CTS Announces Second Quarter 2026 Results
Rhea-AI Summary
CTS (NYSE: CTS) reported second quarter 2026 net sales of $144.8 million, up 7% year over year, with diversified end-market sales up 15% and now representing 59% of revenue, while transportation sales decreased 2%. Net earnings were $19.2 million (13.2% margin) versus $18.5 million a year ago.
Adjusted gross margin reached 41.5% (up 270 bps), adjusted EBITDA margin 25.4% (up 240 bps), and adjusted diluted EPS $0.74, up from $0.57. Operating cash flow was $33.4 million, $5.0 million higher than the prior year. According to CTS, 2026 sales guidance was raised to $565–$585 million and adjusted diluted EPS to $2.55–$2.70.
Positive
- Q2 2026 sales $144.8M, up 7% year over year
- Diversified end-market revenue +15% YoY, now 59% of total sales
- Adjusted gross margin 41.5%, up 270 bps vs. Q2 2025
- Adjusted EBITDA margin 25.4%, up 240 bps year over year
- Adjusted diluted EPS $0.74, up $0.17 vs. prior-year quarter
- Operating cash flow $33.4M, up $5.0M vs. Q2 2025
- 2026 sales guidance raised to $565–$585M; adjusted EPS to $2.55–$2.70
Negative
- Transportation market sales declined 2% year over year in Q2 2026
- SG&A expenses rose to $28.4M from $23.1M year over year
- Net earnings margin eased to 13.2% from 13.7% despite higher profit
- Income tax expense increased to $7.1M from $4.5M year over year
News Explained
CTS’s new balance-sheet detail shows $107,536 thousand cash and $55,000 thousand long-term debt, while second-quarter EPS used 28,909 thousand diluted average shares.
CTS has reported its second-quarter 2026 results, and the release adds a balance-sheet snapshot listing
The quarter’s diluted weighted-average common shares outstanding were
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Apr 29 | First-quarter earnings | Positive | +0.3% | Sales growth, margin expansion, and narrowed full-year guidance supported the quarterly release. |
| Feb 10 | Fourth-quarter earnings | Positive | +3.1% | Fourth-quarter growth, annual earnings gains, and initial 2026 guidance accompanied the results. |
| Oct 28 | Third-quarter earnings | Negative | -4.5% | Lower net income and EPS, charges, and narrowed guidance pressured the quarterly announcement. |
| Jul 24 | Second-quarter earnings | Positive | +3.9% | Higher sales, earnings, margins, and cash flow accompanied maintained annual guidance. |
| Apr 30 | First-quarter earnings | Neutral | -4.5% | Improved reported earnings contrasted with lower adjusted earnings and unchanged annual guidance. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Tag-specific history showed four aligned earnings reactions and one divergence, with an average move of -0.37%.
Key Terms
adjusted ebitda margin financial
diluted eps financial
non-gaap financial measures financial
restructuring charges financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Strong diversification momentum drives record margins and profitability; 2026 outlook raised
LISLE, Ill., July 28, 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 Second quarter of 2026.
“CTS’s diversification strategy is translating into stronger, more resilient performance with those end market sales up
Second Quarter 2026 Results
- Sales were
$144.8 million in the second quarter of 2026, up7% year-over-year. Sales to diversified end-markets increased15% . Sales to the transportation market decreased2% .
- Net income was
$19.2 million , or13.2% of sales, compared to$18.5 million , or13.7% of sales in the second quarter of 2025.
- Diluted EPS was
$0.66 , up 4 cents from$0.62 in the second quarter of 2025.
- Adjusted Gross margin was
41.5% , up 270 bps from38.7% in the second quarter of 2025.
- Adjusted EBITDA margin was
25.4% , up 240 bps from23.0% in the second quarter of 2025.
- Adjusted diluted EPS was
$0.74 , up 17 cents from$0.57 in the second quarter of 2025.
- Operating cash flow was
$33.4 million , up$5.0 million from$28.4 million in the second quarter of 2025.
2026 Guidance
Assuming the continuation of current market conditions, CTS is increasing 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, trade pacts, including the future of the USMCA, 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 | Six Months Ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Net sales | $ | 144,780 | $ | 135,309 | $ | 284,010 | $ | 261,078 | ||||||||
| Cost of goods sold | 84,732 | 82,878 | 168,976 | 162,099 | ||||||||||||
| Gross margin | 60,048 | 52,431 | 115,034 | 98,979 | ||||||||||||
| Selling, general and administrative expenses | 28,390 | 23,077 | 54,373 | 46,700 | ||||||||||||
| Research and development expenses | 4,763 | 6,326 | 11,398 | 12,515 | ||||||||||||
| Restructuring charges | 94 | 297 | 480 | 749 | ||||||||||||
| Operating earnings | 26,801 | 22,731 | 48,783 | 39,015 | ||||||||||||
| Other (expense) income: | ||||||||||||||||
| Interest expense | (704 | ) | (1,121 | ) | (1,412 | ) | (2,289 | ) | ||||||||
| Interest income | 571 | 622 | 1,051 | 1,068 | ||||||||||||
| Other (expense) income, net | (430 | ) | 750 | (511 | ) | 1,307 | ||||||||||
| Total other expense, net | (563 | ) | 251 | (872 | ) | 86 | ||||||||||
| Earnings before income taxes | 26,238 | 22,982 | 47,911 | 39,101 | ||||||||||||
| Income tax expense | 7,074 | 4,455 | 11,550 | 7,210 | ||||||||||||
| Net earnings | $ | 19,164 | $ | 18,527 | $ | 36,361 | $ | 31,891 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.67 | $ | 0.62 | $ | 1.27 | $ | 1.07 | ||||||||
| Diluted | $ | 0.66 | $ | 0.62 | $ | 1.26 | $ | 1.06 | ||||||||
| Basic weighted – average common shares outstanding: | 28,580 | 29,739 | 28,634 | 29,875 | ||||||||||||
| Effect of dilutive securities | 329 | 251 | 317 | 285 | ||||||||||||
| Diluted weighted – average common shares outstanding: | 28,909 | 29,990 | 28,952 | 30,160 | ||||||||||||
| Cash dividends declared per share | $ | 0.04 | $ | 0.04 | $ | 0.08 | $ | 0.08 | ||||||||
| 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 | $ | 107,536 | $ | 82,295 | ||||
| Accounts receivable, net of allowances of | 92,157 | 88,096 | ||||||
| Inventories, net | 59,588 | 52,854 | ||||||
| Other current assets | 27,099 | 29,461 | ||||||
| Total current assets | 286,380 | 252,706 | ||||||
| Property, plant and equipment, net | 89,113 | 89,741 | ||||||
| Operating lease assets, net | 32,142 | 22,542 | ||||||
| Other Assets | ||||||||
| Goodwill | 208,064 | 209,611 | ||||||
| Other intangible assets, net | 144,069 | 153,562 | ||||||
| Deferred income taxes | 21,566 | 25,110 | ||||||
| Other assets | 10,196 | 11,039 | ||||||
| Total other assets | 383,895 | 399,322 | ||||||
| Total Assets | $ | 791,530 | $ | 764,311 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 49,955 | $ | 48,220 | ||||
| Accrued payroll and benefits | 4,377 | 3,453 | ||||||
| Operating lease obligations | 19,279 | 20,732 | ||||||
| Accrued expenses and other liabilities | 36,174 | 37,283 | ||||||
| Total current liabilities | 109,785 | 109,688 | ||||||
| Long-term debt | 55,000 | 57,500 | ||||||
| Long-term operating lease obligations | 30,511 | 21,841 | ||||||
| Long-term pension obligations | 3,671 | 3,698 | ||||||
| Deferred income taxes | 12,531 | 12,800 | ||||||
| Other long-term obligations | 7,217 | 6,998 | ||||||
| Total Liabilities | 218,715 | 212,525 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ Equity | ||||||||
| Common stock | 326,815 | 324,982 | ||||||
| Additional contributed capital | 43,208 | 43,303 | ||||||
| Retained earnings | 747,540 | 713,467 | ||||||
| Accumulated other comprehensive income | 11,019 | 13,748 | ||||||
| Total shareholders’ equity before treasury stock | 1,128,582 | 1,095,500 | ||||||
| Treasury stock | (555,767 | ) | (543,714 | ) | ||||
| Total shareholders’ equity | 572,815 | 551,786 | ||||||
| Total Liabilities and Shareholders’ Equity | $ | 791,530 | $ | 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 June 30, | Six Months Ended June 30, | Twelve Months Ended December 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Gross margin | $ | 60.0 | $ | 52.4 | $ | 115.0 | $ | 99.0 | $ | 208.0 | $ | 187.6 | $ | 190.9 | ||||||||||||||
| Net sales | $ | 144.8 | $ | 135.3 | $ | 284.0 | $ | 261.1 | $ | 541.3 | $ | 514.8 | $ | 550.4 | ||||||||||||||
| Gross margin as a % of net sales | 41.5 | % | 38.7 | % | 40.5 | % | 37.9 | % | 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 | $ | 60.0 | $ | 52.4 | $ | 115.0 | $ | 99.0 | $ | 208.2 | $ | 190.4 | $ | 191.4 | ||||||||||||||
| Adjusted gross margin as a % of net sales | 41.5 | % | 38.7 | % | 40.5 | % | 37.9 | % | 38.5 | % | 37.0 | % | 34.8 | % | ||||||||||||||
Adjusted Operating Earnings
| Three Months Ended June 30, | Six Months Ended June 30, | Twelve Months Ended December 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Operating earnings | $ | 26.8 | $ | 22.7 | $ | 48.8 | $ | 39.0 | $ | 82.6 | $ | 71.2 | $ | 75.1 | ||||||||||||||
| Net sales | $ | 144.8 | $ | 135.3 | $ | 284.0 | $ | 261.1 | $ | 541.3 | $ | 514.8 | $ | 550.4 | ||||||||||||||
| Operating earnings as a % of net sales | 18.5 | % | 16.8 | % | 17.2 | % | 14.9 | % | 15.3 | % | 13.8 | % | 13.6 | % | ||||||||||||||
| Adjustments to reported operating earnings: | ||||||||||||||||||||||||||||
| Restructuring charges (c) | 0.1 | 0.3 | 0.5 | 0.7 | 1.4 | 4.7 | 7.1 | |||||||||||||||||||||
| Restructuring-related charges (b) | 0.1 | — | 0.1 | — | 0.7 | 0.7 | 0.6 | |||||||||||||||||||||
| Environmental charges (a) | 0.4 | 0.2 | 0.6 | 0.4 | 5.5 | 1.6 | 3.5 | |||||||||||||||||||||
| Acquisition-related adjustments (a) | 0.1 | (1.3 | ) | 0.1 | (1.5 | ) | (3.4 | ) | (0.3 | ) | 0.4 | |||||||||||||||||
| Inventory fair value step-up (b) | — | — | — | — | — | 2.1 | — | |||||||||||||||||||||
| Total adjustments to reported operating earnings | $ | 0.6 | $ | (0.8 | ) | $ | 1.4 | $ | (0.4 | ) | $ | 4.2 | $ | 8.8 | $ | 11.5 | ||||||||||||
| Adjusted operating earnings | $ | 27.4 | $ | 21.9 | $ | 50.1 | $ | 38.6 | $ | 86.9 | $ | 80.0 | $ | 86.6 | ||||||||||||||
| Adjusted operating earnings as a % of net sales | 18.9 | % | 16.2 | % | 17.7 | % | 14.8 | % | 16.0 | % | 15.5 | % | 15.7 | % | ||||||||||||||
Adjusted EBITDA Margin
| Three Months Ended June 30, | Six Months Ended June 30, | Twelve Months Ended December 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Net earnings | $ | 19.2 | $ | 18.5 | $ | 36.4 | $ | 31.9 | $ | 65.3 | $ | 55.5 | $ | 60.5 | ||||||||||||||
| Net sales | $ | 144.8 | $ | 135.3 | $ | 284.0 | $ | 261.1 | $ | 541.3 | $ | 514.8 | $ | 550.4 | ||||||||||||||
| Net earnings margin | 13.2 | % | 13.7 | % | 12.8 | % | 12.2 | % | 12.1 | % | 10.8 | % | 11.0 | % | ||||||||||||||
| Depreciation and amortization expense | 8.8 | 8.6 | 17.6 | 17.0 | 34.5 | 30.9 | 28.7 | |||||||||||||||||||||
| Interest expense | 0.7 | 1.1 | 1.4 | 2.3 | 4.3 | 4.2 | 3.3 | |||||||||||||||||||||
| Tax expense | 7.1 | 4.5 | 11.6 | 7.2 | 18.5 | 13.1 | 14.6 | |||||||||||||||||||||
| EBITDA | 35.7 | 32.7 | 66.9 | 58.4 | 122.6 | 103.7 | 107.2 | |||||||||||||||||||||
| EBITDA Margin | 24.7 | % | 24.2 | % | 23.6 | % | 22.4 | % | 22.6 | % | 20.1 | % | 19.5 | % | ||||||||||||||
| Adjustments to EBITDA: | ||||||||||||||||||||||||||||
| Restructuring charges (c) | 0.1 | 0.3 | 0.5 | 0.7 | 1.4 | 4.7 | 7.1 | |||||||||||||||||||||
| Restructuring-related charges (b) | 0.1 | — | 0.1 | — | 0.7 | 0.7 | 0.6 | |||||||||||||||||||||
| Environmental charges (a) | 0.4 | 0.2 | 0.6 | 0.4 | 5.5 | 1.6 | 3.5 | |||||||||||||||||||||
| Acquisition-related adjustments (a) | 0.1 | (1.3 | ) | 0.1 | (1.5 | ) | (5.6 | ) | (0.3 | ) | 0.4 | |||||||||||||||||
| Inventory fair value step-up (b) | — | — | — | — | — | 2.1 | — | |||||||||||||||||||||
| Non-cash pension and related expense (d) | — | — | — | 0.1 | 0.1 | 0.2 | — | |||||||||||||||||||||
| Foreign currency loss (gain) (d) | 0.4 | (0.8 | ) | 0.5 | (1.3 | ) | (1.3 | ) | 2.7 | 2.0 | ||||||||||||||||||
| Total adjustments to EBITDA | 1.0 | (1.6 | ) | 1.9 | (1.6 | ) | 0.9 | 11.7 | 13.5 | |||||||||||||||||||
| Adjusted EBITDA | $ | 36.8 | $ | 31.1 | $ | 68.8 | $ | 56.8 | $ | 123.4 | $ | 115.4 | $ | 120.7 | ||||||||||||||
| Adjusted EBITDA Margin | 25.4 | % | 23.0 | % | 24.2 | % | 21.8 | % | 22.8 | % | 22.4 | % | 21.9 | % | ||||||||||||||
Adjusted Net Earnings and Adjusted Diluted Earnings Per Share
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
| 2026 | 2026 | 2025 | 2025 | 2026 | 2026 | 2025 | 2025 | |||||||||||||||||||||||||
| Per share | Per share | Per share | Per share | |||||||||||||||||||||||||||||
| Net earnings (A) | $ | 19.2 | $ | 0.66 | $ | 18.5 | $ | 0.62 | $ | 36.4 | $ | 1.26 | $ | 31.9 | $ | 1.06 | ||||||||||||||||
| Adjustments to reported net earnings: | ||||||||||||||||||||||||||||||||
| Restructuring charges (c) | 0.1 | 0.00 | 0.3 | 0.01 | 0.5 | 0.02 | 0.7 | 0.03 | ||||||||||||||||||||||||
| Restructuring-related charges (a) | 0.1 | 0.00 | — | — | 0.1 | 0.00 | — | — | ||||||||||||||||||||||||
| Environmental charges (a) | 0.4 | 0.01 | 0.2 | 0.01 | 0.6 | 0.02 | 0.4 | 0.01 | ||||||||||||||||||||||||
| Acquisition-related adjustments (a) | 0.1 | 0.00 | (1.3 | ) | (0.05 | ) | 0.1 | 0.00 | (1.5 | ) | (0.05 | ) | ||||||||||||||||||||
| Non-cash pension and related expense (d) | — | — | — | — | — | — | 0.1 | — | ||||||||||||||||||||||||
| Foreign currency loss (gain) (d) | 0.4 | 0.01 | (0.8 | ) | (0.03 | ) | 0.5 | 0.02 | (1.3 | ) | (0.04 | ) | ||||||||||||||||||||
| Total pretax adjustments to reported net earnings | $ | 1.0 | $ | 0.04 | $ | (1.6 | ) | $ | (0.06 | ) | $ | 1.9 | $ | 0.06 | $ | (1.6 | ) | $ | (0.05 | ) | ||||||||||||
| Income tax effect of above adjustments (f) | (0.1 | ) | (0.00 | ) | 0.3 | 0.01 | (0.3 | ) | (0.01 | ) | 0.1 | — | ||||||||||||||||||||
| Total adjustments, tax affected (f) (B) | $ | 0.9 | $ | 0.03 | $ | (1.3 | ) | $ | (0.05 | ) | $ | 1.6 | $ | 0.05 | $ | (1.5 | ) | $ | (0.05 | ) | ||||||||||||
| Tax adjustments: | ||||||||||||||||||||||||||||||||
| Other discrete tax items (e) | 1.3 | 0.04 | 0.1 | — | 1.3 | 0.04 | 0.1 | — | ||||||||||||||||||||||||
| Total tax adjustments (C) | $ | 1.3 | $ | 0.04 | $ | 0.1 | $ | — | $ | 1.3 | $ | 0.04 | $ | 0.1 | $ | — | ||||||||||||||||
| Adjusted net earnings (A+B+C) and Adjusted net earnings per share | 21.3 | 0.74 | 17.3 | 0.57 | 39.2 | 1.35 | 30.5 | 1.01 | ||||||||||||||||||||||||
| Net sales | $ | 144.8 | $ | 135.3 | $ | 284.0 | $ | 261.1 | ||||||||||||||||||||||||
| Net earnings as a % of net sales | 13.2 | % | 13.7 | % | 12.8 | % | 12.2 | % | ||||||||||||||||||||||||
| Adjusted net earnings as a % of net sales | 14.7 | % | 12.8 | % | 13.8 | % | 11.7 | % | ||||||||||||||||||||||||
| 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
| June 30, | December 31, | |||||||||||||||||||
| 2026 | 2025 | 2025 | 2024 | 2023 | ||||||||||||||||
| Net accounts receivable | $ | 92.2 | $ | 85.6 | $ | 88.1 | $ | 77.6 | $ | 78.6 | ||||||||||
| Net inventory | $ | 59.6 | $ | 57.1 | $ | 52.9 | $ | 52.3 | $ | 60.0 | ||||||||||
| Accounts payable | $ | (50.0 | ) | $ | (47.3 | ) | $ | (48.2 | ) | $ | (42.6 | ) | $ | (43.5 | ) | |||||
| Controllable working capital | $ | 101.8 | $ | 95.4 | $ | 92.7 | $ | 87.3 | $ | 95.1 | ||||||||||
| Quarter sales | $ | 144.8 | $ | 135.3 | $ | 137.3 | $ | 126.4 | $ | 124.7 | ||||||||||
| Multiplied by 4 | 4 | 4 | 4 | 4 | 4 | |||||||||||||||
| Annualized sales | $ | 579.1 | $ | 541.2 | $ | 549.1 | $ | 505.6 | $ | 498.8 | ||||||||||
| Controllable working capital as a % of annualized sales | 17.6 | % | 17.6 | % | 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 June 30, | Six Months Ended June 30, | Twelve Months Ended December 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Net cash provided by operating activities | $ | 33.4 | $ | 28.4 | $ | 50.7 | $ | 43.9 | $ | 102.1 | $ | 98.2 | $ | 88.8 | ||||||||||||||
| Capital expenditures | (4.6 | ) | (3.3 | ) | (9.6 | ) | (7.7 | ) | (15.7 | ) | (18.6 | ) | (14.7 | ) | ||||||||||||||
| Free cash flow | $ | 28.8 | $ | 25.1 | $ | 41.1 | $ | 36.2 | $ | 86.4 | $ | 79.6 | $ | 74.1 | ||||||||||||||
| Operating cash flow as a percentage of net earnings | 174 | % | 153 | % | 139 | % | 138 | % | 156 | % | 177 | % | 147 | % | ||||||||||||||
| Free cash flow as a percentage of adjusted net earnings | 135 | % | 145 | % | 105 | % | 119 | % | 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 June 30, | Six Months Ended June 30, | Twelve Months Ended December 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Capital expenditures | $ | 4.6 | $ | 3.3 | $ | 9.6 | $ | 7.7 | $ | 15.7 | $ | 18.6 | $ | 14.7 | ||||||||||||||
| Net sales | $ | 144.8 | $ | 135.3 | $ | 284.0 | $ | 261.1 | $ | 541.3 | $ | 514.8 | $ | 550.4 | ||||||||||||||
| Capex as % of net sales | 3.2 | % | 2.4 | % | 3.4 | % | 2.9 | % | 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 June 30, | Six Months Ended June 30, | Twelve Months Ended December 31, | |||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2025 | 2024 | 2023 | |||||||||||||||
| Depreciation and amortization expense | $ | 8.8 | $ | 8.6 | $ | 17.6 | $ | 17.0 | $ | 34.5 | $ | 30.9 | $ | 28.7 | |||||||
| Stock-based compensation expense | $ | 2.0 | $ | 0.6 | $ | 4.0 | $ | 2.3 | $ | 4.9 | $ | 5.7 | $ | 5.2 | |||||||
