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CTS Announces Second Quarter 2024 Results
Source: Nasdaq GlobeNewswire / 30 Jul 2024 08:00:01 America/New_York
LISLE, Ill., July 30, 2024 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS), a leading global designer and manufacturer of custom engineered solutions that “Sense, Connect and Move,” today announced second quarter 2024 results.
“We achieved earnings in line with our expectations, despite softness in the transportation end market. We made progress on operational improvements, which helped partially offset the unfavorable impact from lower volumes.” said Kieran O’Sullivan, CEO of CTS Corporation. “Our team is energized on future growth through continued diversification of our customer base and building our pipeline of opportunities. We remain committed to a disciplined capital structure to support organic growth, strategic acquisitions and returning cash to shareholders.”
CTS completed the acquisition of SyQwest, LLC on July 29, 2024 for $125 million, net of cash and debt, and contingent consideration. SyQwest is a leading designer and manufacturer of a broad set of sonar and acoustic sensing solutions primarily for naval applications. “SyQwest adds strong technical capabilities and enhances our scale in underwater acoustic applications in the defense end market, further advancing our diversification strategy,” said Kieran O’Sullivan. “We are excited about the growth momentum and welcome Bob Tarini and the SyQwest team to CTS.”
Second Quarter 2024 Results
- Sales were $130 million, up 4% sequentially compared to the first quarter of 2024, and down 10% year-over-year. Sales to non-transportation end markets increased 11% sequentially and 4% year-over-year. Sales to the transportation end market decreased 3% sequentially and 22% year-over-year.
- Net income was $15 million, or 11% of sales, up from $13 million, or 9% of sales, in the second quarter of 2023.
- Earnings per diluted share were $0.48, compared to $0.41 in the second quarter of 2023.
- Adjusted earnings per diluted share were $0.54, down from $0.59 in the second quarter of 2023.
- Adjusted EBITDA margin was 21.7%, compared to 21.3% in the second quarter of 2023.
- Operating cash flow was $20 million, down from $23 million in the second quarter of 2023.
2024 Guidance
Given the more moderate growth expectations in the second half of 2024, CTS is updating its guidance for full year 2024 sales to be in the range of $525 - $540 million and adjusted diluted EPS to be in the range of $2.05 - $2.25, including the expected impact from the SyQwest acquisition.
CTS does not provide reconciliations of forward-looking non-GAAP financial measures, such as estimated adjusted diluted earnings per share, to the most comparable GAAP financial measures on a forward-looking basis because CTS is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, restructuring costs, environmental remediation costs, acquisition-related costs, foreign exchange rates and other non-routine costs. Each of such adjustments has not yet occurred, are out of CTS' control and/or cannot be reasonably predicted. For the same reasons, CTS is unable to address the probable significance of the unavailable information.
Conference Call and Supplemental Materials
As previously announced, the Company has scheduled a conference call for 10:00 a.m. (ET) today. The dial-in numbers for access from the U.S. are: +1-833-470-1428 (Toll-Free) and +1-404-975-4839 (Local), if calling from outside the U.S., please refer to Global Dial In Numbers to identify the applicable dial-in number for your location. The passcode is 325452. In addition, the Company will be using a supplemental slide presentation that will be referred to during the call. The presentation and a live audio webcast of the conference call will be available and can be accessed directly from CTS’ website at https://investors.ctscorp.com/news-events/events-and-presentations/.Any replay, rebroadcast, transcript or other reproduction or transmission of this conference call, other than the replay accessible through the website noted above, has not been authorized by the Company and is strictly prohibited. Investors should be aware that any unauthorized reproduction of this conference call may not be an accurate reflection of its contents.
About CTS
CTS Corporation (NYSE: CTS) is a leading designer and manufacturer of products that Sense, Connect and Move. CTS manufactures sensors, actuators and electronic components in North America, Europe and Asia, and provides engineered products to customers in the aerospace/defense, industrial, medical and transportation markets. For more information, visit www.ctscorp.com.
Cautionary Statement Regarding Forward-Looking StatementsReaders 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-looking statements” as defined by the “safe harbor” provisions in the Private Securities Litigation Reform Act of 1995. Such statements are made in reliance on the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included or incorporated in this document, including statements regarding our strategy, financial position, guidance, funding for continued operations, cash reserves, liquidity, projected costs, plans, projects, awards and contracts, and objectives of management, among others, are forward-looking statements. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “continued,” “project,” “plan,” “goals,” “opportunity,” “appeal,” “estimate,” “potential,” “predict,” “demonstrates,” “may,” “will,” “might,” “could,” “intend,” “shall,” “possible,” “would,” “approximately,” “likely,” “outlook,” “schedule,” “on track,” “poised,” “pipeline,” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are not guarantees of future performance, conditions or results. Forward-looking statements are based on management’s expectations, certain assumptions, and currently available information. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are based on various assumptions as to future events, the occurrence of which necessarily are subject to uncertainties. These forward-looking statements are made subject to certain risks, uncertainties, and other factors, which could cause CTS’ actual results, performance, or achievements to differ materially from those presented in the forward-looking statements. Examples of factors that may affect future operating results and financial condition include, but are not limited to: supply chain disruptions; changes in the economy generally, including inflationary and/or recessionary conditions, and in respect to the business in which CTS operates; unanticipated issues in integrating acquisitions, including, without limitation, the integration of SyQwest, LLC; the results of actions to reposition CTS’ business; rapid technological change; general market conditions in the transportation, as well as conditions in the industrial, aerospace and defense, and medical markets; reliance on key customers; unanticipated public health crises, natural disasters or other events; environmental compliance and remediation expenses; the ability to protect CTS’ intellectual property; pricing pressures and demand for CTS’ products; risks associated with CTS’ international operations, including trade and tariff barriers, exchange rates and political and geopolitical risks (including, without limitation, the potential impact U.S./China relations and the conflict between Russia and Ukraine may have on our business, results of operations and financial condition); the amount and timing of any share repurchases; and the effect of any cybersecurity incidents on our business. Many of these, and other risks and uncertainties, are discussed in further detail in Item 1A. of CTS’ most recent Annual Report on Form 10-K and other filings made with the SEC. CTS undertakes no obligation to publicly update CTS’ forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes.
Contact
Ashish Agrawal
Vice President and Chief Financial Officer
CTS Corporation
4925 Indiana Avenue
Lisle, IL 60532 USA
+1 (630) 577-8800
ashish.agrawal@ctscorp.comCTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OFEARNINGS- UNAUDITED
(In thousands, except per share amounts)Three Months Ended Six Months Ended June 30,
2024June 30,
2023June 30,
2024June 30,
2023Net sales $ 130,162 $ 145,182 $ 255,912 $ 291,176 Cost of goods sold 83,790 94,440 164,450 188,782 Gross margin 46,372 50,742 91,462 102,394 Selling, general and administrative expenses 21,332 23,694 43,591 45,673 Research and development expenses 6,086 6,721 12,687 13,307 Restructuring charges 1,190 1,895 2,884 2,807 Operating earnings 17,764 18,432 32,300 40,607 Other (expense) income: Interest expense (833 ) (818 ) (1,635 ) (1,512 ) Interest income 1,441 1,072 2,827 2,135 Other expense, net (603 ) (2,606 ) (2,066 ) (2,441 ) Total other income (expense), net 5 (2,352 ) (874 ) (1,818 ) Earnings before income taxes 17,769 16,080 31,426 38,789 Income tax expense 3,062 3,183 5,600 7,548 Net earnings $ 14,707 $ 12,897 $ 25,826 $ 31,241 Earnings per share: Basic $ 0.48 $ 0.41 $ 0.84 $ 0.99 Diluted $ 0.48 $ 0.41 $ 0.84 $ 0.98 Basic weighted – average common shares outstanding: 30,511 31,488 30,627 31,560 Effect of dilutive securities 219 197 224 224 Diluted weighted – average common shares outstanding: 30,730 31,685 30,851 31,784 Cash dividends declared per share $ 0.04 $ 0.04 $ 0.08 $ 0.08 CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)(Unaudited)
June 30,
2024December 31,
2023ASSETS Current Assets Cash and cash equivalents $ 161,246 $ 163,876 Accounts receivable, net 85,380 78,569 Inventories, net 51,670 60,031 Other current assets 16,566 16,873 Total current assets 314,862 319,349 Property, plant and equipment, net 91,759 92,592 Operating lease assets, net 24,181 26,425 Other Assets Goodwill 156,061 157,638 Other intangible assets, net 96,827 103,957 Deferred income taxes 26,619 25,183 Other 15,313 16,023 Total other assets 294,820 302,801 Total Assets $ 725,622 $ 741,167 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Accounts payable $ 40,864 $ 43,499 Accrued payroll and benefits 15,286 14,585 Operating lease obligations 4,371 4,394 Accrued expenses and other liabilities 31,926 34,561 Total current liabilities 92,447 97,039 Long-term debt 65,000 67,500 Long-term operating lease obligations 22,741 24,965 Long-term pension obligations 4,583 4,655 Deferred income taxes 14,314 14,729 Other long-term obligations 3,786 5,457 Total Liabilities 202,871 214,345 Commitments and Contingencies Shareholders’ Equity Common stock 321,894 319,269 Additional contributed capital 41,586 45,097 Retained earnings 625,614 602,232 Accumulated other comprehensive loss 775 4,264 Total shareholders’ equity before treasury stock 989,869 970,862 Treasury stock (467,118 ) (444,040 ) Total shareholders’ equity 522,751 526,822 Total Liabilities and Shareholders’ Equity $ 725,622 $ 741,167 CTS CORPORATION AND SUBSIDIARIES
OTHER SUPPLEMENTAL INFORMATION - UNAUDITED
(In millions of dollars, except percentages and per share amounts)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 presented are commonly used by financial analysts and others in the industries in which CTS operates, and thus further provide useful information to investors. CTS’ definitions of these non-GAAP financial measures may differ from those terms as defined or used by other companies. Non-GAAP measures should not be used by investors or third parties as the sole basis for formulating investment decisions, as they may exclude a number of important cash and non-cash recurring items.
CTS has presented these non-GAAP financial measures as it believes that the presentation of its financial results that exclude (1) restructuring charges; (2) restructuring-related charges; (3) environmental charges; (4) acquisition-related costs; (5) inventory fair value step-up costs; (6) foreign exchange (gains) losses; (7) non-cash pension expenses (income); and (8) certain discrete tax items are useful and assist in comparing CTS’ current operating results with past periods and with the operational performance of other companies in its industry. Included below is a description of the expenses that CTS has determined are not normal, recurring cash operating expenses necessary to operate its business and the rationale for why providing financial measures for its business with such expenses excluded or adjusted is useful to investors as a supplement to the U.S. GAAP measures.
- Restructuring charges – costs primarily related to workforce reductions, building and equipment relocations, asset impairment charges and other facility closure activities in connection with our continued optimization of our organization.
- Restructuring-related charges – costs related to restructuring actions that do not qualify as direct restructuring charges under U.S. GAAP. These include duplicative expenses arising from plant consolidation transition activities such as excess rent, utilities, and personnel-related and other costs incurred prior to the start of production at a new location.
- Environmental charges – costs associated with our non-operating facilities that are unrelated to ongoing operations. Currently, none of these costs and accruals relate to sites that provide revenue generating activities for the Company.
- Acquisition-related costs – diligence and transaction costs related to acquisitions including related contingent earnout adjustments.
- Inventory fair value step-up costs – purchase accounting-related inventory costs from acquisitions.
- Foreign exchange (gains) losses – remeasurement income and expenses for non-U.S. subsidiaries with the U.S. dollar as the functional currency.
- Non-cash pension expenses (income) – pension income and expenses related to the non-operating U.S. pension and post-retirement life insurance plans, including historical plan settlement activities.
- Discrete tax items – non-recurring, infrequent, or unusual tax adjustments (e.g., valuation allowances, uncertain tax position changes, unremitted assertion changes and discrete impacts associated with pre-tax non-GAAP items or due to tax law changes, etc.).
At times, the reconciliations below have been intentionally rounded to the nearest thousand, or $0.01 for EPS figures, and, therefore, may not sum.
Adjusted Gross Margin
Three Months Ended
June 30,Six Months Ended
June 30,Twelve Months Ended
December 31,2024 2023 2024 2023 2023 2022 2021 Gross margin $ 46.4 $ 50.7 $ 91.5 $ 102.4 $ 190.9 $ 210.5 $ 184.6 Net sales $ 130.2 $ 145.2 $ 255.9 $ 291.2 $ 550.4 $ 586.9 $ 512.9 Gross margin as a % of net sales 35.6 % 35.0 % 35.7 % 35.2 % 34.7 % 35.9 % 36.0 % Adjustments to reported gross margin: Restructuring-related charges (b) 0.2 — 0.7 — 0.6 — — Inventory fair value step-up (b) — — — — — 4.0 — Adjusted gross margin $ 46.6 $ 50.7 $ 92.2 $ 102.4 $ 191.5 $ 214.5 $ 184.6 Adjusted gross margin as a % of net sales 35.8 % 35.0 % 36.0 % 35.2 % 34.8 % 36.5 % 36.0 %
Adjusted Operating EarningsThree Months Ended
June 30,Six Months Ended
June 30,Twelve Months Ended
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 $ 255.9 $ 291.2 $ 550.4 $ 586.9 $ 512.9 Operating earnings as a % of net sales 13.6 % 12.7 % 12.6 % 13.9 % 13.6 % 15.8 % 14.9 % Adjustments to reported operating earnings: Restructuring charges (c) 1.2 1.9 2.9 2.8 7.1 1.9 1.7 Restructuring-related charges (b) 0.2 — 0.7 — 0.6 — — Environmental charges (a) 0.5 2.2 0.7 2.7 3.5 2.8 2.3 Acquisition-related costs (a) (0.3 ) — (0.6 ) 0.2 0.4 0.8 — Inventory fair value step-up (b) — — — — — 4.0 — Total adjustments to reported operating earnings $ 1.6 $ 4.1 $ 3.8 $ 5.7 $ 11.5 $ 9.5 $ 3.9 Adjusted operating earnings $ 19.4 $ 22.5 $ 36.1 $ 46.3 $ 86.6 $ 102.5 $ 80.4 Adjusted operating earnings as a % of net sales 14.9 % 15.5 % 14.1 % 15.9 % 15.7 % 17.5 % 15.7 %
Adjusted EBITDA MarginThree Months Ended
June 30,Six Months Ended
June 30,Twelve Months Ended
December 31,2024 2023 2024 2023 2023 2022 2021 Net earnings (loss) $ 14.7 $ 12.9 $ 25.8 $ 31.2 $ 60.5 $ 59.6 $ (41.9 ) Net sales $ 130.2 $ 145.2 $ 255.9 $ 291.2 $ 550.4 $ 586.9 $ 512.9 Net earnings (loss) margin 11.3 % 8.9 % 10.1 % 10.7 % 11.0 % 10.2 % -8.2 % Depreciation and amortization expense 7.3 7.3 14.7 14.2 28.7 29.8 26.9 Interest expense 0.8 0.8 1.6 1.5 3.3 2.2 2.1 Tax expense (benefit) 3.1 3.2 5.6 7.5 14.6 21.2 (19.0 ) EBITDA 25.9 24.2 47.7 54.5 107.2 112.7 (31.8 ) Adjustments to EBITDA: Restructuring charges (c) 1.2 1.9 2.9 2.8 7.1 1.9 1.7 Restructuring-related charges (b) 0.2 — 0.7 — 0.6 — — Environmental charges (a) 0.5 2.2 0.7 2.7 3.5 2.8 2.3 Acquisition-related costs (a) (0.3 ) — (0.6 ) 0.2 0.4 2.5 — Inventory fair value step-up (b) — — — — — 4.0 — Non-cash pension and related expense (d) 0.1 — 0.1 — — 4.8 132.4 Foreign currency loss (d) 0.6 2.8 2.1 2.7 2.0 4.9 3.3 Total adjustments to EBITDA 2.3 6.8 6.0 8.4 13.5 20.9 139.7 Adjusted EBITDA $ 28.2 $ 31.0 $ 53.7 $ 62.9 $ 120.7 $ 133.6 $ 107.9 Adjusted EBITDA Margin 21.7 % 21.3 % 21.0 % 21.6 % 21.9 % 22.8 % 21.0 %
Adjusted Net Earnings and Adjusted Diluted Earnings Per ShareThree Months Ended
June 30,Six Months Ended
June 30,2024 2024 2023 2023 2024 2024 2023 2023 Per share Per share Per share Per share Net earnings (A) $ 14.7 $ 0.48 $ 12.9 $ 0.41 $ 25.8 $ 0.84 $ 31.2 $ 0.98 Adjustments to reported net earnings: Restructuring charges (c) 1.2 0.04 1.9 0.06 2.9 0.09 2.8 0.09 Restructuring-related charges (b) 0.2 0.01 — — 0.7 0.02 — — Environmental charges (a) 0.5 0.02 2.2 0.07 0.7 0.02 2.7 0.09 Acquisition-related costs (a) (0.3 ) (0.01 ) — — (0.6 ) (0.02 ) 0.2 0.00 Non-cash pension and related expense (d) 0.1 — — — 0.1 — — — Foreign currency loss (d) 0.6 0.02 2.8 0.09 2.1 0.07 2.7 0.08 Total pretax adjustments to reported net earnings $ 2.3 $ 0.07 $ 6.8 $ 0.21 $ 6.0 $ 0.19 $ 8.4 $ 0.26 Income tax effect of above adjustments (f) (0.5 ) (0.02 ) (0.9 ) (0.03 ) (1.0 ) (0.03 ) (1.2 ) (0.04 ) Total adjustments, tax affected (f)(B) $ 1.8 $ 0.06 $ 5.9 $ 0.18 $ 5.0 $ 0.16 $ 7.2 $ 0.22 Tax adjustments: Other discrete tax items (e) — — — — 0.3 0.01 — — Total tax adjustments(C) $ — $ — $ — $ — $ 0.3 $ 0.01 $ — $ — Adjusted net earnings (A+B+C) and Adjusted net earnings per share $ 16.5 $ 0.54 $ 18.8 $ 0.59 $ 31.1 $ 1.01 $ 38.4 $ 1.20 Net sales $ 130.2 $ 145.2 $ 255.9 $ 291.2 Net earnings as a % of net sales 11.3 % 8.9 % 10.1 % 10.7 % Adjusted net earnings as a % of net sales 12.7 % 13.0 % 12.1 % 13.2 % Twelve Months Ended
December 31,2023 2023 2022 2022 2021 2021 Per share Per share Per share Net earnings (loss) (A) $ 60.5 $ 1.92 $ 59.6 $ 1.85 $ (41.9 ) $ (1.30 ) Adjustments to reported net earnings (loss): Restructuring charges (c) 7.1 0.22 1.9 0.06 1.7 0.06 Restructuring-related charges (b) 0.6 0.02 — — — — Environmental charges (a) 3.5 0.11 2.8 0.09 2.3 0.07 Acquisition-related costs (a) 0.4 0.01 2.5 0.08 — — Inventory fair value step-up (b) — — 4.0 0.12 — — Non-cash pension and related expense (d) — — 4.8 0.15 132.4 4.10 Foreign currency loss (d) 2.0 0.06 4.9 0.15 3.3 0.10 Total pretax adjustments to reported net earnings (loss) $ 13.5 $ 0.42 $ 20.9 $ 0.65 $ 139.7 $ 4.33 Income tax effect of above adjustments (f) (2.4 ) (0.07 ) (1.6 ) (0.05 ) (31.1 ) (0.99 ) Total adjustments, tax affected (f)(B) $ 11.1 $ 0.35 $ 19.3 $ 0.60 $ 108.6 $ 3.34 Tax adjustments: Increase in valuation allowances (e) — — — — 0.9 0.03 Other discrete tax items (e) (1.6 ) (0.05 ) 0.2 0.01 (4.7 ) (0.14 ) Total tax adjustments(C) $ (1.6 ) $ (0.05 ) $ 0.2 $ 0.01 $ (3.8 ) $ (0.11 ) Adjusted net earnings (A+B+C) and Adjusted net earnings per share $ 70.0 $ 2.22 $ 79.1 $ 2.46 $ 63.0 $ 1.93 Net sales $ 550.4 $ 586.9 $ 512.9 Net earnings (loss) as a % of net sales 11.0 % 10.2 % -8.2 % Adjusted net earnings as a % of net sales 12.7 % 13.5 % 12.3 % (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 items relate to items we deemed outside normal cash-generating operations including, $5.4 million of a stranded tax benefit from the U.S. Pension termination offset by $0.7 million of tax expense from tax costs associated with a one-time internal cash movement, and $0.9 million related to the addition of a valuation allowance for a foreign subsidiary. For 2022, the discrete tax items relate to the net impact to tax expense of expired research and development credits, including the release of associated reserves. For 2023, discrete tax items include adjusting for tax benefits resulting from $0.6 million for research and development tax credits from prior years, $0.8 million in foreign tax credits related to prior years from a 2023 tax law change, as well as $0.2 million from the release of uncertain tax benefits. For 2024, the discrete tax items relate to items we deemed outside normal cash-generating operations including the addition of a valuation allowance for a foreign subsidiary.
(f) We determine the tax effect of non-GAAP adjustments by considering the tax laws and statutory income tax rates applicable in the tax jurisdictions of the underlying non-GAAP adjustments. For all periods presented, we applied the statutory income tax rates to the taxable portion of all of our adjustments. Our acquisition costs and foreign currency gains and losses included in our non-GAAP adjustments were not deductible for income tax purposes; therefore, no statutory income tax rate was applied to such costs.NOTE: CTS believes that adjusted gross margin, adjusted operating earnings, adjusted EBITDA margin, adjusted net earnings and adjusted diluted earnings per share provide useful information to investors regarding its operational performance because they enhance an investor’s overall understanding of CTS’ core financial performance and facilitate comparisons to historical results of operations, by excluding items that are not related directly to the underlying performance of CTS’ fundamental business operations (such as those items noted above in the paragraph titled “Non-GAAP Financial Measures”) or were not part of CTS’ business operations during a comparable period.
Controllable Working Capital
June 30, December 31, 2024 2023 2023 2022 2021 Net accounts receivable $ 85.4 $ 97.5 $ 78.6 $ 90.9 $ 82.2 Net inventory $ 51.7 $ 62.6 $ 60.0 $ 62.3 $ 49.5 Accounts payable $ (40.9 ) $ (53.1 ) $ (43.5 ) $ (53.2 ) $ (55.5 ) Controllable working capital $ 96.2 $ 107.0 $ 95.1 $ 100.0 $ 76.2 Quarter sales $ 130.2 $ 145.2 $ 124.7 $ 142.3 $ 132.5 Multiplied by 4 4 4 4 4 4 Annualized sales $ 520.6 $ 580.7 $ 498.8 $ 569.1 $ 530.0 Controllable working capital as a % of annualized sales 18.5 % 18.4 % 19.1 % 17.6 % 14.4 % NOTE: CTS believes the controllable working capital ratio is a useful measure because it provides an objective measure of the efficiency with which CTS manages its short-term capital needs.
Free Cash Flow
Three Months Ended
June 30,Six Months Ended
June 30,Twelve Months Ended
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 expenditures (4.6 ) (3.9 ) (8.7 ) (8.5 ) (14.7 ) (14.3 ) (15.6 ) Free cash flow $ 15.0 $ 19.5 $ 29.3 $ 26.1 $ 74.1 $ 106.9 $ 70.5 Operating cash flow as a percentage of net earnings 133 % 181 % 147 % 111 % 147 % 203 % -206 % Free cash flow as a percentage of adjusted net earnings 91 % 103 % 94 % 68 % 106 % 135 % 112 % NOTE: CTS believes that free cash flow is a useful measure because it demonstrates the company’s ability to generate cash. Free cash flow is a non-GAAP measure and should be considered in addition to, but not as a substitute for, information contained in the company's condensed consolidated statement of cash flows as a measure of liquidity.
Capital Expenditures
Three Months Ended
June 30,Six Months Ended
June 30,Twelve Months Ended
December 31,2024 2023 2024 2023 2023 2022 2021 Capital expenditures $ 4.6 $ 3.9 $ 8.7 $ 8.5 $ 14.7 $ 14.3 $ 15.6 Net sales $ 130.2 $ 145.2 $ 255.9 $ 291.2 $ 550.4 $ 586.9 $ 512.9 Capex as % of net sales 3.6 % 2.7 % 3.4 % 2.9 % 2.7 % 2.4 % 3.0 % Additional Information
The following table includes other financial information not presented in the preceding financial statements.
Three Months Ended
June 30,Six Months Ended
June 30,Twelve Months Ended
December 31,2024 2023 2024 2023 2023 2022 2021 Depreciation and amortization expense $ 7.3 $ 7.3 $ 14.7 $ 14.2 $ 28.7 $ 29.8 $ 26.9 Stock-based compensation expense $ 1.3 $ 1.6 $ 2.5 $ 3.2 $ 5.2 $ 7.7 $ 6.1