CTS (CTS) Investor presentation summary

Business overview and market positioning

• Designs and manufactures custom engineered solutions for sensing, connectivity, and motion across global markets, with $564M in LTM revenue and 24% adjusted EBITDA margin.

• Revenue is diversified: 42% transportation, 27% industrial, 17% medical, and 14% aerospace & defense, with 58% now from non-transportation markets.

• Technical expertise in advanced ceramics, magnetics, piezoelectric ceramics, and acoustic sensing underpins sustainable competitive advantage.

• Growth driven by automation, healthcare innovation, electrification, and sustainability trends.

• Global footprint with regional capabilities and a strong leadership team focused on operational excellence.

Financial performance and targets

• LTM adjusted diluted EPS reached $2.58, with a long-term target of 10% annual revenue growth.

• Adjusted gross margin at 39.8%, SG&A at 18.0%, and R&D expense at 4.3% of sales, aligning with long-term targets.

• FY 2026 revenue guidance is $565–$585M, with adjusted diluted EPS of $2.55–$2.70.

• Free cash flow for 2025 was $86.4M, with strong cash conversion and $314M returned to shareholders since 2013.

• Maintains leverage of 1.0–2.5x and targets capex at ~4% of sales.

Growth strategy and capital allocation

• Pursues mid-single digit organic growth and strategic M&A, aiming for 10% combined annual growth.

• M&A strategy focuses on enhancing technology, expanding geographies, and entering new end markets, with disciplined ROI above cost of capital.

• Capital allocation prioritizes organic investments, operational excellence, and shareholder returns through dividends and repurchases.

• Evolution 2030 initiative emphasizes growth, operational excellence, and talent engagement.