CTS Corporation Q3业绩超预期并大幅上调2026全年指引，盘前涨约4.6%

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 27, 2026
CTS CORPORATION
(Exact name of Registrant as Specified in Its Charter)
Indiana
1-4639
35-0225010
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(I.R.S. Employer
Identification No.)
4925 Indiana Avenue
Lisle
,
Illinois
60532
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s Telephone Number, Including Area Code:
(630)
577-8800
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock, no par value
CTS
The New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Item 2.02 Results of Operations and Financial Condition.
On October 27, 2026, CTS Corporation (the "Company") issued a press release providing certain results for the third quarter ended September 30, 2026, as more fully described in the press release. A copy of the press release is attached hereto as Exhibit 99.l and is incorporated by reference herein.
The information contained in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.l hereto, is being "furnished" to the Securities and Exchange Commission and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. Furthermore, such information shall not be deemed to be incorporated by reference into any filing made by the Company under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except as set forth by specific reference in such filing.
Item 7.01 Regulation FD Disclosure.
As disclosed in the press release furnished as Exhibit 99.1, the Company will hold a live web cast on October 27, 2026, relating to the Company's financial results for the third quarter ended September 30, 2026. A copy of the slides to be presented during the Company's web cast and discussed in the conference call relating to such financial results is being furnished as Exhibit 99.2 to this Current Report on Form 8-K.
By filing this Current Report on Form 8-K and furnishing the information contained herein, the Company makes no admission as to the materiality of any information in this report that is required to be disclosed solely by reason of Regulation FD.
The information contained in Item 7.01 of this Current Report on Form 8-K and Exhibit 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. Furthermore, such information shall not be deemed to be incorporated by reference into any filing made by the Company under the Securities Act or the Exchange Act, except as set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Description
99.1
Earnings Release dated October 27, 2026
99.2
Slides of CTS Corporation, 3rd Quarter 2026, dated October 27, 2026
104
Cover Page Interactive Data File (embedded within the Inline XBRL Document)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 27, 2026
CTS CORPORATION
By:
/s/ Ashish Agrawal
Ashish Agrawal
Vice President and Chief Financial Officer

----- cts-ex99_1.htm -----
EX-99.1
2
cts-ex99_1.htm
EX-99.1
EX-99.1
Exhibit 99.1
October 27, 2026
FOR IMMEDIATE RELEASE
CTS Announces Third Quarter 2026 Results
2026 Outlook Raised on Record Profitability; Millar Acquisition Advances Diversification
Lisle, Ill. -
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.
www.ctscorp.com
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.
www.ctscorp.com
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
www.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
www.ctscorp.com
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
www.ctscorp.com
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.
www.ctscorp.com
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

----- cts-ex99_2.htm -----
EX-99.2
3
cts-ex99_2.htm
EX-99.2
CTS Corporation
3rd Quarter 2026 Earnings Call October 27, 2026
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.  CTS refers to the forward-looking measures of book-to-bill ratio and total booked business in this document. Book-to-bill ratio is the ratio of customer orders received to revenues recorded for the same period. Although the book-to-bill ratio reflects firm customer orders, changes such as terminations, amendments, or contract cancellations may occur which could result in a reduction to the customer orders. Total booked business reflects expected revenue from the remaining life of long-term agreements with transportation customers. Total booked business is adjusted periodically for changes in expected revenue based on market information, fluctuations in foreign currency exchange rates, information from our customers, and any other factors that may impact the expected revenue from these agreements. Book-to-bill ratio and total booked business are not defined by U.S. GAAP and our methodology for calculating these measures may not be consistent with or comparable to other similarly titled measures of other companies.
Strong execution drives profitable growth Revenue +5% YoY and +3% sequentially Book-to-bill ratio2 of 1.18 Adj. gross margin expanded 330 bps to 42.2% Continued momentum in diversified end markets Revenue +7% YoY, representing 60% of Q3 sales Strong bookings with a Book-to-bill ratio2 of 1.3 Modest growth in Transportation Revenue +2% YoY, 1% sequentially Notes: All comparisons vs. same period in prior year unless otherwise noted. 1 Adj. Gross Margin and Adj. Earnings per Share are non-GAAP financial measures. Refer to the Appendix for reconciliations of non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. 2 Refer to slide 2 for information on book-to-bill ratio. Q3 2026 – Diversification Momentum and Strong Execution Drive Record Profitability $150M Revenue +5% Third Quarter 42.2% Adj. Gross Margin1 +330 bps $0.77 Adj. Diluted EPS1 +$0.17 Advancing Our Strategy: Diversification, Profitable Growth & Disciplined Capital Deployment
Millar Acquisition – Advancing Portfolio Diversification Expanding CTS into attractive markets with differentiated sensing technologies Precision pressure sensing for medical, life sciences and industrial applications 55+ years Sensing expertise across the U.S. and Europe ~$30M Expected annual revenue 2H 2027 Accretive Neurological monitoring Cardiovascular Implantable sensing Industrial / water quality Differentiated capabilities MEMS pressure, pH and conductivity Integrated design, microfabrication and manufacturing Portfolio diversification Complementary technologies and customer relationships New growth opportunities through CTS’s global reach 2
Medical 5 Aerospace & Defense End Markets Update ($ Millions) Revenue ($ Millions) Revenue Strong sales growth of 21% YoY; down 4% sequentially Book-to-bill of 0.7, with bookings down 5% YoY due to timing of orders Key wins across implantable pacemakers, ultrasound diagnostics, precision measurement and therapeutic applications Sales down 7% YoY; up 30% sequentially Strong bookings for the second consecutive quarter; Book-to-bill of 1.9 and bookings +102% YoY Successfully scaling a critical sensing solution for a U.S. Navy undersea warfare application
End Markets Update 6 Industrial Sales up 7% YoY and 1% sequentially Strong bookings with Book-to-bill of 1.36 Multiple design wins across data centers, automation, connectivity, digitalization and energy efficiency New customer win in temperature sensing ($ Millions) Revenue 1 Refer to slide 2 for information on total booked business. Transportation Sales up 2% YoY and 1% sequentially $1.2b total booked business1 at end of Q3 2026 Continued momentum across eBrake technology, foot controls and sensing applications New customer win in seat-track position sensing ($ Millions) Revenue
$2.88 2 $2.78 Notes:  1 Adjusted Diluted EPS is a non-GAAP financial measure. Refer to the Appendix for reconciliations of non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. 2 Revenue and EPS guidance include the expected impact from the Millar acquisition. FY 2026 Updated Guidance Revenue ($ Millions) Adjusted Diluted EPS 1 $580 $590 2 Continuation of current market conditions – Ongoing monitoring of near‑term economic impacts, including geopolitical conflicts, tariff changes, precious metals, and petroleum‑based products, with a focus on agility in cost and pricing actions Continued progress on growth in diversified end markets Light vehicle production expected to be flat to slightly down, partially offset by commercial vehicle volumes Effective tax rate expected to be in the range of 20–22%, excluding discrete items Key Outlook Assumptions
Financials
Notes: All comparisons vs. same period in prior year unless otherwise noted. 1 Adj. Diluted EPS, Adj. Gross Margin and Adj. EBITDA Margin are non-GAAP financial measures. Refer to the Appendix for reconciliations of non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. Revenue up 5% year over year and 3% sequentially Diversified end market revenue up 7% vs Q3 2025 Transportation revenue up 2% year-over-year Adjusted gross margin +330 bps vs. Q3 2025, driven by operations, mix, and FX benefit Adjusted EBITDA up 90 bps vs Q3 2025 Monitoring USMCA, tariff changes, metals/oil inflation FX favorability of approximately 4 cents to EPS Net Income $13.7 $19.2 $17.8 Diluted EPS $0.46 $0.66 $0.61 Adj. Diluted EPS1 $0.60 $0.74 $0.77 Adj. Gross Margin1 38.9% 41.5% 42.2% Adj. EBITDA Margin1 23.8% 25.4% 24.7% Revenue Q3 2026 Financial Summary Results ($ Millions, except percentages and per share amounts) Highlights
Cash and Debt1 $19M Cash Returned to Shareholders YTD Q3 20263 $82M YTD Q3 2026 Free Cash Flow2 Strong Balance Sheet Solid Foundation for Strategic M&A $12M YTD Q3 2026 Capital Expenditures Borrowed Total Facility Q3 YTD Operating Cash Flow Prioritizing strong cash flow generation ($ Millions) ($ Millions) Notes:  1 Cash and Debt balance as of September 30, 2026 2 Free Cash Flow is a non-GAAP financial measure. Refer to the Appendix for reconciliations of non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. 3 Cash Returned to Shareholders consists of share repurchases & dividends.
Q & A
Appendix
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) 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 reductions, building and equipment relocations, asset impairment charges and other facility closure activities 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 U.S. GAAP. These include duplicative expenses incurred due to plant consolidation related transition activities such as excess rent, utilities, personnel related and other costs incurred prior to the 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 $0.01 for EPS figures, and, therefore, may not sum. CTS does not provide reconciliations of forward-looking non-GAAP financial measures, such as estimated adjusted diluted earnings per share, to the most comparable GAAP financial measures on a forward-looking basis because CTS is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, restructuring costs, environmental remediation costs, acquisition-related costs, foreign exchange rates and other non-routine costs. Each of such adjustments has not yet occurred, are out of CTS' control and/or cannot be reasonably predicted. For the same reasons, CTS is unable to address the probable significance of the unavailable information.
Regulation G Schedules ($ Millions, except percentages) Adjusted Gross Margin Three Months Ended
September 30, Nine Months Ended
September 30, Three Months Ended June 30, Twelve Months Ended
December 31, 2026 2025 2026 2025 2026 2025 2024 2023 Gross margin $ 63.2 $ 55.3 $ 178.2 $ 154.3 $ 60.0 $ 208.0 $ 187.6 $ 190.9 Net sales   $ 149.6   $ 143.0   $ 433.6   $ 404.0   $ 144.8 $ 541.3 $ 514.8   $ 550.4 Gross margin as a % of net sales 42.2% 38.7% 41.1% 38.2% 41.5% 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   $ 60.0 $ 208.2 $ 190.4   $ 191.4   Adjusted gross margin as a % of net sales   42.2%   38.9%   41.1%   38.2%   41.5% 38.5% 37.0%   34.8%
Regulation G Schedules ($ Millions, except percentages) 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%
Regulation G Schedules ($ Millions, except percentages) Adjusted EBITDA Margin Three Months Ended
September 30, Nine Months Ended
September 30, Three Months Ended June 30, Twelve Months Ended
December 31, 2026 2025 2026   2025 2026 2025 2024 2023 Net earnings $ 17.8 $ 13.7 $ 54.1 $ 45.6 $ 19.2 $ 65.3 $ 55.5 $ 60.5 Net sales $ 149.6 $ 143.0 $ 433.6 $ 404.0 $ 144.8 $ 541.3 $ 514.8 $ 550.4 Net earnings margin 11.9% 9.6% 12.5% 11.3% 13.2% 12.1% 10.8% 11.0% Depreciation and amortization expense 8.7 8.8 26.3 25.9 8.8 34.5 30.9 28.7 Interest expense 0.6 1.1 2.0 3.4 0.7 4.3 4.2 3.3 Tax expense 20.5 6.0 32.0   13.2     7.1 18.5   13.1 14.6 EBITDA 47.6 29.7 114.5 88.1 35.7 122.6 103.7 107.2 EBITDA Margin 31.8% 20.7% 26.4% 21.8% 24.7% 22.6% 20.1% 19.5% Adjustments to EBITDA: Restructuring charges (c) 0.5 0.3 0.9 1.0 0.1 1.4 4.7 7.1 Restructuring-related charges (b) 0.1 0.4 0.2 0.4 0.1 0.7 0.7 0.6 Environmental charges (a) 0.2 4.2 0.9 4.7 0.4 5.5 1.6 3.5 Acquisition-related adjustments (a) 1.2 (1.1) 1.3 (2.6) 0.1 (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) 0.4 (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 1.0 0.9 11.7 13.5 Adjusted EBITDA $ 37.0 $ 34.1 $ 105.7 $ 90.9 $ 36.8 $ 123.4 $ 115.4 $ 120.7 Adjusted EBITDA Margin 24.7% 23.8% 24.4% 22.5% 25.4% 22.8% 22.4% 21.9%
Regulation G Schedules ($ Millions, except percentages and per share amounts) Adjusted Net Earnings and Adjusted Diluted Earnings Per Share ` Three Months Ended
September 30, Nine Months Ended
September 30, Three Months Ended
June 30, 2026 2026 2025 2025 2026 2026 2025 2025 2026 2026 Per Share 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 $ 19.2 $ 0.66 Adjustments to reported net earnings: Restructuring charges (c) 0.5 0.02 0.3 0.01 0.9 0.03 1.0 0.03 0.1 0.00 Restructuring related charges (a) 0.1 0.00 0.4 0.01 0.2 0.01 0.4 0.01 0.1 0.00 Environmental charges (a) 0.2 0.01 4.2 0.14 0.9 0.03 4.7 0.16 0.4 0.01 Acquisition-related adjustments (a) 1.2 0.04 (1.1) (0.03) 1.3 0.05 (2.6) (0.09) 0.1 0.00 Non-cash pension and related expense (d) — — — — — — — — — — Foreign currency loss (gain) (d) (0.1) (0.00) 0.6 0.02 0.4 0.01 (0.7) (0.02) 0.4 0.01 Insurance recovery (d) (12.5) (0.43) — 0.00 (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 $ 1.0 $ 0.04 Income tax effect of above adjustments (f) 2.5 0.09 (1.0) (0.03) 2.2 0.08 (1.0) (0.03) (0.1) (0.00) Total adjustments, tax affected (f) (B) $ (8.1) $ (0.28) $ 3.4 $ 0.12 $ (6.5) $ (0.23) $ 1.8 $ 0.06 $ 0.9 $ 0.03 Tax adjustments: Other discrete tax items (e) 12.7 0.44 0.7 0.02 14.0 0.48 0.8 0.03 1.3 0.04 Total tax adjustments (C) $ 12.7 $ 0.44 $ 0.7 $ 0.02 $ 14.0 $ 0.48 $ 0.8 $ 0.03 $ 1.3 $ 0.04 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 $ 21.3 $ 0.74 Net sales $ 149.6 $ 143.0 $ 433.6 $ 404.0 $ 144.8 Net earnings as a % of net sales 11.9% 9.6% 12.5% 11.3% 13.2% Adjusted net earnings as a % of net sales 15.0% 12.4% 14.2% 11.9% 14.7%
Regulation G Schedules ($ Millions, except percentages and per share amounts) Adjusted Net Earnings and Adjusted Diluted Earnings Per Share 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. Twelve Months Ended
December 31, 2025 2025 2024 2024 2023 2023 Per share Per share Per share Net earnings (loss) (A) $ 65.3 $ 2.19 $ 55.5 $ 1.80 $ 60.5 $ 1.92 Adjustments to reported net earnings (loss): 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 (loss) $ 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 (loss) 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%
Reflected in Selling, general and administrative and other income (expense), net. Reflected in Cost of goods sold. Reflected in Restructuring charges. Reflected in Other income (expense), net. 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 $0.2 million from the release of uncertain tax benefits. For 2024, the discrete tax items relate to items we deemed outside normal cash-generating operations including the addition of a valuation allowance for a foreign subsidiary. For 2025, the discrete tax items relate to items we deemed outside normal cash-generating operations including the addition of a valuation allowance for research and developmental credits and the tax impacts of an immaterial correction of a prior period error. For 2026, the discrete tax items relate to items we deemed outside normal cash-generating operations including the addition of a valuation allowance for foreign tax credits and adjustments related to uncertain tax positions.  We determine the tax effect of non-GAAP adjustments by considering the tax laws and statutory income tax rates applicable in the tax jurisdictions of the underlying non-GAAP adjustments. For all periods presented, we applied the statutory income tax rates to the taxable portion of all of our adjustments. Our acquisition costs and foreign currency gains and losses included in our non-GAAP adjustments were not deductible for income tax purposes; therefore, no statutory income tax rate was applied to such costs. Regulation G Schedules
($ Millions, except percentages) Free Cash Flow ($ Millions, except percentages) Controllable Working Capital 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. 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. Regulation G Schedules Three Months Ended
September 30, Twelve Months Ended
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% 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% Operating cash flow as a percentage of adjusted EBITDA 118% 85% 89% 80% 83% 85% 74% Free cash flow as a percentage of adjusted net earnings 184% 136% 134% 125% 130% 122% 106%