CTS · CTS Corporation Q2 FY2026 earnings call record财报电话会记录

“Equally important, we converted that growth into record profitability, achieving gross margin of 41.5%, adjusted EBITDA margin of 25.4%, and adjusted diluted EPS of $0.74.”

“Our book-to-bill ratio for the second quarter was 1.1, reflecting sustained customer demand across our portfolio.”

“While funding deployments have been gradual, we are beginning to see government funding flow into several key programs, supporting increased customer activity and a strengthening outlook.”

“As government funding continues to be deployed and program awards progress, we expect a stronger second half of the year, supported by robust bookings, an expanding opportunity pipeline, and increasing participation in both traditional and modern warfare platforms.”

“Across transportation markets, global light vehicle production volumes are forecasted to be flat to modestly down given ongoing tariff, geopolitical, and consumer demand uncertainties.”

“Assuming the continuation of current market conditions for full year 2026, we are raising our guidance, with sales now expected in the range of $565 million-$585 million and adjusted diluted EPS in the range of $2.55-$2.70.”

“Sales to diversified end markets increased 15% year-over-year, while sales to transportation customers were down 2%.”

“We continue to monitor the impact of Section 232 tariff changes, precious metal inflations, and input cost pressures.”

“Our teams are partnering with customers and suppliers to keep the effect on our margins broadly cost neutral.”

“Capital expenditures were $4.6 million in the quarter, and free cash flow was approximately $29 million.”

“It's also fair to assume that despite the volumes returning, that would be a little bit of a dampener on the gross margin line as that business comes back.”

“What happens generally in the transportation volumes, John, whenever you're launching a new program, the gross margin could be a little bit under pressure, you work on productivity improvements as you go along the life of that particular platform.”