Q3 2024 CTS Corp Earnings Call Transcript
Key Points
- CTS Corp (CTS) reported third-quarter revenue of $132 million with adjusted earnings per share of $0.63, reflecting a 17% year-over-year increase in adjusted EPS.
- The company successfully executed its diversification strategy, with revenue from diversified markets accounting for approximately 52% of overall revenue.
- CTS Corp (CTS) expanded its adjusted gross margin by 416 basis points, aided by foreign exchange favorability and improved plant efficiency.
- The acquisition of SyQwest Inc has accelerated growth in the defense sector, contributing $3.6 million in revenue and enhancing the company's position in sensors, transducers, and subsystems.
- The company achieved multiple wins in medical ultrasound, drug delivery, and a pacemaker application, indicating strong momentum in the medical market.
- Overall sales were down 1.6% from the third quarter of 2023, with transportation sales declining by 17% year-over-year.
- CTS Corp (CTS) anticipates softness in the medical market for the fourth quarter due to customer inventory adjustments.
- The transportation market, particularly in China, faces headwinds with softer demand and competition from local OEMs.
- The company updated its full-year sales guidance to a lower range of $515 million to $525 million, down from the previous range of $525 million to $540 million.
- Despite the positive impact of the SyQwest Inc acquisition on gross margin, the acquisition is slightly dilutive to EPS for the current year.
Hello, everyone and welcome to the CTS Corporation third quarter, 2024 earnings call. My name is Nadia and I'll be coordinating the call today.
If you would like to ask a question at the end of the presentation, please press star followed by one on your telephone keypad.
I will now hand over to your host, Kieran OĆ¢Sullivan President and CEO to begin
Kieran, please go ahead.
Good morning and thanks for joining us today. Let's start with some key highlights for the quarter. 1st, 3rd quarter saw revenue of $132 million and adjusted earnings per share of $0.63.
Second, we continued to execute on our diversification strategy with revenue from diversified markets. Now, accounting for approximately 52% of overall revenue in the quarter. Diversification will continue to be a strategic priority, and we expect further progress next year.
Third and finally, we expanded overall adjusted gross
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