Segments

3 Months Ended

Mar. 31, 2013

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) Electronics Manufacturing Services (“EMS”).

Components and sensors are products that 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 restructuring and impairment charge, 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
First Quarter of 2013
Net sales to external customers	$	98,062		$	51,450		$	149,512
Segment operating earnings before corporate and shared services charges		10,382			1,063			11,445
Corporate and shared services charges		(5,979	)		(1,682	)		(7,661	)
Segment operating earnings/(loss)		4,403			(619	)		3,784
Total assets		450,827			113,723			564,550
First Quarter of 2012
Net sales to external customers	$	76,418		$	70,551		$	146,969
Segment operating earnings before corporate and shared services charges		7,344			455			7,799
Corporate and shared services charges		(4,324	)		(1,543	)		(5,867	)
Segment operating earnings/(loss) (1)		3,020			(1,088	)		1,932
Total assets		357,687			150,979			508,666

⁽¹⁾  EMS segment’s operating loss of $(1,088) 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 three-month periods then ended:

($ in thousands)	March 31, 2013			April 1, 2012
Total segment operating earnings	$	3,784		$	1,932
Restructuring and restructuring-related charges — Components and Sensors		(227	)		—
Restructuring and restructuring-related charges — EMS		(595	)		—
Interest expense		(915	)		(659	)
Interest income		413			449
Other income		298			575
Earnings before income taxes	$	2,758		$	2,297