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CTS Announces Third Quarter 2022 Results

CTS Corporation
CTS Corporation

Executing diversification strategy to deliver revenue and earnings growth

LISLE, Ill., Oct. 26, 2022 (GLOBE NEWSWIRE) -- CTS Corporation (NYSE: CTS), a leading global designer and manufacturer of custom engineered solutions that “Sense, Connect and Move,” today announced third quarter 2022 results.

“We delivered strong results in the third quarter, increasing revenue by 24% while expanding Adjusted EBITDA margin by 60-basis points. Our advanced materials expertise, coupled with the strength of our commercial teams, are helping to accelerate our diversification into non-transportation end markets, enabling CTS’ performance in an uncertain macroeconomic environment,” said Kieran O’Sullivan, CEO. “We look forward to continued execution of our strategic priorities to further strengthen our financial profile, positioning CTS for long-term profitable growth.”

Third Quarter 2022 Results

  • Sales were $151.9 million, up 24% year-over-year. Sales to non-transportation end markets increased 22.5%, and sales to the transportation end market increased 25.7% over the same period.

  • Net income was $11.8 million, or $0.37 per diluted share, compared to a $63.9 million net loss, or $(1.97) per share, in the third quarter of 2021.

  • Adjusted diluted EPS was $0.62, up from $0.46 in the third quarter of 2021.

  • Adjusted EBITDA margin was 22.3% compared to 21.7% in the third quarter of 2021.

  • Operating cash flow was $60.4 million compared to $21.3 million in the third quarter of 2021, which includes $34 million from termination of the US pension plan.

2022 Guidance

Including the recent Ferroperm acquisition, CTS now expects full year 2022 sales to be in the range of $585 – $595 million, updated from the previous guidance of $570 – $600 million, and adjusted diluted EPS in the range of $2.40 – $2.55, unchanged from the prior guidance. Management continues to monitor the potential impact of the challenging supply situation, macro-economic environment, and geopolitical events on this guidance.

Conference Call and Supplemental Materials

As previously announced, the Company has scheduled a conference call for 10:00 a.m. (EDT) today. The dial-in number for the U.S. and Canada is 844-200-6205 (+1 929-526-1599, if calling from outside the U.S. and Canada). The passcode is 336733. In addition, the Company 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://www.ctscorp.com/investors/events-presentations/.

About CTS

CTS (NYSE: CTS) is a leading designer and manufacturer of products that Sense, Connect, and Move. The company 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.

Safe Harbor

This document contains statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, any financial or other guidance, statements that reflect our current expectations concerning future results and events, and any other statements that are not based solely on historical fact. 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: the ultimate impact of the COVID-19 pandemic on CTS’ business, results of operations or financial condition, including supply chain disruption; changes in the economy generally, including inflationary and/or recessionary conditions, and in respect to the business in which CTS operates; unanticipated issues in integrating acquisitions, including TEWA Temperature Sensors and Ferroperm Piezoceramics; 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; and risks associated with CTS’ international operations, including trade and tariff barriers, exchange rates and political and geopolitical risks (including, without limitation, the potential impact U.S./China relations and the conflict between Russia and Ukraine may have on our business, results of operations and financial condition). Many of these, and other risks and uncertainties, are discussed in further detail in Item 1A. of CTS’ 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.

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’ management believes that non-GAAP financial measures can be useful to investors in analyzing CTS’ financial performance and results of operations over time. CTS recommends that investors consider both actual and adjusted measures in evaluating the performance of CTS with peer companies.

The information in this press release includes the non-GAAP financial measures of adjusted gross margin, adjusted operating earnings, adjusted EBITDA margin, adjusted net earnings, adjusted diluted earnings per share, debt to capitalization ratio, controllable working capital ratio, and free cash flow. Many of these non-GAAP financial measures exclude the effect of certain expenses and income not related directly to the underlying performance of CTS’ fundamental business operations.

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 or were not part of CTS’ business operations during a comparable period.

CTS believes that debt to capitalization ratio is a measurement of financial leverage and provides an insight into the financial structure of CTS and its financial strength. CTS believes the controllable working capital ratio provides an objective measure of the efficiency with which CTS manages its short-term capital needs. CTS believes that free cash flow is a useful measure of its ability to generate cash.

CTS believes that these non-GAAP financial measures are commonly used by financial analysts and others in the industries in which CTS operates, and thus further provide useful information to investors. Note that CTS’ definitions of these non-GAAP financial measures may differ from those terms as defined or used by other companies.

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.

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 of dollars, except per share amounts)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,
2022

 

 

September 30,
2021

 

 

September 30,
2022

 

 

September 30,
2021

 

Net sales

 

$

151,911

 

 

$

122,382

 

 

$

444,588

 

 

$

380,394

 

Cost of goods sold

 

 

98,565

 

 

 

76,720

 

 

 

285,054

 

 

 

244,446

 

Gross margin

 

 

53,346

 

 

 

45,662

 

 

 

159,534

 

 

 

135,948

 

Selling, general and administrative expenses

 

 

24,003

 

 

 

19,922

 

 

 

68,029

 

 

 

59,184

 

Research and development expenses

 

 

6,207

 

 

 

6,454

 

 

 

18,695

 

 

 

18,170

 

Restructuring charges

 

 

492

 

 

 

319

 

 

 

1,434

 

 

 

551

 

Operating earnings

 

 

22,644

 

 

 

18,967

 

 

 

71,376

 

 

 

58,043

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(342

)

 

 

(514

)

 

 

(1,490

)

 

 

(1,577

)

Interest income

 

 

167

 

 

 

230

 

 

 

610

 

 

 

689

 

Other (expense), net

 

 

(5,171

)

 

 

(108,502

)

 

 

(10,530

)

 

 

(132,786

)

Total other (expense), net

 

 

(5,346

)

 

 

(108,786

)

 

 

(11,410

)

 

 

(133,674

)

Earnings (loss) before income taxes

 

 

17,298

 

 

 

(89,819

)

 

 

59,966

 

 

 

(75,631

)

Income tax expense (benefit)

 

 

5,500

 

 

 

(25,923

)

 

 

15,331

 

 

 

(24,600

)

Net earnings (loss)

 

 

11,798

 

 

 

(63,896

)

 

 

44,635

 

 

 

(51,031

)

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.37

 

 

$

(1.97

)

 

$

1.39

 

 

$

(1.58

)

Diluted

 

$

0.37

 

 

$

(1.97

)

 

$

1.38

 

 

$

(1.58

)

Basic weighted – average common shares outstanding:

 

 

31,865

 

 

 

32,379

 

 

 

32,018

 

 

 

32,365

 

Effect of dilutive securities

 

 

225

 

 

 

 

 

 

220

 

 

 

 

Diluted weighted – average common shares outstanding:

 

 

32,090

 

 

 

32,379

 

 

 

32,238

 

 

 

32,365

 

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,
2022

 

 

December 31,
2021

 

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

147,908

 

 

$

141,465

 

Accounts receivable, net

 

 

97,004

 

 

 

82,191

 

Inventories, net

 

 

63,465

 

 

 

49,506

 

Other current assets

 

 

18,020

 

 

 

15,927

 

Total current assets

 

 

326,397

 

 

 

289,089

 

Property, plant and equipment, net

 

 

95,906

 

 

 

96,876

 

Operating lease assets, net

 

 

22,630

 

 

 

21,594

 

Other Assets

 

 

 

 

 

 

Prepaid pension asset

 

 

5

 

 

 

49,382

 

Goodwill

 

 

138,945

 

 

 

109,798

 

Other intangible assets, net

 

 

106,207

 

 

 

69,888

 

Deferred income taxes

 

 

22,992

 

 

 

25,415

 

Other

 

 

21,597

 

 

 

2,420

 

Total other assets

 

 

289,746

 

 

 

256,903

 

Total Assets

 

$

734,679

 

 

$

664,462

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Accounts payable

 

$

65,687

 

 

$

55,537

 

Operating lease obligations

 

 

3,532

 

 

 

3,393

 

Accrued payroll and benefits

 

 

16,979

 

 

 

18,418

 

Accrued expenses and other liabilities

 

 

35,741

 

 

 

36,718

 

Total current liabilities

 

 

121,939

 

 

 

114,066

 

Long-term debt

 

 

85,478

 

 

 

50,000

 

Long-term operating lease obligations

 

 

22,097

 

 

 

21,354

 

Long-term pension obligations

 

 

6,248

 

 

 

6,886

 

Deferred income taxes

 

 

5,515

 

 

 

5,894

 

Other long-term obligations

 

 

2,790

 

 

 

2,684

 

Total Liabilities

 

 

244,067

 

 

 

200,884

 

Commitments and Contingencies

 

 

 

 

 

 

Shareholders’ Equity

 

 

 

 

 

 

Common stock

 

 

316,520

 

 

 

314,620

 

Additional contributed capital

 

 

44,659

 

 

 

42,549

 

Retained earnings

 

 

533,036

 

 

 

492,242

 

Accumulated other comprehensive loss

 

 

(8,849

)

 

 

(4,525

)

Total shareholders’ equity before treasury stock

 

 

885,366

 

 

 

844,886

 

Treasury stock

 

 

(394,754

)

 

 

(381,308

)

Total shareholders’ equity

 

 

490,612

 

 

 

463,578

 

Total Liabilities and Shareholders’ Equity

 

$

734,679

 

 

$

664,462

 



CTS CORPORATION AND SUBSIDIARIES

OTHER SUPPLEMENTAL INFORMATION - UNAUDITED
(In millions of dollars, except per share amounts)

Adjusted Gross Margin

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

Twelve Months Ended
December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2021

 

 

2020

 

 

2019

 

Gross margin

 

$

53.3

 

 

$

45.7

 

 

$

159.5

 

 

$

135.9

 

 

$

184.6

 

 

$

139.1

 

 

$

157.6

 

Adjustments to reported gross margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory fair value step-up

 

$

2.2

 

 

$

 

 

$

3.3

 

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted gross margin

 

$

55.6

 

 

$

45.7

 

 

$

162.9

 

 

$

135.9

 

 

$

184.6

 

 

$

139.1

 

 

$

157.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

151.9

 

 

$

122.4

 

 

$

444.6

 

 

$

380.4

 

 

$

512.9

 

 

$

424.1

 

 

$

469.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted gross margin as a % of net sales

 

 

36.6

%

 

 

37.3

%

 

 

36.6

%

 

 

35.7

%

 

 

36.0

%

 

 

32.8

%

 

 

33.6

%


Adjusted Operating Earnings

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

Twelve Months Ended
December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2021

 

 

2020

 

 

2019

 

Operating earnings

 

$

22.6

 

 

$

19.0

 

 

$

71.4

 

 

$

58.0

 

 

$

76.5

 

 

$

45.1

 

 

$

53.8

 

Adjustments to reported operating earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charges

 

 

0.5

 

 

 

0.3

 

 

 

1.4

 

 

 

0.6

 

 

 

1.7

 

 

 

1.8

 

 

 

7.4

 

Environmental charges

 

 

0.3

 

 

 

0.4

 

 

 

1.8

 

 

 

0.9

 

 

 

2.3

 

 

 

2.8

 

 

 

2.3

 

Legal settlement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.5

)

Acquisition-related costs

 

 

 

 

 

 

 

0.8

 

 

 

 

 

 

 

 

0.3

 

 

 

0.7

 

Inventory fair value step-up

 

 

2.2

 

 

 

 

 

 

3.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of tax improvement initiatives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.1

 

Total adjustments to reported operating earnings

 

$

3.0

 

 

$

0.7

 

 

$

7.3

 

 

$

1.4

 

 

$

3.9

 

 

$

4.9

 

 

$

10.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating earnings

 

$

25.7

 

 

$

19.7

 

 

$

78.7

 

 

$

59.4

 

 

$

80.4

 

 

$

50.0

 

 

$

63.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

151.9

 

 

$

122.4

 

 

$

444.6

 

 

$

380.4

 

 

$

512.9

 

 

$

424.1

 

 

$

469.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating earnings as a % of net sales

 

 

16.9

%

 

 

16.1

%

 

 

17.7

%

 

 

15.6

%

 

 

15.7

%

 

 

11.8

%

 

 

13.6

%

Adjusted EBITDA

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

Twelve Months Ended
December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2021

 

 

2020

 

 

2019

 

Net earnings (loss)

 

$

11.8

 

 

$

(63.9

)

 

$

44.6

 

 

$

(51.0

)

 

$

(41.9

)

 

$

34.7

 

 

$

36.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

8.0

 

 

 

6.7

 

 

 

21.7

 

 

 

20.2

 

 

 

26.9

 

 

 

26.7

 

 

 

24.6

 

Interest expense

 

 

0.3

 

 

 

0.5

 

 

 

1.5

 

 

 

1.6

 

 

 

2.1

 

 

 

3.3

 

 

 

2.6

 

Tax expense (benefit)

 

 

5.5

 

 

 

(25.9

)

 

 

15.3

 

 

 

(24.6

)

 

 

(19.0

)

 

 

10.8

 

 

 

14.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

25.6

 

 

 

(82.6

)

 

 

83.2

 

 

 

(53.8

)

 

 

(31.8

)

 

 

75.4

 

 

 

77.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charges

 

 

0.5

 

 

 

0.3

 

 

 

1.4

 

 

 

0.6

 

 

 

1.7

 

 

 

1.8

 

 

 

6.9

 

Environmental charges

 

 

0.3

 

 

 

0.4

 

 

 

1.8

 

 

 

0.9

 

 

 

2.3

 

 

 

2.8

 

 

 

2.3

 

Legal settlement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.5

)

Acquisition-related costs

 

 

 

 

 

 

 

 

2.5

 

 

 

 

 

 

 

 

 

0.3

 

 

 

0.7

 

Inventory fair value step-up

 

 

2.2

 

 

 

 

 

 

3.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of tax improvement initiatives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.1

 

Non-cash pension expense

 

 

4.7

 

 

 

107.4

 

 

 

4.8

 

 

 

131.1

 

 

 

132.4

 

 

 

2.5

 

 

 

0.8

 

Foreign currency loss (gain)

 

 

0.5

 

 

 

1.0

 

 

 

4.0

 

 

 

1.4

 

 

 

3.3

 

 

 

(5.3

)

 

 

1.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total adjustments to EBITDA

 

 

8.2

 

 

 

109.2

 

 

 

17.8

 

 

 

134.0

 

 

 

139.7

 

 

 

2.1

 

 

 

12.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

33.8

 

 

$

26.6

 

 

$

101.0

 

 

$

80.2

 

 

$

107.8

 

 

$

77.5

 

 

$

89.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

151.9

 

 

$

122.4

 

 

$

444.6

 

 

$

380.4

 

 

$

512.9

 

 

$

424.1

 

 

$

469.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

 

22.3

%

 

 

21.7

%

 

 

22.7

%

 

 

21.1

%

 

 

21.0

%

 

 

18.3

%

 

 

19.1

%

Adjusted Net Earnings

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

Twelve Months Ended
December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2021

 

 

2020

 

 

2019

 

Net earnings (loss) (A)

 

 

11.8

 

 

$

(63.9

)

 

$

44.6

 

 

$

(51.0

)

 

$

(41.9

)

 

$

34.7

 

 

$

36.1

 

Adjustments to reported net earnings (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charges

 

 

0.5

 

 

 

0.3

 

 

 

1.4

 

 

 

0.6

 

 

 

1.7

 

 

 

1.8

 

 

 

7.4

 

Environmental charges

 

 

0.3

 

 

 

0.4

 

 

 

1.8

 

 

 

0.9

 

 

 

2.3

 

 

 

2.8

 

 

 

2.3

 

Legal settlement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.5

)

Acquisition-related costs

 

 

 

 

 

 

 

 

2.5

 

 

 

 

 

 

 

 

0.3

 

 

 

0.7

 

Inventory fair value step-up

 

 

2.2

 

 

 

 

 

 

3.3

 

 

 

 

 

 

 

 

 

 

Costs of tax improvement initiatives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.1

 

Non-cash pension expense

 

 

4.7

 

 

 

107.4

 

 

 

4.8

 

 

 

131.1

 

 

 

132.4

 

 

 

2.5

 

 

 

0.8

 

Foreign currency loss (gain)

 

 

0.5

 

 

 

1.0

 

 

 

4.0

 

 

 

1.4

 

 

 

3.3

 

 

 

(5.3

)

 

 

1.8

 

Total adjustments to reported net earnings (loss)

 

$

8.2

 

 

$

109.2

 

 

$

17.8

 

 

$

134.0

 

 

$

139.7

 

 

$

2.1

 

 

$

12.6

 

Total adjustments, tax affected (B)

 

$

8.0

 

 

$

84.3

 

 

$

16.6

 

 

$

103.5

 

 

$

108.6

 

 

$

0.4

 

 

$

10.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase in valuation allowances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.9

 

 

 

0.2

 

 

 

Other discrete tax items

 

 

 

 

 

(5.4

)

 

 

 

 

 

(5.4

)

 

 

(4.7

)

 

 

1.2

 

 

 

1.8

 

Total tax adjustments (C)

 

$

 

 

$

(5.4

)

 

$

 

 

$

(5.4

)

 

$

(3.8

)

 

$

1.4

 

 

$

1.8

 

Adjusted net earnings (A+B+C)

 

$

19.8

 

 

$

15.0

 

 

$

61.3

 

 

$

47.1

 

 

$

63.0

 

 

$

36.5

 

 

$

48.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

151.9

 

 

$

122.4

 

 

$

444.6

 

 

$

380.4

 

 

$

512.9

 

 

$

424.1

 

 

$

469.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net earnings as a % of net sales

 

 

13.0

%

 

 

12.3

%

 

 

13.8

%

 

 

12.4

%

 

 

12.3

%

 

 

8.6

%

 

 

10.3

%

Adjusted Diluted Earnings Per Share

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

Twelve Months Ended
December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2021

 

 

2020

 

 

2019

 

GAAP diluted earnings (loss) per share

 

$

0.37

 

 

$

(1.97

)

 

$

1.38

 

 

$

(1.58

)

 

$

(1.30

)

 

$

1.06

 

 

$

1.09

 

Tax affected charges to reported diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charges

 

 

0.01

 

 

 

0.01

 

 

 

0.04

 

 

 

0.02

 

 

 

0.06

 

 

 

0.04

 

 

 

0.18

 

Foreign currency loss (gain)

 

 

0.01

 

 

 

0.03

 

 

 

0.12

 

 

 

0.04

 

 

 

0.10

 

 

 

(0.16

)

 

 

0.05

 

Non-cash pension expense

 

 

0.16

 

 

 

2.54

 

 

 

0.16

 

 

 

3.10

 

 

 

3.13

 

 

 

0.06

 

 

 

0.02

 

Environmental charges

 

 

0.01

 

 

 

0.01

 

 

 

0.04

 

 

 

0.02

 

 

 

0.05

 

 

 

0.07

 

 

 

0.05

 

Acquisition-related costs

 

 

 

 

 

 

 

 

0.07

 

 

 

 

 

 

 

 

0.01

 

 

 

0.02

 

Inventory fair value step-up

 

 

0.06

 

 

 

 

 

 

0.09

 

 

 

 

 

 

 

 

 

 

Legal settlement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.01

)

Discrete tax items

 

 

 

 

 

(0.16

)

 

 

 

 

 

(0.16

)

 

 

(0.11

)

 

 

0.04

 

 

 

0.05

 

Adjusted diluted earnings per share

 

$

0.62

 

 

$

0.46

 

 

$

1.90

 

 

$

1.44

 

 

$

1.93

 

 

$

1.12

 

 

$

1.45

 

Debt to Capitalization

 

September 30,

 

 

December 31,

 

 

2022

 

 

2021

 

 

2021

 

 

2020

 

 

2019

 

Total debt (A)

$

85.5

 

 

$

50.0

 

 

$

50.0

 

 

$

54.6

 

 

$

99.7

 

Total shareholders' equity (B)

$

490.6

 

 

$

457.4

 

 

$

463.6

 

 

$

423.7

 

 

$

405.2

 

Total capitalization (A+B)

$

576.1

 

 

$

507.4

 

 

$

513.6

 

 

$

478.3

 

 

$

504.9

 

Total debt to capitalization

 

14.8

%

 

 

9.9

%

 

 

9.7

%

 

 

11.4

%

 

 

19.7

%

Controllable Working Capital

 

September 30,

 

 

December 31,

 

 

2022

 

2021

 

 

2021

 

 

2020

 

 

2019

 

Net accounts receivable

$

97.0

 

$

78.2

 

 

$

82.2

 

 

$

81.0

 

 

$

78.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net inventory

$

63.5

 

$

50.9

 

 

$

49.5

 

 

$

45.9

 

 

$

42.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

$

(65.7

)

$

(49.0

)

 

$

(55.5

)

 

$

(50.5

)

 

$

(48.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Controllable working capital

$

94.8

 

$

80.1

 

 

$

76.2

 

 

$

76.4

 

 

$

72.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter sales

$

151.9

 

$

122.4

 

 

$

132.5

 

 

$

123.0

 

 

$

115.0

 

Multiplied by 4

 

4

 

 

4

 

 

 

4

 

 

 

4

 

 

 

4

 

Annualized sales

$

607.6

 

$

489.5

 

 

$

530.1

 

 

$

492.1

 

 

$

460.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Controllable working capital as a % of annualized net sales

 

15.6

%

 

16.4

%

 

 

14.4

%

 

 

15.5

%

 

 

15.7

%

Free Cash Flow

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

Twelve Months Ended
December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2021

 

 

2020

 

 

2019

 

Net cash provided by operating activities

 

$

60.4

 

 

$

21.3

 

 

$

95.7

 

 

$

60.1

 

 

$

86.1

 

 

$

76.8

 

 

$

64.4

 

Capital expenditures

 

 

(2.3

)

 

 

(4.2

)

 

 

(9.3

)

 

 

(8.1

)

 

 

(15.6

)

 

 

(14.9

)

 

 

(21.7

)

Free cash flow

 

$

58.1

 

 

$

17.1

 

 

$

86.5

 

 

$

52.0

 

 

$

70.5

 

 

$

61.9

 

 

$

42.7

 

Capital Expenditures

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

Twelve Months Ended
December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2021

 

 

2020

 

 

2019

 

Capital expenditures

 

$

2.3

 

 

$

4.2

 

 

$

9.3

 

 

$

8.1

 

 

$

15.6

 

 

$

14.9

 

 

$

21.7

 

Net sales

 

$

151.9

 

 

$

122.4

 

 

$

444.6

 

 

$

380.4

 

 

$

512.9

 

 

$

424.1

 

 

$

469.0

 

Capex as % of net sales

 

 

1.5

%

 

 

3.4

%

 

 

2.1

%

 

 

2.1

%

 

 

3.0

%

 

 

3.5

%

 

 

4.6

%

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2021

 

 

2020

 

 

2019

 

Depreciation and amortization expense

 

$

8.0

 

 

$

6.7

 

 

$

21.7

 

 

$

20.2

 

 

$

26.9

 

 

$

26.7

 

 

$

24.6

 

Stock-based compensation expense

 

$

2.2

 

 

$

1.0

 

 

$

5.8

 

 

$

4.1

 

 

$

6.1

 

 

$

3.4

 

 

$

5.0

 



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