EX-99.1 2 ex99_1.htm EXHIBIT 99.1 Exhibit 99.1
 
 
- Automotive Sensors
- Electronic Components
Electronics Manufacturing Services
14 - 18%
4  -  8%
6 - 10%
8  -  12%
 Annual Sales Growth
Overall Organic Growth Target
Product/Market Area
(2005 - 2008)
Components & Sensors:
10 - 14%
Business Growth Targets
 
 
 
Awarded 47 Platforms
Industry trend is to adopt integrated
pedals for increased control with
reduced costs.
Total
Available
Market
(Including Pedal Sensors)
$150
$223
$266
$326
$363
$305
CTS Accelerator Pedal Modules Offer
Performance, Quality and Cost Advantages
 CTS Sales $ in Millions
$393
Actual
Accelerator Pedal Module
 
 
 
CTS Sales $ in Millions
Asia Over 50% of
Growth
Actual
10 Year Projected Growth In Vehicle Sales
(17M Units)
China regulations driving
 local content
CTS Operations in
Taiwan and China
Asian Automotive Growth
 
 
 
 
Growth Focused on High
Margin Segments
95%
70%
Top 5 EMS Customers
Communications
Other
Industrial
Medical
Computer
 2006 Sales (1H06)
Aerospace/
Defense
More Complex
Less Complex
High Volume
/ Low Mix
Low Volume
/ High Mix
CTS
Markets
EMS Business
 
 
 
 
 
Expense Leverage Contributing to Earnings
Growth
Adjusted Operating Expenses
(Percent of Sales)
 
 
 
Cumulative
Free Cash Flow
$ in Millions
Strong Cash Earnings and Free Cash Flow
Cumulative
Cash Earnings
70.5
73.5
FY  2006
Estimate
Cumulative Free Cash Flow
 
 
 
Appendix
                   
CTS Corporation
  
Reconciliation of Operating Expenses to Adjusted Operating Expenses
  
($ in millions)
  
                   
   
Full Year
  
   
2005
  
2004
  
2003
  
2002
  
                   
Selling, general and administrative expenses
  
$
68.0
 
$
63.5
 
$
56.9
 
$
63.3
  
Research and development expenses
    
17.1
 
 
19.0
 
 
21.5
 
 
24.1
 
Restructuring, restructuring-related, and asset impairment charges
   
-
 
 
-
 
 
4.6
 
 
18.3
 
Gain on sales of assets
    
(3.1)
 
 
(3.9)
 
 
-
 
 
-
 
                           
    Total reported operating expenses
    
82.0
 
 
78.6
 
 
83.0
 
 
105.7
 
                           
Less restructuring and impairment charges
    
 
 
 
-
 
 
4.6
 
 
18.3
 
Less gain on sale of excess equipment less LTCC severance
    
(1.2)
 
 
 
 
 
 
 
 
 
  
Less gain on sale of excess Canadian land
    
 
 
 
(2.7)
 
 
-
 
 
-
 
                           
Adjusted operating expenses
  
$
83.2
 
$
81.3
 
$
78.4
 
$
87.4
 
                           
Adjusted operating expenses as percentage of total sales
    
13.5%
 
 
15.3%
 
 
16.9%
 
 
19.1%
 
 
 
Appendix
CTS Corporation
  
Cumulative Free Cash Flow
  
($ in millions)
  
                                       
   
Cumulative Est.
 
Full Year Est.
 
Cumulative
 
YTD Q2
 
Cumulative
 
Full Year
 
Cumulative
 
Full Year
 
Full Year
  
   
(2003 - 2006 est.)
 
2006
(as of 8/09/06)
 
(2003-
6 months 2006)
 
2006
 
(2003-2005)
 
2005
 
(2003-2004)
 
2004
 
2003
  
                                                         
Net earnings
              
$
67.3
 
$
12.5
 
$
54.8
 
$
22.2
 
$
32.6
 
$
20.0
 
$
12.6
  
    Depreciation and amortization
               
100.0
 
 
13.2
 
 
86.8
 
 
27.1
 
 
59.7
 
 
26.1
 
 
33.6
 
    Restructuring and impairment charges
               
7.5
 
 
2.9
 
 
4.6
 
 
-
 
 
4.6
 
 
-
 
 
4.6
 
    Gain on asset sales
               
(7.8)
 
 
(0.8)
 
 
(7.0)
 
 
(3.1)
 
 
(3.9)
 
 
(3.9)
 
 
-
 
    Deferred income taxes
               
9.6
 
 
-
 
 
9.6
 
 
9.1
 
 
0.5
 
 
0.2
 
 
0.3
 
    Equity-based compensation and other
               
7.1
 
 
2.1
 
 
5.0
 
 
2.7
 
 
2.3
 
 
1.7
 
 
0.6
 
    Cumulative prepaid pension asset
               
(34.8)
 
 
(3.1)
 
 
(31.7)
 
 
(8.7)
 
 
(23.0)
 
 
(10.9)
 
 
(12.1)
 
    Cash earnings
               
148.9
 
 
26.8
 
 
122.1
 
 
49.3
 
 
72.8
 
 
33.2
 
 
39.6
 
                                                         
    Working capital & other
               
(47.3)
 
 
(9.4)
 
 
(37.9)
 
 
(4.8)
 
 
(33.1)
 
 
(19.2)
 
 
(13.9)
 
    Cash flow from operations
               
101.6
 
 
17.4
 
 
84.2
 
 
44.5
 
 
39.7
 
 
14.0
 
 
25.7
 
                                                         
    Capital expenditures
               
(42.5)
 
 
(5.8)
 
 
(36.7)
 
 
(15.0)
 
 
(21.7)
 
 
(12.7)
 
 
(9.0)
 
Free cash flow
  
$
70.5 - $73.5
 
$
23-$26
 
$
59.1
 
$
11.6
 
$
47.5
 
$
29.5
 
$
18.0
 
$
1.3
 
$
16.7
 
                                                         
                                                         
 

CTS Corporation
Projected Free Cash Flow
($ in millions)
       
   
Year Ended
December 31,2006 (1)
  
         
         
Cash flows provided from operations
  
$
41-$46
 
Capital expenditures
  
$
(18)-$(20)
 
         
Free cash flow
  
$
23-$26
  
         
 (1)  Estimate as of 08/09/2006