CTS Announces Third Quarter 2026 Results
CTS CORP (CTS) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 October 27, 2026 FOR IMMEDIATE RELEASE CTS Announces Third Quarter 2026 Results 2026 Outlook Raised on Record Profitability; Millar Acquisition Advances Diversification Lisle, Ill. - CTS Corporation (NYSE: CTS), a leading global designer and manufacturer of highly en
How this was made
The 30-second read
Why it matters
The raised guidance reflects stronger demand across diversified end‑markets and a successful acquisition, likely prompting a short‑term rally.
Market read
First‑report earnings and guidance lift for a mid‑cap industrial supplier, offering a clear trading catalyst.
What to watch
Potential supply‑chain constraints on rare earth materials could limit the upside.
2026 Outlook Raised on Record Profitability; Millar Acquisition Advances Diversification
Sales increased 5% year over year, adjusted gross margin expanded 330 bps, adjusted EBITDA margin expanded 90 bps, operating cash flow increased to $43.5 million, and CTS raised its 2026 sales and adjusted diluted EPS guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, three months ended September 30, 2026GAAP | $149.6M | – | up 5% year-over-year |
| Gross margin, three months ended September 30, 2026GAAP | $63.15M | – | – |
| Gross margin as a % of net sales, three months ended September 30, 2026GAAP | 42.2% | – | – |
| Selling, general and administrative expenses, three months ended September 30, 2026GAAP | $30.81M | – | – |
| Research and development expenses, three months ended September 30, 2026GAAP | $6.33M | – | – |
| Restructuring charges, three months ended September 30, 2026GAAP | $468K | – | – |
| Operating earnings, three months ended September 30, 2026GAAP | $25.54M | – | – |
| Operating earnings as a % of net sales, three months ended September 30, 2026GAAP | 17.1% | – | – |
| Earnings before income taxes, three months ended September 30, 2026GAAP | $38.23M | – | – |
| Income tax expense, three months ended September 30, 2026GAAP | $20.47M | – | – |
| Net earnings, three months ended September 30, 2026GAAP | $17.76M | – | – |
| Net earnings margin, three months ended September 30, 2026GAAP | 11.9% | – | – |
| Basic earnings per share, three months ended September 30, 2026GAAP | $0.62 | – | – |
| Diluted earnings per share, three months ended September 30, 2026GAAP | $0.61 | – | up 15 cents |
| Adjusted gross margin, three months ended September 30, 2026non-GAAP | 42.2% | – | up 330 bps |
| Adjusted operating earnings, three months ended September 30, 2026non-GAAP | $27.5M | – | – |
| Adjusted operating earnings as a % of net sales, three months ended September 30, 2026non-GAAP | 18.4% | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $37.0 | – | – |
| Adjusted EBITDA margin, three months ended September 30, 2026non-GAAP | 24.7% | – | up 90 bps |
| Adjusted net earnings, three months ended September 30, 2026non-GAAP | $22.4 | – | – |
| Adjusted diluted earnings per share, three months ended September 30, 2026non-GAAP | $0.77 | – | up 17 cents |
| Net cash provided by operating activities, three months ended September 30, 2026GAAP | $43.5 | – | up $14.5 million |
| Capital expenditures, three months ended September 30, 2026other | $2.4 | – | – |
| Free cash flow, three months ended September 30, 2026non-GAAP | $41.1 | – | – |
| Net sales, nine months ended September 30, 2026GAAP | $433.6M | – | – |
| Operating earnings, nine months ended September 30, 2026GAAP | $74.32M | – | – |
| Net earnings, nine months ended September 30, 2026GAAP | $54.12M | – | – |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | $1.87 | – | – |
| Adjusted EBITDA margin, nine months ended September 30, 2026non-GAAP | 24.4% | – | – |
| Adjusted diluted earnings per share, nine months ended September 30, 2026non-GAAP | $2.13 | – | – |
| Net cash provided by operating activities, nine months ended September 30, 2026GAAP | $94.3 | – | – |
| Free cash flow, nine months ended September 30, 2026non-GAAP | $82.3 | – | – |
| Cash and cash equivalents, September 30, 2026GAAP | $143,880 | – | – |
| Long-term debt, September 30, 2026GAAP | $55,000 | – | – |
| Controllable working capital, September 30, 2026non-GAAP | $104.8 | – | – |
| Controllable working capital as a % of annualized sales, September 30, 2026non-GAAP | 17.5% | – | – |
| Depreciation and amortization expense, three months ended September 30, 2026other | $8.7M | – | – |
| Stock-based compensation expense, three months ended September 30, 2026other | $3.3 | – | – |
2026 outlook
- Revenue$580-$590 million
- NoteAdjusted diluted EPS of $2.78-$2.88
Capital returns
- Cash dividends declared per share were $0.04 for the three months ended September 30, 2026, compared to $0.04 for the three months ended September 30, 2025.
- Cash dividends declared per share were $0.12 for the nine months ended September 30, 2026, compared to $0.12 for the nine months ended September 30, 2025.
What drove it
- Sales to diversified end-markets increased 7% and represented 60% of total sales.
- Sales to the transportation market increased 2%.
- CTS cited continued strength across its increasingly diversified portfolio.
- The acquisition of Millar further advances CTS' diversification strategy, especially in the medical end market.
- Third-quarter adjusted gross margin was 42.2%, up 330 bps from 38.9%.
- Third-quarter adjusted EBITDA margin was 24.7%, up 90 bps from 23.8%.
Concerns
- Income tax expense was $20,468 in the third quarter of 2026, compared to $6,033 in the third quarter of 2025.
- Other income, net was $12,534 in the third quarter of 2026 and included a $(12.5) million insurance recovery adjustment in the adjusted EBITDA reconciliation.
- Controllable working capital as a % of annualized sales was 17.5% at September 30, 2026, compared to 16.1% at September 30, 2025.
- CTS' outlook assumes the continuation of current market conditions.
What to watch
- Delivery against 2026 sales guidance of $580-$590 million.
- Delivery against 2026 adjusted diluted EPS guidance of $2.78-$2.88.
- The contribution of diversified end-markets, which represented 60% of total sales.
- Integration of the Millar acquisition and its advancement of medical end-market diversification.
- Sustainability of adjusted gross margin and adjusted EBITDA margin following the reported expansion.
Balance sheet and cash flow
- Cash and cash equivalents were $143,880 at September 30, 2026, compared to $82,295 at December 31, 2025.
- Long-term debt was $55,000 at September 30, 2026, compared to $57,500 at December 31, 2025.
- Total assets were $822,094 at September 30, 2026, compared to $764,311 at December 31, 2025.
- Net cash provided by operating activities was $43.5 million for the third quarter of 2026, compared to $29.0 million in the third quarter of 2025.
- Free cash flow was $41.1 million for the third quarter of 2026, compared to $24.2 million in the third quarter of 2025.
Analysis
CTS reported third-quarter net sales of $149,583, up 5% year over year from $142,970. Management attributed the increase to continued strength across its increasingly diversified portfolio. Diversified end-market sales increased 7%, represented 60% of total sales, and transportation sales increased 2%. The filing does not provide revenue amounts for those end markets.
Profitability improved across reported GAAP and non-GAAP measures. Gross margin was $63,152 and gross margin as a percentage of net sales was 42.2%, versus 38.7% in the prior-year quarter. Operating earnings were $25,539, with an operating margin of 17.1%, versus $20,938 and 14.6%. Adjusted gross margin was 42.2%, up 330 bps from 38.9%, while adjusted EBITDA margin was 24.7%, up 90 bps from 23.8%.
GAAP net earnings were $17,757, or $0.61 per diluted share, compared with $13,687, or $0.46 per diluted share. Adjusted net earnings were $22.4 million and adjusted diluted EPS was $0.77, compared with $17.8 million and $0.60. The quarter included $12,534 of other income, net, and the non-GAAP reconciliation identifies a $(12.5) million insurance recovery adjustment. Income tax expense was $20,468, compared with $6,033 in the prior-year quarter, while the adjusted earnings reconciliation includes $12.7 million of other discrete tax items.
Cash generation strengthened. Net cash provided by operating activities was $43.5 million, up $14.5 million from $29.0 million, and free cash flow was $41.1 million compared with $24.2 million. Cash and cash equivalents were $143,880 at September 30, 2026, while long-term debt was $55,000. CTS declared a $0.04 cash dividend per share for the quarter.
CTS raised 2026 sales guidance to $580-$590 million from its previously stated range of $565-$585 million and raised adjusted diluted EPS guidance to $2.78-$2.88 from $2.55-$2.70. The guidance assumes continuation of current market conditions. Management also highlighted the Millar acquisition as an advancement of its diversification strategy, particularly in the medical end market.
Management, verbatim
CTS delivered another strong quarter, with sales increasing 5% year over year, driven by continued strength across our increasingly diversified portfolio. Diversified end-market sales grew 7% and now represent 60% of total sales, while Transportation sales also posted modest growth.
Pratik Trivedi, CEO of CTS Corporation
Our disciplined execution is delivering profitable growth, record margins and strong cash generation. The acquisition of Millar further advances our diversification strategy, especially in the medical end market, and enhances our opportunity to create sustainable long-term value.
Pratik Trivedi, CEO of CTS Corporation
Not in the filing
stated, not guessed- Segment revenue amounts for diversified end-markets and transportation.
- GAAP effective tax rate for the third quarter of 2026.
- Share repurchases during the third quarter of 2026.
- Quarter-over-quarter comparisons for operating results.
- Forward guidance for gross margin, operating expenses, tax rate, cash flow, capital expenditures, and capital returns.
- Prior-release outlook section for formal actual-versus-prior-guidance comparison.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
CTS Corp filed a Form 8‑K announcing Q3 2026 results and an updated outlook.
Ticker impact
CTS raised its 2026 sales and EPS guidance after reporting Q3 results with record margins and higher profit.
likely upward pressure as investors price in higher sales and earnings expectations
The company reported 5% YoY sales growth, margin expansion, and increased cash flow, then lifted its full-year sales outlook to $580‑$590 M and EPS to $2.78‑$2.88, indicating improved profitability.
Market effects
Higher guidance may boost sentiment in industrial and aerospace & defense components sectors where CTS operates.
Positive for U.S. industrial manufacturers and related supply chains.
May influence global component suppliers tracking CTS's diversification and margin trends.
Counterpoint
If the Millar acquisition integration faces delays, the raised guidance could be premature.
Key entities
- companyCTS Corporation
NYSE‑listed designer and manufacturer of sensors, actuators and electronic components.
