Cts Corporation · NYSE:CTS
Cts — Q3 2022 Earnings Presentation
18 slides from Cts's earnings presentation, Oct 26, 2022
Slide 1: CTS Corporation 3rd Quarter 2022 Earnings Call
CTS Corporation 3rd Quarter 2022 Earnings Call Oct 26, 2022
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: Q3 2022 – Executing diversification strategy to deliver revenue and earnings growth
Q3 2022 – Executing diversification strategy to deliver revenue and earnings growth Third Quarter • Organic growth +17.1% • Non-transportation revenues +22.5%, organic 8.2% $152M 36.6% $0.62 • Acquisitions added $8.6m in sales in 3Q Sales Adj. Gross Margin Adj. diluted EPS • Transportation revenues
Slide 4: Establishing leadership in non-transportation end markets
Establishing leadership in non-transportation end markets Industrial Medical Aerospace & Defense Revenue Revenue Revenue ($ Millions) ($ Millions) ($ Millions) $133 $125 +27% $104 $48 $49 +35% $47 $39 $39 $38 +6% 2020 2021 Q3 YTD 2022 2020 2021 Q3 YTD 2022 2020 2021 Q3 YTD 2022 Added new customers i
Slide 5: Strategic acquisitions fueling diversification – M&A as a catalyst
Strategic acquisitions fueling diversification – M&A as a catalyst Enhancing Piezoceramic Technology and Geographic Reach Pre 2016 2016 2017 2022 Current Bulk Single Crystal Tape Cast Medical Therapeutics Growing Technology Technology Technology Europe Defense Piezoceramic Platform Building a Strong
Slide 6: CTS Portfolio Available Market: Light Vehicle portfolio carries over to EVs
>95% Light Vehicle portfolio carries over to Electric Vehicles Accelerator Modules Chassis Height Sensor Accelerator Modules Chassis Height Sensor eBrake™ CTS a Portfolio Seat Belt Buckle Seat Track Position Seat Belt Buckle Seat Track Position AC Motor Switch Sensor Sensor Switch Sensor Sensor Curr
Slide 7: Battery Electric Vehicle Platform wins in Q3 2022 – Total 23 in 2022
6 Battery Electric Vehicle Platform wins in Q3 2022 – Total 23 in 2022, 44 Total 23 YTD 2022 EV Wins ~8% of 2022 light vehicle sales from BEV+Hybrid platforms, Goal: >25% by 2025 7
Slide 8: FY 2022 Guidance
FY 2022 Guidance Key Outlook Assumptions Revenue Adj. Diluted EPS ($ Millions) 2020-2022 2020-2022 - Strong demand from medical & CAGR 11.6% 3 $595 CAGR 30.3% 3 $2.55 $585 $2.40 aerospace/defense customers $513 - Softer outlook in industrial end $469 $424 $445 $1.93 $1.90 market & distribution chann
Slide 9: 3rd Quarter 2022 Financial Results
3rd Quarter 2022 Financial Results
Slide 10: Q3 2022 Financial Summary
Q3 2022 Financial Summary Highlights Revenue ($ millions) • Revenue up 24.1% vs. Q3 2021, up 4.8% vs. Q2 2022 $152 $145 • Non-transportation sales up 22.5% vs. Q3 2021, organic growth +8.2% $122 • Transportation sales up 25.7% vs. Q3 2021, up 4.9% vs. Q2 2022 Q3 2021 Q2 2022 Q3 2022 • Currency impac
Slide 11: Consistent strong cash flow generation
Consistent strong cash flow generation Operating Cash Flow Cash and Debt ($ Millions) ($ Millions) $96 $400 Total Facility $86 $77 $148 $85 Borrowed 2020 2021 YTD Q3 2022 Cash Debt Note: YTD 2022 results include $34m from Note: Cash and Debt balance as of Sep 30, 2022 US pension plan termination Q3
Slide 12: Q&A
Q&A cts
Slide 13: Appendix
Appendix cts
Slide 14: Regulation G Schedules – Adjusted Diluted EPS
Regulation G Schedules Adjusted Diluted EPS Q3 Q2 Q1 Year-to-Date Full Year 2022 2021 2022 2022 2022 2021 2021 2020 2019 Diluted earnings (loss) per share $ 0.37 $ (1.97) $ 0.39 $ 0.63 $ 1.38 $ (1.58) $ (1.30) $ 1.06 $ 1.09 Tax affected adjustments to reported diluted earnings (loss) per share: Rest
Slide 15: Regulation G Schedules – Adjusted EBITDA
Regulation G Schedules Adjusted EBITDA ($ Millions, except percentages) Q3 Q2 Q1 Year-to-Date Full Year 2022 2021 2022 2022 2022 2021 2021 2020 2019 Net earnings (loss) $ 11.8 $ (63.9) $ 12.6 $ 20.2 $ 44.6 $ (51.0) $ (41.9) $ 34.7 $ 36.1 Depreciation and amortization expense 8.0 6.7 7.0 6.7 21.7 20.
Slide 16: Regulation G Schedules – Adjusted Gross Margin
Regulation G Schedules Adjusted Gross Margin ($ Millions) Q3 Q2 2022 2021 2022 Gross margin $ 53.3 $ 45.7 $ 51.8 Adjustment to reported gross margin: Inventory fair value step-up $2.2 - $0.5 Adjusted gross margin $ 55.6 $ 45.7 $ 52.4 Net sales $ 151.9 $ 122.4 $ 145.0 Adjusted gross margin as a % of
Slide 17: Regulation G Schedules – Free Cash Flow
Regulation G Schedules Free Cash Flow ($ Millions) Year-to- Q3 Date Full Year 2022 2022 2021 2020 2019 Net cash provided by operating activities $ 60.4 $ 95.7 $ 86.1 $ 76.8 $ 64.4 Capital expenditures (2.3) (9.3) (15.6) (14.9) (21.7) Free cash flow $ 58.1 $ 86.5 $ 70.5 $ 61.9 $ 42.7 Free Cash Flow a
Slide 18: Regulation G Schedules – Debt to Capitalization
Regulation G Schedules Debt to Capitalization ($ Millions) Q3 As of December 31 2022 2021 2021 2020 2019 Total debt (A) $ 85.5 $ 50.0 $ 50.0 $ 54.6 $ 99.7 Total shareholders' equity (B) $ 490.6 $ 457.4 $ 463.6 $ 423.7 $ 405.2 Total capitalization (A+B) $ 576.1 $ 507.4 $ 513.6 $ 478.3 $ 504.9 Total d