EXHIBIT 1.01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CTS CORPORATION
Conflict Minerals Report
For the Year Ended December 31, 2022
This Conflict Minerals Report (“Report”) of CTS Corporation and its consolidated subsidiaries (collectively, “CTS,” “we” or “our”) for the year ended December 31, 2022, is filed in accordance with Rule 13p-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Rule 13p-1 under the Exchange Act provides that a registrant must file this specialized disclosure report on Form SD if it manufactures or contracts to manufacture products for which certain “Conflict Minerals” (as defined herein) are necessary to the functionality or production of such products. Conflict Minerals include casserite, columbite-tantalite, gold, wolframite, or their derivatives, tin, tantalum and tungsten.
CTS’ operations, including through its subsidiaries, may at times manufacture, or contract to manufacture, products for which Conflict Minerals are necessary to the functionality or production of those products. As required for products that contain Conflict Minerals, CTS conducted in good faith a reasonable country of origin inquiry with its direct suppliers and undertook due diligence measures reasonably designed to determine whether any of the Conflict Minerals originated in the Democratic Republic of the Congo or an adjoining country (collectively, the “Covered Countries”) or came from recycled or scrap sources. The results of CTS’ reasonable country of origin inquiry are contained in this Report. This Report is not audited.
CTS designs, manufactures and sells a broad line of sensors, connectivity components, and actuators primarily to original equipment manufacturers and tier one suppliers for the aerospace and defense, industrial, medical and transportation markets. CTS operates in more than 20 locations across twelve countries and employs approximately 4,000 people. CTS’ vision is to be a leading provider of sensing and motion devices as well as connectivity components, enabling an intelligent and seamless world. More information about CTS can be found in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which is available free of charge on CTS’ website at https://investors.ctscorp.com. The information contained in CTS’ website is not incorporated by reference into this Report and should not be considered part of this Report.
Conflict Minerals are necessary to the functionality or production of certain of the products manufactured by CTS or contracted by CTS to be manufactured. CTS does not purchase ore or unrefined Conflict Minerals directly from mines, smelters or refiners and is generally many levels downstream from these market participants. For this reason, CTS relies on information provided by its direct suppliers along with appropriate due diligence processes in preparing this Report. Over-reporting of smelters is common for companies such as CTS that are several steps removed from the smelters. In addition, many suppliers do not provide product-specific responses, in part because they may receive limited or incomplete information from their sub-tier suppliers.
CTS began its reasonable country of origin inquiry by contacting suppliers that, due to the nature of their business, might utilize Conflict Minerals (referred to as “direct suppliers”). CTS asked direct suppliers to complete the Responsible Minerals Initiative’s Conflict Minerals Reporting Template (“CMRT”). The CMRT is regarded as the most commonly accepted reporting tool for Conflict Minerals content and sourcing information worldwide. The CMRT asked the direct suppliers to disclose the origin of any Conflict Minerals used in their manufacturing processes and to identify the Conflict Minerals facilities within their supply chains. Based on its reasonable country of origin inquiry and due diligence measures, CTS was unable to determine whether the necessary Conflict Minerals used in certain of the products manufactured by CTS or contracted by CTS to be manufactured originated in the Covered Countries or came from recycled or scrap sources.
EXHIBIT 1.01
CTS’ reasonable country of origin process was reasonably designed and performed in good faith, however, there are inherent limitations in the information provided to CTS by third parties, including the possibility of information being inaccurate, incomplete or falsified. In addition, the lack information provided by some suppliers prevents CTS from conclusively determining the countries of origin of the Conflict Minerals that may be used in all of CTS’ products.
Summarized below are the key elements of CTS’ due diligence process, which was conducted in a manner that is consistent with the nationally recognized due diligence framework set forth in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, which can be found at http://www.oecd.org. As described above, the reasonable country of origin inquiry and due diligence measures that CTS undertook included requesting relevant direct suppliers to complete the CMRT which can be found at http://www.responsiblemineralsinitiative.org, reviewing the information and smelter data provided by relevant direct suppliers, and comparing smelters and refiners identified by the direct suppliers that responded and completed the CMRT to the RMAP Conformant Smelters list which can be found at http://www.responsiblemineralsinitiative.org. In addition, CTS’ due diligence process also included the following elements:
B) Identification and Assessment of Supply Chain Risks
EXHIBIT 1.01
CTS solicited responses from 243 direct suppliers which resulted in the receipt of 236 complete CMRTs and the identification of 222 RMAP Conformant smelters and 30 smelters that are not listed as conformant or active with the RMAP as of the date of this Report. Set forth below is the list of the 30 facilities that are not listed as conformant or active with the RMAP identified by our relevant direct suppliers. Over-reporting of smelters is common for companies such as CTS that are several steps removed from the smelters. In addition, many suppliers do not provide product-specific responses, in part because they may receive limited or incomplete information from their sub-tier suppliers.
Conflict Mineral | Facility | Location |
Gold | 8853 S.p.A. | Italy |
Gold | Cendres + Metaux S.A. | Switzerland |
Gold | DODUCO Contacts and Refining GmbH | Germany |
Gold | Marsam Metals | Brazil |
Gold | Safimet S.p.A. | Italy |
Gold | Samduck Precious Metals | Republic of Korea |
Gold | SAXONIA Edelmetalle GmbH | Germany |
Gold | Shenzhen CuiLu Gold Co., Ltd. | China |
Gold | Singway Technology Co., Ltd. | Taiwan |
Gold | Umicore Precious Metals Thailand | Thailand |
Tantalum | Asaka Riken Co., Ltd. | Japan |
Tantalum | Changsha South Tantalum Niobium Co., Ltd. | China |
Tantalum | Guangdong Rising Rare Metals-EO Materials Ltd. | China |
Tantalum | PRG Dooel (a/k/a Meta Materials) | North Macedonia |
Tin | Dongguan CiEXPO Environmental Engineering Co., Ltd. | China |
Tin | Gejiu Yunxin Nonferrous Electrolysis Co., Ltd. | China |
Tin | Melt Metais e Ligas S.A. | Brazil |
Tin | PT Masbro Alam Stania | Indonesia |
Tin | PT Panca Mega Persada | Indonesia |
Tin | PT Tinindo Inter Nusa | Indonesia |
Tin | Soft Metais Ltda. | Brazil |
Tungsten | ACL Metais Eireli | Brazil |
Tungsten | Albasteel Industria e Comercio de Ligas Para Fundicao, Ltd. | Brazil |
Tungsten | Woltech Korea Co., Ltd. | Republic of Korea |
Tungsten | Hunan Chunchang Nonferrous Metals Co., Ltd. | China |
Tungsten | Hunan Chuangda Vanadium Tungsten Co., Ltd. Wuji | China |
Tungsten | Hydrometallurg, JSC | Russian Federation |
Tungsten | Moliren Ltd. | Russian Federation |
Tungsten | Unecha Refractory metals plant | Russian Federation |
This Report contains forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995 (“PSRLA”). The statements in this Report that are not historical facts are intended to constitute “forward-looking statements” entitled to the safe-harbor provisions of the PSRLA. Forward-looking statements give CTS’ current expectations or forecasts of future events. These forward-looking statements generally can be identified by the use of such words as “believe,” “could,” “estimate,” “expect,” “hope,” “may,” “plan,” “project,” “will,” and variations of such words
EXHIBIT 1.01
and similar expressions. Examples of forward-looking statements include, but are not limited to, statements concerning the additional steps that CTS may take to mitigate the risk that our necessary Conflict Minerals finance or benefit armed groups.
Such forward-looking statements are subject to risks and uncertainties that are often difficult to predict, are beyond CTS’ control and could cause actual actions or performance to differ materially from those expressed in the forward-looking statements. These risks and uncertainties include, but are not limited to, (1) the continued implementation of satisfactory traceability and other compliance measures by our direct suppliers on a timely basis or at all, (2) whether smelters and refiners and other market participants responsibly source subject metals, and (3) political and regulatory developments, whether in the Covered Countries, the United States or elsewhere. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of filing of this Report. CTS undertakes no obligation to publicly update or revise forward-looking statements whether as a result of new information, future events, or otherwise, except as required by law.
