Slide 1: Investor Presentation August 2016
Investor Presentation August 2016
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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, stat
Slide 3: Our Company
2015 Sales: $382 Million Sales by Market: Transportation – 67% Industrial – 14% Defense / Aerospace – 5% Medical – 4% Information Technology – 4% Communications – 3% Other – 3% Sales by Region: Americas – 56% Asia – 31% Europe – 13% Our Company Ticker: CTS (NYSE) Founded: 1896 Busi
Slide 4: Our History - Years of Innovation
Our History - 120 Years of Innovation 4
Slide 5: Our Vision
Our Vision We aim to be a leading provider of sensing and motion devices as well as connectivity components, enabling an intelligent and seamless world. 5
Slide 6: CTS Addressable Markets Growing to $6B by 2020
CTS Addressable Markets Growing to $6B by 2020 with Mid-Single Digit Growth Rates 6 Hydrophones for sonar applications Military communication Organic Growth Drivers 100GB & 400GB Wireline Networks Small Cell Deployment 3D and textile printing New products for industrial controls LV Tur
Slide 7: Product Applications in Passenger and Commercial Vehicles
Product Applications in Passenger and Commercial Vehicles Engine Efficiency Accelerator Pedal Module Current Sensor Gear Position Sensor Throttle Position Sensor Turbo Actuator Turbo Position Sensor Variable Valve Lift Sensor Key Customers New European Customer #1 New European Customer
Slide 8: Product Applications in Industrial
Key Customers Industrial Printers, HVAC, Automation and Safety Products Piezo micro-actuators Switches Encoders Frequency Control EMI Filters Product Applications in Industrial 8 Industrial Inkjet Printers Industrial HVAC
Slide 9: Product Applications in Defense / Aerospace
Key Customers Military Sonar and Communication Products Piezo hydrophones Piezo sonar arrays Frequency Control EMI Filters Product Applications in Defense / Aerospace 9 Unmanned Aerial Vehicles (UAV) Maritime Applications
Slide 10: Product Applications in Medical
Product Applications in Medical Key Customers Ultrasound / IVUS, Infusion Pumps, CPAPs and other medical devices Single Crystal Piezo Bulk Piezo Encoders Frequency Control Piezo micro-valves Switches Joysticks 10 Ultrasound Equipment Infusion Pumps CPAP Machines
Slide 11: Positioning for Growth with Fundamental Market Trends
Positioning for Growth with Fundamental Market Trends Smart Products Applications Vehicles with added intelligence, safety and connectivity Improved medical diagnostics and drug delivery Smart Home sensing and new technology for human machine interface Powertrain, transmission and exhaust se
Slide 12: Inorganic Growth - Targeted Acquisitions
Inorganic Growth - Targeted Acquisitions Disciplined approach to acquisitions: Returns in excess of cost of capital Accretive to earnings Maintain balance sheet strength Synergy opportunities Strengthen Customer Relationships Expand Product Range Broaden Geographic Reach Enhance Technology P
Slide 13: Single Crystal Technology Acquisition
Single Crystal Technology Acquisition Current Applications – 3D & 4D Ultrasound, IVUS Future Applications – Hearing Aid, Pacemaker Founded in 1997, located in Bolingbrook, IL The industry leader for the design and manufacture of piezoelectric single crystals for use in the medical and defense in
Slide 14: RF Sensor Technology Acquisition
RF Sensor Technology Acquisition Disruptive Sensing Technology for Fuel Efficiency… …Boosted by Global Emissions Legislation Start-up founded by two MIT Ph. D. graduates, located in the Boston area Innovative sensing technology that uses a low power RF signal to measure soot and ash loading on d
Slide 15: Diversifying End Markets Organically and with Acquisitions
Diversifying End Markets Organically and with Acquisitions LV I M CV C/IT AD [CATE GORY NAME ] I C AD M IT/O LV I M CV C/IT AD 30-50% 20-30% 10-20% 10-20% 10-20% 5-15% Targeted End Markets Light Vehicles Industrial Medical Comm. / IT Commercial Vehicles Aviation/Defense EMS Divestiture Front End Ref
Slide 16: Positioning for Growth: Simplified and Focused the Business
~[VALUE] ~[VALUE] 2012 2015 16 Positioning for Growth Simplified and Focused the Business [VALUE] $29 [VALUE] $61 2012 2015 Adjusted EBITDA $299 $484 $560 $253 2013 2014 2015 2016 New Business Awards Thru Q2 Positioning for Growth around Sense, Connect and Move Execute Organic Growth Invest in N
Slide 17: Annual Financial Performance Trend
$305 $409 $404 $382 2012 2013 2014 2015 2016E Sales $0.64 $0.82 $0.97 $0.93 2012 2013 2014 2015 2016E Adjusted Earnings Per Share $410 Note 1: Sales are from continuing operations. Adjusted EPS is as reported. Note 2: 2016E represents guidance provided on July 29, 2016. Annual Financial Performance
Slide 18: Capital Structure: Cash and Debt
Equity 73% [CATEGOR Y NAME] $124 $135 $157 $120 $75 $75 $91 $111 2013 2014 2015 2Q 2016 Note 1: Change in Cash/Debt in 2016 due to Single Crystal Acquisition Note 2: Total available credit increased from $200M to $300M in 2Q 2016 Capital Structure Cash and Debt Net Debt $(49) $(60) Current Capital S
Slide 19: Capital Structure and Target Capital Deployment
Capital Structure Leverage = 1.0x - 2.5x EBITDA Operating Cash Flow Return Capital to Shareholders ~4% of Sales 20-40% of Free Cash Flow 12-14% of Sales 60-80% of Free Cash Flow Target Capital Deployment – Disciplined Approach Growth Acquisitions Investment Dividends & Buybacks 19
Slide 20: Appendix
Appendix 20
Slide 21: CTS Core Values
CTS Core Values SC Play to Win Responsiveness Simplicity Solution Oriented
Slide 22: Financial Summary
Financial Summary Note 1: See Regulation G reconciliations from GAAP to Non-GAAP measures and adjustments. Note 2: All figures are from continuing operations except for Adjusted Diluted EPS (As Reported), Operating Cash Flow and Total Debt / Capitalization ($ Millions, except percentages and Adjuste
Slide 23: Regulation G Schedules: Adjusted EBITDA
Regulation G Schedules ($ Millions, except percentages) Adjusted EBITDA 23 2016 2015 2015 2014 2013 2012 2011 Net earnings from continuing operations 22.4 $ 25.4 $ 7.0 $ 26.5 $ 2.0 $ 13.5 $ 11.3 $ Depreciation and amortization expense 8.9 $ 8.1 $ 16.3 $ 17.0 $ 17.3 $ 13.5 $ 12.1 $ Interest expense 1
Slide 24: Regulation G Schedules: Adjusted Diluted EPS
Regulation G Schedules Adjusted Diluted EPS ($ Millions, except percentages) Total Debt to Capitalization 24 2016 2015 2015 2014 2013 2012 2011 2013 2012 2011 Diluted earnings (loss) per share 0.67 $ 0.75 $ 0.21 $ 0.78 $ 0.06 $ 0.39 $ 0.32 $ (0.12) $ 0.59 $ 0.60 $ Tax affected charges (credits) to r