CTS (CTS) investor relations material

Executive summary

• Q2 2025 sales grew 4% year-over-year to $135M, with diversified end markets up 13% and transportation down 6% due to China and commercial vehicle softness; SyQwest acquisition contributed $4.5M in revenue.

• Adjusted gross margin improved to 38.7%, and adjusted EBITDA margin expanded to 23.0%, with adjusted diluted EPS up 7% to $0.57; reported EPS was $0.62.

• Net income rose to $18.5M–$19M, up from $14.7M–$15M year-over-year; operating cash flow reached $28M, up from $20M.

• Strong cash flow and continued execution of diversification strategy across medical, industrial, aerospace, and defense.

• $26M returned to shareholders via dividends and buybacks in 2025.

Financial highlights

• Q2 2025 net sales were $135M, up 4% year-over-year; gross margin was 38.7%, up from 35.6%–35.8% year-over-year.

• Net income for Q2 2025 was $18.5M–$19M; diluted EPS was $0.62, and adjusted EBITDA margin was 23.0%.

• Operating cash flow for the quarter was $28M; free cash flow was $25.1M.

• Share repurchases totaled $17M–$23.3M for 412,000–555,191 shares; $38M remains authorized for buybacks.

• Cash and cash equivalents at quarter-end were $99M–$99.4M; long-term debt at $88M.

Outlook and guidance

• Full-year 2025 sales guidance is $520M–$550M and adjusted diluted EPS of $2.20–$2.35, assuming current market conditions persist.

• Expecting continued growth in medical therapeutics, aerospace and defense, and industrial markets; transportation revenue to face headwinds from tariffs and China market dynamics.

• Management expects cash flows and available credit to be sufficient for operational and capital needs for at least the next twelve months.

• Ongoing focus on sales growth, diversification, and profitability, with continued investment in R&D and operational improvements.

• The impact of the One Big Beautiful Bill Act (OBBBA) tax law changes is under evaluation.