CTS Announces Third Quarter 2026 Results

The raised outlook assumes current market conditions continue, with adjusted diluted EPS expected at $2.78–$2.88.

Rhea-AI Summary

CTS (NYSE: CTS) raised its 2026 outlook after third-quarter sales increased 5% year over year to $149.6 million. Net income rose to $17.8 million from $13.7 million, and diluted earnings per share increased to $0.61 from $0.46. Adjusted diluted EPS reached $0.77 versus $0.60. Adjusted gross margin increased to 42.2% from 38.9%, while operating cash flow rose to $43.5 million from $29.0 million.

Assuming current market conditions continue, CTS expects 2026 sales of $580–$590 million, previously $565–$585 million, and adjusted diluted EPS of $2.78–$2.88, previously $2.55–$2.70. Diversified end-market sales grew 7% and represented 60% of sales; transportation sales grew 2%. CTS said its Millar acquisition advances diversification, particularly in medical markets. Quarterly income tax expense increased to $20.468 million from $6.033 million.

23 points · 1 major

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Hollow bars mark forward-looking points. How the balance works

Positive

• Major point. Forward-looking: it has not happened yet and may not happen.2026 sales guidance raised to $580–$590 million from $565–$585 million, assuming current market conditions continue.
• Moderate pointThird-quarter sales increased 5% year over year to $149.6 million.
• Moderate pointThird-quarter net income rose to $17.8 million, or 11.9% of sales, versus $13.7 million and 9.6%.
• Moderate pointThird-quarter adjusted gross margin expanded 330 basis points to 42.2% from 38.9% a year earlier.
• Moderate pointThird-quarter operating cash flow increased $14.5 million to $43.5 million from $29.0 million a year earlier.
• Moderate pointThird-quarter operating earnings rose to $25.5 million from $20.9 million a year earlier.

17 minor points

• Minor point. Forward-looking: it has not happened yet and may not happen.2026 adjusted diluted EPS guidance raised to $2.78–$2.88 from $2.55–$2.70, assuming current market conditions continue.
• Minor pointThird-quarter diluted EPS increased to $0.61 from $0.46 a year earlier.
• Minor pointThird-quarter adjusted diluted EPS increased to $0.77 from $0.60 a year earlier.
• Minor pointThird-quarter adjusted EBITDA margin increased to 24.7% from 23.8% a year earlier.
• Minor pointDiversified end-market sales grew 7% year over year, representing 60% of third-quarter sales.
• Minor pointTransportation sales increased 2% year over year in the third quarter.
• Minor pointThird-quarter adjusted operating earnings increased to $27.5 million from $24.8 million a year earlier.
• Minor pointMillar acquisition advances diversification, particularly in medical markets, CTS said.
• Minor pointNine-month sales increased to $433.593 million from $404.047 million in the comparable 2025 period.
• Minor pointNine-month net earnings rose to $54.118 million from $45.581 million in the comparable 2025 period.
• Minor pointNine-month diluted EPS increased to $1.87 from $1.52 in the comparable 2025 period.
• Minor pointNine-month operating earnings increased to $74.323 million from $59.954 million in the comparable 2025 period.
• Minor pointCash increased to $143.880 million at September 30, 2026, from $82.295 million at December 31, 2025.
• Minor pointLong-term debt declined to $55.000 million at September 30, 2026, from $57.500 million at year-end 2025.
• Minor pointThird-quarter research and development expenses fell to $6.333 million from $6.901 million a year earlier.
• Minor pointThird-quarter interest expense declined to $0.630 million from $1.110 million a year earlier.
• Minor pointThird-quarter environmental charges declined to $0.2 million from $4.2 million a year earlier.

Negative

• Moderate pointThird-quarter income tax expense increased to $20.468 million from $6.033 million a year earlier.
• Minor pointThird-quarter selling, general and administrative expenses rose to $30.812 million from $27.222 million a year earlier.
• Minor pointThird-quarter acquisition-related adjustments were $1.2 million, versus negative $1.1 million a year earlier.
• Minor pointThird-quarter restructuring charges increased to $0.468 million from $0.280 million a year earlier.
• Minor pointLong-term operating lease obligations rose to $29.412 million at September 30, 2026, from $21.841 million at year-end 2025.

News Explained

The quarter's reported other income was $12,534 thousand.

With third-quarter results now reported, the September 30, 2026 balance sheet lists cash and equivalents of $143,880 thousand and long-term debt of $55,000 thousand, providing a balance-sheet view of liquidity.

The headline calls profitability record, while the earnings table, also in thousands, reports $12,534 of other income in the quarter.

Key Figures

Third-quarter sales: $149.6 million; up 5% year over year Diluted EPS: $0.61, versus $0.46 Adjusted diluted EPS: $0.77, versus $0.60 +5 more

Third-quarter sales

$149.6 million; up 5% year over year

Third quarter 2026

Diluted EPS

$0.61, versus $0.46

Third quarter 2026 versus third quarter 2025

Adjusted diluted EPS

$0.77, versus $0.60

Third quarter 2026 versus third quarter 2025

Adjusted gross margin

42.2%, up 330 bps

Third quarter 2026 year over year

Adjusted EBITDA margin

24.7%, up 90 bps

Third quarter 2026 year over year

Operating cash flow

$43.5 million, up $14.5 million

Third quarter 2026 year over year

2026 sales guidance

$580–$590 million, raised from $565–$585 million

Full-year 2026 guidance

2026 adjusted diluted EPS guidance

$2.78–$2.88, raised from $2.55–$2.70

Full-year 2026 guidance

Previous Earnings Reports

1 past event · Latest: Jul 28

Same Type 1 event

1. Jul 28

   Quarterly earnings

   24h Move

   +7.3%

   Raised 2026 sales guidance to $565–$585 million and adjusted diluted EPS to $2.55–$2.70.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

non-gaap financial measures, diluted eps, restructuring-related charges, inventory fair value step-up

4 terms

non-gaap financial measures financial

"Non-GAAP Financial Measures"

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

diluted eps financial

"Diluted EPS was $0.61, up 15 cents from $0.46"

Diluted earnings per share (EPS) shows how much profit a company makes for each share of stock, assuming all possible shares from stock options or convertible securities are used. It provides a more conservative estimate than basic EPS, accounting for potential share increases that could dilute ownership. Investors use diluted EPS to get a clearer picture of a company's true profitability on a per-share basis.

restructuring-related charges financial

"Restructuring-related charges"

Restructuring-related charges are one-time costs a company records when it reorganizes operations, such as employee severance, closing facilities, breaking leases, selling assets at a loss, or hiring advisers to reshuffle the business. Think of it like the upfront bill for remodeling a house to run more efficiently; these charges reduce reported profit in the short term but may lead to lower ongoing costs. Investors watch them because large or repeated charges can affect cash flow, distort underlying operating performance, and signal either strategic improvement or financial stress.

inventory fair value step-up financial

"Inventory fair value step-up costs"

An inventory fair value step-up is the increase in the carrying amount of inventory on a buyer’s balance sheet that occurs at the acquisition date when purchase accounting (business combination accounting) requires the buyer to record the acquired inventories at their fair value rather than the seller’s historical cost. It is established as part of the purchase price allocation under accounting standards and becomes the new cost basis for those inventories; as the inventories are sold after the acquisition, the stepped-up amount is recognized through higher cost of goods sold (or reduced profit) and can create temporary differences for tax reporting. The measurement is fixed at the acquisition date and subsequent accounting follows inventory measurement rules, so the step-up affects future margins and deferred tax calculations but is not remeasured upward after closing.

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2026 Outlook Raised on Record Profitability; Millar Acquisition Advances Diversification

LISLE, Ill., Oct. 27, 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 third quarter of 2026.

“CTS delivered another strong quarter, with sales increasing 5% year over year, driven by continued strength across our increasingly diversified portfolio. Diversified end-market sales grew 7% and now represent 60% of total sales, while Transportation sales also posted modest growth,” said Pratik Trivedi, CEO of CTS Corporation. “Our disciplined execution is delivering profitable growth, record margins and strong cash generation. The acquisition of Millar further advances our diversification strategy, especially in the medical end market, and enhances our opportunity to create sustainable long-term value.”

Third Quarter 2026 Results

• Sales were $149.6 million in the third quarter of 2026, up 5% year-over-year. Sales to diversified end-markets increased 7%. Sales to the transportation market increased 2%.
• Net income was $17.8 million, or 11.9% of sales, compared to $13.7 million, or 9.6% of sales in the third quarter of 2025.
• Diluted EPS was $0.61, up 15 cents from $0.46 in the third quarter of 2025.
• Adjusted Gross margin was 42.2%, up 330 bps from 38.9% in the third quarter of 2025.
• Adjusted EBITDA margin was 24.7%, up 90 bps from 23.8% in the third quarter of 2025.
• Adjusted diluted EPS was $0.77, up 17 cents from $0.60 in the third quarter of 2025.
• Operating cash flow was $43.5 million, up $14.5 million from $29.0 million in the third 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 $565-$585 million to $580-$590 million and adjusted diluted EPS from a range of $2.55-$2.70 to $2.78-$2.88. 

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 Q3 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/.

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; changes in existing tax laws or adoption of new tax laws; 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								Nine Months Ended
		September 30, 2026				September 30, 2025				September 30, 2026				September 30, 2025
Net sales		$	149,583			$	142,970			$	433,593			$	404,047
Cost of goods sold			86,431				87,629				255,407				249,727
Gross margin			63,152				55,341				178,186				154,320
Selling, general and administrative expenses			30,812				27,222				85,185				73,922
Research and development expenses			6,333				6,901				17,730				19,416
Restructuring charges			468				280				948				1,028
Operating earnings			25,539				20,938				74,323				59,954
Other (expense) income:
Interest expense			(630	)			(1,110	)			(2,042	)			(3,398	)
Interest income			782				535				1,832				1,603
Other income (expense), net			12,534				(643	)			12,023				665
Total other income (expense), net			12,686				(1,218	)			11,813				(1,130	)
Earnings before income taxes			38,225				19,720				86,136				58,824
Income tax expense			20,468				6,033				32,018				13,243
Net earnings		$	17,757			$	13,687			$	54,118			$	45,581
Earnings per share:
Basic		$	0.62			$	0.47			$	1.89			$	1.53
Diluted		$	0.61			$	0.46			$	1.87			$	1.52
Basic weighted – average common shares outstanding:			28,547				29,348				28,605				29,698
Effect of dilutive securities			370				279				342				281
Diluted weighted – average common shares outstanding:			28,917				29,627				28,947				29,979
Cash dividends declared per share		$	0.04			$	0.04			$	0.12			$	0.12

CTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of dollars)
		(Unaudited) September 30, 2026				December 31, 2025
ASSETS
Current Assets
Cash and cash equivalents		$	143,880			$	82,295
Accounts receivable, net of allowances of $584 and $910, respectively			93,007				88,096
Inventories, net			62,355				52,854
Other current assets			29,704				29,461
Total current assets			328,946				252,706
Property, plant and equipment, net			86,637				89,741
Operating lease assets, net			31,016				22,542
Other Assets
Goodwill			207,395				209,611
Other intangible assets, net			139,535				153,562
Deferred income taxes			17,739				25,110
Other assets			10,826				11,039
Total other assets			375,495				399,322
Total Assets		$	822,094			$	764,311
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable		$	50,582			$	48,220
Operating lease obligations			4,355				3,453
Accrued payroll and benefits			22,699				20,732
Accrued expenses and other liabilities			49,205				37,283
Total current liabilities			126,841				109,688
Long-term debt			55,000				57,500
Long-term operating lease obligations			29,412				21,841
Long-term pension obligations			3,656				3,698
Deferred income taxes			13,163				12,800
Other long-term obligations			7,298				6,998
Total Liabilities			235,370				212,525
Commitments and Contingencies
Shareholders’ Equity
Common stock			326,888				324,982
Additional contributed capital			46,043				43,303
Retained earnings			764,156				713,467
Accumulated other comprehensive income			8,701				13,748
Total shareholders’ equity before treasury stock			1,145,788				1,095,500
Treasury stock			(559,064	)			(543,714	)
Total shareholders’ equity			586,724				551,786
Total Liabilities and Shareholders’ Equity		$	822,094			$	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); (8) non-recurring insurance recovery proceeds and (9) 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.
• Insurance recovery – recovery relating to non-recurring insurance claims
• 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 $0.01 for EPS figures, and, therefore, may not sum.

Adjusted Gross Margin

		Three Months Ended September 30,								Nine Months Ended September 30,								Twelve Months Ended December 31,
		2026				2025				2026				2025				2025				2024				2023
Gross margin		$	63.2			$	55.3			$	178.2			$	154.3			$	208.0			$	187.6			$	190.9
Net sales		$	149.6			$	143.0			$	433.6			$	404.0			$	541.3			$	514.8			$	550.4
Gross margin as a % of net sales			42.2	%			38.7	%			41.1	%			38.2	%			38.4	%			36.4	%			34.7	%
Adjustments to reported gross margin:
Restructuring-related charges (b)			—				0.2				—				0.2				0.2				0.7				0.6
Inventory fair value step-up (b)			—				—				—				—				—				2.1			—
Adjusted gross margin		$	63.2			$	55.6			$	178.2			$	154.5			$	208.2			$	190.4			$	191.4
Adjusted gross margin as a % of net sales			42.2	%			38.9	%			41.1	%			38.2	%			38.5	%			37.0	%			34.8	%

Adjusted Operating Earnings

		Three Months Ended September 30,								Nine Months Ended September 30,								Twelve Months Ended December 31,
		2026				2025				2026				2025				2025				2024				2023
Operating earnings		$	25.5			$	20.9			$	74.3			$	60.0			$	82.6			$	71.2			$	75.1
Net sales		$	149.6			$	143.0			$	433.6			$	404.0			$	541.3			$	514.8			$	550.4
Operating earnings as a % of net sales			17.1	%			14.6	%			17.1	%			14.8	%			15.3	%			13.8	%			13.6	%
Adjustments to reported operating earnings:
Restructuring charges (c)			0.5				0.3				0.9				1.0				1.4				4.7				7.1
Restructuring-related charges (b)			0.1				0.4				0.2				0.4				0.7				0.7				0.6
Environmental charges (a)			0.2				4.2				0.9				4.7				5.5				1.6				3.5
Acquisition-related adjustments (a)			1.2				(1.1	)			1.3				(2.6	)			(3.4	)			(0.3	)			0.4
Inventory fair value step-up (b)			—				—				—				—				—				2.1				—
Total adjustments to reported operating earnings		$	2.0			$	3.8			$	3.3			$	3.5			$	4.2			$	8.8			$	11.5
Adjusted operating earnings		$	27.5			$	24.8			$	77.7			$	63.4			$	86.9			$	80.0			$	86.6
Adjusted operating earnings as a % of net sales			18.4	%			17.3	%			17.9	%			15.7	%			16.0	%			15.5	%			15.7	%

Adjusted EBITDA Margin

		Three Months Ended September 30,								Nine Months Ended September 30,								Twelve Months Ended December 31,
		2026				2025				2026				2025				2025				2024				2023
Net earnings		$	17.8			$	13.7			$	54.1			$	45.6			$	65.3			$	55.5			$	60.5
Net sales		$	149.6			$	143.0			$	433.6			$	404.0			$	541.3			$	514.8			$	550.4
Net earnings margin			11.9	%			9.6	%			12.5	%			11.3	%			12.1	%			10.8	%			11.0	%
Depreciation and amortization expense			8.7				8.8				26.3				25.9				34.5				30.9				28.7
Interest expense			0.6				1.1				2.0				3.4				4.3				4.2				3.3
Tax expense			20.5				6.0				32.0				13.2				18.5				13.1				14.6
EBITDA			47.6				29.7				114.5				88.1				122.6				103.7				107.2
EBITDA Margin			31.8	%			20.7	%			26.4	%			21.8	%			22.6	%			20.1	%			19.5	%
Adjustments to EBITDA:
Restructuring charges (c)			0.5				0.3				0.9				1.0				1.4				4.7				7.1
Restructuring-related charges (b)			0.1				0.4				0.2				0.4				0.7				0.7				0.6
Environmental charges (a)			0.2				4.2				0.9				4.7				5.5				1.6				3.5
Acquisition-related adjustments (a)			1.2				(1.1	)			1.3				(2.6	)			(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)			(0.1	)			0.6				0.4				(0.7	)			(1.3	)			2.7				2.0
Insurance recovery (d)			(12.5	)			—				(12.5	)			—				—				—				—
Total adjustments to EBITDA			(10.6	)			4.4				(8.7	)			2.8				0.9				11.7				13.6
Adjusted EBITDA		$	37.0			$	34.1			$	105.7			$	90.9			$	123.4			$	115.4			$	120.7
Adjusted EBITDA Margin			24.7	%			23.8	%			24.4	%			22.5	%			22.8	%			22.4	%			21.9	%

Adjusted Net Earnings and Adjusted Diluted Earnings Per Share

		Three Months Ended September 30,																Nine Months Ended September 30,
		2026				2026				2025				2025				2026				2026				2025				2025
						Per share								Per share								Per share								Per share
Net earnings (A)		$	17.8			$	0.61			$	13.7			$	0.46			$	54.1			$	1.87			$	45.6			$	1.52
Adjustments to reported net earnings:
Restructuring charges (c)			0.5				0.02				0.3				0.01				0.9				0.03				1.0				0.03
Restructuring-related charges (a)			0.1				0.00				0.4				0.01				0.2				0.01				0.4				0.01
Environmental charges (a)			0.2				0.01				4.2				0.14				0.9				0.03				4.7				0.16
Acquisition-related adjustments (a)			1.2				0.04				(1.1	)			(0.03	)			1.3				0.05				(2.6	)			(0.09	)
Non-cash pension and related expense (d)			—				—				—				—				—				—				0.1				—
Foreign currency loss (gain) (d)			(0.1	)			(0.00	)			0.6				0.02				0.4				0.01				(0.7	)			(0.02	)
Insurance recovery (d)			(12.5	)			(0.43	)			—				—				(12.5	)			(0.43	)			—				—
Total pretax adjustments to reported net earnings		$	(10.6	)		$	(0.37	)		$	4.4			$	0.15			$	(8.7	)		$	(0.30	)		$	2.8			$	0.09
Income tax effect of above adjustments (f)			2.5				0.09				(1.0	)			(0.03	)			2.2				0.08				(1.0	)			(0.03	)
Total adjustments, tax affected (f) (B)		$	(8.1	)		$	(0.28	)		$	3.4			$	0.12			$	(6.5	)		$	(0.23	)		$	1.8			$	0.06
Tax adjustments:
Other discrete tax items (e)			12.7				0.44				0.7				0.02				14.0				0.48				0.8				0.03
Total tax adjustments (C)		$	12.7			$	0.44			$	0.7			$	0.02			$	14.0			$	0.48			$	0.8			$	0.03
Adjusted net earnings (A+B+C) and Adjusted net earnings per share			22.4				0.77				17.8				0.60				61.6				2.13				48.2				1.61
Net sales		$	149.6							$	143.0							$	433.6							$	404.0
Net earnings as a % of net sales			11.9	%							9.6	%							12.5	%							11.3	%
Adjusted net earnings as a % of net sales			15.0	%							12.4	%							14.2	%							11.9	%

		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 $0.6 million for research and development tax credits from prior years, $0.8 million in foreign tax credits related to prior years from a 2023 tax law change, as well as $0.2 million from the release of uncertain tax benefits. For 2024, the discrete tax items relate to items we deemed outside normal cash-generating operations including the addition of a valuation allowance for a foreign subsidiary. For 2025, the discrete tax items relate to items we deemed outside normal cash-generating operations including the addition of a valuation allowance for research and developmental credits and the tax impacts of an immaterial correction of a prior period error. For 2026, the discrete tax items relate to items we deemed outside normal cash-generating operations including the addition of a valuation allowance for foreign tax credits and adjustments related to uncertain tax positions. 
(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

		September 30,								December 31,
		2026				2025				2025				2024				2023
Net accounts receivable		$	93.0			$	85.9			$	88.1			$	77.6			$	78.6
Net inventory		$	62.4			$	54.2			$	52.9			$	52.3			$	60.0
Accounts payable		$	(50.6	)		$	(48.1	)		$	(48.2	)		$	(42.6	)		$	(43.5	)
Controllable working capital		$	104.8			$	92.0			$	92.7			$	87.3			$	95.1
Quarter sales		$	149.6			$	143.0			$	137.3			$	126.4			$	124.7
Multiplied by 4			4				4				4				4				4
Annualized sales		$	598.3			$	571.9			$	549.1			$	505.6			$	498.8
Controllable working capital as a % of annualized sales			17.5	%			16.1	%			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 September 30,								Nine Months Ended September 30,								Twelve Months Ended December 31,
		2026				2025				2026				2025				2025				2024				2023
Net cash provided by operating activities		$	43.5			$	29.0			$	94.3			$	72.9			$	102.1			$	98.2			$	88.8
Capital expenditures			(2.4	)			(4.8	)			(12.0	)			(12.5	)			(15.7	)			(18.6	)			(14.7	)
Free cash flow		$	41.1			$	24.2			$	82.3			$	60.4			$	86.4			$	79.6			$	74.1
Operating cash flow as a percentage of net earnings			245	%			212	%			174	%			160	%			156	%			177	%			147	%
Free cash flow as a percentage of adjusted net earnings			184	%			136	%			134	%			125	%			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 September 30,								Nine Months Ended September 30,								Twelve Months Ended December 31,
		2026				2025				2026				2025				2025				2024				2023
Capital expenditures		$	2.4			$	4.8			$	12.0			$	12.5			$	15.7			$	18.6			$	14.7
Net sales		$	149.6			$	143.0			$	433.6			$	404.0			$	541.3			$	514.8			$	550.4
Capex as % of net sales			1.6	%			3.4	%			2.8	%			3.1	%			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 September 30,								Nine Months Ended September 30,								Twelve Months Ended December 31,
		2026				2025				2026				2025				2025				2024				2023
Depreciation and amortization expense		$	8.7			$	8.8			$	26.3			$	25.9			$	34.5			$	30.9			$	28.7
Stock-based compensation expense		$	3.3			$	1.2			$	7.3			$	3.4			$	4.9			$	5.7			$	5.2

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What is CTS's updated 2026 earnings and sales guidance?

CTS expects 2026 sales of $580–$590 million and adjusted diluted EPS of $2.78–$2.88, assuming current market conditions continue. The previous ranges were $565–$585 million and $2.55–$2.70, respectively.

What were CTS's third-quarter 2026 earnings results?

CTS reported net income of $17.8 million and diluted EPS of $0.61, compared with $13.7 million and $0.46 in the third quarter of 2025. Sales increased 5% year over year to $149.6 million, and adjusted diluted EPS rose to $0.77 from $0.60.