cts corp. - annual report year 3
TRANSCRIPT
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
StatementFinance Operations Marketing
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
StatementFinance Operations Marketing
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
StatementFinance Operations Marketing
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
StatementFinance Operations Marketing
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
StatementFinance Operations Marketing
Human
RelationsSummary
Liberal
EducationQ&AFinance
7.782
11.193
FINANCE - STOCK PRICE (NYSE: CTS)
Company
Overview
Mission
StatementFinance Operations Marketing
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
StatementFinance Operations Marketing
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
StatementFinance Operations Marketing
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
StatementFinance Operations Marketing
Human
RelationsSummary
Liberal
EducationQ&A
Operations
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Q1Y1 Q2Y1 Q3Y1 Q4Y1 Q1Y2 Q2Y2 Q3Y2 Q4Y2 Q1Y3 Q2Y3 Q3Y3 Q4Y3
Defect Rates
$-
$20
$40
$60
$80
$100
Q1Y1 Q2Y1 Q3Y1 Q4Y1 Q1Y2 Q2Y2 Q3Y2 Q4Y2 Q1Y3 Q2Y3 Q3Y3 Q4Y3
Quality Program Spending
(In 000's)
Hardware
Software
Systems
Venture #6
OPERATIONS - TECHNOLOGY SPENDING
Company
Overview
Mission
StatementFinance Operations Marketing
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
StatementFinance Operations Marketing
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
StatementFinance Operations Marketing
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
StatementFinance Operations Marketing
Human
RelationsSummary
Liberal
EducationQ&AMarketing
$0
$100
$200
$300
$400
$500
$600
$700
$800
$0
$100
$200
$300
$400
$500
$600
Q1Y1 Q2Y1 Q3Y1 Q4Y1 Q1Y2 Q2Y2 Q3Y2 Q4Y2 Q1Y3 Q2Y3 Q3Y3 Q4Y3
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
StatementFinance Operations Marketing
Human
RelationsSummary
Liberal
EducationQ&AMarketing
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
Q1Y1 Q2Y1 Q3Y1 Q4Y1 Q1Y2 Q2Y2 Q3Y2 Q4Y2 Q1Y3 Q2Y3 Q3Y3 Q4Y3
Unit
Sold
47.444 units
MARKETING - MARKET SHARE
Company
Overview
Mission
StatementFinance Operations Marketing
Human
RelationsSummary
Liberal
EducationQ&AMarketing
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
StatementFinance Operations Marketing
Human
RelationsSummary
Liberal
EducationQ&A
Human Relations
HUMAN RESOURCES - EMPLOYEE TURNOVER RATE
5
6
7
8
9
10
11
12
Q1Y1 Q2Y1 Q3Y1 Q4Y1 Q1Y2 Q2Y2 Q3Y2 Q4Y2 Q1Y3 Q2Y3 Q3Y3 Q4Y3
Perc
enta
ge (%
)
Hardware
Software
Systems
Venture 6
Company
Overview
Mission
StatementFinance Operations Marketing
Human
RelationsSummary
Liberal
EducationQ&A
Human Relations
HUMAN RESOURCES - YEAR-END BENEFITS
Company
Overview
Mission
StatementFinance Operations Marketing
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
StatementFinance Operations Marketing
Human
RelationsSummary
Liberal
EducationQ&A
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
Q1Y1 Q2Y1 Q3Y1 Q4Y1 Q1Y2 Q2Y2 Q3Y2 Q4Y2 Q1Y3 Q2Y3 Q3Y3 Q4Y3
Hardware
Software
Systems
Venture 6
Human Relations
Company
Overview
Mission
StatementFinance Operations Marketing
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
StatementFinance Operations Marketing
Human
RelationsSummary
Liberal
EducationQ&ASummary
SUMMARY
$0
$50
$100
$150
$200
$250
$300
$350
Q1Y1 Q2Y1 Q3Y1 Q4Y1 Q1Y2 Q2Y2 Q3Y2 Q4Y2 Q1Y3 Q2Y3 Q3Y3 Q4Y3
Stock Price (NYSE: CTS)
To extend appreciation to shareholders, CTS issued a ¢22
per share dividend.
$288.48
Company
Overview
Mission
StatementFinance Operations Marketing
Human
RelationsSummary
Liberal
EducationQ&A
Liberal Education
LIBERAL EDUCATION