Cts Corporation · NYSE:CTS
Cts — Q1 2023 Earnings Presentation
20 slides from Cts's earnings presentation, Apr 27, 2023
Slide 1: CTS Corporation 1st Quarter 2023 Earnings Call
CTS Corporation 1st Quarter 2023 Earnings Call April 27, 2023
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: Q1 2023 – Driving Progress on Diversification and Electrification Strategy
Non-transportation revenues up 5% Transportation revenues down 6% primarily due to semiconductor shortages Acquisitions added $11M in sales Organic revenue down 8% New business wins $152M, 6 EV platform wins Book-to-bill ratio 0.96, added 9 new customers Generated $11M operating cash flow Solid Resu
Slide 4: Diversifying into Attractive Non-transportation End Markets
Diversifying into Attractive Non-transportation End Markets Industrial Aerospace & Defense Medical Wins in temperature sensing solutions across HVAC and precision instruments Expanded distributor partnerships across temperature sensing in North America and Europe New customers added in nano position
Slide 5: Continued Progress in Transportation
Continued Progress in Transportation ($ 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 6: Cash Returned to Shareholders
Cash Returned to Shareholders Dividend & Buybacks 20-40% of FCF Capital Structure Leverage 1.0 – 2.5x Operating Cash Flow 15-17% of Sales Growth Capex ~4% of Sales Acquisitions 60-80% of FCF Capital Allocation Priorities Maintain healthy Balance Sheet Disciplined organic investments Growth resources
Slide 7: Progressing on Our ESG Initiatives
Published inaugural ESG Report highlighting ESG progress Continued advancing our goal of deriving more than 25% of sales of components for light vehicles from electrified platforms. 6 new wins for electrified vehicle platforms in Q1 2023 Employees devoted over 1,100 hours to community service events
Slide 8: FY 2023 Guidance
2020-2023 CAGR 32% 1 $2.70 $2.40 Notes: 1 CAGR based on mid point of 2023 guidance 2 Refer to Appendix for reconciliation from Diluted EPS to Adjusted Diluted EPS FY 2023 Guidance Revenue ($ Millions) Adjusted Diluted EPS $580 $640 2020-2023 CAGR 13% 1 Solid demand from medical & aerospace/defense c
Slide 9: 1st Quarter and Financial Results
1st Quarter and Financial Results
Slide 10: Q1 2023 Financial Summary
Revenue down 1% vs. Q1 2022, up 3% vs. Q4 2022 Non-transportation revenue up 5% vs. Q1 2022, acquisitions added $11 million Transportation revenue down 6% vs. Q1 2022 primarily due to IC supply issue Foreign exchange impact on revenue unfavorable $2.3 million Foreign exchange impact on gross margin
Slide 11: Cash and Debt
Cash and Debt $10M Returned to Shareholders in Q1 $7M Q1 Free Cash Flow Strong Balance Sheet Net Cash Position Solid Foundation for Strategic M&A $4M Q1 Capital Expenditures Note: Cash and Debt balance as of March 31, 2023 Borrowed Total Facility Note: 2022 results include $27m from US pension plan
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: Adjusted Diluted EPS Regulation G Schedules
Adjusted Diluted EPS Regulation G Schedules Q1 Q4 Q1 2023 2022 2022 2022 2021 2020 Diluted earnings (loss) per share $0.58 $0.47 $0.63 1.85 $ (1.30) $ $1.06 Tax affected adjustments to reported diluted earnings (loss) per share: Restructuring charges 0.02 0.01 0.01 0.05 0.06 0.04 Foreign currency (g
Slide 16: Regulation G Schedules: Adjusted EBITDA Margin
Regulation G Schedules ($ Millions) Adjusted EBITDA Margin Q1 Q4 Q1 2023 2022 2022 2022 2021 2020 Net earnings (loss) 18.3 $ 14.9 $ 20.2 $ 59.6 $ (41.9) $ 34.7 $ Net sales 146.0 $ 142.3 $ 147.7 $ 586.9 $ 512.9 $ 424.1 $ Net earnings (loss) margin 12.6% 10.5% 13.7% 10.2% -8.2% 8.2% Depreciation and a
Slide 17: Regulation G Schedules: Adjusted Gross Margin
Regulation G Schedules ($ Millions) Adjusted Gross Margin Q1 Q4 Q1 2023 2022 2022 2022 2021 2020 Gross margin 51.7 $ 51.0 $ 54.3 $ 210.5 $ 184.6 $ 139.1 $ Net sales 146.0 $ 142.3 $ 147.7 $ 586.9 $ 512.9 $ 424.1 $ Gross margin as a % of net sales 35.4% 35.8% 36.8% 35.9% 36.0% 32.8% Adjustment to repo
Slide 18: Regulation G Schedules: Adjusted Net Earnings
Regulation G Schedules ($ Millions) Adjusted Net Earnings Q1 Q4 Q1 2023 2022 2022 2022 2021 2020 Net earnings (loss) (A) 18.3 $ 14.9 $ 20.2 $ 59.6 $ (41.9) $ 34.7 $ Net sales 146.0 $ 142.3 $ 147.7 $ 586.9 $ 512.9 $ 424.1 $ Net earnings (loss) as a % of net sales 12.6% 10.5% 13.7% 10.2% -8.2% 8.2% Ad
Slide 19: Regulation G Schedules: Free Cash Flow
($ Millions) Free Cash Flow Regulation G Schedules Q1 Q4 Q1 2023 2022 2022 2022 2021 2020 Net cash provided by operating activities 11.2 $ 25.5 $ 19.3 $ 121.2 $ 86.1 $ 76.8 $ Capital expenditures (4.5) (5.1) (3.4) (14.3) (15.6) (14.9) Free cash flow 6.6 $ 20.4 $ 15.9 $ 106.9 $ 70.5 $ 61.9 $ Full Yea
Slide 20: Regulation G Schedules: Controllable Working Capital
($ Millions) Controllable Working Capital Regulation G Schedules 2023 2022 2022 2021 2020 Net accounts receivable 97.7 $ 95.1 $ 90.9 $ 82.2 $ 81.0 $ Net inventory 63.5 $ 52.5 $ 62.3 $ 49.5 $ 45.9 $ Accounts payable (53.4) $ (60.0) $ (53.2) $ (55.5) $ (50.5) $ Controllable working capital 107.8 $ 87.