debt / Capitalization Depreciation and Amortization Adjusted EBITDA Adjusted EBI
Slide 19: Regulation G Schedules: Adjusted Gross Margin
Regulation G Schedules ($ Millions, except percentages) Adjusted Gross Margin 2020 2019 2020 2019 2019 2018 2017 Gross margin 36.9 $ 37.1 $ 96.4 $ 118.9 $ 157.6 $ 165.0 $ 140.4 $ Adjustments to reported gross margin: Pension settlement charge - - - - - - 4.8 Adjusted gross margin 36.9 $ 37.1 $ 96.4
Slide 20: Regulation G Schedules: Adjusted EBITDA
Regulation G Schedules ($ Millions, except percentages) Adjusted EBITDA 2020 2019 2020 2019 2019 2018 2017 Net earnings 11.1 $ 2.7 $ 19.7 $ 26.1 $ 36.1 $ 46.5 $ 14.4 $ Depreciation and amortization expense 6.7 6.1 19.8 18.0 24.6 22.5 20.7 Interest expense 0.9 0.8 2.6 1.7 2.6 2.1 3.3 Tax expense 3.2
Slide 21: Regulation G Schedules: Adjusted Diluted EPS
Regulation G Schedules Adjusted Diluted EPS ($ Millions, except percentages) Total Debt to Capitalization 2020 2019 2020 2019 2019 2018 2017 Diluted earnings per share 0.34 $ 0.08 $ 0.61 $ 0.79 $ 1.09 $ 1.39 $ 0.43 $ Tax affected adjustments to reported diluted earnings per share: Restructuring char