CTS CORPORATION AND SUBSIDIARIES | ||||||||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF (LOSS) / EARNINGS | ||||||||||||||||
SIX MONTHS ENDED JUNE 30, 2013 | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Historical (1) | EMS (2) | Pro Forma Adjustments | Pro Forma CTS | |||||||||||||
Net sales | $ | 301,073 | $ | 97,630 | $ | - | $ | 203,443 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of goods sold | 234,404 | 90,147 | - | 144,257 | ||||||||||||
Insurance recovery for business interruption - casualties | - | - | - | - | ||||||||||||
Selling, general and administrative expenses | 42,156 | 7,323 | - | 34,833 | ||||||||||||
Research and development expenses | 12,023 | - | - | 12,023 | ||||||||||||
Insurance recovery for property damage - casualties | - | - | - | - | ||||||||||||
Restructuring and impairment charge | 7,802 | 596 | - | 7,206 | ||||||||||||
Gain on sale-leaseback | - | - | - | - | ||||||||||||
Operating earnings/(loss) | 4,688 | (436 | ) | - | 5,124 | |||||||||||
Other (expense)/income: | ||||||||||||||||
Interest expense, net | (1,135 | ) | (30 | ) | - | (1,105 | ) | |||||||||
Other (expense)/income | (12 | ) | 97 | - | (109 | ) | ||||||||||
Total other (expense)/income | (1,147 | ) | 67 | - | (1,214 | ) | ||||||||||
Earnings/(loss) before income taxes | 3,541 | (369 | ) | - | 3,910 | |||||||||||
Income tax expense | 11,308 | 692 | - | 10,616 | ||||||||||||
Net (loss)/earnings | $ | (7,767 | ) | $ | (1,061 | ) | $ | - | $ | (6,706 | ) | |||||
Net (loss) / earnings per share: | ||||||||||||||||
Basic | $ | (0.23 | ) | $ | (0.20 | ) | ||||||||||
Diluted | $ | (0.23 | ) | $ | (0.20 | ) | ||||||||||
Average common shares outstanding: | ||||||||||||||||
Basic | 33,589 | 33,589 | ||||||||||||||
Diluted | 33,589 | 33,589 | ||||||||||||||
(1) As reported in CTS Corporation and Subsidiaries unaudited financial statements contained in its Quarterly Report on Form 10-Q for the Six Months Ended June 30, 2013. | ||||||||||||||||
(2) Derived from EMS Segment reported numbers contained in CTS Corporation and Subsidiaries Quarterly Report on Form 10-Q for the Six Months Ended June 30, 2013 adjusted by $2,753 for certain corporate charges that could not | ||||||||||||||||
be supportable and directly attributable to the transaction. | ||||||||||||||||
CTS CORPORATION AND SUBSIDIARIES | ||||||||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS | ||||||||||||||||
YEAR ENDED DECEMBER 31, 2012 | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Historical (1) | EMS (2) | Pro Forma Adjustments | Pro Forma CTS | |||||||||||||
Net sales | $ | 576,918 | $ | 272,437 | $ | - | $ | 304,481 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of goods sold | 475,536 | 262,571 | - | 212,965 | ||||||||||||
Insurance recovery for business interruption - casualties | (20,893 | ) | (20,256 | ) | - | (637 | ) | |||||||||
Selling, general and administrative expenses | 80,386 | 17,315 | - | 63,071 | ||||||||||||
Research and development expenses | 20,918 | - | - | 20,918 | ||||||||||||
Insurance recovery for property damage - casualties | (1,769 | ) | (1,769 | ) | - | - | ||||||||||
Restructuring and impairment charge | 6,386 | 2,949 | - | 3,437 | ||||||||||||
Gain on sale-leaseback | (10,334 | ) | - | - | (10,334 | ) | ||||||||||
Operating earnings/(loss) | 26,688 | 11,627 | - | 15,061 | ||||||||||||
Other (expense)/income: | ||||||||||||||||
Interest (expense)/income, net | (839 | ) | 10 | - | (849 | ) | ||||||||||
Other income | 1,093 | 861 | - | 232 | ||||||||||||
Total other (expense)/income | 254 | 871 | - | (617 | ) | |||||||||||
Earnings before income taxes | 26,942 | 12,498 | - | 14,444 | ||||||||||||
Income tax expense | 6,609 | 4,254 | - | 2,355 | ||||||||||||
Net earnings | $ | 20,333 | $ | 8,244 | $ | - | $ | 12,089 | ||||||||
Net earnings per share: | ||||||||||||||||
Basic | $ | 0.60 | $ | 0.36 | ||||||||||||
Diluted | $ | 0.59 | $ | 0.35 | ||||||||||||
Average common shares outstanding: | ||||||||||||||||
Basic | 33,922 | 33,922 | ||||||||||||||
Diluted | 34,523 | 34,523 | ||||||||||||||
(1) As reported in CTS Corporation and Subsidiaries audited financial statements contained in its Annual Report on Form 10-K for the Year Ended December 31, 2012. | ||||||||||||||||
(2) Derived from EMS Segment reported numbers contained in CTS Corporation and Subsidiaries Annual Report on Form 10-K for the Year Ended December 31, 2012 adjusted by $6,566 for certain corporate charges that could not be supportable and directly attributable to the transaction. | ||||||||||||||||
CTS CORPORATION AND SUBSIDIARIES | ||||||||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS | ||||||||||||||||
YEAR ENDED DECEMBER 31, 2011 | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Historical (1) | EMS (2) | Pro Forma Adjustments | Pro Forma CTS | |||||||||||||
Net sales | $ | 588,506 | $ | 308,649 | $ | - | $ | 279,857 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of goods sold | 478,657 | 288,023 | - | 190,634 | ||||||||||||
Insurance recovery for business interruption - casualties | (4,082 | ) | (4,082 | ) | - | - | ||||||||||
Selling, general and administrative expenses | 71,890 | 17,754 | - | 54,136 | ||||||||||||
Research and development expenses | 19,990 | - | - | 19,990 | ||||||||||||
Insurance recovery for property damage - casualties | (6,067 | ) | (6,067 | ) | - | - | ||||||||||
Restructuring and impairment charge | 2,878 | 489 | - | 2,389 | ||||||||||||
Gain on sale-leaseback | - | - | - | - | ||||||||||||
Operating earnings | 25,240 | 12,532 | - | 12,708 | ||||||||||||
Other (expense)/income: | ||||||||||||||||
Interest expense, net | (862 | ) | (11 | ) | - | (851 | ) | |||||||||
Other income | 1,959 | 1,500 | - | 459 | ||||||||||||
Total other (expense)/income | 1,097 | 1,489 | - | (392 | ) | |||||||||||
Earnings before income taxes | 26,337 | 14,021 | - | 12,316 | ||||||||||||
Income tax expense | 5,370 | 2,707 | - | 2,663 | ||||||||||||
Net earnings | $ | 20,967 | $ | 11,314 | $ | - | $ | 9,653 | ||||||||
Net earnings per share: | ||||||||||||||||
Basic | $ | 0.61 | $ | 0.28 | ||||||||||||
Diluted | $ | 0.60 | $ | 0.28 | ||||||||||||
Average common shares outstanding: | ||||||||||||||||
Basic | 34,321 | 34,321 | ||||||||||||||
Diluted | 35,006 | 35,006 | ||||||||||||||
(1) As reported in CTS Corporation and Subsidiaries audited financial statements contained in its Annual Report on Form 10-K for the Year Ended December 31, 2011. | ||||||||||||||||
(2) Derived from EMS Segment reported numbers contained in CTS Corporation and Subsidiaries Annual Report on Form 10-K for the Year Ended December 31, 2011 adjusted by $5,998 for certain corporate charges that could not be supportable and directly attributable to the transaction. | ||||||||||||||||
CTS CORPORATION AND SUBSIDIARIES | ||||||||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS | ||||||||||||||||
YEAR ENDED DECEMBER 31, 2010 | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Historical (1) | EMS (2) | Pro Forma Adjustments | Pro Forma CTS | |||||||||||||
Net sales | $ | 552,641 | $ | 269,781 | $ | - | $ | 282,860 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of goods sold | 432,731 | 247,126 | - | 185,605 | ||||||||||||
Insurance recovery for business interruption - casualties | - | - | - | - | ||||||||||||
Selling, general and administrative expenses | 72,310 | 17,679 | - | 54,631 | ||||||||||||
Research and development expenses | 18,313 | - | - | 18,313 | ||||||||||||
Insurance recovery for property damage - casualties | - | - | - | - | ||||||||||||
Restructuring and impairment charge | 1,444 | 434 | - | 1,010 | ||||||||||||
Gain on sale-leaseback | - | - | - | - | ||||||||||||
Operating earnings/(loss) | 27,843 | 4,542 | - | 23,301 | ||||||||||||
Other (expense)/income: | ||||||||||||||||
Interest expense, net | (689 | ) | (58 | ) | - | (631 | ) | |||||||||
Other income/(expense) | 872 | 1,651 | - | (779 | ) | |||||||||||
Total other income/(expense) | 183 | 1,593 | - | (1,410 | ) | |||||||||||
Earnings before income taxes | 28,026 | 6,135 | - | 21,891 | ||||||||||||
Income tax expense | 5,988 | 539 | - | 5,449 | ||||||||||||
Net earnings | $ | 22,038 | $ | 5,596 | $ | - | $ | 16,442 | ||||||||
Net earnings per share: | ||||||||||||||||
Basic | $ | 0.65 | $ | 0.48 | ||||||||||||
Diluted | $ | 0.63 | $ | 0.47 | ||||||||||||
Average common shares outstanding: | ||||||||||||||||
Basic | 34,090 | 34,090 | ||||||||||||||
Diluted | 34,849 | 34,849 | ||||||||||||||
(1) As reported in CTS Corporation and Subsidiaries audited financial statements contained in its Annual Report on Form 10-K for the Year Ended December 31, 2010. | ||||||||||||||||
(2) Derived from EMS Segment reported numbers contained in CTS Corporation and Subsidiaries Annual Report on Form 10-K for the Year Ended December 31, 2010 adjusted by $7,042 for certain corporate charges that could not be supportable and directly attributable to the transaction. | ||||||||||||||||
CTS CORPORATION AND SUBSIDIARIES | |||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET | |||||||
AS OF JUNE 30, 2013 | |||||||
(In thousands of dollars) | |||||||
Historical (1) | EMS (2) | Pro Forma Adjustments | Pro Forma CTS | ||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ 86,044 | $ - | $ 73,100 | (a) | $ 159,144 | ||
Accounts receivable, net | 93,908 | 28,339 | - | 65,569 | |||
Inventories | 85,160 | 51,778 | - | 33,382 | |||
Other current assets | 28,955 | 6,824 | - | 22,131 | |||
Total current assets | 294,067 | 86,941 | 73,100 | 280,226 | |||
Property, plant & equipment, net | 91,068 | 14,640 | - | 76,428 | |||
Deferred income taxes | 61,209 | 219 | - | 60,990 | |||
Other assets | 82,329 | 5,132 | - | 77,197 | |||
Total Assets | $ 528,673 | $ 106,932 | $ 73,100 | $ | 494,841 | ||
Liabilities and Shareholders' Equity | |||||||
Current Liabilities | |||||||
Accounts payable | 70,694 | 26,068 | - | 44,626 | |||
Other accrued liabilities | 46,786 | 11,847 | 2,338 | (b) | 37,277 | ||
Total current liabilities | 117,480 | 37,915 | 2,338 | 81,903 | |||
Long-term debt | 129,500 | - | - | 129,500 | |||
Other obligations | 20,066 | 17 | - | 20,049 | |||
Shareholders' Equity | |||||||
Preferred stock - authorized 25,000,000 shares without par value; non issued | - | - | - | - | |||
Common stock - authorized 75,000,000 shares without par value; 55,672,410 | |||||||
shares issued at June 30, 2013 | 296,102 | 28 | 28 | 296,102 | |||
Additional contributed capital | 38,952 | 63,623 | 63,623 | 38,952 | |||
Retained earnings | 357,681 | 5,349 | 7,111 | 359,443 | |||
Accumulated other comprehensive loss | (118,657) | - | - | (118,657) | |||
574,078 | 69,000 | 70,762 | 575,840 | ||||
Cost of common stock held in treasury (2013 - 21,980,159) | (312,451) | - | - | (312,451) | |||
Total shareholders' equity | 261,627 | 69,000 | 70,762 | (b) | 263,389 | ||
Total Liabilities and Shareholders' Equity | $ 528,673 | $ 106,932 | $ 73,100 | $ | 494,841 | ||
(1) As reported in CTS Corporation and Subsidiaries unaudited financial statements contained in its Quarterly Report on Form 10-Q as of June 30, 2013. | |||||||
(2) Derived from EMS Segment reported numbers contained in CTS Corporation and Subsidiaries Quarterly Report on Form 10-Q as of June 30, 2013 adjusted for assets and liabilities excluded from the stock purchase agreement. | |||||||
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET | ||||||||||
NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS | ||||||||||
Pro forma adjustments reflect only those adjustments which are supportable and directly attributable to the transaction | ||||||||||
and do not include the impact of contingencies. Pro forma adjustments include the following ($ in thousands): | ||||||||||
(a) To record cash proceeds of $75,000 net of transaction costs of $1,900 for the sale of the EMS business. | ||||||||||
(b) Adjustment to Equity of $73,100 consists of net assets of EMS sold to Benchmark Electronics, Inc. of | ||||||||||
$69,000 and the estimated gain on sale of net assets of $4,100 (net of taxes of $2,338). The gain is derived from | ||||||||||
the June 30, 2013 pro forma statements, the most recently available financial information. | ||||||||||