CTS Corporation is a global enterprise specializing in the production and distribution of vital electronic components, such as sensors, actuators, and connectivity ...
CTS Corporation is a diversified electronic components manufacturer with origins dating to 1896, when the business was established in Chicago as Chicago Telephone Supply. Today, the company designs and manufactures engineered sensing, motion, and connectivity products, primarily for original equipment manufacturers (OEMs). Its portfolio includes sensors, actuators, switches, temperature sensors, ...CTS Corporation is a diversified electronic components manufacturer with origins dating to 1896, when the business was established in Chicago as Chicago Telephone Supply. Today, the company designs and manufactures engineered sensing, motion, and connectivity products, primarily for original equipment manufacturers (OEMs). Its portfolio includes sensors, actuators, switches, temperature sensors, potentiometers, piezoelectric materials, substrates, and high-speed connectivity components. These products are integrated into larger systems rather than generally sold as consumer-branded finished goods, making CTS an important component supplier within several industrial value chains.
The automotive business is a central part of CTS’s activities. The company supplies specialized sensors and actuators for passenger vehicles and commercial vehicles, supporting applications such as position sensing, temperature measurement, fluid management, transmission systems, braking, powertrain controls, and other electronically managed functions. As vehicles become more connected, electrified, automated, and software-controlled, demand for reliable sensing and control components can increase. CTS also serves industrial customers with components used in automation, equipment controls, energy systems, and factory applications. In aerospace and defense, medical, and information technology markets, its piezoelectric materials and substrates can support precision, motion, imaging, communications, and other demanding applications.
Connectivity products are another important area. CTS provides components intended for telecommunications infrastructure, information technology networks, and high-speed electronic applications. The company’s sales model combines internal sales engineers, independent manufacturers’ representatives, and distributors. This approach allows CTS to support technically complex OEM programs while also reaching a broader base of industrial and electronics customers.
CTS operates internationally, with more than 20 locations in 12 countries and over 3,500 employees. Its reported workforce of approximately 3,492 people places it in the 2,001-5,000 employee category. Manufacturing and engineering capabilities across North America, Europe, and Asia help the company serve customers near their production sites and manage regional supply-chain requirements. Its cost structure includes raw materials, electronic and electromechanical components, direct labor, factory overhead, research and development, selling expenses, and general and administrative costs. Because CTS products are engineered for specific applications, design-in wins, qualification requirements, quality standards, and long customer production cycles can create both opportunities and barriers to entry.
Based on the supplied trailing-twelve-month information, CTS generated a gross margin of approximately 39.3%, an EBITDA margin of about 23.3%, and a net margin of roughly 12.4%. Its debt-to-equity ratio was approximately 0.20, while its current ratio was about 2.61, indicating comparatively moderate leverage and substantial short-term liquidity. The company reported free cash flow of approximately $94.6 million on a firm basis and maintained capital expenditures at about 3.1% of revenue. These figures suggest a business with meaningful cash-generation capacity, although results remain sensitive to automotive production levels, industrial demand, customer concentration, currency movements, material costs, semiconductor and component availability, and global economic conditions.
Pratik Trivedi serves as President and Chief Executive Officer. Under its current leadership, CTS’s strategic priorities include expanding higher-value sensing and connectivity technologies, improving operational efficiency, supporting innovation, and increasing participation in secular growth markets such as vehicle electrification, advanced industrial automation, medical technology, and high-speed communications. The company’s long-term objective is to combine engineering expertise, global manufacturing, customer relationships, and disciplined capital allocation to deliver dependable electronic solutions and sustainable shareholder value.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$542.2M
+5.2%
+3.6%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$65.3M
+12.4%
+11.4%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+38.5%
+5.5%
+7.9%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
+15.6%
+5.3%
+23.0%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
+12.0%
+6.9%
+7.6%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$86.4M
+7.1%
+134.7%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
+15.9%
+1.8%
+126.5%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
22.1%
+0.2%
+18.6%
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
2.30x
-8.0%
+3.4%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Operator: Hello everyone. Thank you for joining us and welcome to CTS Corporation's second quarter 26 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Prateek Trivedi. Pratik, please go ahead.
Pratik Trivedi: Good morning, and thank you for joining us. As I begin my first earnings call as CEO, I want to thank Kieran O'Sullivan for his leadership and the strong foundation he built at CTS. The Evolution 30 strategy and our focus on diversification remains central to our value creation. We delivered a strong second quarter with revenue growing 7% to $145 million. Our diversified end markets increased 15% year over year and represented 59% of total sales. Equally important, we converted that growth into record profitability achieving gross margin of 41.5% adjusted EBITDA margin of 25.4%, and adjusted diluted EPS of $0.74. While the quarter benefited from certain unusual items, that contributed approximately $0.07 of favorable EPS impact, we still delivered record earnings per share. Robust growth across our diversified end markets drove strong financial results and improved the quality of our earnings despite modest declines in transportation. Combined with disciplined execution, this momentum gives us confidence in our ability to continue delivering profitable growth and long term shareholder value. Ashish Agrawal, our CFO, will take us through the safe harbor statement. Ashish?
Ashish Agrawal: I would like to remind our listeners that this conference call contains forward looking statements. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed in the forward looking statements. Additional information regarding these risks and uncertainties is contained in the press release issued today and more information can be found in the company's SEC filings. To the extent that today's discussion refers to any non GAAP measures under Regulation G, the required explanations and reconciliations are available with today's earnings press release and the supplemental slide presentation which can be found in our Investors section of the CTS website. I will now turn the discussion back over to Prateek.
Pratik Trivedi: Thank you, Ashish. We finished the second quarter with sales of $145 million representing a 7% increase compared to the second quarter of 25 and up 4% sequentially from the first quarter. Our diversified end markets were up 15% year over year while transportation sales were down 2%. Diversified end market sales were 59% of overall company revenue in the quarter, up from 55% in the prior year period. For the first half of 26, diversified sales were up 16% and transportation sales remained flat over the same period last year. Our book to bill ratio for the second …