CTS Announces First Quarter 2026 Results
Rhea-AI Summary
CTS (NYSE: CTS) reported first-quarter 2026 results with sales of $139 million, up 11% year-over-year, and diversified end-market sales up 18%. Net income was $17 million (12.4% of sales); diluted EPS was $0.59. Adjusted gross margin improved to 39.5% and adjusted EBITDA margin to 23.0%. Operating cash flow was $17.3 million. CTS narrowed full-year 2026 sales guidance to $560–$580 million and adjusted diluted EPS to $2.35–$2.45, and noted it cannot reconcile forward-looking non‑GAAP measures to GAAP.
Positive
- Sales +11% YoY to $139 million
- Diversified end-market sales +18% YoY
- Net income $17 million (12.4% of sales)
- Adjusted gross margin +250 bps to 39.5%
- Adjusted EBITDA margin +250 bps to 23.0%
- Operating cash flow +$1.8 million to $17.3 million
Negative
- Transportation sales growth only +3% YoY
- Company cannot reconcile forward-looking non-GAAP metrics to GAAP
News Market Reaction – CTS
On the day this news was published, CTS gained 0.29%, reflecting a mild positive market reaction. Our momentum scanner triggered 4 alerts that day, indicating moderate trading interest and price volatility. This price movement added approximately $5M to the company's valuation, bringing the market cap to $1.66B at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
CTS was down 3.05% while close peers showed mixed moves: BHE +0.76%, ALNT +2.28%, BELFB +0.72%, DAKT -2.79%, ROG -1.45%. Momentum scanner only flagged KOPN up 5.5% with no news. This points to a CTS-specific reaction rather than a coordinated sector move.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Feb 10 | Q4 & FY 2025 earnings | Positive | +3.1% | Sales and margins grew in 2025 with new 2026 guidance issued. |
| Oct 28 | Q3 2025 earnings | Negative | -4.5% | EPA charge and lower net income despite solid diversified segment growth. |
| Jul 24 | Q2 2025 earnings | Positive | +3.9% | Strong EPS growth, higher margins, and robust operating cash flow. |
| Apr 30 | Q1 2025 earnings | Neutral | -4.5% | Flat sales with mixed segment trends and unchanged full‑year guidance. |
| Feb 04 | Q4 & FY 2024 earnings | Neutral | -4.5% | Lower annual sales but improved margins and diversification with 2025 guidance. |
Earnings reactions have been mixed, with four of the last five showing alignment between the tone of results and the next-day move, and one instance where mixed fundamentals met a sharper selloff.
Over the past year, CTS has repeatedly highlighted diversification and margin expansion across earnings updates. Q1 2025 showed flat sales but improving earnings mix, followed by stronger growth in Q2 2025 and ongoing diversification in Q3 amid an EPA charge. Q4 and full‑year 2025 results on Feb 10, 2026 delivered higher margins and initial 2026 guidance of $550–$580 million sales and adjusted EPS of $2.30–$2.45. Today’s Q1 2026 report narrows and modestly lifts the lower end of that guidance, reinforcing the margin and diversification themes seen in prior quarters.
Historical Comparison
In the past year, CTS posted 5 earnings updates with an average move of -1.32%. Today’s Q1 2026 results and guidance tightening came alongside a -3.05% move, leaning more negative than the typical earnings reaction.
Earnings releases show a consistent narrative: diversified end‑markets growing faster than transportation, with steady expansion in adjusted margins. Guidance evolved from 2025 ranges to initial 2026 targets and now a narrowed 2026 outlook, reflecting ongoing execution on diversification and profitability themes across successive quarters.
Market Pulse Summary
This announcement highlighted solid Q1 2026 execution with sales of $139 million, net income of $17 million, and improved adjusted gross and EBITDA margins of 39.5% and 23.0%. Management narrowed 2026 guidance to $560–$580 million in sales and adjusted diluted EPS of $2.35–$2.45, reinforcing a focus on diversified end‑markets and profitability. Investors may track transportation demand, margin sustainability, and future guidance updates as key checkpoints.
Key Terms
diluted eps financial
adjusted gross margin financial
adjusted ebitda margin financial
operating cash flow financial
non-gaap financial measures financial
basis points financial
AI-generated analysis. Not financial advice.
Strong Results driven by Growth in Diversified End-Markets
LISLE, Ill., April 29, 2026 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS), a leading global designer and manufacturer of highly engineered solutions that “Sense, Connect and Move,” today announced results for the first quarter of 2026.
“CTS delivered another quarter of strong performance, with diversified end-market sales up
First Quarter 2026 Results
- Sales were
$139 million in the first quarter of 2026, up11% year-over-year. Sales to diversified end-markets increased18% . Sales to the transportation market increased3% . - Net income was
$17 million , or12.4% of sales, compared to$13 million , or10.6% of sales in the first quarter of 2025. - Diluted EPS was
$0.59 , up 15 cents from$0.44 in the first quarter of 2025. - Adjusted Gross margin was
39.5% , up 250 bps from37.0% in the first quarter of 2025. - Adjusted EBITDA margin was
23.0% , up 250 bps from20.5% in the first quarter of 2025. - Adjusted diluted EPS was
$0.62 , up 18 cents from$0.44 in the first quarter of 2025. - Operating cash flow was
$17.3 million , up$1.8 million from$15.5 million in the first quarter of 2025.
2026 Guidance
Assuming the continuation of current market conditions, CTS is narrowing its previous guidance of 2026 sales from a range of
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.
Conference Call and Supplemental Materials
As previously announced, CTS has scheduled a conference call for 10:00 a.m. (ET) today. The conference call can be accessed by registering online at CTS Corporation Q1 2026 Earnings Call, at which time registrants will receive dial-in information as well as a conference ID. In addition, CTS 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://investors.ctscorp.com/news-events/events-and-presentations/default.aspx
Any replay, rebroadcast, transcript or other reproduction or transmission of this conference call, other than the replay accessible through the website noted above, has not been authorized by CTS and is strictly prohibited. Investors should be aware that any unauthorized reproduction of this conference call may not be an accurate reflection of its contents.
About CTS
CTS Corporation (NYSE: CTS) is a leading designer and manufacturer of products that Sense, Connect and Move. CTS 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/.
Diversified end markets, previously referred as the “non-transportation” market, includes the industrial, aerospace & defense, and medical end markets.
Cautionary Statement Regarding Forward-Looking Statements
Readers are cautioned that the statements contained in this document regarding expectations of our performance or other matters that may affect our business, results of operations, or financial condition are, or may be deemed to be, “forward-looking statements” as defined by the “safe harbor” provisions in the Private Securities Litigation Reform Act of 1995. Such statements are made in reliance on the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included or incorporated in this document, including statements regarding our strategy, financial position, guidance, funding for continued operations, cash reserves, liquidity, projected costs, plans, projects, awards and contracts, and objectives of management, among others, are forward-looking statements. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “continued,” “project,” “plan,” “goals,” “opportunity,” “appeal,” “estimate,” “potential,” “predict,” “demonstrates,” “may,” “will,” “might,” “could,” “intend,” “shall,” “possible,” “would,” “approximately,” “likely,” “outlook,” “schedule,” “on track,” “poised,” “pipeline,” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are not guarantees of future performance, conditions or results. 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: supply chain disruptions (including, but not limited to, the availability and cost of rare earth elements, minerals and metals); changes in the economy generally, including inflationary and/or recessionary conditions and increased tariffs, and in respect to the businesses in which CTS operates; unanticipated issues in integrating acquisitions; the funding of contracts by the U.S. Government; 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; risks associated with CTS’ international operations, including trade and tariff barriers, exchange rates and political and geopolitical risks (including, without limitation, the impact of tariffs on China, Canada and Mexico, and other nations, the potential impact of U.S./China relations and the impact of geopolitical conflicts may have on our business, results of operations and financial condition; write offs of goodwill on our balance sheet; the amount and timing of any share repurchases; and the effect of any cybersecurity incidents on our business. Many of these, and other risks and uncertainties, are discussed in further detail in Item 1A. of CTS's most recent 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.
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
| CTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED (In thousands, except per share amounts) | ||||||||
| Three Months Ended | ||||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Net sales | $ | 139,230 | $ | 125,769 | ||||
| Cost of goods sold | 84,244 | 79,220 | ||||||
| Gross margin | 54,986 | 46,549 | ||||||
| Selling, general and administrative expenses | 25,984 | 23,623 | ||||||
| Research and development expenses | 6,634 | 6,190 | ||||||
| Restructuring charges | 386 | 451 | ||||||
| Operating earnings | 21,982 | 16,285 | ||||||
| Other (expense) income: | ||||||||
| Interest expense | (708 | ) | (1,167 | ) | ||||
| Interest income | 480 | 447 | ||||||
| Other (expense) income, net | (81 | ) | 557 | |||||
| Total other expense, net | (309 | ) | (163 | ) | ||||
| Earnings before income taxes | 21,673 | 16,122 | ||||||
| Income tax expense | 4,476 | 2,755 | ||||||
| Net earnings | $ | 17,197 | $ | 13,367 | ||||
| Earnings per share: | ||||||||
| Basic | $ | 0.60 | $ | 0.45 | ||||
| Diluted | $ | 0.59 | $ | 0.44 | ||||
| Basic weighted – average common shares outstanding: | 28,689 | 30,013 | ||||||
| Effect of dilutive securities | 313 | 313 | ||||||
| Diluted weighted – average common shares outstanding: | 29,002 | 30,326 | ||||||
| Cash dividends declared per share | $ | 0.04 | $ | 0.04 | ||||
| CTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of dollars) | ||||||||
| (Unaudited) March 31, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 90,851 | $ | 82,295 | ||||
| Accounts receivable, net of allowances of | 93,771 | 88,096 | ||||||
| Inventories, net | 57,270 | 52,854 | ||||||
| Other current assets | 24,123 | 29,461 | ||||||
| Total current assets | 266,015 | 252,706 | ||||||
| Property, plant and equipment, net | 89,404 | 89,741 | ||||||
| Operating lease assets, net | 29,726 | 22,542 | ||||||
| Other Assets | ||||||||
| Goodwill | 208,665 | 209,611 | ||||||
| Other intangible assets, net | 148,627 | 153,562 | ||||||
| Deferred income taxes | 24,314 | 25,110 | ||||||
| Other assets | 10,404 | 11,039 | ||||||
| Total other assets | 392,010 | 399,322 | ||||||
| Total Assets | $ | 777,155 | $ | 764,311 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 50,328 | $ | 48,220 | ||||
| Accrued payroll and benefits | 4,098 | 3,453 | ||||||
| Operating lease obligations | 14,722 | 20,732 | ||||||
| Accrued expenses and other liabilities | 36,261 | 37,283 | ||||||
| Total current liabilities | 105,409 | 109,688 | ||||||
| Long-term debt | 62,500 | 57,500 | ||||||
| Long-term operating lease obligations | 28,363 | 21,841 | ||||||
| Long-term pension obligations | 3,684 | 3,698 | ||||||
| Deferred income taxes | 12,631 | 12,800 | ||||||
| Other long-term obligations | 7,093 | 6,998 | ||||||
| Total Liabilities | 219,680 | 212,525 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ Equity | ||||||||
| Common stock | 326,577 | 324,982 | ||||||
| Additional contributed capital | 41,791 | 43,303 | ||||||
| Retained earnings | 729,518 | 713,467 | ||||||
| Accumulated other comprehensive income (loss) | 11,919 | 13,748 | ||||||
| Total shareholders’ equity before treasury stock | 1,109,805 | 1,095,500 | ||||||
| Treasury stock | (552,330 | ) | (543,714 | ) | ||||
| Total shareholders’ equity | 557,475 | 551,786 | ||||||
| Total Liabilities and Shareholders’ Equity | $ | 777,155 | $ | 764,311 | ||||
CTS CORPORATION AND SUBSIDIARIES
OTHER SUPPLEMENTAL INFORMATION - UNAUDITED
(In millions of dollars, except percentages and per share amounts)
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 believes that the non-GAAP financial measures presented are commonly used by financial analysts and others in the industries in which CTS operates, and thus further provide useful information to investors. CTS’ definitions of these non-GAAP financial measures may differ from those terms as defined or used by other companies. Non-GAAP measures should not be used by investors or third parties as the sole basis for formulating investment decisions, as they may exclude a number of important cash and non-cash recurring items.
CTS has presented these non-GAAP financial measures as it believes that the presentation of its financial results that exclude (1) restructuring charges; (2) restructuring-related charges; (3) environmental charges; (4) acquisition-related adjustments; (5) inventory fair value step-up costs; (6) foreign exchange (gains) losses; (7) non-cash pension expenses (income); and (8) certain discrete tax items are useful and assist in comparing CTS’ current operating results with past periods and with the operational performance of other companies in its industry. Included below is a description of the expenses that CTS has determined are not normal, recurring cash operating expenses necessary to operate its business and the rationale for why providing financial measures for its business with such expenses excluded or adjusted is useful to investors as a supplement to the U.S. GAAP measures.
- Restructuring charges – costs primarily relating to workforce reduction costs, building and equipment relocation costs, asset impairment charges and other facility closure costs in connection with our continued optimization of our organization.
- Restructuring-related charges – costs related to restructuring actions that do not qualify as direct restructuring charges under US GAAP. These include duplicative expenses incurred due to the plant consolidation related transition activities such as excess rent, utilities, personnel related and other costs prior to start of production at the new location.
- Environmental charges – costs associated with our non-operating facilities that are unrelated to ongoing operations. Currently, none of these costs and accruals relate to sites that provide revenue generating activities for the Company.
- Acquisition-related adjustments – diligence and transaction costs related to acquisitions including related contingent earnout and other adjustments.
- Inventory fair value step-up costs – purchase accounting-related inventory costs from acquisitions.
- Foreign exchange (gains) losses – remeasurement income and expenses for non-U.S. subsidiaries with the U.S. dollar as the functional currency.
- Non-cash pension expenses (income) – pension income and expenses relating to the non-operating U.S. pension and post-retirement life insurance plans, including historical plan settlement activities.
- Discrete tax items – non-recurring, infrequent, or unusual tax adjustments (e.g., valuation allowances, uncertain tax position changes, unremitted assertion changes and discrete impacts associated with pre-tax non-GAAP items or due to tax law changes, etc.).
At times, the reconciliations below have been intentionally rounded to the nearest thousand, or
Adjusted Gross Margin
| Three Months Ended March 31, | Twelve Months Ended December 31, | |||||||||||||||||||
| 2026 | 2025 | 2025 | 2024 | 2023 | ||||||||||||||||
| Gross margin | $ | 55.0 | $ | 46.5 | $ | 208.0 | $ | 187.6 | $ | 190.9 | ||||||||||
| Net sales | $ | 139.2 | $ | 125.8 | $ | 541.3 | $ | 514.8 | $ | 550.4 | ||||||||||
| Gross margin as a % of net sales | 39.5 | % | 37.0 | % | 38.4 | % | 36.4 | % | 34.7 | % | ||||||||||
| Adjustments to reported gross margin: | ||||||||||||||||||||
| Restructuring-related charges (b) | — | — | 0.2 | 0.7 | 0.6 | |||||||||||||||
| Inventory fair value step-up (b) | — | — | — | 2.1 | — | |||||||||||||||
| Adjusted gross margin | $ | 55.0 | $ | 46.5 | $ | 208.2 | $ | 190.4 | $ | 191.4 | ||||||||||
| Adjusted gross margin as a % of net sales | 39.5 | % | 37.0 | % | 38.5 | % | 37.0 | % | 34.8 | % | ||||||||||
Adjusted Operating Earnings
| Three Months Ended March 31, | Twelve Months Ended December 31, | |||||||||||||||||||
| 2026 | 2025 | 2025 | 2024 | 2023 | ||||||||||||||||
| Operating earnings | $ | 22.0 | $ | 16.3 | $ | 82.6 | $ | 71.2 | $ | 75.1 | ||||||||||
| Net sales | $ | 139.2 | $ | 125.8 | $ | 541.3 | $ | 514.8 | $ | 550.4 | ||||||||||
| Operating earnings as a % of net sales | 15.8 | % | 12.9 | % | 15.3 | % | 13.8 | % | 13.6 | % | ||||||||||
| Adjustments to reported operating earnings: | ||||||||||||||||||||
| Restructuring charges (c) | 0.4 | 0.5 | 1.4 | 4.7 | 7.1 | |||||||||||||||
| Restructuring-related charges (b) | 0.1 | — | 0.7 | 0.7 | 0.6 | |||||||||||||||
| Environmental charges (a) | 0.2 | 0.2 | 5.5 | 1.6 | 3.5 | |||||||||||||||
| Acquisition-related adjustments (a) | 0.1 | (0.2 | ) | (3.4 | ) | (0.3 | ) | 0.4 | ||||||||||||
| Inventory fair value step-up (b) | — | — | — | 2.1 | — | |||||||||||||||
| Total adjustments to reported operating earnings | $ | 0.7 | $ | 0.5 | $ | 4.2 | $ | 8.8 | $ | 11.5 | ||||||||||
| Adjusted operating earnings | $ | 22.7 | $ | 16.8 | $ | 86.9 | $ | 80.0 | $ | 86.6 | ||||||||||
| Adjusted operating earnings as a % of net sales | 16.3 | % | 13.4 | % | 16.0 | % | 15.5 | % | 15.7 | % | ||||||||||
Adjusted EBITDA Margin
| Three Months Ended March 31, | Twelve Months Ended December 31, | |||||||||||||||||||
| 2026 | 2025 | 2025 | 2024 | 2023 | ||||||||||||||||
| Net earnings | $ | 17.2 | $ | 13.4 | $ | 65.3 | $ | 55.5 | $ | 60.5 | ||||||||||
| Net sales | $ | 139.2 | $ | 125.8 | $ | 541.3 | $ | 514.8 | $ | 550.4 | ||||||||||
| Net earnings margin | 12.4 | % | 10.6 | % | 12.1 | % | 10.8 | % | 11.0 | % | ||||||||||
| Depreciation and amortization expense | 8.8 | 8.5 | 34.5 | 30.9 | 28.7 | |||||||||||||||
| Interest expense | 0.7 | 1.2 | 4.3 | 4.2 | 3.3 | |||||||||||||||
| Tax expense | 4.5 | 2.8 | 18.5 | 13.1 | 14.6 | |||||||||||||||
| EBITDA | 31.2 | 25.8 | 122.6 | 103.7 | 107.2 | |||||||||||||||
| EBITDA Margin | 22.4 | % | 20.5 | % | 22.6 | % | 20.1 | % | 19.5 | % | ||||||||||
| Adjustments to EBITDA: | ||||||||||||||||||||
| Restructuring charges (c) | 0.4 | 0.5 | 1.4 | 4.7 | 7.1 | |||||||||||||||
| Restructuring-related charges (b) | 0.1 | — | 0.7 | 0.7 | 0.6 | |||||||||||||||
| Environmental charges (a) | 0.2 | 0.2 | 5.5 | 1.6 | 3.5 | |||||||||||||||
| Acquisition-related adjustments (a) | 0.1 | (0.2 | ) | (5.6 | ) | (0.3 | ) | 0.4 | ||||||||||||
| Inventory fair value step-up (b) | — | — | — | 2.1 | — | |||||||||||||||
| Non-cash pension and related expense (d) | — | — | 0.1 | 0.2 | — | |||||||||||||||
| Foreign currency loss (gain) (d) | 0.1 | (0.5 | ) | (1.3 | ) | 2.7 | 2.0 | |||||||||||||
| Total adjustments to EBITDA | 0.8 | - | 0.9 | 11.7 | 13.5 | |||||||||||||||
| Adjusted EBITDA | $ | 32.0 | $ | 25.8 | $ | 123.4 | $ | 115.4 | $ | 120.7 | ||||||||||
| Adjusted EBITDA Margin | 23.0 | % | 20.5 | % | 22.8 | % | 22.4 | % | 21.9 | % | ||||||||||
Adjusted Net Earnings and Adjusted Diluted Earnings Per Share
| Three Months Ended March 31, | ||||||||||||||||
| 2026 | 2026 | 2025 | 2025 | |||||||||||||
| Per share | Per share | |||||||||||||||
| Net earnings (A) | $ | 17.2 | $ | 0.59 | $ | 13.4 | $ | 0.44 | ||||||||
| Adjustments to reported net earnings: | ||||||||||||||||
| Restructuring charges (c) | 0.4 | 0.01 | 0.5 | 0.02 | ||||||||||||
| Restructuring-related charges (a) | 0.1 | 0.00 | — | — | ||||||||||||
| Environmental charges (a) | 0.2 | 0.01 | 0.2 | 0.01 | ||||||||||||
| Acquisition-related adjustments (a) | 0.1 | 0.00 | (0.2 | ) | (0.01 | ) | ||||||||||
| Foreign currency loss (gain) (d) | 0.1 | 0.00 | (0.5 | ) | (0.01 | ) | ||||||||||
| Total pretax adjustments to reported net earnings | $ | 0.8 | $ | 0.03 | $ | — | $ | 0.01 | ||||||||
| Income tax effect of above adjustments (f) | (0.2 | ) | (0.01 | ) | (0.2 | ) | (0.01 | ) | ||||||||
| Total adjustments, tax affected (f) (B) | $ | 0.7 | $ | 0.02 | $ | (0.2 | ) | $ | (0.00 | ) | ||||||
| Tax adjustments: | ||||||||||||||||
| Other discrete tax items (e) | — | — | — | — | ||||||||||||
| Total tax adjustments (C) | $ | — | $ | — | $ | — | $ | — | ||||||||
| Adjusted net earnings (A+B+C) and Adjusted net earnings per share | $ | 17.9 | $ | 0.62 | $ | 13.2 | $ | 0.44 | ||||||||
| Net sales | $ | 139.2 | $ | 125.8 | ||||||||||||
| Net earnings as a % of net sales | 12.4 | % | 10.6 | % | ||||||||||||
| Adjusted net earnings as a % of net sales | 12.8 | % | 10.5 | % | ||||||||||||
| Twelve Months Ended December 31, | ||||||||||||||||||||||||
| 2025 | 2025 | 2024 | 2024 | 2023 | 2023 | |||||||||||||||||||
| Per share | Per share | Per share | ||||||||||||||||||||||
| Net earnings (A) | $ | 65.3 | $ | 2.19 | $ | 55.5 | $ | 1.80 | $ | 60.5 | $ | 1.92 | ||||||||||||
| Adjustments to reported net earnings: | ||||||||||||||||||||||||
| Restructuring charges (c) | 1.4 | 0.05 | 4.7 | 0.15 | 7.1 | 0.22 | ||||||||||||||||||
| Restructuring-related charges (a) | 0.7 | 0.02 | 0.7 | 0.02 | 0.6 | 0.02 | ||||||||||||||||||
| Environmental charges (a) | 5.5 | 0.18 | 1.6 | 0.05 | 3.5 | 0.11 | ||||||||||||||||||
| Acquisition-related adjustments (a) | (5.6 | ) | (0.19 | ) | (0.3 | ) | (0.01 | ) | 0.4 | 0.01 | ||||||||||||||
| Inventory fair value step-up (b) | — | — | 2.1 | 0.07 | — | — | ||||||||||||||||||
| Non-cash pension and related expense (d) | 0.1 | 0.00 | 0.2 | 0.01 | — | — | ||||||||||||||||||
| Foreign currency (gain) loss (d) | (1.3 | ) | (0.04 | ) | 2.7 | 0.09 | 2.0 | 0.06 | ||||||||||||||||
| Total pretax adjustments to reported net earnings | $ | 0.9 | $ | 0.03 | $ | 11.7 | $ | 0.38 | $ | 13.5 | $ | 0.42 | ||||||||||||
| Income tax effect of above adjustments (f) | (0.6 | ) | (0.02 | ) | (2.2 | ) | (0.07 | ) | (2.4 | ) | (0.07 | ) | ||||||||||||
| Total adjustments, tax affected (f) (B) | $ | 0.3 | $ | 0.01 | $ | 9.5 | $ | 0.31 | $ | 11.1 | $ | 0.35 | ||||||||||||
| Tax adjustments: | ||||||||||||||||||||||||
| Increase in valuation allowances (e) | — | — | — | — | — | — | ||||||||||||||||||
| Other discrete tax items (e) | 0.8 | 0.03 | 0.3 | 0.01 | (1.6 | ) | (0.05 | ) | ||||||||||||||||
| Total tax adjustments (C) | $ | 0.8 | $ | 0.03 | $ | 0.3 | $ | 0.01 | $ | (1.6 | ) | $ | (0.05 | ) | ||||||||||
| Adjusted net earnings (A+B+C) and Adjusted net earnings per share | $ | 66.3 | $ | 2.23 | $ | 65.3 | $ | 2.12 | $ | 70.0 | $ | 2.22 | ||||||||||||
| Net sales | $ | 541.3 | $ | 514.8 | $ | 550.4 | ||||||||||||||||||
| Net earnings as a % of net sales | 12.1 | % | 10.8 | % | 11.0 | % | ||||||||||||||||||
| Adjusted net earnings as a % of net sales | 12.3 | % | 12.7 | % | 12.7 | % | ||||||||||||||||||
(a) Reflected in Selling, general and administrative and other income (expense), net.
(b) Reflected in Cost of goods sold.
(c) Reflected in Restructuring charges.
(d) Reflected in Other income (expense), net.
(e) Reflected in Income tax expense. For 2023, discrete tax items include adjusting for tax benefits resulting from
(f) We determine the tax effect of non-GAAP adjustments by considering the tax laws and statutory income tax rates applicable in the tax jurisdictions of the underlying non-GAAP adjustments. For all periods presented, we applied the statutory income tax rates to the taxable portion of all of our adjustments. Our acquisition costs and foreign currency gains and losses included in our non-GAAP adjustments were not deductible for income tax purposes; therefore, no statutory income tax rate was applied to such costs.
NOTE: CTS believes that adjusted gross margin, adjusted operating earnings, adjusted EBITDA margin, 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 (such as those items noted above in the paragraph titled “Non-GAAP Financial Measures”) or were not part of CTS’ business operations during a comparable period.
Controllable Working Capital
| March 31, | December 31, | |||||||||||||||||||
| 2026 | 2025 | 2025 | 2024 | 2023 | ||||||||||||||||
| Net accounts receivable | $ | 93.8 | $ | 81.4 | $ | 88.1 | $ | 77.6 | $ | 78.6 | ||||||||||
| Net inventory | $ | 57.3 | $ | 53.9 | $ | 52.9 | $ | 52.3 | $ | 60.0 | ||||||||||
| Accounts payable | $ | (50.3 | ) | $ | (43.2 | ) | $ | (48.2 | ) | $ | (42.6 | ) | $ | (43.5 | ) | |||||
| Controllable working capital | $ | 100.7 | $ | 92.1 | $ | 92.7 | $ | 87.3 | $ | 95.1 | ||||||||||
| Quarter sales | $ | 139.2 | $ | 125.8 | $ | 137.3 | $ | 126.4 | $ | 124.7 | ||||||||||
| Multiplied by 4 | 4 | 4 | 4 | 4 | 4 | |||||||||||||||
| Annualized sales | $ | 556.9 | $ | 503.1 | $ | 549.1 | $ | 505.6 | $ | 498.8 | ||||||||||
| Controllable working capital as a % of annualized sales | 18.1 | % | 18.3 | % | 16.9 | % | 17.3 | % | 19.1 | % | ||||||||||
NOTE: CTS believes the controllable working capital ratio is a useful measure because it provides an objective measure of the efficiency with which CTS manages its short-term capital needs.
Free Cash Flow
| Three Months Ended March 31, | Twelve Months Ended December 31, | |||||||||||||||||||
| 2026 | 2025 | 2025 | 2024 | 2023 | ||||||||||||||||
| Net cash provided by operating activities | $ | 17.3 | $ | 15.5 | $ | 102.1 | $ | 98.2 | $ | 88.8 | ||||||||||
| Capital expenditures | (5.0 | ) | (4.5 | ) | (15.7 | ) | (18.6 | ) | (14.7 | ) | ||||||||||
| Free cash flow | $ | 12.3 | $ | 11.0 | $ | 86.4 | $ | 79.6 | $ | 74.1 | ||||||||||
| Operating cash flow as a percentage of net earnings | 101 | % | 116 | % | 156 | % | 177 | % | 147 | % | ||||||||||
| Free cash flow as a percentage of adjusted net earnings | 69 | % | 83 | % | 130 | % | 122 | % | 106 | % | ||||||||||
NOTE: CTS believes that free cash flow is a useful measure because it demonstrates the company’s ability to generate cash. Free cash flow is a non-GAAP measure and should be considered in addition to, but not as a substitute for, information contained in the company's condensed consolidated statement of cash flows as a measure of liquidity.
Capital Expenditures
| Three Months Ended March 31, | Twelve Months Ended December 31, | |||||||||||||||||||
| 2026 | 2025 | 2025 | 2024 | 2023 | ||||||||||||||||
| Capital expenditures | $ | 5.0 | $ | 4.5 | $ | 15.7 | $ | 18.6 | $ | 14.7 | ||||||||||
| Net sales | $ | 139.2 | $ | 125.8 | $ | 541.3 | $ | 514.8 | $ | 550.4 | ||||||||||
| Capex as % of net sales | 3.6 | % | 3.6 | % | 2.9 | % | 3.6 | % | 2.7 | % | ||||||||||
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, | |||||||||||||||||||
| 2026 | 2025 | 2025 | 2024 | 2023 | ||||||||||||||||
| Depreciation and amortization expense | $ | 8.8 | $ | 8.5 | $ | 34.5 | $ | 30.9 | $ | 28.7 | ||||||||||
| Stock-based compensation expense | $ | 2.0 | $ | 1.6 | $ | 4.9 | $ | 5.7 | $ | 5.2 | ||||||||||
