8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  April 28, 2022

CTS CORPORATION

(Exact Name of Registrant as Specified in its Charter)

IN	1-4639	35-0225010
(State or other jurisdiction of incorporation)	(Commission File Number)	(1.R.S. Employer Identification No)
4925 Indiana Avenue
Lisle IL		60532
(Address of principal executive offices)		(Zip Code)

Registrant's Telephone Number, Including Area Code:(630) 577-8800

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240. l 4d2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, no par value	CTS	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02     Results of Operations and Financial Condition.

On April 28, 2022, CTS Corporation (the "Registrant") issued a press release providing certain results for the first quarter ended March 31, 2022, as more fully described in the press release.  A copy of the press release is attached hereto as Exhibit 99.l and is incorporated by reference herein.

The information contained in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.l hereto, is being "furnished" to the Securities and Exchange Commission and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act” ) or otherwise subject to the liabilities of that section.  Furthermore, such information shall not be deemed to be incorporated by reference into any filing made by the Registrant under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except as set forth by specific reference in such filing.

Item 7.01     Regulation FD Disclosure.

As disclosed in the press release furnished as Exhibit 99.1, the Registrant will hold a live web cast on April 28, 2022, relating to the Registrant’s financial results for the first quarter ended March 31, 2022.  A copy of the slides to be presented during the Registrant’s web cast and discussed in the conference call relating to such financial results is being furnished as Exhibit 99.2 to this Current Report on Form 8-K.

By filing this Current Report on Form 8-K and furnishing the information contained herein, the Company makes no admission as to the materiality of any information in this report that is required to be disclosed solely by reason of Regulation FD. 

The information contained in Item 7.01 of this Current Report on Form 8-K and Exhibit 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section.  Furthermore, such information shall not be deemed to be incorporated by reference into any filing made by the Registrant under the Securities Act or the Exchange Act, except as set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit	Description
99.1	Earnings Release dated April 28, 2022
99.2	Slides of CTS Corporation, 1st Quarter 2022, dated April 28, 2022
104	Cover Page Interactive Data File (embedded within the Inline XBRL Document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on  its behalf by the undersigned hereunto duly authorized.

Date: April 28, 2022		CTS CORPORATION
	By:	/s/ Thomas M. White
		Thomas M. White
		Corporate Controller

EX-99.1

Exhibit 99.1

 

April 28, 2022   FOR IMMEDIATE RELEASE

CTS Announces First Quarter 2022 Results

Delivered solid growth, further advancing diversification strategy

Lisle, Ill. - CTS Corporation (NYSE: CTS), a leading global designer and manufacturer of custom engineered solutions that “sense, connect and move” today announced first quarter 2022 results.

“Our solid first quarter results highlight the progress of our diversification strategy and our ability to deliver enhanced profitability, with revenue growing 15% and Adjusted EBITDA margin expanding 350-basis points. Our acquisition of TEWA Sensors in the first quarter and our recently announced agreement to acquire Ferroperm demonstrate our efforts to expand growth of non-transportation end markets and will move this portion of the business closer to 50% of total revenues in the year ahead,” said Kieran O’Sullivan, CEO of CTS Corporation. "Demand remains robust across all end markets. Our strong balance sheet and solid cash flow generation continue to be key competitive advantages as we further execute on our strategic priorities and drive value for our shareholders.”

First Quarter 2022 Results

• Sales were $147.7 million, up 15% year-over-year. Sales to non-transportation end markets increased 30%, and sales to the transportation end market increased 4% over the same period.

• Net income was $20.2 million, or $0.63 per diluted share, compared to $12.0 million, or $0.37 per diluted share, in the first quarter of 2021.

• Adjusted diluted EPS was $0.67, up from $0.46 in the first quarter of 2021.

• Adjusted EBITDA margin was 23.5% compared to 20.0% in the first quarter of 2021.

• Operating cash flow was $19.3 million compared to $20.1 million in the first quarter of 2021.

2022 Guidance

Including the impact of the recent TEWA Sensors acquisition, CTS now expects full year 2022 sales to be in the range of $550 – $580 million, up from the previous guidance of $525 – $550 million and adjusted diluted EPS in the range of $2.20 - $2.45, up from the previous guidance of $2.00 – $2.25. Management continues to carefully evaluate the impact of inflation, supply chain issues, COVID 19-related disruptions in China, and geopolitical risks.

Conference Call and Supplemental Materials

As previously announced, the Company has scheduled a conference call at 10:00 a.m. (EDT) today to discuss the first quarter 2022 financial results. The dial-in number for the U.S. and Canada is 844-200-6205 (+1 929-526-1599, if calling from outside the U.S. or Canada).  The passcode is 549088. In addition, the Company will be using a supplemental slide presentation that will be referred to during the call. The presentation and a live audio webcast of the conference call will be available and can be accessed directly from CTS’ website at https://www.ctscorp.com/investors/events-presentations/.

www.ctscorp.com

Exhibit 99.1

About CTS

CTS (NYSE: CTS) is a leading designer and manufacturer of products that Sense, Connect, and Move.  The company manufactures sensors, actuators, and electronic components in North America, Europe, and Asia, and provides engineered products to customers in the aerospace/defense, industrial, medical, and transportation markets. For more information, visit www.ctscorp.com.

Safe Harbor

This document contains statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, any financial or other guidance, statements that reflect our current expectations concerning future results and events, and any other statements that are not based solely on historical fact. Forward-looking statements are based on management’s expectations, certain assumptions and currently available information. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are based on various assumptions as to future events, the occurrence of which necessarily are subject to uncertainties. These forward-looking statements are made subject to certain risks, uncertainties and other factors, which could cause CTS’ actual results, performance or achievements to differ materially from those presented in the forward-looking statements. Examples of factors that may affect future operating results and financial condition include, but are not limited to: the ultimate impact of the COVID-19 pandemic on CTS’ business, results of operations or financial condition; changes in the economy generally and in respect to the business in which CTS operates; unanticipated issues in integrating acquisitions including TEWA Temperature Sensors and Ferroperm Piezoceramics(once closed subject to obtaining regulatory approvals and satisfaction of customary closing conditions); the results of actions to reposition CTS’ business; rapid technological change; general market conditions in the transportation, as well as conditions in the industrial, aerospace and defense, and medical markets; reliance on key customers; unanticipated public health crises, natural disasters or other events; environmental compliance and remediation expenses; the ability to protect CTS’ intellectual property; pricing pressures and demand for CTS’ products; and risks associated with CTS’ international operations, including trade and tariff barriers, exchange rates and political and geopolitical risks (including, without limitation, the potential impact the conflict between Russia and Ukraine may have on our business, results of operations and financial condition). Many of these, and other risks and uncertainties, are discussed in further detail in Item 1A. of CTS’ Annual Report on Form 10-K and other filings made with the SEC. CTS undertakes no obligation to publicly update CTS’ forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes.

Non-GAAP Financial Measures

From time to time, CTS may use non-GAAP financial measures in discussing CTS’ business. These measures are intended to supplement, not replace, CTS’ presentation of its financial results in accordance with U.S. GAAP. CTS’ management believes that non-GAAP financial measures can be useful to investors in analyzing CTS’ financial performance and results of operations over time. CTS recommends that investors consider both actual and adjusted measures in evaluating the performance of CTS with peer companies.

The information included in this press release includes the non-GAAP financial measures of adjusted gross margin, adjusted operating earnings, adjusted EBITDA, adjusted net earnings, adjusted diluted earnings per share, debt to capitalization ratio, controllable working capital ratio, and free cash flow. Many of these non-GAAP financial measures exclude the effect of certain expenses and income not related directly to the underlying performance of CTS’ fundamental business operations.

CTS believes that adjusted gross margins, adjusted operating earnings, adjusted EBITDA, adjusted net earnings and, adjusted diluted earnings per share provide useful information to investors regarding its operational performance because they enhance an investor’s overall understanding of CTS’ core financial performance and facilitate comparisons to historical results of operations, by excluding items that are not related directly to the underlying performance of CTS’ fundamental business operations or were not part of CTS’ business operations during a comparable period.

www.ctscorp.com

Exhibit 99.1

CTS believes that debt to capitalization ratio is a measurement of financial leverage and provides an insight into the financial structure of CTS and its financial strength. CTS believes the controllable working capital ratio provides an objective measure of the efficiency with which CTS manages its short-term capital needs.  CTS believes that free cash flow is a useful measure of its ability to generate cash.

CTS believes that these non-GAAP financial measures are commonly used by financial analysts and others in the industries in which CTS operates, and thus further provide useful information to investors. Note that CTS’ definitions of these non-GAAP financial measures may differ from those terms as defined or used by other companies.

CTS does not provide reconciliations of forward-looking non-GAAP financial measures, such as estimated adjusted diluted earnings per share, to the most comparable GAAP financial measures on a forward-looking basis because CTS is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, restructuring costs, environmental remediation costs, acquisition related costs, foreign exchange rates and other non-routine costs. Each of such adjustments has not yet occurred, are out of CTS' control and/or cannot be reasonably predicted. For the same reasons, CTS is unable to address the probable significance of the unavailable information.

Contact

Ashish Agrawal

Vice President and Chief Financial Officer

CTS Corporation

4925 Indiana Avenue

Lisle, IL 60532 USA

+1 (630) 577-8800

ashish.agrawal@ctscorp.com

www.ctscorp.com

Exhibit 99.1

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OFEARNINGS- UNAUDITED

(In thousands of dollars, except per share amounts)

	Three Months Ended
	March 31, 2022			March 31, 2021
Net sales	$	147,695		$	128,427
Cost of goods sold		93,355			85,836
Gross margin		54,340			42,591
Selling, general and administrative expenses		21,788			18,325
Research and development expenses		6,194			5,687
Restructuring charges		312			81
Operating earnings		26,046			18,498
Other (expense) income:
Interest expense		(546	)		(555	)
Interest income		180			202
Other income (expense), net		66			(3,356	)
Total other expense, net		(300	)		(3,709	)
Earnings before income taxes		25,746			14,789
Income tax expense		5,507			2,799
Net earnings		20,239			11,990
Earnings per share:
Basic	$	0.63		$	0.37
Diluted	$	0.63		$	0.37
Basic weighted – average common shares outstanding:		32,123			32,319
Effect of dilutive securities		204			301
Diluted weighted – average common shares outstanding:		32,327			32,620
Cash dividends declared per share	$	0.04		$	0.04

www.ctscorp.com

Exhibit 99.1

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of dollars)

	(Unaudited)
	March 31, 2022			December 31, 2021
ASSETS
Current Assets
Cash and cash equivalents	$	126,118		$	141,465
Accounts receivable, net		95,107			82,191
Inventories, net		52,454			49,506
Other current assets		18,366			15,927
Total current assets		292,045			289,089
Property, plant and equipment, net		97,041			96,876
Operating lease assets, net		23,212			21,594
Other Assets
Prepaid pension asset		31,882			49,382
Goodwill		117,524			109,798
Other intangible assets, net		79,849			69,888
Deferred income taxes		23,828			25,415
Other		19,365			2,420
Total other assets		272,448			256,903
Total Assets	$	684,746		$	664,462
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	60,010		$	55,537
Operating lease obligations		3,522			3,393
Accrued payroll and benefits		12,954			18,418
Accrued expenses and other liabilities		38,554			36,718
Total current liabilities		115,040			114,066
Long-term debt		50,000			50,000
Long-term operating lease obligations		22,712			21,354
Long-term pension obligations		6,464			6,886
Deferred income taxes		5,865			5,894
Other long-term obligations		4,487			2,684
Total Liabilities		204,568			200,884
Commitments and Contingencies
Shareholders’ Equity
Common stock		316,496			314,620
Additional contributed capital		41,158			42,549
Retained earnings		511,197			492,242
Accumulated other comprehensive loss		(3,445	)		(4,525	)
Total shareholders’ equity before treasury stock		865,406			844,886
Treasury stock		(385,228	)		(381,308	)
Total shareholders’ equity		480,178			463,578
Total Liabilities and Shareholders’ Equity	$	684,746		$	664,462

www.ctscorp.com

Exhibit 99.1

CTS CORPORATION AND SUBSIDIARIES

OTHER SUPPLEMENTAL INFORMATION - UNAUDITED

(In millions of dollars, except per share amounts)

Adjusted Gross Margin

	Three Months Ended March 31,						Twelve Months Ended December 31,
	2022			2021			2021			2020			2019
Gross margin	$	54.3		$	42.6		$	184.6		$	139.1		$	157.6
Adjustments to reported gross margin:
Inventory fair value step-up	$	0.6		$	—		$	—		$	—		$	—
Adjusted gross margin	$	54.9		$	42.6		$	184.6		$	139.1		$	157.6
Net sales	$	147.7		$	128.4		$	512.9		$	424.1		$	469.0
Adjusted gross margin as a % of net sales		37.2	%		33.2	%		36.0	%		32.8	%		33.6	%

Adjusted Operating Earnings

	Three Months Ended March 31,						Twelve Months Ended December 31,
	2022			2021			2021			2020			2019
Operating earnings	$	26.0		$	18.5		$	76.5		$	45.1		$	53.8
Adjustments to reported operating earnings:
Restructuring charges		0.3			0.1			1.7			1.8			7.4
Environmental charges		0.5			0.2			2.3			2.8			2.3
Legal settlement		—			—			—			—			(0.5	)
Transaction costs		0.5			—			—			0.3			0.7
Inventory fair value step-up		0.6			—			—			—			—
Costs of tax improvement initiatives		—			—			—			—			0.1
Total adjustments to reported operating earnings	$	1.9		$	0.3		$	3.9		$	4.9		$	10.0
Adjusted operating earnings	$	28.0		$	18.8		$	80.4		$	50.0		$	63.8
Net sales	$	147.7		$	128.4		$	512.9		$	424.1		$	469.0
Adjusted operating earnings as a % of net sales		19.0	%		14.6	%		15.7	%		11.8	%		13.6	%

www.ctscorp.com

Exhibit 99.1

Adjusted EBITDA

	Three Months Ended March 31,						Twelve Months Ended December 31,
	2022			2021			2021			2020			2019
Net earnings (loss)	$	20.2		$	12.0		$	(41.9	)	$	34.7		$	36.1
Depreciation and amortization expense		6.7			6.8			26.9			26.7			24.6
Interest expense		0.5			0.6			2.1			3.3			2.6
Tax expense (benefit)		5.5			2.8			(19.0	)		10.8			14.1
EBITDA		33.0			22.2			(31.8	)		75.4			77.5
Adjustments to EBITDA:
Restructuring charges		0.3			0.1			1.7			1.8			6.9
Environmental charges		0.5			0.2			2.3			2.8			2.3
Legal settlement		—			—			—			—			(0.5	)
Transaction costs		0.5			—			—			0.3			0.7
Inventory fair value step-up		0.6			—			—			—			—
Costs of tax improvement initiatives		—			—			—			—			0.1
Non-cash pension expense		—			1.9			132.4			2.5			0.8
Foreign currency (gain) loss		(0.3	)		1.3			3.3			(5.3	)		1.8
Total adjustments to EBITDA		1.7			3.5			139.7			2.1			12.0
Adjusted EBITDA	$	34.7		$	25.7		$	107.8		$	77.5		$	89.5
Net sales	$	147.7		$	128.4		$	512.9		$	424.1		$	469.0
Adjusted EBITDA as a % of net sales		23.5	%		20.0	%		21.0	%		18.3	%		19.1	%

www.ctscorp.com

Exhibit 99.1

Adjusted Net Earnings

	Three Months Ended March 31,						Twelve Months Ended December 31,
	2022			2021			2021			2020			2019
Net earnings (loss) (A)	$	20.2		$	12.0		$	(41.9	)	$	34.7		$	36.1
Adjustments to reported net earnings (loss):
Restructuring charges		0.3			0.1			1.7			1.8			7.4
Environmental charges		0.5			0.2			2.3			2.8			2.3
Legal settlement		—			—			—			—			(0.5	)
Transaction costs		0.5			—			—			0.3			0.7
Inventory fair value step-up		0.6			—			—			—			—
Costs of tax improvement initiatives		—			—			—			—			0.1
Non-cash pension expense		—			1.9			132.4			2.5			0.8
Foreign currency (gain) loss		(0.3	)		1.3			3.3			(5.3	)		1.8
Total adjustments to reported net earnings (loss)	$	1.7		$	3.5		$	139.7		$	2.1		$	12.6
Total adjustments, tax affected (B)	$	1.4		$	3.0		$	108.6		$	0.4		$	10.2
Tax adjustments:
Increase in valuation allowances		—			—			0.9			0.2			—
Other discrete tax items		—			—			(4.7	)		1.2			1.8
Total tax adjustments (C)	$	—		$	—		$	(3.8	)	$	1.4		$	1.8
Adjusted net earnings (A+B+C)	$	21.7		$	15.0		$	63.0		$	36.5		$	48.1
Net sales	$	147.7		$	128.4		$	512.9		$	424.1		$	469.0
Adjusted net earnings as a % of net sales		14.7	%		11.7	%		12.3	%		8.6	%		10.3	%

Adjusted Diluted Earnings Per Share

	Three Months Ended March 31,					Twelve Months Ended December 31,
	2022			2021		2021			2020			2019
GAAP diluted earnings (loss) per share	$	0.63		$	0.37	$	(1.30	)	$	1.06		$	1.09
Tax affected charges to reported diluted earnings (loss) per share:
Restructuring charges		0.01			—		0.06			0.04			0.18
Foreign currency (gain) loss		(0.01	)		0.04		0.10			(0.16	)		0.05
Non-cash pension expense		—			0.04		3.13			0.06			0.02
Environmental charges		0.01			0.01		0.05			0.07			0.05
Transaction costs		0.02			—		—			0.01			0.02
Inventory fair value step-up		0.01			—		—			—			—
Legal settlement		—			—		—			—			(0.01	)
Discrete tax items		—			—		(0.11	)		0.04			0.05
Adjusted diluted earnings per share	$	0.67		$	0.46	$	1.93		$	1.12		$	1.45

www.ctscorp.com

Exhibit 99.1

Debt to Capitalization

	Three Months Ended March 31,						Twelve Months Ended December 31,
	2022			2021			2021			2020			2019
Total debt (A)	$	50.0		$	50.0		$	50.0		$	54.6		$	99.7
Total shareholders' equity (B)	$	480.2		$	435.7		$	463.6		$	423.7		$	405.2
Total capitalization (A+B)	$	530.2		$	485.7		$	513.6		$	478.3		$	504.9
Total debt to capitalization		9.4	%		10.3	%		9.7	%		11.4	%		19.7	%

Controllable Working Capital

	Three Months Ended March 31,						Twelve Months Ended December 31,
	2022			2021			2021			2020			2019
Net accounts receivable	$	95.1		$	81.6		$	82.2		$	81.0		$	78.0
Net inventory	$	52.5		$	47.5		$	49.5		$	45.9		$	42.2
Accounts payable	$	(60.0	)	$	(53.3	)	$	(55.5	)	$	(50.5	)	$	(48.2	)
Controllable working capital	$	87.6		$	75.8		$	76.2		$	76.4		$	72.0
Quarter sales	$	147.7		$	128.4		$	132.5		$	123.0		$	115.0
Multiplied by 4		4			4			4			4			4
Annualized sales	$	590.8		$	513.6		$	530.1		$	492.1		$	460.2
Controllable working capital as a % of annualized net sales		14.8	%		14.8	%		14.4	%		15.5	%		15.7	%

Free Cash Flow

	Three Months Ended March 31,						Twelve Months Ended December 31,
	2022			2021			2021			2020			2019
Net cash provided by operating activities	$	19.3		$	20.1		$	86.1		$	76.8		$	64.4
Capital expenditures		(3.4	)		(1.6	)		(15.6	)		(14.9	)		(21.7	)
Free cash flow	$	15.9		$	18.5		$	70.5		$	61.9		$	42.7

Capital Expenditures

	Three Months Ended March 31,						Twelve Months Ended December 31,
	2022			2021			2021			2020			2019
Capital expenditures	$	3.4		$	1.6		$	15.6		$	14.9		$	21.7
Net sales	$	147.7		$	128.4		$	512.9		$	424.1		$	469.0
Capex as % of net sales		2.3	%		1.3	%		3.0	%		3.5	%		4.6	%

www.ctscorp.com

Exhibit 99.1

Additional Information

The following table includes other financial information not presented in the preceding financial statements.

	Three Months Ended March 31,				Twelve Months Ended December 31,
	2022		2021		2021		2020		2019
Depreciation and amortization expense	$	6.7	$	6.8	$	26.9	$	26.7	$	24.6
Stock-based compensation expense	$	2.0	$	1.2	$	6.1	$	3.4	$	5.0

www.ctscorp.com

EX-99.2

CTS Corporation 1st Quarter 2022 Earnings Call April 28, 2022 Exhibit 99.2

Forward-Looking Statements This document contains statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, any financial or other guidance, statements that reflect our current expectations concerning future results and events, and any other statements that are not based solely on historical fact. Forward-looking statements are based on management’s expectations, certain assumptions and currently available information. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are based on various assumptions as to future events, the occurrence of which necessarily are subject to uncertainties. These forward-looking statements are made subject to certain risks, uncertainties and other factors, which could cause CTS’ actual results, performance or achievements to differ materially from those presented in the forward-looking statements. Examples of factors that may affect future operating results and financial condition include, but are not limited to: the ultimate impact of the COVID-19 pandemic on CTS’ business, results of operations or financial condition; changes in the economy generally and in respect to the business in which CTS operates; unanticipated issues in integrating acquisitions including TEWA Temperature Sensors and Ferroperm Piezoceramics (once closed subject to obtaining regulatory approvals and satisfaction of customary closing conditions); the results of actions to reposition CTS’ business; rapid technological change; general market conditions in the transportation, as well as conditions in the industrial, aerospace and defense, and medical markets; reliance on key customers; unanticipated public health crises, natural disasters or other events; environmental compliance and remediation expenses; the ability to protect CTS’ intellectual property; pricing pressures and demand for CTS’ products; and risks associated with CTS’ international operations, including trade and tariff barriers, exchange rates and political and geopolitical risks (including, without limitation, the potential impact the conflict between Russia and Ukraine may have on our business, results of operations and financial condition). Many of these, and other risks and uncertainties, are discussed in further detail in Item 1A. of CTS’ Annual Report on Form 10-K and other filings made with the SEC. CTS undertakes no obligation to publicly update CTS’ forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes. Non-GAAP Financial Measures From time to time, CTS may use non-GAAP financial measures in discussing CTS’ business. These measures are intended to supplement, not replace, CTS’ presentation of its financial results in accordance with U.S. GAAP. CTS’ management believes that non-GAAP financial measures can be useful to investors in analyzing CTS’ financial performance and results of operations over time. CTS recommends that investors consider both actual and adjusted measures in evaluating the performance of CTS with peer companies. The information included in this press release includes the non-GAAP financial measures of adjusted gross margin, adjusted operating earnings, adjusted EBITDA, adjusted net earnings, adjusted diluted earnings per share, debt to capitalization ratio, controllable working capital ratio, and free cash flow. Many of these non-GAAP financial measures exclude the effect of certain expenses and income not related directly to the underlying performance of CTS’ fundamental business operations. CTS believes that adjusted gross margins, adjusted operating earnings, adjusted EBITDA, adjusted net earnings and, adjusted diluted earnings per share provide useful information to investors regarding its operational performance because they enhance an investor’s overall understanding of CTS’ core financial performance and facilitate comparisons to historical results of operations, by excluding items that are not related directly to the underlying performance of CTS’ fundamental business operations or were not part of CTS’ business operations during a comparable period. CTS believes that debt to capitalization ratio is a measurement of financial leverage and provides an insight into the financial structure of CTS and its financial strength. CTS believes the controllable working capital ratio provides an objective measure of the efficiency with which CTS manages its short-term capital needs. CTS believes that free cash flow is a useful measure of its ability to generate cash. CTS believes that these non-GAAP financial measures are commonly used by financial analysts and others in the industries in which CTS operates, and thus further provide useful information to investors. Note that CTS’ definitions of these non-GAAP financial measures may differ from those terms as defined or used by other companies. CTS does not provide reconciliations of forward-looking non-GAAP financial measures, such as estimated adjusted diluted earnings per share, to the most comparable GAAP financial measures on a forward-looking basis because CTS is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, restructuring costs, environmental remediation costs, acquisition related costs, foreign exchange rates and other non-routine costs. Each of such adjustments has not yet occurred, are out of CTS' control and/or cannot be reasonably predicted. For the same reasons, CTS is unable to address the probable significance of the unavailable information.

  First Quarter Organic growth +14% Non-transportation revenues +30%, organic 28% Transportation revenues +4%, excl. Smart Actuators 0.4% Tewa acquisition added $1.4m in sales in March New business wins $117M; added 4 new customers $19M operating cash flow, $16M free cash flow Improved profitability despite supply and inflation challenges All comparisons vs. same period in prior year unless otherwise noted 3 Q1 2022 – Delivered solid growth, Further advances in diversification

  Secular trends providing strong growth momentum 4 Non-transportation end markets – solid organic growth Industrial Medical Aerospace & Defense Momentum in inkjet printing – packaging material demand from growth in e-commerce Temperature sensing growth in commercial appliances, pool & spa, HVAC, refrigeration Strong mid to long term growth expected in imaging, wins in minimally invasive surgery and other applications Wins for Temperature and RF Filter products in satellite and GPS anti-jamming applications Continued traction in European military applications

5 Founded in 1952, based in Kvistgaard, Denmark Closing subject to obtaining regulatory approvals and satisfaction of customary closing conditions High performance piezoelectric ceramic components for medical, industrial and defense applications Medical therapeutics products, complements CTS diagnostics focus Expansion into automation (Flow, Level, Vibration) Strengthens European presence in Piezoceramics Founded in 1964, based in Lublin, Poland Leading designer and manufacturer of high-performance, high-quality thermistor and temperature probes in Europe Broad product portfolio to measure temperature for various industrial and medical applications Expanded CTS presence in Europe (footprint, commercial) Enhanced position with the distribution channel ~$15m/yr revenue, Expected to be ~$0.04 accretive in 2022 Key Products & Applications Key Products & Applications Strategic acquisitions fueling diversification – M&A as a catalyst Medical Diagnostics Aero & Defense Medical Therapeutics Expecting non-transportation sales closer to 50% in 2H 2022 Thermistors Probes / Assemblies Temperature Sensors Piezoceramic Components Multilayer Tape Cast PZT Thick Film

6 >95% Light Vehicle portfolio carries over to Electric Vehicles > 50% expansion in Available Market with EV-related new products Traditional light vehicle key product Portfolio Light vehicle key products For BEV/HEV/PHEV and ICE New products for Electrification AC Motor Current Sensor AC Motor Position Sensor Chassis Height Sensor Accelerator Modules Brake Position Sensor Belt Tension Sensor Seat Track Position Sensor Seat Belt Buckle Switch Sensor 2022: $2.1Bn Available Market (SAM) >2030: $1Bn+ 2025: $2.2Bn + eBrake™ In Development

7 5 EV platform wins in Q1 – Total 26 8% of light vehicle sales from EV/Hybrid platforms, Goal: >25% by 2025 2 GM platforms

8 Revenue $580 $550 Adjusted Diluted EPS $2.45 $2.20 ($ millions) Key Assumptions Light vehicle market – US 13.5-14M, China ~24-25M, Europe 15-15.5M units, forecasts lowered from earlier this year Robust commercial vehicle market through 2022 Non-transportation markets robust in 1H, monitoring 2H demand Supply challenges and inflationary pressures persist, China COVID-19 shutdown resulting in additional risks Tax rate in the range of 21-23% excluding discrete items FY 2022 Guidance

1st Quarter 2022 Financial Results

10 Q1 2022 Financial Summary

Cash and Debt ($ Millions) Operating Cash Flow Q1 2022 – $5M 2021 – $14M Returned to shareholders Q1 2022 – $16M 2021 – $71M Free Cash Flow Strong Balance Sheet Solid Foundation for Strategic M&A Q1 2022 – $3.4M 2021 – $16M Capital Expenditures 11 ($ Millions) Consistently strong cash flow generation

Q & A

Appendix

($ Millions, except percentages and Adjusted Diluted EPS) Net Sales Adjusted Diluted EPS Operating Cash Flow Total Debt / Capitalization Depreciation and Amortization Adjusted EBITDA Adjusted EBITDA % of Sales Adj. Gross Margin Adj. Gross Margin % of Sales 2019 $469.0 $1.45 $64.4 19.7% $24.6 $89.5 19.1% $157.6 33.6% 2020 $424.1 $1.12 $76.8 11.4% $26.7 $77.5 18.3% $139.1 32.8% 2021 $512.9 $1.93 $86.1 9.7% $26.9 $107.8 21.0% $184.6 36.0% 14 2021 $128.4 $0.46 $20.1 10.3% $6.8 $25.7 20.0% $42.6 33.2% 2022 $147.7 $0.67 $19.3 9.4% $6.7 $34.7 23.5% $54.9 37.2% Q1 Full Year Financial Summary

Adjusted Diluted EPS ($ Millions, except percentages) Total Debt to Capitalization 15 Regulation G Schedules

($ Millions, except percentages) Adjusted EBITDA 16 Regulation G Schedules

($ Millions) Adjusted Gross Margin 17 Regulation G Schedules

($ Millions) Free Cash Flow 18 Regulation G Schedules

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Cover Document	Apr. 28, 2022
Cover [Abstract]
Document Type	8-K
Document Period End Date	Apr. 28, 2022
Entity Registrant Name	CTS CORPORATION
Entity Incorporation, State or Country Code	IN
Entity File Number	1-4639
Entity Tax Identification Number	35-0225010
Entity Address, Address Line One	4925 Indiana Avenue
Entity Address, City or Town	Lisle
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60532
City Area Code	630
Local Phone Number	577-8800
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	CTS
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0000026058
Amendment Flag	false