Segments

3 Months Ended

Jul. 01, 2012

Segments [Abstract]

Segments

NOTE G —  Segments

CTS reportable segments are grouped by entities that exhibit similar economic characteristics and the segment’s reporting results are regularly reviewed by CTS’ chief operating decision maker to make decisions about resources to be allocated to these segments and to evaluate the segment’s performance. CTS has two reportable segments: 1) Components and Sensors and 2) EMS.

Components and sensors are products which perform specific electronic functions for a given product family and are intended for use in customer assemblies. Components and sensors consist principally of: automotive sensors and actuators used in commercial or consumer vehicles; electronic components used in communications infrastructure and computer markets; terminators, including ClearONE™ terminators, used in computer and other high speed applications, switches, resistor networks and potentiometers used to serve multiple markets; and fabricated piezo-electric materials and substrates used primarily in medical, computer and industrial markets.

EMS includes the higher level assembly of electronic and mechanical components into a finished subassembly or assembly performed under a contract manufacturing agreement with an Original Equipment Manufacturer (“OEM”) or other contract manufacturer. Additionally for some customers, CTS provides full turnkey manufacturing and completion including design, bill-of-material management, logistics, and repair.

The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies in the Company’s annual report on Form 10-K. Management evaluates performance based upon segment operating earnings/(loss) before interest expense, interest income, other non-operating income/(expense), and income tax expense.

Summarized financial information concerning CTS’ reportable segments is shown in the following table:

($ in thousands)	Components and Sensors			EMS			Total
Second Quarter of 2012
Net sales to external customers	$	76,823		$	77,471		$	154,294
Segment operating earnings before corporate and shared services charges	$	8,398		$	6,086		$	14,484
Corporate and shared services charges		(3,034	)		(1,906	)		(4,940	)
Segment operating earnings	$	5,364		$	4,180		$	9,544
Total assets	$	361,483		$	128,606		$	490,089
Second Quarter of 2011
Net sales to external customers	$	68,037		$	78,882		$	146,919
Segment operating earnings before corporate and shared services charges	$	8,846		$	2,259		$	11,105
Corporate and shared services charges		(3,995	)		(1,889	)		(5,884	)
Segment operating earnings	$	4,851		$	370		$	5,221
Total assets	$	355,841		$	139,582		$	495,423
First Six Months of 2012
Net sales to external customers	$	153,241		$	148,022		$	301,263
Segment operating earnings before corporate and shared services charges	$	15,742		$	6,541		$	22,283
Corporate and shared services charges		(7,358	)		(3,449	)		(10,807	)
Segment operating earnings (1)	$	8,384		$	3,092		$	11,476
Total assets	$	361,483		$	128,606		$	490,089
First Six Months of 2011
Net sales to external customers	$	140,068		$	158,369		$	298,437
Segment operating earnings before corporate and shared services charges	$	18,651		$	4,089		$	22,740
Corporate and shared services charges		(8,044	)		(3,716	)		(11,760	)
Segment operating earnings	$	10,607		$	373		$	10,980
Total assets	$	355,841		$	139,582		$	495,423

(1) EMS segment’s operating earnings of $3,092 includes $1,769 of insurance recovery for property damage related to the flood at CTS Thailand’s manufacturing facility.

Reconciling information between reportable segments’ operating earnings and CTS’ consolidated earnings before income taxes is shown in the following table for the three and six-month periods then ended:

	Three Months Ended						Six Months Ended
($ in thousands)	July 1, 2012			July 3, 2011			July 1, 2012			July 3, 2011
Total segment operating earnings	$	9,544		$	5,221		$	11,476		$	10,980
Restructuring charges		(3,831	)		(694	)		(3,831	)		(694	)
Interest expense		(626	)		(511	)		(1,285	)		(1,003	)
Interest income		467			276			916			472
Other (expense)/income		(1,041	)		743			(466	)		1,873
Earnings before income taxes	$	4,513		$	5,035		$	6,810		$	11,628