ELKHART, IN — CTS Corporation announced second quarter 2005 revenues of $158.3 million, a 15 percent increase over the second quarter of 2004. Diluted earnings per share were $0.10, which included a negative $0.07 per share from repatriation-related tax expense and the reversal of certain tax reserves. This compares to second quarter 2004 diluted earnings per share of $0.18 which included a gain of $0.05 from the sale of excess Canadian land.
The second quarter also included a $4.5 million tax expense for repatriation of $50 million of our overseas cash under the American Jobs Creation Act of 2004 and a $1.7 million tax benefit relating to the reversal of income tax reserves due to successful resolution of certain foreign jurisdiction tax issues.
Sales growth was driven by the SMTEK acquisition, which closed January 31, 2005, and strong growth in automotive products, partially offset by weaker EMS sales in communications infrastructure and declining handset component sales.
“The SMTEK acquisition has clearly proven to be a very positive addition to the company, strengthening our competitive position and contributing significantly to sales and earnings growth,” commented Donald Schwanz, CTS chairman and chief executive officer.
Based on the first-half 2005 results and revised estimates for the balance of the year, the company expects full-year 2005 sales to be in the range of $630 million to $680 million which is 19 percent to 28 percent over 2004. Earnings per share, excluding the second quarter tax adjustment impact of $0.07 per share, are now expected to be in the range of $0.62 to $0.68.
Capital expenditures of $5.9 million were 1.9 percent of sales in the first half 2005. The company expects full-year 2005 capital expenditures to be in the range of $16 – $20 million. The company continues to generate strong free cash flow, with second quarter free cash flow of $10.8 million and it plans to repurchase approximately 322,000 shares of its stock in the second quarter for $3.7 million.
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