Segments

9 Months Ended

Sep. 30, 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 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
Third Quarter of 2012
Net sales to external customers	$	75,565		$	61,792		$	137,357
Segment operating earnings before corporate and shared services charges	$	9,492		$	4,202		$	13,694
Corporate and shared services charges		(4,185	)		(1,827	)		(6,012	)
Segment operating earnings	$	5,307		$	2,375		$	7,682
Total assets	$	369,614		$	111,762		$	481,376
Third Quarter of 2011
Net sales to external customers	$	69,089		$	76,981		$	146,070
Segment operating earnings before corporate and shared services charges	$	7,738		$	5,870		$	13,608
Corporate and shared services charges		(3,557	)		(2,297	)		(5,854	)
Segment operating earnings (1)	$	4,181		$	3,573		$	7,754
Total assets	$	367,387		$	149,088		$	516,475
First Nine Months of 2012
Net sales to external customers	$	228,806		$	209,814		$	438,620
Segment operating earnings before corporate and shared services charges	$	25,233		$	10,744		$	35,977
Corporate and shared services charges		(11,543	)		(5,276	)		(16,819	)
Segment operating earnings (2)	$	13,690		$	5,468		$	19,158
Total assets	$	369,614		$	111,762		$	481,376
First Nine Months of 2011
Net sales to external customers	$	209,158		$	235,349		$	444,507
Segment operating earnings before corporate and shared services charges	$	26,388		$	9,960		$	36,348
Corporate and shared services charges		(11,601	)		(6,013	)		(17,614	)
Segment operating earnings (3)	$	14,787		$	3,947		$	18,734
Total assets	$	367,387		$	149,088		$	516,475

(1) EMS segment’s operating earnings of $3,573 includes $2,687 of insurance recovery for property damage related to the fire at CTS Scotland’s manufacturing facility.

(2) EMS segment’s operating earnings of $5,468 includes $1,769 of insurance recover for property damage related to the flood at CTS Thailand’s manufacturing facility.

(3) EMS segment’s operating earnings of $3,947 includes $2,687 of insurance recovery for property damage related to the fire at CTS Scotland’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 nine-month periods then ended:

	Three Months Ended						Nine Months Ended
($ in thousands)	September 30, 2012			October 2, 2011			September 30, 2012			October 2, 2011
Total segment operating earnings	$	7,682		$	7,754		$	19,158		$	18,734
Restructuring and restructuring-related charges		(878	)		—			(4,709	)		(694	)
Interest expense		(584	)		(549	)		(1,869	)		(1,552	)
Interest income		425			359			1,341			831
Other income/(expense)		763			(65	)		297			1,808
Earnings before income taxes	$	7,408		$	7,499		$	14,218		$	19,127