CTS Corp. (CTS) designs, manufactures, assembles and sells a broad line of electronic components and sensors. The firm also provides electronics manufacturing services primarily to original equipment manufacturers (OEMs) for the automotive, computer, communications, medical, industrial and defense and aerospace markets.
The firm was established in 1896 as a provider of high-quality telephone products, and was incorporated as an Indiana corporation in February 1929. Along the way, CTS had a hand in numerous technologies from the radio to the Space Shuttle Columbia.
CTS has two reportable segments: Electronics Manufacturing Services (EMS) and Components and Sensors.
CTS is the perfect storm — it is diversified, profitable and growing. Against a backdrop of such macro-trends in fuel efficiency, green initiatives and data traffic for smartphones and social networking, the firm is launching new products, expanding into new areas and increasing market share.
Sensors and Actuators (32% of sales) should see double-digit sales growth over the next 3-5 years. Green programs and fuel efficiency should provide a tail-wind. The Smart Actuator, Position Sensors and Accelerator Pedal Module are three CTS products in this segment.
Drilling down further to Smart Actuators, the firm penetrated two of the largest diesel manufacturers with smart actuators for trucks and industrial engines. There have been four wins in all. This takes CTS into on-and-off highway diesel engines and trucks. This introduces the firm to commercial applications like construction, mining and agriculture.
The total commercial market looks to be between $750 million to $1 billion. CTS’ target market share is 10%. Management sees projected sales at $90 million through 2015 with the first year of significant sales in 2013, at $20 million.
CTS CORP (CTS): Free Stock Analysis Report
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