CTS Corporation (NYSE:CTS) Q2 2023 Earnings Conference Call July 25, 2023 10:00 AM ET

Company Participants

Kieran O'Sullivan - President and CEO

Ashish Agrawal - CFO

Conference Call Participants

Justin Long - Stephens

John Franzreb - Sidoti

Joshua Buchalter - TD Cowen

Hendi Susanto - Gabelli Funds

Operator

Good morning and a warm welcome to the CTS Corporation Second Quarter 2023 Conference Call. My name is Candice and I will be your moderator for today's call. [Operator Instructions]

I would now like to turn the call over to our host Kieran O'Sullivan. Please go ahead.

Kieran O'Sullivan

Thank you, Candice. Good morning and thank you for joining our second quarter 2023 earnings call. We posted solid quarterly results and had strong new business wins, including robust electrification bookings where we obtained our first award for our innovative eBrake product.

We also continue to expand our customer base in medical and industrial markets. Our focus on profitable growth driving diversification through our advanced materials capability and growth through electrification in mobility markets with innovative new products remain our highest priorities. We are energized by the significant awards in the quarter and remain focused on achieving our long-term strategic goals while improving our operational performance.

For the second quarter 2023, sales were $145 million, essentially flat compared to the same period last year. Adjusted gross margin was 35%, down 120 basis points from the same period in 2022, driven primarily by the mix shift to transportation products. We expect this mix shift to persist for a few more quarters. Adjusted diluted earnings per share was $0.59, down $0.03 compared to the second quarter of 2022. New business awards were stellar in the quarter.

Total booked business in transportation increased by $70 million to $1.6 billion. We also added 10 new customers across different end markets. I just mentioned the first eBrake product award, a significant strategic milestone as we capture growth opportunities through the electrification megatrend. Our Maglab team had a notable win and also secured a reference design award with a semiconductor OEM.

Ashish will now take us through the Safe Harbor statement. Ashish?

Ashish Agrawal

I would like to remind our listeners that this conference call contains forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Additional information regarding these risks and uncertainties is contained in the press release issued today and more information can be found in the company's SEC filings. To the extent that today's discussion refers to any non-GAAP measures under Regulation G. The required explanations and reconciliations are available in the Investors section of the CTS website.