4Q revenue increased 8% for CTS

Fourth quarter 2010 net earnings were USD 4.8 million, or USD 0.14 per diluted share, including a restructuring and related charge of USD 1.7 million, or USD 0.03 per share. Excluding the fourth quarter 2010 restructuring charge, adjusted earnings per share were USD 0.17. Full-year 2010 revenue was USD 552.6 million, an 11% increase from 2009 full-year revenue. Components and Sensors segment revenue increased 33% year-over-year. Although global automotive unit production increased 24%, sales of CTS’ automotive sensors and actuators increased 30% year-over-year from new customers, new product introductions and increased market share. Sales of electronic component products increased 38% from improvement in the economy, new product introductions and growth initiatives. In 2010, Components and Sensors segment sales were 51% of total CTS sales compared to 43% in the prior year. EMS segment revenues declined 6% year-over-year primarily reflecting the timing of certain new program introductions, however, EMS sales are expected to grow 12 - 15% in 2011. Full-year diluted earnings per share were USD 0.63 including a restructuring and related charge of USD 0.03 per share. Excluding this charge, full-year 2010 adjusted earnings per share were USD 0.66, an increase of 83% over full-year 2009 adjusted earnings per share of USD 0.36. Fourth quarter 2010 sales increased 8% over the fourth quarter 2009. Within the Components and Sensors segment, electronic component product sales increased 21% primarily from higher demand in piezoceramic and electrocomponent sales into new applications, while automotive product shipments declined 10% as anticipated from timing of certain program ramps. EMS segment sales increased 16% from the fourth quarter of 2009 due to higher sales in the defense and aerospace, industrial, communications and computer markets. EMS segment sales increased 18% sequentially from the third quarter of 2010 primarily in the defense and aerospace, communications and computer markets. Several strategic programs were initiated in the fourth quarter 2010. CTS entered into a new five-year USD 150 million credit facility which provides enhanced financial flexibility, replacing the previous USD 100 million facility that was scheduled to expire in June 2011. The agreement is unsecured and has the same covenants as the prior facility. CTS’ acquisition of certain assets and liabilities of Fordahl, initiated in the fourth quarter 2010, closed earlier this week. Fordahl is a Swiss designer and manufacturer of highly engineered electronic components. This strategic acquisition provides growth opportunities for precision frequency products in European markets and positions CTS to pursue new growing telecom markets with world-class products. Full-year cash flow from operations was USD 19.3 million and capital expenditures were USD 13.3 million, or 2.4% of sales. Total debt, as a percentage of total capitalization, was 20.3% at year-end 2010, compared to 16.9% at year-end 2009. New program launch and new customer-related inventory and higher year-end sales-driven receivables lowered the cash flow in 2010. However, management expects working capital to moderate somewhat in 2011. Commenting on fourth quarter 2010 results, Vinod M. Khilnani, CTS Chairman and Chief Executive Officer, stated, "Our investment in research and development reached a six-year high in 2010, further expanding our range of innovative products and number of patent filings and grants. Our pipeline of new business, record design wins and the acquisition of the Swiss-based Fordahl is again expected to contribute to double-digit revenue and earnings growth in 2011." Management anticipates full-year 2011 sales to increase in the range of 9 - 13% over 2010 and diluted earnings per share to be in the range of USD 0.70 - 0.75. Normal quarterly seasonality is expected with stronger second and fourth quarters compared to the first and third quarters. Components & Sensors: Within the Components and Sensors segment, electronic component product sales increased 21% from higher demand in piezoceramic and electrocomponent shipments for sales into new applications, while automotive product shipments declined 10% as anticipated from timing of certain program ramps. Segment operating earnings decreased USD 0.9 million from the same period last year primarily from unfavorable product mix. Components and Sensors fourth quarter 2010 sales decreased USD 6.4 million, or 9%, from the third quarter of 2010. Automotive sensor and actuator product sales decreased USD 3.1 million, or 7%, from timing of certain new program ramps, and sales of electronic component products decreased USD 3.2 million, or 11%, primarily in sales of components for infrastructure applications. Segment operating earnings decreased USD 1.0 million from the third quarter of 2010 primarily from lower sales. EMS: EMS fourth quarter 2010 sales increased USD 11.2 million, or 16%, from the fourth quarter of 2009, due to higher demand in the defense and aerospace, industrial, communications and computer markets. Segment operating earnings of USD 1.0 million increased USD 0.3 million from the fourth quarter 2009 primarily from higher sales. EMS fourth quarter 2010 sales increased USD 12.0 million, or 18%, from the third quarter of 2010 reflecting higher sales primarily in the defense and aerospace, communications and computer markets. Segment operating earnings increased USD 0.9 million from the third quarter of 2010 primarily from higher sales.