Slide 1: CTS Corporation 2nd Quarter 2024 Earnings Call
CTS Corporation 2nd Quarter 2024 Earnings Call July 30, 2024
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements Readers are cautioned that the statements contained in this document regarding expectations of our performance or other matters that may affect our business, results of operations, or financial condition are, or may be deemed to be, “forward-
Slide 3: Q2 2024 – Driving Operational Execution, Continued Focus on Diversification
Q2 2024 – Driving Operational Execution, Continued Focus on Diversification Second Quarter • Non-transportation revenues up 11% sequentially, up 4% year-over-year $130M 35.8% $0.54 • Transportation revenues down 3% sequentially, Revenue Adj Gross Margin1 Adj. Diluted EPS1 (10)% +80 bps (10)% down 22
Slide 4: Strategic Acquisition – SyQwest, LLC
Strategic Acquisition – SyQwest, LLC Business Summary Transaction Rationale - Designer and manufacturer of - Accelerate CTS diversification strategy acoustic sensing solutions for defense - Deeper penetration into US defense - Growth from continued military spending - Acoustic sensor solutions for t
Slide 5: Medical and Aerospace & Defense End Market Update
End Market Update Revenue1 ($ Millions) • Momentum with growth in first half of 2024, $68 continued growth expected in second half $64 Medical • Two new customers $35 - Lead-free drug delivery application - Minimally invasive optical application 2022 FY 2023 FY 1H 2024 • Multiple wins for diagnostic
Slide 6: Industrial and Transportation End Market Update
End Market Update Revenue1 ($ Millions) • Sales up sequentially, gradual recovery in $171 distribution and OEMs Industrial $129 • Wins for industrial printing, temperature sensing, flow metering, commercial appliances $63 • Added one new customer in test and 2022 FY 2023 FY 1H 2024 measurement 1 The
Slide 7: FY 2024 Guidance
FY 2024 Guidance Revenue Adjusted Diluted EPS 2 ($ Millions) 2020-2024 2020-2024 CAGR 6% 1 CAGR 18% 1 $587 $540 3 $2.25 3 $2.46 $550 $525 $2.05 $513 $2.22 $1.93 $424 $1.12 2020 2021 2022 2023 2024F 2020 2021 2022 2023 2024F Key Outlook Assumptions - Continued progress in medical, aerospace and defen
Slide 8: 2nd Quarter Financial Results
2nd Quarter Financial Results
Slide 9: Q2 2024 Financial Summary
Q2 2024 Financial Summary Results Highlights ($ Millions, except percentages and per share amounts) • Revenue up 4% vs. Q1 2024, down 10% vs. Q2 2023 Revenue $145 $126 $130 • Non-transportation revenues up 11% sequentially, up 4% year-over-year • Transportation revenues down 3% sequentially, Q2 2023
Slide 10: Prioritizing strong cash flow generation
Prioritizing strong cash flow generation Operating Cash Flow1 Cash and Debt2 ($ Millions) ($ Millions) $121 $400 Total Facility $89 $161 $38 $65 Borrowed 2022 FY 2023 FY 1H 2024 Cash Debt $29M $26M 3 4 YTD 2024 Free Cash Flow Cash Returned to Shareholders YTD 2024 $9M Strong Balance Sheet YTD 2024 C
Slide 11: Q&A
Q&A cts
Slide 12: Appendix
Appendix cts
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures From time to time, CTS may use non-GAAP financial measures in discussing CTS’ business. These measures are intended to supplement, not replace, CTS’ presentation of its financial results in accordance with U.S. GAAP. CTS believes that the non-GAAP financial measures prese
Slide 14: Regulation G Schedules: Adjusted Gross Margin
Regulation G Schedules Adjusted Gross Margin ($ Millions, except percentages) Three Months Ended Six Months Ended Three Months Ended Twelve Months Ended June 30, June 30, March 31, December 31, 2024 2023 2024 2023 2024 2023 2022 2021 Gross margin $ 46.4 $ 50.7 $ 91.5 $ 102.4 $ 45.1 $ 190.9 $ 210.5 $
Slide 15: Regulation G Schedules: Adjusted Operating Earnings
Regulation G Schedules Adjusted Operating Earnings ($ Millions, except percentages) Three Months Ended Six Months Ended Twelve Months Ended June 30, June 30, December 31, 2024 2023 2024 2023 2023 2022 2021 Operating earnings $ 17.8 $ 18.4 $ 32.3 $ 40.6 $ 75.1 $ 93.0 $ 76.5 Net sales $ 130.2 $ 145.2
Slide 16: Regulation G Schedules: Adjusted EBITDA Margin
Regulation G Schedules Adjusted EBITDA Margin ($ Millions, except percentages) Three Months Ended Six Months Ended Three Months Ended Twelve Months Ended June 30, June 30, March 31, December 31, 2024 2023 2024 2023 2024 2023 2022 2021 Net earnings (loss) $ 14.7 $ 12.9 $ 25.8 $ 31.2 $ 11.1 $ 60.5 $ 5
Slide 17: Regulation G Schedules: Adjusted Net Earnings and Adjusted Diluted EPS
Regulation G Schedules Adjusted Net Earnings and Adjusted Diluted Earnings Per Share ($ Millions, except percentages and per share amounts) Three Months Ended Six Months Ended Three Months Ended June 30, June 30, March 31, 2024 2024 2023 2023 2024 2024 2023 2023 2024 2024 Per share Per share Per sha
Slide 18: Regulation G Schedules: Adjusted Net Earnings and Adjusted Diluted EPS
Regulation G Schedules Adjusted Net Earnings and Adjusted Diluted Earnings Per Share ($ Millions, except percentages and per share amounts) Twelve Months Ended December 31, 2023 2023 2022 2022 2021 2021 2020 2020 Per share Per share Per share Per share Net earnings (loss) (A) $ 60.5 $ 1.92 $ 59.6 $
Slide 19: Regulation G Schedules: Footnotes
Regulation G Schedules a) Reflected in selling, general and administrative and other (expense) income, net. b) Reflected in cost of goods sold. c) Reflected in restructuring charges. d) Reflected in other (expense) income, net. e) Reflected in income tax expense (income). For 2021, the discrete tax
Slide 20: Regulation G Schedules: Free Cash Flow
Regulation G Schedules Free Cash Flow ($ Millions, except percentages) Three Months Ended Six Months Ended Twelve Months Ended June 30, June 30, December 31, 2024 2023 2024 2023 2023 2022 2021 Net cash provided by operating activities $ 19.6 $ 23.4 $ 37.9 $ 34.6 $ 88.8 $ 121.2 $ 86.1 Capital expendi