Indiana
|
1-4639
|
35-0225010
|
(State or Other Jurisdiction of Incorporation)
|
(Commission File Numbers)
|
(I.R.S. Employer Identification Nos.)
|
905 West Boulevard North
|
||
Elkhart, Indiana
|
46514
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
q
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
q
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
q
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
q
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Item 2.02
|
Results of Operations and Financial Condition.
|
99.1
|
Press Release dated January 25, 2012
|
·
|
CTS announced a 17% dividend increase to its shareholders. On an annual basis the dividend will now be $0.14 per share compared to the previous rate of $0.12 per share.
|
·
|
The acquisition of Valpey-Fisher was completed this week. Valpey-Fisher is a U.S. based public company located near Boston, with annual sales of approximately $15 million. Valpey-Fisher is a designer and manufacturer of highly engineered electronic components. This acquisition will expand CTS’ technology and bring strong engineering capabilities and management leadership.
|
·
|
We repurchased approximately 403,000 shares for $3.6 million, at an average price of $8.86 in 2011, of which approximately 257,000 shares were repurchased in the fourth quarter of 2011. Approximately 574,000 shares remain in our one million share buyback authorization.
|
·
|
In the fourth quarter, CTS initiated a bank amendment which was completed in early January. This amendment increased the Company’s facility from $150 million to $200 million, while keeping it unsecured and at a more favorable pricing through 2017.
|
Fourth Quarter
|
Fourth Quarter
|
Third Quarter
|
|||||||||
2011
|
2010
|
2011
|
|||||||||
Segment
|
Segment
|
Segment
|
|||||||||
Net
|
Operating
|
Net
|
Operating
|
Net
|
Operating
|
||||||
Sales
|
Earnings
|
Sales
|
Earnings
|
Sales
|
Earnings
|
||||||
Components and Sensors
|
$70.7
|
$6.5
|
$65.4
|
$6.7
|
$69.1
|
$4.2
|
|||||
Electronics Manufacturing Services (EMS) *
|
73.3
|
3.1
|
79.6
|
1.0
|
77.0
|
3.6
|
|||||
Segment Operating Earnings
|
9.6
|
7.7
|
7.8
|
||||||||
Expenses not allocated to business segments:
|
|||||||||||
- Restructuring and related charges
|
(2.4)
|
(1.7)
|
-
|
||||||||
Total
|
$144.0
|
$7.2
|
$145.0
|
$6.0
|
$146.1
|
$7.8
|
|||||
* Fourth quarter 2011 includes $3.4 million and third quarter 2011 includes $2.7 million of insurance recoveries for fire-related property damage.
|
CTS CORPORATION AND SUBSIDIARIES
|
||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED | ||||||||||||
(In thousands, except per share amounts)
|
||||||||||||
Three Months Ended
|
Twelve Months Ended
|
|||||||||||
Dec 31
|
Dec 31
|
Dec 31
|
Dec 31
|
|||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||
Net sales
|
$ 143,999
|
$ 145,025
|
$ 588,506
|
$ 552,641
|
||||||||
Costs and expenses:
|
||||||||||||
Cost of goods sold
|
118,161
|
115,903
|
478,657
|
432,731
|
||||||||
Insurance recovery for business interruption
|
(2,190)
|
-
|
(4,082)
|
-
|
||||||||
Selling, general and administrative expenses
|
16,816
|
17,366
|
71,890
|
72,310
|
||||||||
Research and development expenses
|
5,208
|
4,328
|
19,990
|
18,313
|
||||||||
Insurance recovery for property damage
|
(3,380)
|
-
|
(6,067)
|
-
|
||||||||
Restructuring and impairment charges
|
2,184
|
1,444
|
2,878
|
1,444
|
||||||||
Operating earnings
|
7,200
|
5,984
|
25,240
|
27,843
|
||||||||
Other (expense) / income:
|
||||||||||||
Interest expense
|
(141)
|
(211)
|
(862)
|
(689)
|
||||||||
Other
|
151
|
(45)
|
1,959
|
872
|
||||||||
Total other expense
|
10
|
(256)
|
1,097
|
183
|
||||||||
Earnings before income taxes
|
7,210
|
5,728
|
26,337
|
28,026
|
||||||||
Income tax expense
|
1,354
|
928
|
5,370
|
5,988
|
||||||||
Net earnings
|
$ 5,856
|
$ 4,800
|
$ 20,967
|
$ 22,038
|
||||||||
Net earnings per share:
|
||||||||||||
Basic
|
$ 0.17
|
$ 0.14
|
$ 0.61
|
$ 0.65
|
||||||||
-
|
||||||||||||
Diluted
|
$ 0.17
|
$ 0.14
|
$ 0.60
|
$ 0.63
|
||||||||
Cash dividends declared per share
|
$ 0.035
|
$ 0.03
|
$ 0.125
|
$ 0.12
|
||||||||
Average common shares outstanding:
|
||||||||||||
Basic
|
34,241
|
34,184
|
34,321
|
34,090
|
||||||||
Diluted
|
34,945
|
34,952
|
35,006
|
34,849
|
CTS Corporation and Subsidiaries
|
||||||||
Condensed Consolidated Balance Sheets - Unaudited
|
||||||||
(In thousands of dollars)
|
||||||||
December 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Cash and cash equivalents
|
$ 76,412
|
$ 73,315
|
||||||
Accounts receivable, net
|
88,345
|
95,930
|
||||||
Inventories, net
|
92,540
|
76,885
|
||||||
Other current assets
|
26,089
|
20,525
|
||||||
Total current assets
|
283,386
|
266,655
|
||||||
Property, plant & equipment, net
|
84,860
|
78,213
|
||||||
Other assets
|
112,569
|
137,716
|
||||||
Total Assets
|
$ 480,815
|
$ 482,584
|
||||||
Notes payable and current portion
|
||||||||
of long-term debt
|
$ -
|
$ -
|
||||||
Accounts payable
|
80,468
|
75,384
|
||||||
Other accrued liabilities
|
43,769
|
44,716
|
||||||
Total current liabilities
|
124,237
|
120,100
|
||||||
Long-term debt
|
74,400
|
70,000
|
||||||
Other obligations
|
18,881
|
18,234
|
||||||
Shareholders' equity
|
263,297
|
274,250
|
||||||
Total Liabilities and
|
||||||||
Shareholders' Equity
|
$ 480,815
|
$ 482,584
|
CTS CORPORATION AND SUBSIDIARIES
|
||||||||
OTHER SUPPLEMENTAL INFORMATION
|
||||||||
Gross Margin
|
||||||||
The following table reconciles GAAP gross margin to adjusted gross margin and gross margin as a percentage
|
||||||||
of sales to adjusted gross margin as a percentage of sales.
|
||||||||
$ in thousands
|
Three Months Ended
|
Twelve Months Ended
|
||||||
Dec 31
|
Dec 31
|
Dec 31
|
Dec 31
|
|||||
2011
|
2010
|
2011
|
2010
|
|||||
GAAP gross margin
|
$ 25,838
|
$ 29,122
|
$ 109,849
|
$ 119,910
|
||||
GAAP gross margin as a percentage of sales
|
17.9%
|
20.1%
|
18.7%
|
21.7%
|
||||
Restructuring related charge
|
260
|
253
|
260
|
253
|
||||
Insurance recovery for business interruption
|
2,190
|
-
|
4,082
|
-
|
||||
Adjusted gross margin
|
$ 28,288
|
$ 29,375
|
$ 114,191
|
$ 120,163
|
||||
Adjusted gross margin as a percentage of sales
|
19.6%
|
20.3%
|
19.4%
|
21.7%
|
||||
Earnings per Share
|
||||||||
The following table reconciles GAAP earnings per share to adjusted earnings per share for the Company:
|
||||||||
Three Months Ended
|
Twelve Months Ended
|
|||||||
Dec 31
|
Dec 31
|
Dec 31
|
Dec 31
|
|||||
2011
|
2010
|
2011
|
2010
|
|||||
GAAP net earnings per share
|
$ 0.17
|
$ 0.14
|
$ 0.60
|
$ 0.63
|
||||
Tax affected charges to reported diluted loss per share:
|
||||||||
Restructuring charge
|
0.05
|
0.03
|
0.06
|
0.03
|
||||
Additional legal costs
|
-
|
-
|
0.01
|
-
|
||||
Adjusted earnings per share
|
$ 0.22
|
$ 0.17
|
$ 0.67
|
$ 0.66
|
||||
Non-GAAP financial measures are discussed below.
|
||||||||
Additional Information
|
||||||||
Management estimates that the full-year net impact of the lost earnings related to the Japan earthquake and the
|
||||||||
Thailand floods, net of all insurance recoveries related to the Japan earthquake, the Thailand floods and the
|
||||||||
Scotland fire, is approximately a negative $0.02 per share.
|
||||||||
The following table includes other financial information not presented in the preceding financial statements.
|
||||||||
Fourth
|
Full
|
|||||||
$ In thousands
|
Quarter
|
Year
|
||||||
Other Expense Information
|
2011
|
2011
|
||||||
Depreciation and Amortization
|
$ 4,372
|
$ 17,548
|
||||||
Equity Based Compensation
|
382
|
3,745
|