(MENAFN- GlobeNewsWire - Nasdaq) Momentum on Diversification and Solid Execution

LISLE, Ill., Oct. 28, 2025 (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 2025 results.

“Our business had another quarter of strong growth with sales up 22% year over year in the diversified end markets. The CTS team executed well in a challenging environment achieving solid profitability and strong cash generation,” said Kieran O'Sullivan, CEO of CTS Corporation.“Diversification remains a strategic priority to drive growth and margin expansion.”

Third Quarter 2025 Results

• Sales were $143 million in the third quarter of 2025, up 8% year-over-year. Sales to diversified end markets increased 22%. Sales to the transportation end market decreased 7%.
• Net income was $14 million, or 9.6% of sales, including an extraordinary $4.2 million charge related to the previously disclosed EPA past cost recovery claim. Net income was $18 million, or 13.7% of sales, in the third quarter of 2024.
• Diluted EPS was $0.46, compared to $0.59 in the third quarter of 2024.
• Adjusted Gross margin was 38.9%, compared to 38.2% in the third quarter of 2024.
• Adjusted EBITDA margin was 23.8%, compared to 24.4% in the third quarter of 2024.
• Adjusted diluted EPS was $0.60, compared to $0.61 in the third quarter of 2024.
• The Adjusted diluted EPS includes an unfavorable impact of $0.03 from the recent US tax legislation.
• Operating cash flow was $29 million, compared to $35 million in the third quarter of 2024.

2025 Guidance

Assuming the continuation of current market conditions, CTS is narrowing its guidance of sales in the range of $535-$545 million and adjusted diluted EPS to be in the range of $2.20-$2.25.

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 dial-in numbers for access from the U.S. are: +1-833-470-1428 (Toll-Free) and +1-646-844-6383 (Local), if calling from outside the U.S., please refer to Global Dial In Numbers to identify the applicable dial-in number for your location. The passcode is 815166. 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 .

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 .

Diversified end markets, previously referred as the“non-transportation” market, includes the industrial, aerospace & defense, and medical end markets.

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 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 business in which CTS operates; unanticipated issues in integrating acquisitions including, without limitation the integration of SyQwest; the funding of contracts by the US 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, 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 the conflicts in Ukraine, and the Middle East may have on our business, results of operations and financial condition; 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' 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
...

CTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED (In thousands, except per share amounts)
		Three Months Ended			Nine Months Ended
		September 30, 2025			September 30, 2024			September 30, 2025			September 30, 2024
Net sales		$	142,970			$	132,384			$	404,047			$	388,296
Cost of goods sold			87,629				83,195				249,727				247,645
Gross margin			55,341				49,189				154,320				140,651
Selling, general and administrative expenses			27,222				22,509				73,922				66,100
Research and development expenses			6,901				5,031				19,416				17,718
Restructuring charges			280				773				1,028				3,657
Operating earnings			20,938				20,876				59,954				53,176
Other (expense) income:
Interest expense			(1,110	)			(1,307	)			(3,398	)			(2,942	)
Interest income			535				973				1,603				3,800
Other income (expense), net			(643	)			1,306				665				(761	)
Total other (expense) income, net			(1,218	)			972				(1,130	)			97
Earnings before income taxes			19,720				21,848				58,824				53,273
Income tax expense			6,033				3,764				13,243				9,364
Net earnings		$	13,687			$	18,084			$	45,581			$	43,909
Earnings per share:
Basic		$	0.47			$	0.60			$	1.53			$	1.44
Diluted		$	0.46			$	0.59			$	1.52			$	1.43
Basic weighted – average common shares outstanding:			29,348				30,300				29,698				30,517
Effect of dilutive securities			279				236				281				230
Diluted weighted – average common shares outstanding:			29,627				30,536				29,979				30,747
Cash dividends declared per share		$	0.04			$	0.04			$	0.12			$	0.12

CTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED (In thousands of dollars)
		September 30, 2025			December 31, 2024
ASSETS
Current Assets
Cash and cash equivalents		$	110,296			$	94,334
Accounts receivable, net			85,869				77,649
Inventories, net			54,246				52,312
Other current assets			25,767				17,879
Total current assets			276,178				242,174
Property, plant and equipment, net			90,580				94,357
Operating lease assets, net			23,613				22,939
Other Assets
Goodwill			207,254				201,304
Other intangible assets, net			157,439				163,882
Deferred income taxes			24,387				27,591
Other			10,920				13,180
Total other assets			400,000				405,957
Total Assets		$	790,371			$	765,427
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable		$	48,071			$	42,629
Accrued payroll and benefits			3,591				4,719
Operating lease obligations			19,027				15,754
Accrued expenses and other liabilities			34,081				35,361
Total current liabilities			104,770				98,463
Long-term debt			90,700				92,300
Long-term operating lease obligations			22,837				21,120
Long-term pension obligations			3,842				3,931
Deferred income taxes			12,937				12,743
Other long-term obligations			7,631				8,662
Total Liabilities			242,717				237,219
Commitments and Contingencies
Shareholders' Equity
Common stock			324,745				321,979
Additional contributed capital			42,244				44,662
Retained earnings			694,881				652,851
Accumulated other comprehensive loss			12,594				(4,266	)
Total shareholders' equity before treasury stock			1,074,464				1,015,226
Treasury stock			(526,810	)			(487,018	)
Total shareholders' equity			547,654				528,208
Total Liabilities and Shareholders' Equity		$	790,371			$	765,427

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); and (8) 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 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.
• 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.

Adjusted Gross Margin

		Three Months Ended September 30,			Nine Months Ended September 30,			Twelve Months Ended December 31,
		2025			2024			2025			2024			2024			2023			2022
Gross margin		$	55.3			$	49.2			$	154.3			$	140.7			$	187.6			$	190.9			$	210.5
Net sales		$	143.0			$	132.4			$	404.0			$	388.3			$	514.8			$	550.4			$	586.9
Gross margin as a % of net sales			38.7	%			37.2	%			38.2	%			36.2	%			36.4	%			34.7	%			35.9	%
Adjustments to reported gross margin:
Restructuring-related charges (b)			0.2				-				0.2				0.7				0.7				0.6			-
Inventory fair value step-up (b)			-				1.4				-				1.4				2.1			-				4.0
Adjusted gross margin		$	55.6			$	50.6			$	154.5			$	142.8			$	190.4			$	191.5			$	214.5
Adjusted gross margin as a % of net sales			38.9	%			38.2	%			38.2	%			36.8	%			37.0	%			34.8	%			36.5	%

Adjusted Operating Earnings

		Three Months Ended September 30,			Nine Months Ended September 30,			Twelve Months Ended December 31,
		2025			2024			2025			2024			2024			2023			2022
Operating earnings		$	20.9			$	20.9			$	60.0			$	53.2			$	71.2			$	75.1			$	93.0
Net sales		$	143.0			$	132.4			$	404.0			$	388.3			$	514.8			$	550.4			$	586.9
Operating earnings as a % of net sales			14.6	%			15.8	%			14.8	%			13.7	%			13.8	%			13.6	%			15.8	%
Adjustments to reported operating earnings:
Restructuring charges (c)			0.3				0.8				1.0				3.7				4.7				7.1				1.9
Restructuring-related charges (b)			0.4				-				0.4				0.7				0.7				0.6				-
Environmental charges (a)			4.2				(1.0	)			4.7				(0.2	)			1.6				3.5				2.8
Acquisition-related adjustments (a)			(1.1	)			1.3				(2.6	)			0.7				(0.3	)			0.4				0.8
Inventory fair value step-up (b)			-				1.4				-				1.4				2.1				-				4.0
Total adjustments to reported operating earnings		$	3.8			$	2.5			$	3.5			$	6.2			$	8.8			$	11.5			$	9.5
Adjusted operating earnings		$	24.8			$	23.3			$	63.4			$	59.4			$	80.0			$	86.6			$	102.5
Adjusted operating earnings as a % of net sales			17.3	%			17.6	%			15.7	%			15.3	%			15.5	%			15.7	%			17.5	%

Adjusted EBITDA Margin

		Three Months Ended September 30,			Nine Months Ended September 30,			Twelve Months Ended December 31,
		2025			2024			2025			2024			2024			2023			2022
Net earnings		$	13.7			$	18.1			$	45.6			$	43.9			$	55.5			$	60.5			$	59.6
Net sales		$	143.0			$	132.4			$	404.0			$	388.3			$	514.8			$	550.4			$	586.9
Net earnings margin			9.6	%			13.7	%			11.3	%			11.3	%			10.8	%			11.0	%			10.2	%
Depreciation and amortization expense			8.8				8.0				25.9				22.6				30.9				28.7				29.8
Interest expense			1.1				1.3				3.4				2.9				4.2				3.3				2.2
Tax expense			6.0				3.8				13.2				9.4				13.1				14.6				21.2
EBITDA			29.7				31.1				88.1				78.9				103.7				107.2				112.7
EBITDA Margin			20.7	%			23.5	%			21.8	%			20.3	%			20.1	%			19.5	%			19.2	%
Adjustments to EBITDA:
Restructuring charges (c)			0.3				0.8				1.0				3.7				4.7				7.1				1.9
Restructuring-related charges (b)			0.4				-				0.4				0.7				0.7				0.6				-
Environmental charges (a)			4.2				(1.0	)			4.7				(0.2	)			1.6				3.5				2.8
Acquisition-related adjustments (a)			(1.1	)			1.3				(2.6	)			0.7				(0.3	)			0.4				2.5
Inventory fair value step-up (b)			-				1.4				-				1.4				2.1				-				4.0
Non-cash pension and related expense (d)			0.0				-				0.1				0.1				0.2				-				4.8
Foreign currency (gain) loss (d)			0.6				(1.3	)			(0.7	)			0.8				2.7				2.0				4.9
Total adjustments to EBITDA			4.4				1.1				2.8				7.2				11.7				13.5				20.9
Adjusted EBITDA		$	34.1			$	32.3			$	90.9			$	86.0			$	115.4			$	120.7			$	133.6
Adjusted EBITDA Margin			23.8	%			24.4	%			22.5	%			22.2	%			22.4	%			21.9	%			22.8	%

Adjusted Net Earnings and Adjusted Diluted Earnings Per Share

		Three Months Ended September 30,			Nine Months Ended September 30,
		2025			2025			2024			2024			2025			2025			2024			2024
					Per share						Per share						Per share						Per share
Net earnings (A)		$	13.7			$	0.46			$	18.1			$	0.59			$	45.6			$	1.52			$	43.9			$	1.43
Adjustments to reported net earnings:
Restructuring charges (c)			0.3				0.01				0.8				0.03				1.0				0.03				3.7				0.12
Restructuring-related charges (a)			0.4				0.01				-				-				0.4				0.01				0.7				0.02
Environmental charges (a)			4.2				0.14				(1.0	)			(0.03	)			4.7				0.16				(0.2	)			(0.01	)
Acquisition-related adjustments (a)			(1.1	)			(0.03	)			1.3				0.04				(2.6	)			(0.09	)			0.7				0.02
Inventory fair value step-up (b)			-				-				1.4				0.05				-				-				1.4				0.05
Non-cash pension and related expense (d)			0.0				-				-				-				0.1				-				0.1				-
Foreign currency (gain) loss (d)			0.6				0.02				(1.3	)			(0.04	)			(0.7	)			(0.02	)			0.8				0.03
Total pretax adjustments to reported net earnings		$	4.4			$	0.15			$	1.2			$	0.04			$	2.8			$	0.09			$	7.2			$	0.23
Income tax effect of above adjustments (f)			(1.0	)			(0.03	)			(0.5	)			(0.02	)			(1.0	)			(0.03	)			(1.7	)			(0.05	)
Total adjustments, tax affected (f) (B)		$	3.4			$	0.12			$	0.7			$	0.02			$	1.8			$	0.06			$	5.5			$	0.18
Tax adjustments:
Other discrete tax items (e)			0.7				0.02				-				-				0.8				0.03				0.3				0.01
Total tax adjustments (C)		$	0.7			$	0.02			$	-			$	-			$	0.8			$	0.03			$	0.3			$	0.01
Adjusted net earnings (A+B+C) and Adjusted net earnings per share		$	17.8			$	0.60			$	18.8			$	0.61			$	48.2			$	1.61			$	49.7			$	1.62
Net sales		$	143.0						$	132.4						$	404.0						$	388.3
Net earnings as a % of net sales			9.6	%						13.7	%						11.3	%						11.3	%
Adjusted net earnings as a % of net sales			12.4	%						14.2	%						11.9	%						12.8	%

		Twelve Months Ended December 31,
		2024			2024			2023			2023			2022			2022
					Per share						Per share						Per share
Net earnings (A)		$	55.5			$	1.80			$	60.5			$	1.92			$	59.6			$	1.85
Adjustments to reported net earnings:
Restructuring charges (c)			4.7				0.15				7.1				0.22				1.9				0.06
Restructuring-related charges (a)			0.7				0.02				0.6				0.02				-				-
Environmental charges (a)			1.6				0.05				3.5				0.11				2.8				0.09
Acquisition-related adjustments (a)			(0.3	)			(0.01	)			0.4				0.01				2.5				0.08
Inventory fair value step-up (b)			2.1				0.07				-				-				4.0				0.12
Non-cash pension and related expense (d)			0.2				0.01				-				-				4.8				0.15
Foreign currency loss (d)			2.7				0.09				2.0				0.06				4.9				0.15
Total pretax adjustments to reported net earnings		$	11.7			$	0.38			$	13.5			$	0.42			$	20.9			$	0.65
Income tax effect of above adjustments (f)			(2.2	)			(0.07	)			(2.4	)			(0.07	)			(1.6	)			(0.05	)
Total adjustments, tax affected (f) (B)		$	9.5			$	0.31			$	11.1			$	0.35			$	19.3			$	0.60
Tax adjustments:
Increase in valuation allowances (e)			-				-				-				-				-				-
Other discrete tax items (e)			0.3				0.01				(1.6	)			(0.05	)			0.2				0.01
Total tax adjustments (C)		$	0.3			$	0.01			$	(1.6	)		$	(0.05	)		$	0.2			$	0.01
Adjusted net earnings (A+B+C) and Adjusted net earnings per share		$	65.3			$	2.12			$	70.0			$	2.22			$	79.1			$	2.46
Net sales		$	514.8						$	550.4						$	586.9
Net earnings as a % of net sales			10.8	%						11.0	%						10.2	%
Adjusted net earnings as a % of net sales			12.7	%						12.7	%						13.5	%

(a) Reflected in selling, general and administrative and other (expense) income, net.
(b) Reflected in cost of goods sold.
(c) Reflected in restructuring charges.
(d) Reflected in other (expense) income, net.
(e) Reflected in income tax expense (income). For 2022, the discrete tax items relate to the net impact to tax expense of expired research and development credits, including the release of associated reserves. 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, the tax impacts of an immaterial correction of a prior period error, the tax impacts related to cost associated with the environmental contamination liability.
(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,
		2025			2024			2024			2023			2022
Net accounts receivable		$	85.9			$	86.4			$	77.6			$	78.6			$	90.9
Net inventory		$	54.2			$	56.0			$	52.3			$	60.0			$	62.3
Accounts payable		$	(48.1	)		$	(45.0	)		$	(42.6	)		$	(43.5	)		$	(53.2	)
Controllable working capital		$	92.0			$	97.4			$	87.3			$	95.1			$	100.0
Quarter sales		$	143.0			$	132.4			$	126.4			$	124.7			$	142.3
Multiplied by 4			4				4				4				4				4
Annualized sales		$	571.9			$	529.5			$	505.6			$	498.8			$	569.1
Controllable working capital as a % of annualized sales			16.1	%			18.4	%			17.3	%			19.1	%			17.6	%

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,
		2025			2024			2025			2024			2024			2023			2022
Net cash provided by operating activities		$	29.0			$	35.4			$	72.9			$	73.3			$	98.2			$	88.8			$	121.2
Capital expenditures			(4.8	)			(3.9	)			(12.5	)			(12.5	)			(18.6	)			(14.7	)			(14.3	)
Free cash flow		$	24.2			$	31.5			$	60.4			$	60.8			$	79.6			$	74.1			$	106.9
Operating cash flow as a percentage of net earnings			212	%			189	%			160	%			167	%			177	%			147	%			203	%
Free cash flow as a percentage of adjusted net earnings			131	%			163	%			123	%			122	%			122	%			106	%			135	%

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,
		2025			2024			2025			2024			2024			2023			2022
Capital expenditures		$	4.8			$	3.9			$	12.5			$	12.5			$	18.6			$	14.7			$	14.3
Net sales		$	143.0			$	132.4			$	404.0			$	388.3			$	514.8			$	550.4			$	586.9
Capex as % of net sales			3.4	%			2.9	%			3.1	%			3.2	%			3.6	%			2.7	%			2.4	%

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,
		2025			2024			2025			2024			2024			2023			2022
Depreciation and amortization expense		$	8.8			$	8.0			$	25.9			$	22.6			$	30.9			$	28.7			$	29.8
Stock-based compensation expense		$	1.2			$	1.4			$	3.4			$	4.0			$	5.7			$	5.2			$	7.7

The Company updated certain previously furnished 2024 amounts due to immaterial errors identified. Refer to Note 1, "Basis of Presentation" in the Quarterly Report on Form 10-Q as of September 30, 2025 for more information.

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