EXHIBIT 99.1
[NEWSRELEASE LOGO]
CTS CORPORATION ELKHART, INDIANA 46514 (574) 293-7511
November 17, 2004
FOR RELEASE: Immediately
CTS CORPORATION ANNOUNCES AGREEMENT TO ACQUIRE SMTEK INTERNATIONAL
Elkhart, IN...CTS Corporation (NYSE:CTS) has reached a definitive agreement to
acquire SMTEK International, Inc., (Nasdaq: SMTI). The agreement calls for CTS
to acquire all outstanding shares of SMTEK at a price between $14.20 per share
and $15.00 per share, with the final price per share depending upon the
performance of CTS stock over the next 20 trading days. Consideration paid will
be in the form of 75% cash and 25% CTS common stock. Additionally, CTS will
assume all outstanding debt obligations of SMTEK, currently at approximately $15
million. The agreement is subject to the approval of SMTEK shareholders and
certain conditions typical to an acquisition of this type. A more complete
description of this transaction is included in the Company's Form 8-K to be
filed later today. Management expects the transaction to be accretive by $0.02
to $0.03 per share in the first year.
SMTEK, a provider of high mix, turnkey electronics manufacturing services (EMS),
had sales in the last reported 12 months of $102.4 million and operating
earnings of $4.0 million. With operations on both the East and West Coasts of
the U.S., and in Southeast Asia, SMTEK serves over 25 major customers in the
medical, industrial and security, aerospace and defense, and communications
markets.
CTS, a global manufacturer of electronic components and sensors and a provider
of electronics manufacturing services (EMS), had sales of $520.8 million in the
last reported 12 months. CTS' EMS revenues in the same period totaled $258.7
million. When the transaction is completed, the combined EMS operation will have
estimated revenues in excess of $360 million, making it one of the larger
providers of high mix, turnkey electronics manufacturing services globally.
Don Schwanz, Chairman and CEO of CTS, stated that, "SMTEK is an excellent fit
with CTS' EMS business model. The two companies' strengths are very
complementary, providing an extended set of capabilities to our customers. The
combination brings CTS an expanded geographic and market footprint and
significantly broadens the engineering capabilities we can bring to our
customers. For SMTEK customers, the combined Company provides greater financial
strength, broader geographic point of delivery capability and expanded expertise
in box build and direct-ship logistics."
Benefits of the acquisition include:
- INCREASED MARKET DIVERSIFICATION: SMTEK primarily serves medical,
industrial and security, aerospace and defense, and communications
markets. CTS' largest EMS markets are in computing and
communications.
- REDUCED CUSTOMER CONCENTRATION: SMTEK brings a variety of new large
accounts that will significantly broaden CTS' EMS customer base.
- ENHANCED OPERATIONAL CAPABILITIES: SMTEK is a leader in printed
circuit board design, assembly and testing for complex electronic
products and has key process and facility certifications in medical
and aerospace.
- INCREASED GLOBAL FOOTPRINT: SMTEK has strong operational
capabilities on the West Coast, in Thailand and on the East Coast.
CTS has EMS operations on the East Coast, in Europe, China and
Singapore.
CTS expects the transaction to close in the first quarter of 2005. A conference
call is scheduled for Wednesday, November 17, at 1:30 p.m. Eastern Standard
Time. Those interested in participating may dial 800-762-6067 (480-629-9566, if
calling from outside the U.S.). No access code is needed. There will be a replay
of the conference call available from 5:00 p.m. EST on November 17, 2004,
through 11:59 p.m. EST on November 24, 2004. The telephone number for the replay
is 800-475-6701 (320-365-3844, if calling from outside the U.S.) The access code
for the replay is 757237.
# # # #
About CTS:
CTS Corporation is a leading designer and manufacturer of electronic components
and sensors, and a provider of electronics manufacturing services (EMS) to OEMs
in the automotive, computer and communications markets. The Company manufactures
products in North America, Europe and Asia. The Company's stock is traded on the
NYSE under the ticker symbol "CTS." To find out more, visit the CTS Web site at
www.ctscorp.com.
About SMTEK International:
SMTEK International is an electronics manufacturing services (EMS) provider
serving original equipment manufacturers (OEMs) in the medical, industrial
instrumentation, telecommunications, security, financial services automation,
aerospace and defense industries with integrated solutions ranging from design
to end-of-life services. The Company's four facilities are located in Moorpark
and Santa Clara, California; Marlborough, Massachusetts; and in Bangkok,
Thailand.
Safe Harbor Statement
This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements include
statements regarding anticipated benefits of the proposed merger, as well as
anticipated future revenues. These statements are based on our respective
managements' current expectations, certain assumptions and currently available
information. There are a number of risks and uncertainties that could cause
actual results to differ materially from those presented. For example, we may be
unable to
obtain SMTEK shareholder approval required for the merger. Problems may arise in
successfully integrating our businesses and the transaction may involve greater
than expected costs. Our businesses may suffer as a result of uncertainty
surrounding the transaction. The market for our products may change or be
impacted by competition, new data, supply issues or EMS industry trends.
For more detailed information on the risks and uncertainties associated with CTS
and SMTEK's business activities see our respective reports filed with the SEC.
The companies undertake no obligation to publicly update their forward-looking
statements, whether as a result of market or industry changes, new information,
or future events.
Additional Information
CTS Corporation intends to file with the Securities and Exchange Commission a
registration statement on Form S-4 that will include a proxy statement and a
prospectus and other relevant documents in connection with the proposed
transaction. In addition, CTS Corporation will publish and make available to
shareholders of SMTEK International, Inc. and file with the Securities and
Exchange Commission, a prospectus. Investors and security holders are urged to
carefully read the prospectus regarding the acquisition when it becomes
available because it will contain important information on which to exclusively
base their investment decision. Investors and security holders of SMTEK
International, Inc. are urged to read the proxy statement and prospectuses and
other relevant materials when they become available because they will contain
important information about CTS Corporation and SMTEK International, Inc. and
the proposed transaction. Investors and security holders may obtain a free copy
of these materials when they are available and other documents filed with the
Securities and Exchange Commission at the SEC's Web site at www.sec.gov. CTS
Corporation and its respective executive officers and directors may be deemed to
be participants in the solicitation of proxies from the SMTEK International,
Inc. stockholders with respect to the proposed transaction. Information
regarding the interests of these officers and directors in the proposed
transaction will be included in the proxy statement and prospectuses.
All investment is subject to risk. The value of securities offered may go down
as well as up. Past performance is no guarantee of future returns. Potential
investors are advised to seek expert financial advice before making any
investment decision.
This press release does not constitute an offer to sell or a solicitation of an
offer to buy any security and shall not constitute an offer, solicitation or
sale in any jurisdiction in which such offering would be unlawful.
# # # #
Contact: Vinod M. Khilnani, Sr. Vice President and Chief Financial Officer, or
George T. Newhart, Vice President Investor Relations
CTS Corporation, 905 West Boulevard North, Elkhart, IN 46514
Telephone (574) 293-7511 FAX (574) 293-0251
www.ctscorp.com