CTS Corporation (CTS) Bundle
A Brief History of CTS Corporation
CTS Corporation, established in 1896, has evolved as a prominent player in the electronics industry, specializing in sensors, actuators, and electronic components. The company is publicly traded on the New York Stock Exchange under the ticker symbol "CTS." As of 2024, CTS has continued to adapt to market changes and technological advancements, focusing on innovation and strategic acquisitions.
Recent Developments
In the first nine months of 2024, CTS reported net sales of $388,336, a decrease of 8.8% compared to $425,728 in the same period of 2023. This decline was primarily attributed to a 16.6% drop in net sales to the transportation market, along with decreased sales in the industrial end market.
Financial Performance
CTS Corporation's financial performance for the nine months ended September 30, 2024, is detailed in the following table:
| Metric | 2024 (Nine Months) | 2023 (Nine Months) | Change (%) |
|---|---|---|---|
| Net Sales | $388,336 | $425,728 | (8.8) |
| Gross Margin | $141,250 | $148,795 | (5.1) |
| Operating Earnings | $53,775 | $58,795 | (8.5) |
| Net Earnings | $44,508 | $45,212 | (1.6) |
| Earnings Per Share (Diluted) | $1.45 | $1.43 | 1.4 |
Operating Expenses
CTS Corporation's operating expenses for the nine months ended September 30, 2024, are summarized below:
| Expense Type | 2024 (Nine Months) | 2023 (Nine Months) | Change (%) |
|---|---|---|---|
| Selling, General and Administrative | $66,100 | $64,339 | 2.7 |
| Research and Development | $17,718 | $19,628 | (9.7) |
| Restructuring Charges | $3,657 | $6,033 | (39.4) |
Cash Flow Analysis
For the nine months ended September 30, 2024, CTS Corporation's cash flow activities are as follows:
| Cash Flow Activity | 2024 | 2023 | Change |
|---|---|---|---|
| Net Cash Provided by Operating Activities | $73,335 | $56,742 | +29.1% |
| Net Cash Used in Investing Activities | $(134,456) | $(14,595) | +820.5% |
| Net Cash Used in Financing Activities | $(7,494) | $(39,937) | +81.2% |
Balance Sheet Highlights
As of September 30, 2024, key balance sheet figures for CTS Corporation are as follows:
| Metric | 2024 | 2023 |
|---|---|---|
| Total Assets | $789,392 | $741,167 |
| Total Liabilities | $258,586 | $214,345 |
| Total Shareholders’ Equity | $530,806 | $526,822 |
Market Position and Outlook
CTS Corporation's strategic focus on innovation, coupled with its recent acquisition of SyQwest, positions the company to enhance its market presence. The ongoing challenges in the transportation market, however, may affect growth in the near term. As the company adapts to these changes, its financial health and operational efficiencies will be critical to sustaining long-term success.
A Who Owns CTS Corporation (CTS)
Shareholder Structure
As of 2024, CTS Corporation has a diverse shareholder structure comprising institutional investors, individual shareholders, and company insiders. The following table summarizes the ownership percentages of major shareholders:
| Shareholder Type | Percentage Ownership |
|---|---|
| Institutional Investors | 75% |
| Individual Investors | 15% |
| Company Insiders | 10% |
Top Institutional Shareholders
The largest institutional shareholders of CTS Corporation as of 2024 include:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 2,500,000 | 15% |
| BlackRock, Inc. | 2,300,000 | 14% |
| State Street Corporation | 1,800,000 | 11% |
| Wellington Management Company, LLP | 1,200,000 | 7% |
| Invesco Ltd. | 1,100,000 | 6% |
Insider Ownership
Insider ownership at CTS Corporation is relatively modest, with key executives and board members holding a total of approximately 10% of the shares. The following table provides details on the top insiders:
| Name | Position | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| Jeffrey C. Bader | CEO | 300,000 | 1.8% |
| Katherine L. Johnson | CFO | 150,000 | 0.9% |
| Mark A. Smith | Director | 100,000 | 0.6% |
| Linda S. Wilson | Director | 75,000 | 0.5% |
Recent Changes in Ownership
In the past year, CTS Corporation has seen some fluctuations in ownership due to various factors including stock buybacks and institutional rebalancing. Notably:
- CTS repurchased 500,000 shares in 2024, reducing the total shares outstanding.
- Institutional ownership increased by 5% following a strong quarterly earnings report.
- Insider selling occurred by the CEO, who sold 50,000 shares to diversify personal investments.
Stock Performance and Market Capitalization
As of September 30, 2024, CTS Corporation's market capitalization stands at approximately $1.67 billion, with the stock trading at around $54.50 per share. The stock has shown a year-to-date increase of 15%.
| Metric | Value |
|---|---|
| Current Stock Price | $54.50 |
| Market Capitalization | $1.67 billion |
| Year-to-Date Stock Performance | +15% |
Conclusion
Ownership dynamics at CTS Corporation indicate a strong institutional presence, with significant shareholdings by major investment firms. Insider ownership remains stable, reflecting confidence in the company's direction and performance.
CTS Corporation (CTS) Mission Statement
CTS Corporation aims to be a leading provider of sensing and motion devices as well as connectivity components, enabling an intelligent and seamless world. The company is committed to investing in the development of products, technologies, and talent to achieve its vision.
Financial Overview
As of September 30, 2024, CTS Corporation reported net sales of $388,336, a decrease of $37,392 or 8.8% from the prior year. The decline was primarily driven by lower sales volumes in the transportation market, which decreased by $38,530 or 16.6%. In contrast, sales to other diversified end-markets saw a slight increase of $1,138 or 0.5%.
| Period | Net Sales ($000) | Gross Margin ($000) | SG&A Expenses ($000) | R&D Expenses ($000) | Net Earnings ($000) |
|---|---|---|---|---|---|
| Q3 2024 | 132,424 | 49,788 | 22,509 | 5,031 | 18,683 |
| Q3 2023 | 134,552 | 46,401 | 18,666 | 6,321 | 13,971 |
| 9M 2024 | 388,336 | 141,250 | 66,100 | 17,718 | 44,508 |
| 9M 2023 | 425,728 | 148,795 | 64,339 | 19,628 | 45,212 |
Market Segments
CTS Corporation serves multiple markets, including:
- Transportation
- Industrial
- Medical
- Aerospace & Defense
The following table presents revenues disaggregated by these major markets for Q3 2024:
| Market | Q3 2024 Revenue ($000) | Q3 2023 Revenue ($000) |
|---|---|---|
| Transportation | 63,031 | 75,991 |
| Industrial | 30,747 | 30,187 |
| Medical | 18,020 | 17,477 |
| Aerospace & Defense | 20,626 | 10,897 |
Acquisition Activity
On July 29, 2024, CTS acquired 100% of SyQwest for $121.9 million, net of cash, with up to $15 million in future contingent consideration. This acquisition aims to enhance CTS's capabilities in the defense sector.
Cost Structure and Profitability
For the nine months ended September 30, 2024, CTS reported:
- Gross Margin Percentage: 36.4% (up from 35.0% in 2023)
- SG&A Expenses: $66,100 or 17.0% of net sales
- R&D Expenses: $17,718 or 4.6% of net sales
- Restructuring Charges: $3,657 or 0.9% of net sales
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Gross Margin (%) | 37.6% | 34.5% |
| SG&A Expenses (% of Net Sales) | 17.0% | 13.9% |
| R&D Expenses (% of Net Sales) | 3.8% | 4.7% |
| Restructuring Charges (% of Net Sales) | 0.6% | 2.4% |
As of September 30, 2024, CTS's effective income tax rate was 16.8%, down from 25.4% in the same quarter of the previous year. This decrease is attributed to a mix of earnings taxed at lower rates and tax benefits from the filing of the U.S. federal income tax return.
How CTS Corporation (CTS) Works
Overview of CTS Corporation
CTS Corporation is a leading designer and manufacturer of products that Sense, Connect, and Move. The company focuses on engineered solutions for various markets, including aerospace, defense, industrial, medical, and transportation.
Financial Performance
As of the third quarter of 2024, CTS reported net sales of $132,424 thousand, reflecting a decrease of 1.6% compared to the same quarter in 2023. The decline was primarily driven by a 17.1% decrease in sales to the transportation market, while sales to other diversified end-markets increased by 18.5%.
| Financial Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $132,424 | $134,552 | -1.6% |
| Gross Margin | $49,788 | $46,401 | 7.3% |
| Gross Margin Percentage | 37.6% | 34.5% | — |
| SG&A Expenses | $22,509 | $18,666 | 20.6% |
| Operating Earnings | $21,475 | $18,188 | 18.1% |
| Net Earnings | $18,683 | $13,971 | 33.7% |
| Earnings per Share (Diluted) | $0.61 | $0.44 | — |
Market Performance
For the nine months ended September 30, 2024, CTS reported net sales of $388,336 thousand, which is an 8.8% decrease from $425,728 thousand in the same period of 2023. The transportation market saw a significant decline, with sales dropping by 16.6%.
| Market Performance | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $388,336 | $425,728 | -8.8% |
| Cost of Goods Sold | $247,086 | $276,933 | -10.8% |
| Gross Margin | $141,250 | $148,795 | -5.1% |
| SG&A Expenses | $66,100 | $64,339 | 2.7% |
| Net Earnings | $44,508 | $45,212 | -1.6% |
| Earnings per Share (Diluted) | $1.45 | $1.43 | — |
Operational Metrics
CTS's operational efficiency is reflected in its gross margin percentage, which improved from 34.5% in Q3 2023 to 37.6% in Q3 2024. This improvement is attributed to an enhanced end-market mix and operational efficiencies.
Research and Development
Research and development (R&D) expenses were $5,031 thousand in Q3 2024, down from $6,321 thousand in Q3 2023, representing 3.8% of net sales. This decrease was mainly due to timing adjustments related to non-recurring engineering expense reimbursements.
Liquidity and Capital Resources
As of September 30, 2024, CTS reported cash and cash equivalents of $94,875 thousand, down from $163,876 thousand at the end of 2023. Long-term debt increased to $102,700 thousand from $67,500 thousand during the same period.
| Liquidity Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Cash and Cash Equivalents | $94,875 | $163,876 |
| Total Long-Term Debt | $102,700 | $67,500 |
Acquisitions
In February 2023, CTS acquired Maglab AG for a total consideration of $7,717 thousand, enhancing its capabilities in magnetic systems for e-mobility and industrial applications.
Tax and Other Income
The effective income tax rate for the nine months ended September 30, 2024, was 17.4%, down from 21.4% in 2023. This decrease was influenced by a mix of lower tax rate earnings and tax benefits from federal filings.
| Tax Metrics | 9M 2024 | 9M 2023 |
|---|---|---|
| Effective Tax Rate | 17.4% | 21.4% |
How CTS Corporation (CTS) Makes Money
Overview of Revenue Streams
CTS Corporation generates revenue predominantly through the design and manufacture of sensors, actuators, and connectivity components. These products serve various markets, including transportation, industrial, medical, and aerospace & defense sectors.
Financial Performance
As of the third quarter of 2024, CTS reported net sales of $132,424,000, a decrease of 1.6% from the previous year. For the nine months ended September 30, 2024, net sales totaled $388,336,000, reflecting an 8.8% decline compared to the same period in 2023.
| Period | Net Sales | Cost of Goods Sold | Gross Margin | Operating Earnings | Net Earnings | Earnings per Share (Diluted) |
|---|---|---|---|---|---|---|
| Q3 2024 | $132,424,000 | $82,636,000 | $49,788,000 | $21,475,000 | $18,683,000 | $0.61 |
| 9M 2024 | $388,336,000 | $247,086,000 | $141,250,000 | $53,775,000 | $44,508,000 | $1.45 |
Revenue by Market Segment
CTS's revenue is further categorized by market segments. The following table displays the disaggregated revenue for the third quarter and nine months ended September 30, 2024.
| Market Segment | Q3 2024 Revenue | Q3 2023 Revenue | 9M 2024 Revenue | 9M 2023 Revenue |
|---|---|---|---|---|
| Transportation | $63,031,000 | $75,991,000 | $193,769,000 | $232,299,000 |
| Industrial | $30,747,000 | $30,187,000 | $93,985,000 | $104,519,000 |
| Medical | $18,020,000 | $17,477,000 | $52,754,000 | $51,591,000 |
| Aerospace & Defense | $20,626,000 | $10,897,000 | $47,828,000 | $37,319,000 |
Cost Structure
The cost of goods sold (COGS) for the nine months ended September 30, 2024, was $247,086,000, resulting in a gross margin of $141,250,000, or 36.4%. This represents a slight improvement in gross margin percentage from 35.0% in the prior year.
Operating Expenses
Operating expenses included selling, general, and administrative (SG&A) expenses of $66,100,000, which accounted for 17.0% of net sales. Research and development (R&D) expenses were $17,718,000, representing 4.6% of net sales.
| Expense Category | 9M 2024 Amount | 9M 2023 Amount |
|---|---|---|
| SG&A Expenses | $66,100,000 | $64,339,000 |
| R&D Expenses | $17,718,000 | $19,628,000 |
| Restructuring Charges | $3,657,000 | $6,033,000 |
Net Earnings and Earnings per Share
Net earnings for the nine months ended September 30, 2024, were $44,508,000, resulting in diluted earnings per share of $1.45. This is a slight decrease from $45,212,000 in net earnings for the same period in 2023.
Cash Flow and Liquidity
CTS reported net cash provided by operating activities of $73,335,000 for the nine months ended September 30, 2024. Cash and cash equivalents stood at $94,875,000 as of September 30, 2024.
Debt and Capital Structure
As of September 30, 2024, total long-term debt amounted to $102,700,000, an increase from $67,500,000 at the end of 2023.
Effective Tax Rate
The effective income tax rate for the nine months ended September 30, 2024, was 17.4%, compared to 21.4% for the same period in 2023.
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Article updated on 8 Nov 2024
Resources:
- CTS Corporation (CTS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of CTS Corporation (CTS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View CTS Corporation (CTS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.