CTS Corporation Reports 4% Net Sales Increase in Q2 2025, Driven by Diversified Markets

CTS Corporation reported a net sales increase of 4.0% for the second quarter of 2025, reaching $135.3 million compared to $130.2 million in the same period last year. The growth was driven by a 13.2% rise in sales to diversified end markets, bolstered by contributions from the SyQwest acquisition, which added $4.5 million in sales. However, sales in the transportation sector declined by 5.5%, primarily due to reduced volumes in commercial vehicle products and lower sales to customers in China. For the first half of 2025, net sales totaled $261.1 million, a 2.0% increase from $255.9 million in the prior year.

The company's gross margin improved significantly, rising to 38.7% in the second quarter of 2025 from 35.6% in the same quarter of 2024, attributed to a favorable sales mix and operational enhancements. Gross margin for the first half of 2025 was 37.9%, up from 35.7% year-over-year. CTS's operating earnings for the second quarter increased by 28.0% to $22.7 million, while net earnings rose 26.0% to $18.5 million, reflecting a strong operational performance despite rising selling, general, and administrative expenses, which were impacted by higher depreciation from the SyQwest acquisition.

In terms of strategic developments, CTS has continued to focus on integrating SyQwest, which was acquired in July 2024. The company has also been actively managing its workforce in response to market conditions, resulting in restructuring charges of $297, significantly lower than the $1.2 million incurred in the same quarter last year. The total restructuring charges for the first half of 2025 were $749, down from $2.9 million in the prior year, indicating a shift towards stabilizing operations.

Operationally, CTS reported a cash and cash equivalents balance of $99.4 million as of June 30, 2025, an increase from $94.3 million at the end of 2024. The company’s long-term debt decreased to $88.0 million from $92.3 million, reflecting ongoing efforts to manage its capital structure effectively. The company also repurchased 411,650 shares of common stock during the second quarter, part of a broader $100 million share repurchase program initiated in February 2024.

Looking ahead, CTS remains optimistic about its growth trajectory, particularly in the medical and industrial markets, while acknowledging challenges in the transportation sector. The company plans to continue investing in product development and operational efficiencies to enhance its competitive position. However, it also recognizes potential risks, including market volatility and the impact of global trade policies, which could affect future performance.