Slide 1: CTS Corporation 4th Quarter 2023 Earnings Call
CTS Corporation 4th Quarter 2023 Earnings Call February 6, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements This document 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, sta
Slide 3: Q4 and Full-Year 2023 Financial Update
$125M Revenue (12)% YoY 34.2% Adjusted Gross Margin1 (215) bps YoY $0.47 Adj. Earnings Per Share1 $(0.09) YoY Q4 2023 Financials Notes: All comparisons vs. same period in prior year unless otherwise noted. 1 Adj. Gross Margin and Adj. Earnings per Share are non-GAAP financial measures. Refer to the
Slide 4: Advancing Strategic Priorities While Navigating Near-Term Operating Challenges
Advancing Strategic Priorities While Navigating Near-Term Operating Challenges 2023 Highlights Strong traction with new customers and applications in Non-transportation end markets with tailwinds from macro-trends Industrial: efficient climate control, flow metering, machine health, nano-positioning
Slide 5: Diversifying Revenue into Attractive Non-transportation End Markets
Diversifying Revenue into Attractive Non-transportation End Markets Industrial Aerospace & Defense Medical ($ Millions) ($ Millions) ($ Millions) Near-Term Softness as Customer Inventories Correct; Tailwinds from Megatrends Support Long-Term Strategy Key 4th Quarter Wins Note: The end market sales f
Slide 6: Continued Progress in Transportation
Continued Progress in Transportation ($ Millions) Revenue Total Booked Business ($ Billions) Chassis Height Sensor Accelerator Modules Brake Position Sensor Belt Tension Sensor Seat Track Position Sensor Seat Belt Buckle Switch Sensor 95% of existing light vehicle portfolio transitions to EVs New pr
Slide 7: FY 2024 Guidance
$2.35 $2.10 Notes: 1 CAGR based on mid point of 2024 guidance 2 Adjusted Diluted EPS is a non-GAAP financial measure. Refer to the Appendix for reconciliations of non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. FY 2024
Slide 8: 4th Quarter Financial Results
4th Quarter Financial Results
Slide 9: Q4 2023 Financial Results
Notes: All comparisons vs. same period in prior year unless otherwise noted. 1 Adj. Diluted EPS, Adj. Gross Margin and Adj. EBITDA Margin are non-GAAP financial measures. Refer to the Appendix for reconciliations of non-GAAP financial measures to the most directly comparable financial measures calcu
Slide 10: Full Year 2023 Revenue and Results
Revenue Notes: All comparisons vs. same period in prior year unless otherwise noted. 1 Adj. Diluted EPS, Adj. Gross Margin and Adj. EBITDA Margin are non-GAAP financial measures. Refer to the Appendix for reconciliations of non-GAAP financial measures to the most directly comparable financial measur
Slide 11: Cash and Debt
Cash and Debt2 $46M Cash Returned to Shareholders in FY 20234 $74M FY 2023 Free Cash Flow3 Strong Balance Sheet Solid Foundation for Strategic M&A $15M FY 2023 Capital Expenditures Borrowed Total Facility Operating Cash Flow1 Prioritizing strong cash flow generation ($ Millions) ($ Millions) Notes:
Slide 12: Q&A
Q&A cts
Slide 13: Appendix
Appendix cts
Slide 14: Non-GAAP Financial Measures
Non-GAAP Financial Measures From time to time, CTS may use non-GAAP financial measures in discussing CTS’ business. These measures are intended to supplement, not replace, CTS’ presentation of its financial results in accordance with U.S. GAAP. CTS believes that the non-GAAP financial measures prese
Slide 15: Regulation G Schedules: Adjusted Gross Margin
Regulation G Schedules ($ Millions, except percentages) Adjusted Gross Margin Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 2021 Gross margin $ 42.1 $ 51.0 $ 190.9 $ 210.5 $ 184.6 Net sales $ 124.7 $ 142.3 $ 550.4 $ 586.9 $ 512.9 Gross margin as a % of net sale
Slide 16: Regulation G Schedules: Adjusted Operating Earnings
Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 2021 Operating earnings $ 16.3 $ 21.6 $ 75.1 $ 93.0 $ 76.5 Net sales $ 124.7 $ 142.3 $ 550.4 $ 586.9 $ 512.9 Operating earnings as a % of net sales 13.0% 15.2% 13.6% 15.8% 14.9% Adjustments to reported operating ear
Slide 17: Regulation G Schedules: Adjusted EBITDA Margin
Regulation G Schedules ($ Millions, except percentages) Adjusted EBITDA Margin Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 2021 Net earnings (loss) $ 15.3 $ 14.9 $ 60.5 $ 59.6 $ (41.9) Net sales $ 124.7 $ 142.3 $ 550.4 $ 586.9 $ 512.9 Net earnings (loss) marg
Slide 18: Regulation G Schedules: Adjusted Net Earnings and Diluted EPS
Regulation G Schedules ($ Millions, except percentages and per share amounts) Adjusted Net Earnings and Adjusted Diluted Earnings Per Share Three Months Ended December 31, 2023 2023 2022 2022 Per share Per share Net earnings (A) $ 15.3 $ 0.49 $ 14.9 $ 0.47 Adjustments to reported net earnings: Restr
Slide 19: Regulation G Schedules: Adjusted Net Earnings and Diluted EPS (Full Year)
Regulation G Schedules ($ Millions, except percentages and per share amounts) Adjusted Net Earnings and Adjusted Diluted Earnings Per Share NOTE: CTS believes that adjusted gross margin, adjusted operating earnings, adjusted EBITDA margin, adjusted net earnings and adjusted diluted earnings per shar
Slide 20: Reconciliation footnotes
Reflected in selling, general and administrative and other (expense) income, net. Reflected in cost of goods sold. Reflected in restructuring charges. Reflected in other (expense) income, net. Reflected in income tax expense (income). For 2020, the discrete tax items relate to items we deemed outsid
Slide 21: Free Cash Flow and Controllable Working Capital
($ Millions, except percentages) Free Cash Flow Regulation G Schedules ($ Millions, except percentages) Controllable Working Capital NOTE: CTS believes that free cash flow is a useful measure because it demonstrates the company’s ability to generate cash. Free cash flow is a non-GAAP measure and sho