EX-99.1 2 ex99_1.htm EXHIBIT 99.1 INVESTOR PRESENTATION MATERIAL Exhibit 99.1 Investor Presentation Material
Segment
Automotive
25%
Communications
22%
Other
9%
Computer
29%
Electronic
Components
 and
Sensors
Electronics
Manufacturing
Services
Markets
Industrial &
Medical
15%
42%
58%
25%
7%
2%
7%
27%
2%
15%
1%
14%
Based on Last Four Quarters Through June 2006
Segment
Defense & Aerospace
Security
Consumer
Segments and Markets
 
 
 
 Target Adjusted Return on
Invested Capital (ROIC)
OPERATING
MARGIN
AFTER-TAX
(NOPAT
Margin)
    INVESTED CAPITAL TURNOVER
Both Segments Have Comparable ROIC Targets
2003
2004
2005
4%
2%
6%
8%
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0%
6.3%
7.9%
ROIC
10%
12%
4.0
EMS
Components
  & Sensors
 
 
 
®
®
Automotive
EC
EMS
Customers
 
 
 
WiMax Applications Expected to Add $10-$12M Incremental
Sales in 2008 (EMS $8-$10M)
WiMax Equipment:
Industry Capital Spend
WiMax allows broadband wireless access networks and equipment to talk to each other
Estimates per Transmedia – based on provider spending plans
•
CTS Electronic Components awarded design wins with three different OEMs
serving several providers.
Content:  Frequency and Timing Modules, Crystal Oscillators, Filters
•
CTS EMS provides high level assembly for a major WiMax OEM.
WiMax
 
 
 
Sales
$ in Millions
Medical Ultrasound
   Wide Format
Inkjet Printer Head
Undersea Energy
Exploration
Technology:
- Superior piezo ceramic material
-
 Photolithographic capabilities
-
 Ultra-Thin
- High dielectric
Electronic Components –
Piezo Electronic Elements
 
 
 
Components & Sensors
EMS
SALES
$ in Millions
ADJUSTED
 SEGMENT
 OPERATING
EARNINGS
% OF SALES
Segment Performance
 
 
 

CTS Corporation
Appendix 1
 
 
 
 
 

 
CTS Corporation
  
 
  
 
  
 
  
Definition of Financial Term -
 
  
Adjusted Return on Invested Capital
  
               
   
Full Year
  
   
2005
 
2004
 
2003
  
               
Operating earnings
  
$
40.3
  
$
31.1
  
$
13.8
  
                     
Charges (credits) to reported operating earnings:
                    
                     
Restructuring and asset impairment charges
                
4.6
 
Gain on sale of excess equipment less LTCC severance
    
(1.2
)
            
Gain on sale of excess Canadian land
          
(2.7
)
      
                     
Total adjustments to reported operating earnings
   
(1.2
)
  
(2.7
)
  
4.6
 
                     
Adjusted operating earnings
 
$
39.1
  
$
28.4
  
$
18.4
  
                     
Tax rate
    
25
%
  
23
%
  
25
%
                     
Tax effected adjusted operating earnings
  
$
29.3
  
$
21.9
  
$
13.8
  
                     
                     
Invested Capital:
                    
Current Year:
                    
Shareholders' equity
  
$
329.6
  
$
310.7
  
$
294.2
  
Long-term debt
    
68.3
   
94.2
   
75.9
 
Notes payable and current portion of LT debt
    
13.4
   
3.3
   
-
 
Less: Cash
    
(12.0
)
  
(61.0
)
  
(25.4
)
Invested capital
    
399.3
   
347.2
   
344.7
 
                     
Prior Year:
                    
Shareholders' equity
    
310.7
   
294.2
   
265.0
 
Long-term debt
    
94.2
   
75.9
   
67.0
 
Notes payable and current portion of LT debt
    
3.3
   
-
   
28.3
 
Less: Cash
    
(61.0
)
  
(25.4
)
  
(9.2
)
Invested capital
    
347.2
   
344.7
   
351.1
 
                     
Adjusted invested capital
  
$
373.3
  
$
346.0
  
$
347.9
  
                     
Adjusted return on invested capital
    
7.9
%
  
6.3
%
  
4.0
%
                     
                     
Sales
  
$
617.5
  
$
531.3
  
$
463.0
  
Tax effected adjusted operating earnings
    
29.3
   
21.9
   
13.8
 
Tax effected adjusted operating margin as a
                   
percentage of sales (a)
    
4.7
%
  
4.1
%
  
3.0
%
                     
Sales
  
$
617.5
  
$
531.3
  
$
463.0
  
Adjusted invested capital
    
373.3
   
346.0
   
347.9
 
Invested capital turns (b)
    
1.65
   
1.54
   
1.33
 
                     
Adjusted return on invested capital (a) x (b)
    
7.9
%
  
6.3
%
  
4.0
%
 
 

 
 
 
 
 
 
CTS Corporation
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
Reconciliation of Segment Operating Earnings (Loss) to Adjusted Segment Operating Earnings (Loss)
  
 
  
($ in millions)
                                                  
 
 
  
YTD Q2 2006
  
2005
  
2004
  
2003
  
2002
  
2001
  
       
Components
      
Components
      
Components
      
Components
      
Components
      
Components
  
   
EMS
  
& Sensors
  
EMS
  
& Sensors
  
EMS
  
& Sensors
  
EMS
  
& Sensors
  
EMS
  
& Sensors
  
EMS
  
& Sensors
  
Segment Net Sales to External Customers
  
$
177.1
  
$
139.3
  
$
364.5
  
$
253.0
  
$
270.3
  
$
261.0
  
$
210.1
  
$
252.9
  
$
186.9
  
$
270.9
  
$
211.6
  
$
366.1
  
                                                                           
Segment Operating earnings (loss)
  
$
3.6
  
$
18.3
  
$
10.1
  
$
30.2
  
$
7.8
  
$
23.3
  
$
11.0
  
$
7.4
  
$
10.8
  
$
(6.0
)
$
10.5
  
$
(8.3
)
                                                                           
Charges (credits) to reported operating earnings (loss):
                                                                          
Customer reimbursement
                                                          
(3.1
)
            
Gain on sale of excess equipment less LTCC severance
                      
(1.2
)
                                                
Gain on sale of excess Canadian land
                                  
(2.7
)
                                    
                                                                           
Total adjustments to reported operating earnings (loss)
    
-
   
-
   
-
   
(1.2
)
  
-
   
(2.7
)
  
-
   
-
   
-
   
(3.1
)
  
-
   
-
 
                                                                           
Adjusted operating earnings (loss), excluding above referenced items
  
$
3.6
  
$
18.3
  
$
10.1
  
$
29.0
  
$
7.8
  
$
20.6
  
$
11.0
  
$
7.4
  
$
10.8
  
$
(9.1
)
$
10.5
  
$
(8.3
)
                                                                           
Adjusted segment operating earnings (loss), excluding above referenced items, as a percentage of total sales
    
2.0
%
  
13.1
%
  
2.8
%
  
11.5
%
  
2.9
%
  
7.9
%
  
5.2
%
  
2.9
%
  
5.8
%
  
-3.4
%
  
5.0
%
  
-2.3
%