cts corp. - annual report year 3

ANNUAL PRESENTATION

Year 2018

Company

Overview

Mission

StatementFinance Operations Marketing

Human

RelationsSummary

Liberal

EducationQ&A

COMPANY OVERVIEW

Company Overview

Stuart E. Aquadro, CEO

Holley A. Humberd, CFO

Michael P. Peters, COO

Hoang T. Phan, CMO

Jacinda M. Burke, CHRO

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&A

COMPANY OVERVIEW

Company Overview

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Acquired Venture 6

Export to Borealis

Ventures closed

Default crash resulting in stock price of $1.97

Hostile takeover by SoloTech

2016 2017 2018

Reach $10 million in net profit in one quarter.

MISSION STATEMENT

“Through operational excellence, CTS Corp. builds and sells a diverse collection of

affordable information technology products to satisfy all of our consumer’s needs. Harboring a combination of product breadth and customer

loyalty is exclusive to our brand.”

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&A

Mission Statement

FINANCE - OVERVIEW

Successes-AAA Bond Rating

-1508.92% increase in stock price over Year 3

-Only company to reach $10 million in profits in a single quarter

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&A

Failures-Not financially stable enough to avoid being taken over

-29,893 in total lost sales

Finance

FINANCE - CURRENT RATIO

0

1

2

3

4

5

6

7

Y1Q1 Y1Q2 Y1Q3 Y1Q4 Y2Q1 Y2Q2 Y2Q3 Y2Q4 Y3Q1 Y3Q2 Y3Q3 Y4Q4

CTS

Industry Average

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&AFinance

4.434

2.874

0

2

4

6

8

10

12

Y1Q1 Y1Q2 Y1Q3 Y1Q4 Y2Q1 Y2Q2 Y2Q3 Y2Q4 Y3Q1 Y3Q2 Y3Q3 Y3Q4

CTS

Industry Average

FINANCE - EARNING PER SHARE

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&AFinance

7.782

11.193

FINANCE - STOCK PRICE (NYSE: CTS)

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&AFinance

$0

$50

$100

$150

$200

$250

$300

$350

Q1Y1 Q2Y1 Q3Y1 Q4Y1 Q1Y2 Q2Y2 Q3Y2 Q4Y2 Q1Y3 Q2Y3 Q3Y3 Q4Y3

$288.48

FINANCE - NET PROFIT

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&AFinance

-$2,000

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

(In 000's)

Q4Y1

Q4Y2

Q1Y3

Q2Y3

Q3Y3

Q4Y3

$10,376

OPERATIONS - OVERVIEW

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&A

Operations

• Purchase of Venture 6Year 1

•All defect rates below 4%Year 2

•Hostile Takeover by SoloTech

•Changed strategy to low cost

•Increased quality program spendingYear 3

OPERATIONS

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&A

Operations

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%


Defect Rates

$-

$20

$40

$60

$80

$100


Quality Program Spending

(In 000's)

Hardware

Software

Systems

Venture #6

OPERATIONS - TECHNOLOGY SPENDING

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&A

Operations

$-

$50

$100

$150

$200

$250

Q1 Y1 Q2 Y1 Q3 Y1 Q4 Y1 Q1 Y2 Q2 Y2 Q3 Y2 Q4 Y2 Q1 Y3 Q2 Y3 Q3 Y3 Q4 Y3

(In 000's)

Hardware

Software

Systems

Venture #6

OPERATIONS - LOST SALES BY QUARTER OF 2018

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&A

Operations

0

2000

4000

6000

8000

10000

12000

14000

Quarter 1 Quarter 2 Quarter 3 Quarter 4

Hardware

Software

Systems

MARKETING - OVERVIEW

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&AMarketing

Successes-Ad campaign reached key decision makers in major corporations

-Business tactic received new leads for prospective customers

Failures-Problem with marketing mix

-Sales lower than expected

MARKETING - PROFITABILITY

Company

Overview

Mission


Human

RelationsSummary

Liberal


$0

$100

$200

$300

$400

$500

$600

$700

$800

$0

$100

$200

$300

$400

$500

$600


Pric

e

Cost

In 0

00

's

Average

Marketing Budget

& New Product

Research

Q4Y2: 43.9%

Q4Y3: 32.8%

Cost of Goods Sold

MARKETING - TOTAL SALES

Company

Overview

Mission


Human

RelationsSummary

Liberal


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000


Unit

Sold

47.444 units

MARKETING - MARKET SHARE

Company

Overview

Mission


Human

RelationsSummary

Liberal


HUMAN RESOURCES - OVERVIEW•Training and Development Program in Software, Systems, &

Venture 6

•Overlooked addition of benefit programs in Hardware SBUYear 1

•Rejected Employee Stock Program proposal

•Increase in employee turnover rate in all SBUsYear 2

•Benefit program cuts to align with low cost strategy(2% to 0.5% of

sales)

•Changes in employee turnover rateYear 3

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&A

Human Relations

HUMAN RESOURCES - EMPLOYEE TURNOVER RATE

5

6

7

8

9

10

11

12


Perc

enta

ge (%

)

Hardware

Software

Systems

Venture 6

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&A

Human Relations

HUMAN RESOURCES - YEAR-END BENEFITS

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&A

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Hardware Software Systems Venture 6

% o

f Sale

s

Year 1

Year 2

Year 3

Human Relations

HUMAN RESOURCES - BENEFIT COSTS

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&A

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000


Hardware

Software

Systems

Venture 6

Human Relations

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&ASummary

SUMMARY

CTS built up recognition as a differentiated business

Risk of changing strategy to Low Cost Leadership

Reward of the risk

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&ASummary

SUMMARY

$0

$50

$100

$150

$200

$250

$300

$350


Stock Price (NYSE: CTS)

To extend appreciation to shareholders, CTS issued a ¢22

per share dividend.

$288.48

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&A

Liberal Education

LIBERAL EDUCATION

HOLLEY

MIKE PETERS

Internships

Capstone/OB

Outside of Class

Activities

COLBY-SAWYER BASEBALL

Company

Overview

Mission


Human

RelationsSummary

Liberal

EducationQ&AQ&A

THANK YOU FOR ATTENDING!

Q&A