10 unchanged sentences
We manufacture sensors, actuators and connectivity components in North America, Europe, and Asia.
−Removed: CTS provides engineered products to OEMs and tier one suppliers in the aerospace and defense, industrial, medical, and transportation markets, and the U.S.
+Added: CTS provides highly engineered products to OEMs and tier one suppliers in the aerospace and defense, industrial, medical, and transportation markets, and the U.S.
There is an increasing proliferation of sensing and motion applications within various markets we serve.
2 unchanged sentences
We are subject to challenges including periodic market softness, competition from other suppliers, changes in technology, and the ability to add new customers, launch new products or penetrate new markets.
−Removed: On July 29, 2024, we acquired 100% of the outstanding membership interests of SyQwest, LLC (“SyQwest”), a leading designer and manufacturer of a broad set of sonar and acoustic sensing solutions primarily for naval applications, for $121.9 million, net of cash and up to $15 million in future contingent consideration.
−Removed: The SyQwest acquisition strengthens our strategy and scale in the defense end market.
−Removed: The acquisition was funded from both cash on hand and borrowings under our revolving credit facility.
Results of Operations:
10 unchanged sentences
Operating earnings
−Removed: Total other (expense) income, net
+Added: Total other income (expense), net
Earnings before taxes
2 unchanged sentences
Diluted net earnings per share
−Removed: Net sales were $515,771 for the year ended December 31, 2024, a decrease of $34,651, or 6.3%, from 2023.
−Removed: The decline in net sales was primarily driven by a decreased volume of transportation products, which were down $51,077, or 16.9%.
+Added: Net sales were $541,318 for the year ended December 31, 2025, an increase of $26,562, or 5.2%, from 2024.
Net sales to the diversified end markets increased $42,998, or 16.3%.
−Removed: The SyQwest acquisition added net sales of $14,448 in 2024, while the acquisition of maglab AG ("Maglab") added net sales of $1,755 in 2023.
+Added: We achieved growth in the aerospace & defense and medical end markets and saw continued recovery in the industrial end market.
+Added: The acquisition of SyQwest, LLC ("SyQwest") added net sales of $22,329 and $13,433 in 2025 and 2024, respectively.
+Added: Net sales to the transportation end market decreased $16,436 or 6.6%, primarily driven by lower volumes of our commercial vehicle related products and our customers' loss of market share in China.
+Added: Gross margin was $208,026 for the year ended December 31, 2025, an increase of $20,471, or 10.9%, from the year ended December 31, 2024.
+Added: The increase in gross margin was primarily driven by continued operational improvements and an improved mix of sales by end market.
CTS CORPORATION 26
−Removed: Gross margin was $189,150 for the year ended December 31, 2024, a decrease of $1,709, or 0.9%, from the year ended December 31, 2023.
−Removed: The decrease in gross margin was primarily driven by lower sales volumes partially offset by the favorable impact of changes in end market mix, operational improvements as well as favorable impacts in foreign exchange rates of $1,102 primarily due to the U.S.
−Removed: Dollar appreciating compared to the Peso.
Selling, general and administrative ("SG&A") expenses were $98,720, or 18.2% of sales for the year ended December 31, 2025, versus $88,285 or 17.2% of sales in 2024.
−Removed: The increase in SG&A expenses was primarily driven by increased incentive compensation and the SyQwest acquisition.
−Removed: Research and development expenses were $23,388, or 4.5% of sales in 2024, compared to $24,918, or 4.5% of sales in 2023, in line with our commitment to continue investing in research and product development to drive organic growth.
+Added: The increase in SG&A expenses was primarily driven by higher amortization expense in 2025 from the SyQwest acquisition and a one-time charge related to the potential settlement of prior period costs with the U.S.
+Added: Environmental Protection Agency (the "EPA").
+Added: Research and development expenses were $25,268, or 4.7% of sales in 2025, compared to $23,388, or 4.5% of sales in 2024.
+Added: We continue to invest in research and product development to drive long-term organic growth.
Restructuring charges were $1,396, or 0.3% of net sales in 2025, compared to $4,697, or 0.9% of net sales in 2024.
−Removed: The restructuring charges in the year ended December 31, 2024, were primarily related to costs associated with our plant closure and consolidation activities and severance expenses related thereto.
+Added: The restructuring charges in the year ended December 31, 2025 were primarily related to changes to adjust our business in response to demand changes across certain locations and products.
See Note 9, “Costs Associated with Exit and Restructuring Activities,” in the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K for further information.
3 unchanged sentences
Interest income
−Removed: Other expense
−Removed: Total other (expense) income, net
−Removed: Interest income decreased due to lower investments of available cash into short-term, cash equivalent, high-yield deposit accounts as a result of the SyQwest acquisition.
−Removed: Interest expense increased due to higher borrowings to fund the SyQwest acquisition.
−Removed: Other expense, net for 2024 is primarily driven by foreign currency translation losses primarily related to the Chinese Renminbi offset partially by income from the qualified replacement plan assets.
+Added: Other income (expense), net
+Added: Total other income (expense), net
+Added: Interest income decreased due to lower investments of available cash as a result of the SyQwest acquisition.
+Added: Other income for 2025 is driven by foreign currency translation gains primarily related to the Euro and Mexican Peso, and a prior period adjustment recorded related to the SyQwest acquisition.
+Added: See Note 1 “Summary of Significant Accounting Policies” in the Notes to the Condensed Consolidated Financial Statements in this Annual Report on Form 10-K for further information.
Years Ended December 31,
1 unchanged sentence
The effective income tax rate in 2025 was 22.0% compared to 18.4% in the prior year.
−Removed: The decrease is primarily due to a change in mix of earnings taxed at lower rates.
+Added: The increase in the effective income tax rate is primarily attributable to a change in mix of earnings taxed at higher rates and the impact of the One Big Beautiful Bill Act (the "OBBBA").
+Added: See Note 19 “Income Taxes” in the Notes to the Condensed Consolidated Financial Statements in this Annual Report on Form 10-K for further information.
Liquidity and Capital Resources
2 unchanged sentences
However, we may choose to pursue additional equity and debt financing to provide additional liquidity or to fund acquisitions.
−Removed: Cash and cash equivalents were $94,334 at December 31, 2024 and $163,876 at December 31, 2023, of which $92,944 and $99,940, respectively, were held outside the United States.
+Added: Cash and cash equivalents were $82,295 at December 31, 2025 and $94,334 at December 31, 2024, of which $75,943 and $92,944, respectively, were held in our foreign affiliates.
Total debt as of December 31, 2025 and December 31, 2024 was $57,500 and $92,300, respectively.
1 unchanged sentence
Net cash provided by operating activities was $102,105 during the year ended December 31, 2025.
−Removed: Components of net cash provided by operating activities included net earnings of $58,114, depreciation and amortization expense of $30,922, other net non-cash items totaling $2,907, and a net cash inflow from changes in assets and liabilities of $7,346 primarily driven by reductions in inventories.
+Added: Components of net cash provided by operating activities included net earnings of $65,317, depreciation and amortization expense of $34,538, other net non-cash items totaling $750, and a net cash inflow from changes in assets and liabilities of $3,694 primarily driven by increases in accrued expenses and other liabilities, accounts payable and accrued payroll partially offset by an increase in accounts receivable.
Net cash provided by operating activities was $98,242 during the year ended December 31, 2024.
−Removed: Components of net cash provided by operating activities included net earnings of $60,532, depreciation and amortization expense of $28,710, other net non-cash items
+Added: Components of net cash provided by operating activities included net earnings of $55,472, depreciation and amortization expense of $30,922, other net non-cash items totaling $2,907, and a net cash inflow from changes in assets and liabilities of $8,941 primarily driven by reductions in inventories.
CTS CORPORATION 27
−Removed: totaling $3,108, offset by a net cash outflow from changes in assets and liabilities of $(3,539) primarily driven by reductions in accounts payable and accrued payroll and benefits.
Cash Flows from Investing Activities
+Added: Net cash used in investing activities for the year ended December 31, 2025 was $18,514, driven by capital expenditures of $15,731 and contributions to short-term investments of $2,783.
Net cash used in investing activities for the year ended December 31, 2024 was $140,556, driven by $121,912 of acquisition payments for the SyQwest acquisition and capital expenditures of $18,644.
See Note 3, "Business Acquisitions," in the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K.
−Removed: Net cash used in investing activities for the year ended December 31, 2023 was $18,097, driven by capital expenditures of $14,738 and $3,359 of acquisition payments, primarily for the Maglab acquisition as well as final working capital adjustments from the TEWA Temperature Sensors SP.
−Removed: Zo.o and Meggitt A/S (a/k/a Ferroperm Piezoceramics A/S) acquisitions.
−Removed: See Note 3, "Business Acquisitions," in the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K.
Cash Flows from Financing Activities
Net cash used by financing activities for the year ended December 31, 2025, was $98,438.
−Removed: The net cash outflow was the result of treasury stock purchases of $42,596, dividend payments of $4,885, taxes paid on behalf of equity award participants of $3,131 and contingent consideration payments of $1,076, partially offset by borrowings net of payments of $23,753.
+Added: The net cash outflow was the result of debt payments net of borrowings of $34,800, treasury stock purchases of $56,178, dividend payments of $4,750, and taxes paid on behalf of equity award participants of $2,710.
Net cash used by financing activities for the year ended December 31, 2024, was $26,888.
−Removed: The net cash outflow was the result of treasury stock purchases of $40,926, net cash for debt paydowns of $16,170, dividend payments of $5,040, and taxes paid on behalf of equity award participants of $3,263.
+Added: The net cash outflow was the result of treasury stock purchases of $42,596, dividend payments of $4,885, and taxes paid on behalf of equity award participants of $3,131 and contingent consideration payments of $1,076, partially offset by borrowings net of payments of $24,800.
Capital Resources
6 unchanged sentences
Weighted-average interest rate
−Removed: On December 15, 2021, we entered into a second amended and restated five-year credit agreement with a group of banks (the “Revolving Credit Facility”) to (i) increase the total credit facility availability to $400,000 which may be increased by $200,000 at the request of the Company, subject to the administrative agent's approval, (ii) extend the maturity of the Revolving Credit Facility from February 12, 2024 to December 15, 2026, (iii) replace LIBOR with SOFR as the primary reference rate used to calculate interest on the loans under the Revolving Credit Facility, (iv) increase available sublimits for letters of credit, and swingline loans as well as providing for additional alternative currency borrowing capabilities, and (v) modify the financial and non-financial covenants to provide the Company additional flexibility.
−Removed: This new unsecured credit facility replaced the prior $300,000 unsecured credit facility, which would have expired February 12, 2024.
+Added: On November 24, 2025, we entered into a new five-year revolving credit agreement (the “Revolving Credit Facility”) with a group of banks for a total credit facility availability of $300,000 which may be increased by up to $125,000, subject to the administrative agent's approval.
+Added: The new Revolving Credit Facility matures on November 24, 2030 and modified the financial and non-financial covenants to provide the Company additional flexibility.
+Added: The new Revolving Credit Facility is unsecured and replaced the prior $400,000 revolving credit facility, which would have expired on December 15, 2026.
Borrowings in U.S.
3 unchanged sentences
The contractual rate of these arrangements ranges from 1.49% to 2.45%.
−Removed: The Revolving Credit Facility includes a swing line sublimit of $20,000 and a letter of credit sublimit of $20,000.
+Added: The Revolving Credit Facility includes a swing line sublimit of $20,000, a letter of credit sublimit of $20,000 and an alternative currency sublimit of $150,000.
We also pay a quarterly commitment fee on the unused portion of the Revolving Credit Facility.
4 unchanged sentences
"Risk Factors” for additional discussion of risks that our business faces.
−Removed: CTS CORPORATION 26
As of December 31, 2025, our material cash requirements for our known contractual and other obligations were as follows:
4 unchanged sentences
See Note 13, “Debt,” and Note 14, “Derivatives,” in the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K for further details of our debt and hedging activities.
+Added: CTS CORPORATION 28
• Operating lease payments – We enter into various noncancelable lease agreements for land, buildings and equipment used in our operations.
4 unchanged sentences
We have no off-balance sheet arrangements that have a material current effect or are reasonably likely to have a material future effect on our financial condition or changes in our financial condition.
−Removed: On February 6, 2023, we acquired 100% of the outstanding shares of Maglab for $4,164 in cash subject to additional earnout payments based on future performance.
−Removed: The acquisition was funded from cash on hand.
On July 29, 2024, we acquired 100% of the outstanding membership interests of SyQwest for $121,912 in cash subject to additional earnout payments based on future performance.
−Removed: The acquisition was funded from both cash on hand and borrowings under our Revolving Credit Facility.
−Removed: Critical Accounting Estimates and Policies
+Added: The acquisition was funded from both cash on hand and borrowings under our previous revolving credit facility.
+Added: Critical Accounting Policies and Estimates
The Securities and Exchange Commission ("SEC") has defined a company’s critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.
2 unchanged sentences
Actual results may differ from these estimates.
−Removed: Critical Accounting Estimates
Goodwill, Intangibles and Other Long-Lived Assets
8 unchanged sentences
Impairment Assessment – Goodwill
−Removed: CTS CORPORATION 27
Goodwill of a reporting unit is tested for impairment on the first day of its fiscal fourth quarter, or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount.
7 unchanged sentences
If we believe that one or more indicators of impairment have occurred, we perform an impairment test.
+Added: CTS CORPORATION 29
We have the option to perform a qualitative assessment (commonly referred to as a "step zero" test) to determine whether further quantitative analysis for impairment of goodwill and indefinite-lived intangible assets is necessary.
6 unchanged sentences
Changes in these estimates and assumptions could materially affect the determination of fair value and impact the goodwill impairment assessment.
−Removed: For 2024, we elected to perform the quantitative assessment.
+Added: For 2025, we elected to perform the qualitative assessment on two of our reporting units, and the quantitative assessment on our third reporting unit.
Based upon our latest assessment, we determined that our goodwill was not impaired as of October 1, 2025.
15 unchanged sentences
The assumptions about future taxable income require the use of significant judgment and are consistent with the plans and estimates we are using to manage our underlying businesses.
−Removed: CTS CORPORATION 28
The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations.
3 unchanged sentences
These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.
−Removed: Critical Accounting Policies
Revenue Recognition
2 unchanged sentences
We base these estimates on the most likely value method considering all reasonably available information, including our historical experience and current expectations, and are reflected in the transaction price when sales are recorded.
+Added: CTS CORPORATION 30
+Added: Revenue is recognized as performance obligations are satisfied and the customer obtains control of the products.
+Added: A portion of our contracts allow the customers to unilaterally terminate the contract for convenience, take control of any work in process, and pay us for costs incurred plus a reasonable profit.
+Added: Revenue from these contracts is generally recognized over time as the work progresses, either as products are produced or services are rendered, because we generally do not have an alternative use for the completed assets produced and we have an enforceable right to payment for performance completed to date.
+Added: Significant estimates and assumptions are made in estimating total revenues, costs, and profit for each performance obligation.
+Added: We generally estimate revenue for these contracts using the costs incurred by the Company as we have determined that this method is the most representative of the Company's cumulative efforts relative to the total expected efforts to satisfy the performance obligations.
+Added: These estimates require significant judgment and are subject to change during the performance of the contract and may affect contract profitability.
Product Warranties
23 unchanged sentences
(in thousands, except percentages)
−Removed: CTS CORPORATION 29
Our cash flows and earnings are subject to fluctuations resulting from changes in foreign currency exchange rates, interest rates and commodity prices.
3 unchanged sentences
We monitor our underlying market risk exposures on an ongoing basis and believe that we can modify or adapt our hedging strategies as needed.
+Added: CTS CORPORATION 31
Interest Rate Risk
18 unchanged sentences
The assumptions used in measuring fair value of the cross-currency interest rate swap are considered level 2 inputs, which are based upon the Krone to United States Dollar exchange rate market.
−Removed: At December 31, 2024, we had a net unrealized loss of $51 in accumulated other comprehensive (loss) income.
+Added: At December 31, 2025, we had a net unrealized loss of $1,719 in accumulated other comprehensive income (loss).
Commodity Price Risk
Many of our products require the use of raw materials that are produced in only a limited number of regions around the world or are available from only a limited number of suppliers.
−Removed: Our most significant raw materials and purchased components include conductive inks and contactors, passive connectivity components, integrated circuits and semiconductors, certain rare earth elements ("REEs"), ceramic powders, plastic components, molding compounds, printed circuit boards and assemblies, quartz blanks and crystals, wire harness assemblies, copper, brass, silver, gold, platinum, lead, aluminum, and steel-based raw materials and components.
+Added: Our most significant raw materials and purchased components include conductive inks and contactors, passive connectivity components, integrated circuits and semiconductors, certain rare earth elements ("REEs"), ceramic powders, plastic components, molding compounds, printed circuit boards and assemblies, quartz blanks and crystals, wire harness assemblies, copper, brass, silver, gold, platinum, lead, aluminum, titanium and steel-based raw materials and components.
Our results of operations may be materially and adversely affected if we have difficulty obtaining these raw materials, the quality of available raw materials deteriorates, or there are significant price increases for these raw materials.
1 unchanged sentence
For periods in which the prices are declining, we may be required to write down our inventory carrying cost of these raw materials, since we record our inventory at the lower of cost or net realizable value.
−Removed: As the Company is exposed to significant changes in certain commodity prices, we actively monitor these exposures and may take various actions from time to time to mitigate any negative impacts relating thereto.
+Added: As the Company is exposed to significant changes in these commodity prices, we actively monitor these exposures and may take various actions from time to time to mitigate any negative impacts relating thereto.
CTS CORPORATION 32
18 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical audit matter
−Removed: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
−Removed: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
−Removed: SyQwest, LLC acquisition – valuation of acquired customer relationships
−Removed: As described further in Note 3 to the consolidated financial statements, the Company acquired SyQwest, LLC (“SyQwest”) on July 29, 2024 for a total purchase price of $128.0 million.
−Removed: Accordingly, the purchase price has been allocated to the assets acquired and liabilities assumed based on their respective fair values, including identified intangible assets of approximately $76.1 million, which is primarily comprised of customer relationships of $68.5 million.
−Removed: The Company estimated the fair value of the customer relationships using the multi-period excess earnings method, which is an income approach that required management to make significant estimates and assumptions related to future revenues and cash flows and the selection of the discount rate.
−Removed: We identified the measurement of the acquisition-date fair value of the acquired customer relationships as a critical audit matter.
−Removed: The principal considerations for our determination that the acquisition-date fair value of the acquired customer relationships is a critical audit matter were the high degree of auditor judgment and an increased extent of effort, which included utilizing specialists, to test management’s internally developed assumptions for which there was limited observable market information.
−Removed: These assumptions were:
−Removed: 1) the forecasted revenues, including the renewal rate for existing customer contracts, and 2) the discount rate.
+Added: Critical audit matters
+Added: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or are required to be communicated to the audit committee and that:
+Added: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: Over time revenue recognition – estimation of costs at completion
+Added: As described in Note 2 to the consolidated financial statements, the Company has certain customer contracts that allow the customers to unilaterally terminate the contract for convenience, take control of any work in process, and pay the Company for costs incurred plus a reasonable profit.
+Added: Revenue from these contracts is generally recognized over time as the work progresses, either as products are produced or services are rendered, because the Company does not have an alternative use for the completed assets produced, and the Company has an enforceable right to payment for performance completed to date.
+Added: The accounting for these contracts requires significant management judgment with respect to the estimation of costs at completion for each performance obligation.
+Added: We have identified the Company’s estimation of costs at completion for its over time revenue contracts as a critical audit matter.
+Added: The principal consideration for our determination that the estimation of costs at completion is a critical audit matter is the significant degree of management judgment required to evaluate the estimated labor and material costs for each contract, which are assumptions with a high level of estimation uncertainty and susceptibility to potential management bias.
CTS CORPORATION 33
Our audit procedures related to the critical audit matter included the following, among others.
−Removed: • We tested certain internal controls over the Company’s acquisition-date valuation process, including controls over the development of the key assumptions such as the forecasted revenues, renewal rate, and the discount rate.
−Removed: • We evaluated the Company’s forecasted revenues for existing customer contracts by comparing the forecasted growth assumptions to industry and historical results and performing independent sensitivities over the renewal rate with the assistance of our valuation specialists.
−Removed: • We assessed, with the assistance of specialists, the Company’s discount rate by comparing it against a discount rate range that was independently developed using publicly available market data for comparable peers and performing a sensitivity analysis based on that data.
+Added: We tested the Company’s assumptions for labor hours and materials to be incurred for a selection of in-process contracts as follows:
+Added: • Inspected a sample of underlying contracts to obtain an understanding of the contractual requirements and deliverables and the nature of the costs necessary to fulfill those contracts;
+Added: • Agreed a sample of actual labor and material costs incurred to supporting documentation, verifying the costs were accurate and classified to the appropriate contracts;
+Added: • Recalculated revenue recognized to date through comparison of actual costs incurred to date as a percentage of the estimated total contract costs at completion, and applied that percentage to the underlying contract price;
+Added: • Evaluated the Company’s ability to accurately estimate costs at completion through 1) an evaluation of the competence and experience of the key operational executive who is responsible for developing the estimated costs at completion and 2) the selection of completed contracts in order to compare the Company’s initial estimated costs and profit margin to the actual costs and profit margin at the completion of the contracts.
+Added: Quantitative goodwill impairment assessment
+Added: The Company’s consolidated goodwill balance was $209.6 million as of December 31, 2025.
+Added: As described in Note 1 and Note 8 to the consolidated financial statements, the Company evaluates goodwill for impairment at the reporting unit level annually.
+Added: A quantitative impairment assessment was performed as of October 1, 2025 for one of the Company’s three reporting units.
+Added: The goodwill balance for this reporting unit amounts to $48.8 million.
+Added: The quantitative impairment assessment involves the comparison of the fair value of a reporting unit to its carrying value.
+Added: The Company determines the fair value of the reporting unit using a combination of discounted cash flow analysis and a market-based valuation methodology, which requires significant management judgment.
+Added: We have identified the quantitative goodwill impairment assessment as a critical audit matter.
+Added: The principal consideration for our determination that the quantitative goodwill impairment assessment is a critical audit matter is the significant auditor judgment required to evaluate the reporting unit’s forecasted revenues and EBITDA and the Company’s selection of the discount rate.
+Added: Our audit procedures related to the critical audit matter included the following, among others:
+Added: • Tested the design and operating effectiveness of the key controls over the Company’s quantitative goodwill impairment assessment, including controls over the development of the significant assumptions such as the forecasted revenues, EBITDA, and the discount rate;
+Added: • Evaluated a selection of the customer contracts to support the reasonableness of the reporting unit’s forecasted revenues that pertain to recurring contracts;
+Added: • Corroborated management’s probability evaluation of future contract awards by inspecting correspondence with third parties, evaluating publicly available information, and reviewing subsequent information to identify evidence consistent with management’s forecasted revenues for the future contract awards;
+Added: • Evaluated the forecasted revenues and EBITDA for the reporting unit by comparing the forecasted growth assumptions to both current and historical results, as well as forecasted industry trends;
+Added: • Assessed the Company’s discount rate for the reporting unit by comparing it against a discount rate independently developed using publicly available market data for comparable peers and evaluating management’s sensitivity analysis over the selected company specific risk premium.
+Added: Specialists were involved in evaluating the valuation methodology and significant assumptions such as the discount rate.
/s/ GRANT THORNTON LLP
12 unchanged sentences
Operating earnings
−Removed: Other (expense) income:
+Added: Other income (expense):
Interest expense
Interest income
−Removed: Other (expense)
−Removed: Total other (expense) income, net
+Added: Other income (expense), net
+Added: Total other income (expense), net
Earnings before taxes
11 unchanged sentences
Years Ended December 31,
−Removed: Other comprehensive (loss) earnings:
+Added: Other comprehensive earnings (loss) :
Changes in fair market value of derivatives, net of tax
1 unchanged sentence
Cumulative translation adjustment, net of tax
−Removed: Other comprehensive (loss) earnings
+Added: Other comprehensive earnings (loss)
Comprehensive earnings
6 unchanged sentences
Cash and cash equivalents
−Removed: Accounts receivable, net
+Added: Accounts receivable, net of allowances of $910 and $730, respectively
Inventories, net
23 unchanged sentences
Retained earnings
−Removed: Accumulated other comprehensive (loss) income
+Added: Accumulated other comprehensive income (loss)
Total shareholders' equity before treasury stock
12 unchanged sentences
Non-cash inventory charges
−Removed: Pensions and other post-retirement plan expense (income)
+Added: Pensions and other post-retirement plan expense
Stock-based compensation
3 unchanged sentences
(Gain) loss on foreign currency hedges, net of cash
+Added: Goodwill prior period adjustment
Changes in assets and liabilities, net of acquisitions:
10 unchanged sentences
Payments for acquisitions, net of cash acquired
+Added: Short-term investments
Net cash used in investing activities
6 unchanged sentences
Contingent consideration payments
−Removed: Net cash (used in) provided by financing activities
+Added: Net cash used in financing activities
Effect of exchange rate on cash and cash equivalents
14 unchanged sentences
Comprehensive
+Added: Income (Loss)
Balances at January 1, 2023
11 unchanged sentences
Cash dividends of $ 0.16 per share
−Removed: Acquired 970,109 shares for treasury stock
+Added: Acquired 897,939 shares of treasury stock
Issued shares on vesting of restricted stock units
5 unchanged sentences
Cash dividends of $ 0.16 per share
−Removed: Acquired 897,939 shares for treasury stock
+Added: Acquired 1,352,313 shares of treasury stock
Issued shares on vesting of restricted stock units
33 unchanged sentences
We do not require collateral.
−Removed: The allowance for credit losses is based on management's estimates of the collectability of our accounts receivable after analyzing historical credit losses, customer concentrations, customer creditworthiness, current economic trends, specific customer collection issues, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual terms of our receivables.
−Removed: Uncollectible trade receivables are charged against the allowance for credit losses when all reasonable efforts to collect the amounts due have been exhausted.
Our net sales to significant customers as a percentage of total net sales were as follows:
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
Toyota Motor Corporation
38 unchanged sentences
Intangible assets (excluding indefinite-lived intangible assets) consist primarily of technology, customer lists and relationships, patents, and trade names.
−Removed: These assets are recorded at cost and usually amortized on a straight-line basis over their estimated lives.
+Added: These assets are recorded at cost and are usually amortized on a straight-line basis over their estimated lives.
We assess useful lives based on the period over which the asset is expected to contribute to cash flows.
7 unchanged sentences
and 5) recognize revenue when (or as) the entity satisfies a performance obligation.
−Removed: Our revenue reserves contain uncertainties because they require management to make assumptions and to apply judgment to estimate the value of future credits to customers for product returns, price adjustments, and stock rotation adjustments.
−Removed: We base these estimates on the most likely value method considering all reasonably available information, including our historical experience and current expectations, and are reflected in the transaction price when sales are recorded.
CTS CORPORATION 41
23 unchanged sentences
We estimate the fair value of our cash, cash equivalents, accounts receivable and accounts payable at cost due to the short-term nature of these instruments.
−Removed: Please refer to Note 13, "Debt," and Note 14, "Accumulated Other Comprehensive (Loss) Income," for information on the method of determining fair value for our debt and financial derivatives, respectively.
+Added: Please refer to Note 13, "Debt," and Note 15, "Accumulated Other Comprehensive Income (Loss) ," for information on the method of determining fair value for our debt and financial derivatives, respectively.
Stock-Based Compensation:
1 unchanged sentence
The grant date fair values of our service-based and performance-based RSUs are the closing price of our common stock on the date of grant.
−Removed: The grant date fair value of our market-based RSUs is determined by using a simulation, or Monte Carlo, approach.
−Removed: Under this approach, stock returns from a comparative group of companies are simulated over the performance period, considering both stock price volatility and the correlation of returns.
−Removed: The simulated results are then used to estimate the future payout based on the performance and payout relationship established by the conditions of the award.
−Removed: The future payout is discounted to the measurement date using the risk-free interest rate.
Our RSU awards primarily have a graded vesting schedule.
4 unchanged sentences
See Note 17, "Stock-Based Compensation," for further information.
+Added: Earnings Per Share:
+Added: Basic earnings per share excludes any dilution and is computed by dividing net earnings available to common shareholders by the weighted-average number of common shares outstanding for the period.
CTS CORPORATION 42
−Removed: Earnings (Loss) Per Share:
−Removed: Basic earnings (loss) per share excludes any dilution and is computed by dividing net earnings (loss) available to common shareholders by the weighted-average number of common shares outstanding for the period.
Diluted earnings per share is calculated by dividing net earnings by the weighted average shares outstanding assuming dilution.
2 unchanged sentences
If the common stock equivalents have an anti-dilutive effect, they are excluded from the computation of diluted earnings per share.
−Removed: If there is a net loss for the period, then basic earnings (loss) per share equals diluted earnings (loss) per share.
+Added: If there is a net loss for the period, then basic earnings per share equals diluted earnings per share.
Our antidilutive securities consist of the following:
5 unchanged sentences
dollars using the U.S.
−Removed: dollar as the functional currency with all remeasurement adjustments included in the determination of net earnings (loss).
−Removed: Foreign currency losses recorded in the Consolidated Statements of Earnings includes the following:
+Added: dollar as the functional currency with all remeasurement adjustments included in the determination of net earnings.
+Added: Foreign currency gains / losses recorded in the Consolidated Statements of Earnings includes the following:
Years Ended December 31,
−Removed: Foreign currency losses
+Added: Foreign currency gain / (loss)
The assets and liabilities of our non-U.S.
dollar functional subsidiaries are translated into U.S.
−Removed: dollars at the current exchange rate at period end, with the resulting translation adjustments made directly to the "accumulated other comprehensive (loss) income" component of shareholders' equity.
+Added: dollars at the current exchange rate at period end, with the resulting translation adjustments made directly to the "accumulated other comprehensive income (loss)" component of shareholders' equity.
Our Consolidated Statements of Earnings accounts are translated at the average rates during the period.
3 unchanged sentences
When applicable, we classify sales taxes on a net basis in our consolidated financial statements.
+Added: Immaterial Correction of Prior Period Errors
+Added: As reported in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025, the Company identified immaterial prior period errors in the consolidated financial statements related to the acquisition of SyQwest, LLC (“SyQwest”) as well as the foreign currency impact on certain long-term debt payments.
+Added: The errors related to the SyQwest acquisition were due to errors with the calculation of revenue and cost of goods sold both prior to and subsequent to the acquisition date of July 29, 2024.
+Added: The Company assessed the materiality of this change on prior period consolidated financial statements in accordance with SEC Staff Accounting Bulletin No.
+Added: 99, “Materiality” (ASC Topic 250, Accounting Changes and Error Corrections).
+Added: Based on this assessment, the Company concluded that these error corrections were material in the first quarter of 2025, but were not material to any previously presented consolidated financial statements.
+Added: Accordingly, the Company corrected the previously reported immaterial errors for the year ended December 31, 2024 in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025.
+Added: The financial reporting periods affected by this error include the Company’s previously reported audited consolidated financial statements for the fiscal year ended December 31, 2024 and the Company’s previously reported interim unaudited consolidated financial statements for the three and nine months ended September 30, 2024.
+Added: The Company is presenting the corrected 2024 amounts in this Annual Report on Form 10-K on a year-to-date basis.
+Added: A summary of the immaterial corrections to the Company’s previously reported audited and unaudited consolidated financial statements follows.
+Added: CTS CORPORATION 43
+Added: Corrected Consolidated Statement of Earnings for the Year Ended December 31, 2024 (in thousands):
+Added: December 31, 2024
+Added: December 31, 2024
+Added: Previously Reported
+Added: Cost of goods sold
+Added: Operating earnings
+Added: Other income (expense):
+Added: Other income (expense), net
+Added: Total other expense, net
+Added: Earnings before income taxes
+Added: Earnings per share:
+Added: Basic weighted – average common shares outstanding:
+Added: Effect of dilutive securities
+Added: Diluted weighted – average common shares outstanding:
+Added: Corrected Consolidated Balance Sheet as of December 31, 2024 (in thousands):
+Added: December 31, 2024
+Added: December 31, 2024
+Added: Previously Reported
+Added: Current Assets
+Added: Inventories, net
+Added: Other current assets
+Added: Total current assets
+Added: Total other assets
+Added: LIABILITIES AND SHAREHOLDERS’ EQUITY
+Added: Current Liabilities
+Added: Accrued expenses and other liabilities
+Added: Total current liabilities
+Added: Long-term debt
+Added: Total Liabilities
+Added: Shareholders’ Equity
+Added: Retained earnings
+Added: Total shareholders’ equity before treasury stock
+Added: Total shareholders’ equity
+Added: Total Liabilities and Shareholders’ Equity
+Added: CTS CORPORATION 44
+Added: Corrected Consolidated Statement of Cash Flows for the Year Ended December 31, 2024 (in thousands):
+Added: December 31, 2024
+Added: December 31, 2024
+Added: Previously Reported
+Added: CASH FLOWS FROM OPERATING ACTIVITIES:
+Added: Changes in assets and liabilities, net of acquisitions:
+Added: Accrued expenses and other liabilities
+Added: Net cash provided by operating activities
+Added: CASH FLOWS FROM FINANCING ACTIVITIES:
+Added: Payments of long-term debt
+Added: Net cash (used in) provided by financing activities
+Added: Corrected Fair Value of SyQwest Assets Acquired and Liabilities Assumed:
+Added: Fair Values at
+Added: July 29, 2024
+Added: Accounts receivable
+Added: Other current assets
+Added: Property, plant and equipment
+Added: Intangible assets
+Added: Fair value of assets acquired
+Added: Less fair value of liabilities acquired
+Added: Purchase price
+Added: During the fourth quarter of 2025, the Company identified additional immaterial prior period errors related to the acquisition of SyQwest.
+Added: The errors related to the calculation of revenue and cost of goods sold that originated prior to the acquisition date of July 29, 2024 and continued through 2025.
+Added: The Company assessed the materiality of this change on prior period consolidated financial statements in accordance with SEC Staff Accounting Bulletin No.
+Added: 99, “Materiality” (ASC Topic 250, Accounting Changes and Error Corrections).
+Added: Based on this assessment, the Company concluded that these error corrections are not material to the current or previously presented consolidated financial statements.
+Added: Accordingly, the Company corrected the immaterial errors during the period ending December 31, 2025 impacting Revenue, Cost of goods sold, Other income (expense) and Goodwill resulting in decreased earnings before taxes of $ 893 .
+Added: The correction includes a $ 2,194 adjustment to Goodwill related to errors originating prior to the acquisition date.
Accounting Pronouncements Recently Adopted
−Removed: 2023-07, "Segment Reporting (Topic 280):
−Removed: Improvements to Reportable Segment Disclosure"
−Removed: In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):
−Removed: Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments' significant expenses and other segment items on an interim and annual basis.
−Removed: Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as existing segment disclosures and reconciliation required under ASC 280 on an interim and annual basis.
−Removed: ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for the interim periods beginning after December 15, 2024, with early adoption permitted.
−Removed: We adopted the guidance in our 2024 annual reporting.
−Removed: See Note 20, "Segment Information," for further information.
−Removed: Recently issued accounting pronouncements not yet adopted
2023-09, “ Income Taxes (Topic 740):
3 unchanged sentences
ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.
−Removed: The Company is currently evaluating the impact of adopting ASU 2023-09.
−Removed: We will adopt the guidance when it becomes effective on a prospective basis.
+Added: The adoption of this ASU impacts our income tax disclosures, but has no impact on our results of operations, cash flows, or financial condition.
+Added: We adopted the guidance in our 2025 annual reporting on a retrospective basis.
+Added: See Note 19, "Income Taxes," for further information.
+Added: CTS CORPORATION 45
+Added: Recently issued accounting pronouncements not yet adopted
2024-03, “ Income Statement (Subtopic 220-40):
Disaggregation of Income Statement Expenses”
−Removed: CTS CORPORATION 41
In November 2024, the FASB issued ASU 2024-03, Income Statement (Subtopic 220-40):
1 unchanged sentence
ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted.
+Added: The standard can be applied either prospectively or retrospectively.
The Company is currently evaluating the impact of adopting ASU 2024-03.
−Removed: We will adopt the guidance when it becomes effective on a prospective basis.
+Added: 2025-05, “Financial Instruments—Credit Losses (Topic 326):
+Added: Measurement of Credit Losses for Accounts Receivable and Contract Assets”
+Added: In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):
+Added: Measurement of Credit Losses for Accounts Receivable and Contract Assets, which allows for a practical expedient election to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset in the development of a reasonable and supportable forecast as part of estimating expected credit losses.
+Added: ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted.
+Added: The Company is currently evaluating the impact of electing the practical expedient under ASU 2025-05.
+Added: 2025-06, “ Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):
+Added: Targeted Improvements to the Accounting for Internal-Use Software”
+Added: In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):
+Added: Targeted Improvements to the Accounting for Internal-Use Software, which is intended to improve the operability and application of guidance related to capitalized software development costs.
+Added: ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, with early adoption permitted.
+Added: The Company is currently evaluating the impact of adopting ASU 2025-06.
NOTE 2 – Revenue Recognition
8 unchanged sentences
Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.
−Removed: The majority of our revenue is derived from contracts for sales of commercial products, which generally contain a single performance obligation.
+Added: Our revenue reserves contain uncertainties because they require management to make assumptions and to apply judgment to estimate the value of future credits to customers for product returns, price adjustments, and stock rotation adjustments.
+Added: We base these estimates on the most likely value method considering all reasonably available information, including our historical experience and current expectations, and are reflected in the transaction price when sales are recorded.
+Added: Approximately 96 % of our revenue is derived from contracts for sales of commercial products, which generally contain a single performance obligation.
We generally recognize revenue at a point in time on the delivery date based on the shipping terms stipulated in the contract.
3 unchanged sentences
The accounting for these contracts involves applying significant judgment with respect to estimating total revenues, costs and profit for each performance obligation.
−Removed: We generally estimate revenue for these contracts using the costs incurred by the Company as we have determined it is most representative of the Company's cumulative efforts relative to the total expected efforts to satisfy the performance obligations.
−Removed: See Note 11, "Contingencies" for information about our product warranties.
+Added: We generally estimate revenue for these contracts using the costs incurred by the Company as we have determined that this method is the most representative of the Company's cumulative efforts relative to the total expected efforts to satisfy the performance obligations.
+Added: Approximately 4 % of the Company's revenue is recognized over time.
+Added: CTS CORPORATION 46
+Added: At December 31, 2025, we estimated that $ 8,628 in revenue is expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period for contracts greater than one year.
+Added: We expect to recognize 6,072 and 2,556 of the Company's unsatisfied (or partially unsatisfied) performance obligations as revenue in 2026 and 2027 , respectively.
+Added: See Note 11, "Commitments and Contingencies" for information about our product warranties.
Contract Assets and Liabilities
Contract assets and liabilities included in our Condensed Consolidated Balance Sheets are as follows:
+Added: As of December 31,
Contract Assets
1 unchanged sentence
Total Contract Assets
−Removed: There were no contract liabilities as of December 31, 2024 and 2023.
−Removed: During the year ended December 31, 2024, our acquisition of SyQwest, LLC.
−Removed: (“SyQwest”) increased our contract assets by $ 4,941 as compared to December 31, 2023.
−Removed: Further information regarding this acquisition, including the assets acquired and liabilities assumed is included in Note 3, “Business Acquisitions.”
−Removed: CTS CORPORATION 42
+Added: Contract Liabilities
+Added: Customer advance payments included in Accrued expenses and other liabilities
+Added: Total Contract Liabilities
+Added: The Company recognized $ 478 of revenue that was included in the contract liability balance at December 31, 2024.
Disaggregated Revenue
2 unchanged sentences
Aerospace & Defense
−Removed: The end market sales for 2022 were adjusted by immaterial amounts to align the classification of certain customers in connection with our acquisitions during that year with our enterprise-level end market information.
NOTE 3 - Business Acquisitions
−Removed: TEWA Temperature Sensors SP.
−Removed: On February 28, 2022, we acquired 100 % of the outstanding shares of TEWA Temperature Sensors SP.
−Removed: TEWA is a designer and manufacturer of high-quality temperature sensors.
−Removed: TEWA has complementary capabilities with our existing temperature sensing platform, and the acquisition supports our end market diversification strategy and expands our presence in Europe.
−Removed: The final purchase price of $ 23,721 , net of cash acquired of $ 2,979 , has been allocated to the fair values of assets and liabilities acquired as of February 28, 2022.
−Removed: The purchase price was reduced by $ 794 for the final settlement of net working capital during the first quarter of 2023.
−Removed: The purchase accounting was completed in the first quarter of 2023.
−Removed: The following table summarizes the consideration paid, the fair values of the assets acquired, and the liabilities assumed as of the date of acquisition:
−Removed: Fair Values at
−Removed: February 28, 2022
−Removed: Accounts Receivable
−Removed: Other current assets
−Removed: Property, plant and equipment
−Removed: Intangible assets
−Removed: Fair value of assets acquired
−Removed: Less fair value of liabilities acquired
−Removed: Purchase price
−Removed: Goodwill represents value the Company expects to be created by combining the operations of the acquired business with the Company's operations, including the expansion of customer relationships, access to new customers, and potential cost savings and synergies.
−Removed: Goodwill related to the acquisition is expected to be deductible for tax purposes.
−Removed: The Company recorded a $ 1,180 step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation.
−Removed: The step-up was amortized as a non-cash charge to cost of goods sold as the acquired inventory was sold with all of it recognized in the twelve months ended December 31, 2022.
−Removed: The following table summarizes the carrying amounts and weighted average lives of the acquired intangible assets:
−Removed: CTS CORPORATION 43
−Removed: Carrying Value
−Removed: Customer lists/relationships
−Removed: Trademarks, tradenames, and other intangibles
−Removed: Supplemental pro forma disclosures are not included as the amounts are deemed to be immaterial.
−Removed: Ferroperm Piezoceramics A/S Acquisition
−Removed: On June 30, 2022, we acquired 100 % of the outstanding shares of Ferroperm Piezoceramics A/S (“Ferroperm”).
−Removed: Ferroperm specializes in the design and manufacture of high performance piezoceramic components for use in complex and demanding medical, industrial, and aerospace applications.
−Removed: Ferroperm has complementary capabilities with our existing medical diagnostics and imaging product lines.
−Removed: The acquisition supports our end market diversification strategy and expands our presence in European end markets.
−Removed: The final purchase price of $ 72,340 , net of cash acquired of $ 5,578 , was allocated to the fair values of assets and liabilities acquired as of June 30, 2022.
−Removed: The valuation of intangible assets and associated deferred tax liability was finalized in the first quarter of 2023.
−Removed: The following table summarizes the final consideration paid, the fair values of the assets acquired, and the liabilities assumed as of the date of acquisition:
−Removed: Fair Values at
−Removed: June 30, 2022
−Removed: Accounts Receivable
−Removed: Other current assets
−Removed: Property, plant and equipment
−Removed: Intangible assets
−Removed: Fair value of assets acquired
−Removed: Less fair value of liabilities acquired
−Removed: Purchase price
−Removed: Goodwill represents value the Company expects to be created by combining the operations of the acquired business with the Company's operations, including the expansion of customer relationships, access to new customers, and potential cost savings and synergies.
−Removed: Goodwill related to the acquisition is expected to be deductible for tax purposes.
−Removed: The Company recorded a $ 3,012 step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation.
−Removed: The step-up was amortized as a non-cash charge to cost of goods sold as the acquired inventory was sold with all of it recognized in the twelve months ended December 31, 2022.
−Removed: The following table summarizes the carrying amounts and weighted average lives of the acquired intangible assets:
−Removed: Customer lists/relationships
−Removed: Technology and other intangibles
−Removed: Supplemental pro forma disclosures are not included as the amounts are deemed to be immaterial.
Maglab AG Acquisition
1 unchanged sentence
Maglab has deep expertise in magnetic system design and current measurement solutions for use in e-mobility, industrial automation, and renewable energy applications.
−Removed: CTS CORPORATION 44
Maglab's domain expertise coupled with CTS’ commercial, technical and operational capabilities position us to advance our status as a recognized innovator in current sensing.
1 unchanged sentence
The purchase price was increased by $ 3 for the final settlement of net working capital during the second quarter of 2023.
+Added: CTS CORPORATION 47
The following table summarizes the final consideration paid, the fair values of the assets acquired and the liabilities assumed as of the date of acquisition:
18 unchanged sentences
All contingent consideration is payable in cash and is based on success factors related to the integration process as well as upon the achievement of annual revenue and customer order targets through the fiscal year ending December 31, 2025.
−Removed: The Company recorded $ 3,564 as the acquisition date fair value of the contingent consideration based on the estimate of the probability of achieving the performance targ ets.
+Added: The Company recorded $ 3,564 as the acquisition date fair value of the contingent consideration based on the estimate of the probability of achieving the performance targets.
This amount was also reflected as an addition to the purchase price.
3 unchanged sentences
SyQwest, LLC Acquisition
−Removed: On July 29, 2024, we acquired 100 % of the outstanding membership interests of SyQwest, LLC, a leading designer and manufacturer of a broad set of sonar and acoustic sensing solutions primarily for naval applications.
+Added: On July 29, 2024, we acquired 100 % of the outstanding membership interests of SyQwest, a leading designer and manufacturer of a broad set of sonar and acoustic sensing solutions primarily for naval applications.
The SyQwest acquisition is expected to strengthen our strategy and scale in the defense end market.
1 unchanged sentence
The following tables summarize the purchase price, the fair values of the assets acquired and the liabilities assumed as of the date of the acquisition of SyQwest:
−Removed: CTS CORPORATION 45
Consideration Paid
2 unchanged sentences
Purchase price
+Added: CTS CORPORATION 48
Fair Values at
18 unchanged sentences
The contingent consideration has a maximum payout of $ 15,000 .
+Added: See Note 18, "Fair Value Measurements," for more information on contingent consideration .
Supplemental pro forma disclosures are not included as the amounts are deemed to be immaterial.
38 unchanged sentences
locations and the post-retirement life insurance plan were December 31, 2025 and 2024.
−Removed: In February 2020, our Board of Directors authorized management to explore termination of the U.S.-based pension plan ("Plan"), subject to certain conditions.
−Removed: On June 1, 2020, we entered into the fifth amendment to the Plan whereby we set an effective termination date for the Plan of July 31, 2020.
−Removed: In February 2021, we received a determination letter from the Internal Revenue Service that allowed us to proceed with the termination process for the Plan.
−Removed: During the second quarter of 2021, the Company offered the option of receiving a lump sum payment to eligible participants with vested qualified Plan benefits in lieu of receiving monthly annuity payments.
−Removed: Approximately 365 participants elected to receive the settlement, and lump sum payments of approximately $ 35,594 were made from Plan assets to these participants in June 2021.
−Removed: As required under U.S.
−Removed: GAAP, the Company recognizes a settlement gain or loss when the aggregate amount of lump-sum distributions to participants equals or exceeds the sum of the service and interest cost components of the net periodic pension cost.
−Removed: The amount of settlement gain or loss recognized is the pro rata amount of the existing unrealized gain or loss immediately prior to the settlement.
CTS CORPORATION 50
−Removed: general, both the projected benefit obligation and fair value of plan assets are required to be remeasured in order to determine the settlement gain or loss.
−Removed: Upon the partial settlement of the pension liability due to the lump sum offering in the second quarter of 2021, the Company recognized a non-cash and non-operating settlement charge of $ 20,063 related to pension losses, reclassified from accumulated other comprehensive loss to other (income) expense in the Company's Condensed Consolidated Statements of Earnings.
−Removed: On July 29, 2021, the Plan purchased a group annuity contract that transferred our benefit obligations for approximately 2,700 CTS participants and beneficiaries in the United States (“Transferred Participants”).
−Removed: As part of the purchase of the group annuity contract, Plan benefit obligations and related annuity administration services for Transferred Participants were irrevocably assumed and guaranteed by the insurance company effective as of August 3, 2021.
−Removed: There will be no change to pension benefits for Transferred Participants.
−Removed: The purchase of the group annuity contract was fully funded directly by Plan assets.
−Removed: As a result of the final settlement of the pension liability with the purchase of annuities, we reclassified the remaining related unrecognized pension losses of $ 106,206 that were previously recorded in accumulated other comprehensive income (loss) to the Consolidated Statements of Earnings in the third quarter of 2021.
−Removed: In January 2022, we transferred approximately $ 17,500 of funds from Plan assets to a qualified replacement plan ("QRP") managed by the Company.
−Removed: The QRP requires that these assets be used to fund future annual Company contributions to our U.S.
−Removed: 401(k) program.
−Removed: The remaining Plan assets were transferred to the Company in the third quarter of 2022 as part of the final termination process.
−Removed: As a result, approximately $ 34,016 was transferred to the Company, which resulted in $ 6,803 of excise tax being recorded in Other Expense in the Company's Condensed Consolidated Statements of Earnings.
−Removed: As a result of the termination of the Plan and final reversion activities in 2022, no assets remained in the Plan as of December 31, 2022.
The following table provides a reconciliation of the benefit obligation, plan assets, and the funded status of the pension plans for U.S.
16 unchanged sentences
Funded status (plan assets less projected benefit obligations)
−Removed: CTS CORPORATION 48
The following table provides a reconciliation of the benefit obligation, plan assets, and the funded status of the post-retirement life insurance plan at those measurement dates.
19 unchanged sentences
The components of the accrued cost of the post-retirement life insurance plan are classified in the following lines in the Consolidated Balance Sheets at December 31:
+Added: CTS CORPORATION 51
Post-Retirement
3 unchanged sentences
Total accrued cost
−Removed: We have also recorded the following amounts to accumulated other comprehensive (loss) income for the U.S.
+Added: We have also recorded the following amounts to accumulated other comprehensive income (loss) for the U.S.
pension plans, net of tax:
5 unchanged sentences
Amortization of retirement benefits, net of tax
−Removed: Net actuarial (loss)
+Added: Net actuarial gain (loss)
Foreign exchange impact
Balance at December 31, 2025
−Removed: CTS CORPORATION 49
−Removed: We have recorded the following amounts to accumulated other comprehensive (loss) income for the post-retirement life insurance plan, net of tax:
+Added: We have recorded the following amounts to accumulated other comprehensive income (loss) for the post-retirement life insurance plan, net of tax:
Balance at January 1, 2024
Amortization of retirement benefits, net of tax
−Removed: Net actuarial loss
+Added: Net actuarial gain (loss)
Balance at January 1, 2025
Amortization of retirement benefits, net of tax
−Removed: Net actuarial gain
+Added: Net actuarial gain (loss)
Balance at December 31, 2025
The accumulated actuarial gains and losses included in other comprehensive earnings are amortized in the following manner:
−Removed: The component of unamortized net gains or losses related to our qualified pension plan is amortized based on the future life expectancy of the plan participants (estimated to be approximately 10 years at December 31, 2024), because substantially all of the participants in those plans are former employees who are now retired.
−Removed: The component of unamortized net gains or losses related to our post-retirement life insurance plan is amortized based on the estimated remaining future service period of the plan participants (estimated to be a pproximately three ye ars at December 31, 2024 ).
−Removed: The Company uses a market-related approach to value plan assets, reflecting changes in the fair value of plan assets over a five-year period.
−Removed: The variance resulting from the difference between the expected and actual return on plan assets is included in the amortization calculation upon reflection in the market-related value of plan assets.
+Added: The component of unamortized net gains or losses related to our non-qualified pension plan is amortized based on the future life expectancy of the plan participants (estimated to be approximately nine years at December 31, 2025), because all of the participants in those plans are former employees who are now retired.
+Added: The component of unamortized net gains or losses related to our post-retirement life insurance plan is amortized based on the future life expectancy of the plan participants (estimated to be a pproximately six years at December 31, 2025), because substantially all of the participants in those plans are former employees who are now retired.
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for those pension plans with accumulated benefit obligation in excess of the fair value of plan assets is shown below:
3 unchanged sentences
Fair value of plan assets
+Added: CTS CORPORATION 52
Net pension expense includes the following components:
14 unchanged sentences
Net post-retirement expense includes the following components:
−Removed: CTS CORPORATION 50
Post-Retirement
16 unchanged sentences
plan during 2026.
+Added: CTS CORPORATION 53
Expected benefit payments under the Pension Plans and the postretirement benefit plan, for the five years subsequent to 2025 (i.e., 2026-2030, inclusive), and in the aggregate for the five years thereafter (i.e., 2031-2035, inclusive) are as follows:
3 unchanged sentences
Contributions and costs for such plans were generally determined as a percentage of the covered employee's annual salary.
−Removed: During 2022, our investment committee, in consultation with the plan’s advisors, determined the 401(k) plan’s position in CTS common stock would be liquidated and the resulting funds would be reinvested in other investments.
−Removed: That process was completed in the fourth quarter of 2022.
Effective January 1, 2022, in connection with the U.S.
5 unchanged sentences
401(k) and other defined contribution plan expense
−Removed: CTS CORPORATION 51
NOTE 8 — Goodwill and Other Intangible Assets
7 unchanged sentences
Amortization expense for the year ended December 31, 2025
+Added: CTS CORPORATION 54
As of December 31, 2024
5 unchanged sentences
Amortization expense for the year ended December 31, 2023
−Removed: The changes in the gross carrying amounts of intangible assets were primarily due to a business acquisition and purchase accounting activity as discussed in Note 3, "Business Acquisitions," as well as foreign exchange impacts.
+Added: The changes in the gross carrying amounts of intangible assets were primarily due to foreign exchange impacts.
The estimated amortization expense for the next five years and thereafter is as follows:
5 unchanged sentences
Goodwill as of December 31, 2024
−Removed: Increase due to acquisitions
Foreign exchange impact
+Added: Increase due to prior period adjustment
Goodwill as of December 31, 2025
Refer to Note 3, "Business Acquisitions," for further information on the increase in the net carrying amount of goodwill due to acquisitions.
−Removed: CTS CORPORATION 52
+Added: Refer to Note 1, "Summary of Significant Accounting Policies," for further information on the prior period adjustment to Goodwill.
We performed our annual impairment test as of October 1, 2025, our measurement date, and concluded that there was no impairment in any of our reporting units.
7 unchanged sentences
Restructuring charges
−Removed: Closure and Consolidation of Juarez Manufacturing Facility and Operations
−Removed: During the first quarter of 2023, we announced the closure of our Juarez manufacturing facility.
−Removed: As a part of this activity, operations from the Juarez plant were consolidated into our expanded Matamoros facility (collectively, the "Matamoros Consolidation").
−Removed: The Matamoros Consolidation was substantially complete as of December 31, 2024.
−Removed: During the year ended December 31, 2024 , we incurred $ 1,820 in restructuring costs associated with the Matamoros Consolidation, comprised of $ 270 , $ 1,180 , and $ 370 in workforce reduction, building and equipment relocation costs and other charges, respectively.
−Removed: The restructuring liability associated with the Matamoros Consolidation was $ 139 and $ 194 as of December 31, 2024 and 2023, respectively.
−Removed: In addition to these charges, we have incurred an additional $ 1,268 of other costs relating to the Matamoros Consolidation that would not qualify as restructuring charges, but represent duplicative expenses arising from the transition process, such as excess rent, utilities, personnel-related expenses and other costs.
−Removed: These other expenses totaled $ 697 and $ 571 during the twelve months ended December 31, 2024 and 2023, respectively.
−Removed: Other Restructuring Activities
−Removed: During the year ended December 31, 2024 , we incurred total other restructuring charges of $ 2,877 , comprised of $ 2,413 , $ 286 and $ 178 in workforce reduction, building and equipment relocation costs, and asset impairment and other charges, respectively.
+Added: CTS CORPORATION 55
+Added: During the year ended December 31, 2025 , we incurred total restructuring charges of $ 1,396 , comprised of $ 1,291 , $ 68 and $ 37 in workforce reduction, building and equipment relocation costs, and asset impairment and other charges, respectively.
The remaining restructuring liability associated with these actions was $ 192 and $ 659 at December 31, 2025 and December 31, 2024, respectively.
+Added: During the first quarter of 2023, we announced the closure of our Juarez manufacturing facility.
+Added: As a part of this activity, operations
+Added: from the Juarez plant were consolidated into our expanded Matamoros facility (collectively, the "Matamoros Consolidation").
+Added: Matamoros Consolidation was substantially complete as of December 31, 2024.
+Added: As a result, our restructuring charges decreased significantly during the year ended December 31, 2025.
The following table displays the restructuring liability activity for all plans for the year ended December 31, 2025:
1 unchanged sentence
Restructuring charges
−Removed: Other activities (1)
Restructuring liability at December 31, 2025
−Removed: (1) Other charges include the effects of currency translation, non-cash asset write-downs, travel, legal and other charges.
The total liability of $ 192 is included in accrued expenses and other liabilities at December 31, 2025 .
−Removed: CTS CORPORATION 53
NOTE 10 — Accrued Expenses and Other Liabilities
10 unchanged sentences
Total accrued expenses and other liabilities
−Removed: NOTE 11 — Contingencies
+Added: NOTE 11 — Commitments and Contingencies
Certain processes in the manufacture of our current and past products may create by-products classified as hazardous waste.
13 unchanged sentences
(1) Other activity includes currency translation adjustments not recorded through remediation expense.
+Added: CTS CORPORATION 56
The Company operates under and in accordance with a federal consent decree, dated March 7, 2017, with the EPA for the Asheville Site.
On February 8, 2023, the Company received a letter from the EPA (the “EPA Letter”) seeking reimbursement of its past response costs and interest thereon relating to any release or threatened release of hazardous substances at the Asheville Site in the aggregate amount of $ 9,955 from the three potentially responsible parties associated with the Asheville Site, including the Company.
−Removed: The Company expects its potential exposure to be between $ 1,900 and $ 9,955 .
−Removed: We have determined that no point within this range is more likely than another and therefore we have recorded a loss estimate of $ 1,900 as of December 31, 2024 in the Consolidated Balance Sheets.
+Added: Subsequently, the Department of Justice (the "DOJ") re-evaluated the EPA's past response costs and interest thereon and adjusted the amount of the costs to $ 8,288 .
+Added: On October 3, 2025, the Company presented a settlement offer as part of pre-litigation mediation and the mediation is ongoing.
+Added: There can be no assurance that the matter will settle in mediation.
+Added: The Company has updated its estimate of potential exposure to be between $ 6,575 and $ 7,169 .
+Added: We have determined that no point within this range is more likely than another and, therefore, we have recorded a loss estimate of $ 6,575 as of December 31, 2025.
Unrelated to the environmental claims described above, certain other legal claims are pending against us with respect to matters arising out of the ordinary conduct of our business.
2 unchanged sentences
We accrue for specific warranty claims if we believe that the facts of a specific claim make it probable that a liability in excess of our historical experience has been incurred and provide disclosures for specific claims whenever it is reasonably possible that a material loss may be incurred which cannot be estimated.
−Removed: CTS CORPORATION 54
We cannot provide assurance that the ultimate disposition of environmental, legal, and product warranty claims will not materially exceed the amount of our accrued losses and adversely impact our consolidated financial position, results of operations, or cash flows.
20 unchanged sentences
Leased assets obtained in exchange for new operating lease obligations
+Added: CTS CORPORATION 57
Supplemental balance sheet information related to leases was as follows:
5 unchanged sentences
Weighted-average discount rate
−Removed: CTS CORPORATION 55
Remaining maturity of our existing lease liabilities as of December 31, 2025 was as follows:
10 unchanged sentences
Weighted-average interest rate
−Removed: On December 15, 2021, we entered into a second amended and restated five-year credit agreement with a group of banks (the “Revolving Credit Facility”) to (i) increase the total credit facility to $ 400,000 which may be increased by $ 200,000 at the request of the Company, subject to the administrative agent's approval, (ii) extend the maturity of the Revolving Credit Facility from February 12, 2024 to December 15, 2026 , (iii) replace LIBOR with SOFR as the primary reference rate used to calculate interest on the loans under the Revolving Credit Facility, (iv) increase available sublimits for letters of credit, and swingline loans as well as providing for additional alternative currency borrowing capabilities, and (v) modify the financial and non-financial covenants to provide the Company additional flexibility.
−Removed: This new unsecured credit facility replaced the prior $ 300,000 unsecured credit facility, which would have expired February 12, 2024.
+Added: On November 24, 2025, we entered into a new five-year revolving credit agreement (the “Revolving Credit Facility”) with a group of banks for a total credit facility availability of $ 300,000 which may be increased by up to $ 125,000 , subject to the administrative agent's approval.
+Added: The new Revolving Credit Facility matures on November 24, 2030 and modified the financial and non-financial covenants to provide the Company additional flexibility.
+Added: The new Revolving Credit Facility is unsecured and replaced the prior $ 400,000 revolving credit facility, which would have expired on December 15, 2026.
Borrowings in U.S.
3 unchanged sentences
The contractual rate of these arrangements ranges from 1.49 % to 2.45 %.
−Removed: Refer to Note 14, "Derivatives," for further discussion on the impact of interest rate swaps.
−Removed: The Revolving Credit Facility includes a swing line sublimit of $ 20,000 and a letter of credit sublimit of $ 20,000 .
+Added: The Revolving Credit Facility includes a swing line sublimit of $ 20,000 , a letter of credit sublimit of $ 20,000 and an alternative currency sublimit of $ 150,000 .
We also pay a quarterly commitment fee on the unused portion of the Revolving Credit Facility.
22 unchanged sentences
We manage our credit risk by entering into derivative contracts with only highly rated financial institutions and by using netting agreements.
−Removed: The effective portion of derivative gains and losses are recorded in accumulated other comprehensive (loss) income until the hedged transaction affects earnings upon settlement, at which time they are reclassified to costs of goods sold or net sales.
−Removed: If it is probable that an anticipated hedged transaction will not occur by the end of the originally specified time period, we reclassify the gains or losses related to that hedge from accumulated other comprehensive (loss) income to other (expense) income, net.
+Added: The effective portion of derivative gains and losses are recorded in accumulated other comprehensive income (loss) until the hedged transaction affects earnings upon settlement, at which time they are reclassified to costs of goods sold or net sales.
+Added: If it is probable that an anticipated hedged transaction will not occur by the end of the originally specified time period, we reclassify the gains or losses related to that hedge from accumulated other comprehensive income (loss) to other income (expense), net.
We assess hedge effectiveness qualitatively by verifying that the critical terms of the hedging instrument and the forecasted transaction continue to match, and that there have been no adverse developments that have increased the risk that the counterparty will default.
4 unchanged sentences
We continue to monitor the Company’s overall currency exposure and may elect to add cash flow hedges in the future.
−Removed: At December 31, 2024 , we had a net unrealized loss of $ 3,232 in accumulated other comprehensive (loss) income, of which $ 2,848 is expected to be reclassified to earnings within the next 12 months.
+Added: At December 31, 2025 , we had a net unrealized gain of $ 5,038 in accumulated other comprehensive income (loss), of which $ 4,106 is expected to be reclassified to earnings within the next 12 months.
The notional amount of foreign currency forward contracts outstanding was $ 62,570 at December 31, 2025.
3 unchanged sentences
The difference to be paid or received under the terms of the swap agreements will be recognized as an adjustment to interest expense when settled.
−Removed: These swaps are treated as cash flow hedges and consequently, the changes in fair value are recorded in other comprehensive (loss) income.
−Removed: The estimated net amount of the existing gains that are reported in accumulated other comprehensive (loss) income that are expected to be reclassified into earnings within the next twelve months is approximately $ 792 .
+Added: These swaps are treated as cash flow hedges and consequently, the changes in fair value are recorded in other comprehensive earnings (loss).
+Added: The estimated net amount of the existing gains that are reported in accumulated other comprehensive income (loss) that are expected to be reclassified into earnings within the next twelve months is approximately $ 455 .
Cross-Currency Swap
2 unchanged sentences
Upon completion of the Ferroperm acquisition on June 30, 2022, the transaction was designated as a net investment hedge for accounting purposes and will mature on June 30, 2027 .
−Removed: Accordingly, any gains or losses on this derivative instrument will be included in the foreign currency translation component of other comprehensive income until the net investment is sold, diluted or liquidated.
+Added: Accordingly, any gains or losses on this derivative instrument will be included in the foreign currency translation component of other comprehensive income until the net investment is sold, diluted or liquida ted.
At December 31, 2025 , the variable rate debt associated with the cross-currency interest rate swap was $ 7,500 due to ongoing principle payments.
1 unchanged sentence
The assumptions used in measuring fair value of the cross-currency interest rate swap are considered Level 2 inputs, which are based upon the Krone to United States Dollar exchange rate market.
−Removed: At December 31, 2024 we had a net unrealized loss of $ 51 in accumulated other comprehensive (loss) income.
−Removed: CTS CORPORATION 57
−Removed: Prior to designation as a net investment hedge, a gain of $ 111 was recorded in other expense within the Condensed Consolidated Statements of Earnings during the second quarter of 2022.
+Added: At December 31, 2025 we had a net unrealized loss of $ 1,719 in accumulated other comprehensive income (loss).
The location and fair values of derivative instruments designated as hedging instruments in the Consolidated Balance Sheets as of December 31, 2025, are shown in the following table:
+Added: CTS CORPORATION 59
As of December 31,
13 unchanged sentences
Total amounts reclassified from AOCI to earnings
−Removed: Total derivative gains on foreign exchange contracts
+Added: Total derivative (losses) gains on foreign exchange contracts
recognized in earnings
4 unchanged sentences
Total gains on derivatives
−Removed: Derivative Contracts Not Designated as Hedges
−Removed: In the second quarter of 2022, the Company used derivative contracts to manage foreign currency exchange risk related to funds to be used for the purchase price of the Ferroperm acquisition.
−Removed: These contracts were not designated as hedges and therefore changes in the fair values of these instruments were recognized directly in earnings.
−Removed: All contracts were settled in conjunction with the closing of the Ferroperm acquisition.
−Removed: As a result of these contracts, the Company recognized a $ 1,776 loss in other expense in the Consolidated Statements of Earnings in 2022.
−Removed: NOTE 15 — Accumulated Other Comprehensive (Loss) Income
−Removed: Shareholders’ equity includes certain items classified as accumulated other comprehensive (loss) income (“AOCI”) in the Consolidated Balance Sheets, including:
+Added: NOTE 15 — Accumulated Other Comprehensive Income (Loss)
+Added: Shareholders’ equity includes certain items classified as accumulated other comprehensive income (loss) (“AOCI”) in the Consolidated Balance Sheets, including:
• Unrealized gains (losses) on hedges relate to interest rate swaps to convert a portion of our revolving credit facility's outstanding balance from a variable rate of interest into a fixed rate and foreign currency forward contracts used to hedge our exposure to changes in exchange rates affecting certain revenues and costs denominated in foreign currencies.
4 unchanged sentences
Further information related to our pension obligations is included in Note 7, “Retirement Plans.”
−Removed: CTS CORPORATION 58
• Cumulative translation adjustment relates to our non-U.S.
2 unchanged sentences
dollars using a combination of historical, period-end, and average foreign exchange rates.
−Removed: This combination of rates creates the foreign currency translation adjustment component of other comprehensive income.
−Removed: The components of accumulated other comprehensive (loss) income for the year ended December 31, 2024 are as follows:
+Added: This combination of rates creates the foreign currency translation adjustment component of other comprehensive earnings (loss).
+Added: CTS CORPORATION 60
+Added: The components of accumulated other comprehensive income (loss) for the year ended December 31, 2025 are as follows:
Changes in fair market value of derivatives:
4 unchanged sentences
Income tax benefit (expense)
−Removed: Total accumulated other comprehensive (loss) income
−Removed: The components of accumulated other comprehensive (loss) income for the year ended December 31, 2023 are as follows:
+Added: Total accumulated other comprehensive income (loss)
+Added: The components of accumulated other comprehensive income (loss) for the year ended December 31, 2024 are as follows:
Changes in fair market value of derivatives:
1 unchanged sentence
Changes in unrealized pension cost:
−Removed: Income tax benefit
+Added: Income tax benefit (expense)
Cumulative translation adjustment:
Income tax benefit (expense)
−Removed: Total accumulated other comprehensive (loss) income
−Removed: CTS CORPORATION 59
+Added: Total accumulated other comprehensive income (loss)
NOTE 16 — Shareholders' Equity
10 unchanged sentences
Treasury stock
−Removed: On February 9, 2023, our Board of Directors approved a share repurchase program that authorized the Company to repurchase up to $ 50,000 of the Company’s common stock.
+Added: CTS CORPORATION 61
+Added: In February 2023, our Board of Directors approved a share repurchase program that authorized the Company to repurchase up to $ 50,000 of the Company’s common stock.
The repurchase program had no set expiration date and replaced the repurchase program approved by the Board of Directors on May 13, 2021.
1 unchanged sentence
The repurchase program could have been extended, modified, suspended or discontinued at any time.
−Removed: On February 2, 2024, our Board of Directors approved a new share repurchase program that authorized the Company to repurchase up to $ 100,000 of its common stock.
+Added: In February 2024, our Board of Directors approved a new share repurchase program that authorized the Company to repurchase up to $ 100,000 of its common stock.
The repurchase program has no set expiration date and superseded and replaced the repurchase program approved by the Board of Directors in February 2023.
1 unchanged sentence
The repurchase program may be extended, modified, suspended or discontinued at any time.
−Removed: During the year ended December 31, 2024 , 897,939 shares of common stock were repurchased for approximately $ 43,025 , across both share repurchase programs described above.
−Removed: As of December 31, 2024 approximately $ 61,422 was still available for future purchases under the February 2024 program.
+Added: In November 2025, our Board of Directors approved a new share repurchase program authorizing the Company to repurchase up to $ 100,000 of its common stock.
+Added: This program replaces the prior share repurchase program that was approved in February 2024.
+Added: The program has no set expiration date and authorizes repurchases from time to time in the open market (including, without limitation, the use of Rule 10b5-1 plans), or through privately negotiated transactions, and repurchases will depend on various factors, including our evaluation of general market and economic conditions, our financial condition and the trading price of our common stock.
+Added: The repurchase program may be extended, modified, suspended or discontinued at any time.
+Added: During the year ended December 31, 2025 , 1,352,313 shares of common stock were repurchased for approximately $ 56,859 , pursuant to the share repurchase programs described above.
+Added: As of December 31, 2025 approximately $ 90,367 was still available for future purchases under the November 2025 program.
As of 2023, we are subject to a 1% excise tax on stock repurchases under the United States Inflation Reduction Act of 2022, which we include in the cost of stock repurchases as a reduction of shareholders’ equity.
10 unchanged sentences
The 2018 Plan allows for grants of stock options, stock appreciation rights, restricted stock, RSUs, performance shares, performance units, and other stock awards subject to the terms of the 2018 Plan.
−Removed: CTS CORPORATION 60
The following table summarizes the compensation expense included in selling, general and administrative expenses in the Consolidated Statements of Earnings related to stock-based compensation plans:
4 unchanged sentences
Income tax benefit
+Added: CTS CORPORATION 62
The fair value of all equity awards that vested during the periods ended December 31, 2025, 2024 and 2023 were $ 7,269 , $ 7,599 and $ 8,282 , respectively.
7 unchanged sentences
Awards originally available to be granted
−Removed: Performance stock options outstanding
−Removed: Maximum potential RSU and cash settled
−Removed: awards outstanding
Maximum potential awards outstanding
8 unchanged sentences
The fair value of the RSUs is equivalent to the trading value of our common stock on the grant date.
−Removed: CTS CORPORATION 61
A summary of RSU activity for the year ended December 31, 2025 is presented below:
5 unchanged sentences
Intrinsic value of RSUs released
+Added: CTS CORPORATION 63
A summary of non-vested RSU activity for the year ended December 31, 2025 is presented below:
4 unchanged sentences
PRSUs are usually awarded in the range from zero percent to 200 % of a targeted number of shares .
−Removed: The award rate for the 2022-2024, 2023-2025 and 2024-2026 PRSUs is dependent upon our achievement of targets for sales growth, cash flow, and relative total shareholder return ("RTSR").
+Added: The award rate for the 2023-2025, 2024-2026 and 2025-2027 PRSUs is dependent upon our achievement of targets for sales growth, cash flow, and a relative total shareholder return ("RTSR") modifier.
We use a matrix based on the percentile ranking of our stock price performance compared to a peer group of companies over a three-year period to calculate the achievement of the RTSR targets.
7 unchanged sentences
Releasable at December 31, 2025
−Removed: CTS CORPORATION 62
The following table summarizes each grant of PRSUs outstanding at December 31, 2025:
4 unchanged sentences
February 9, 2023
−Removed: 35 % RTSR, 35 % sales growth,
−Removed: 30 % operating cash flow
−Removed: Focus 2025 Performance RSUs
−Removed: Cumulative revenues of $ 750 million over a trailing four-quarter period
+Added: 60 % sales growth,
+Added: 40 % operating cash flow, RTSR modifier
2024-2026 Performance RSUs
3 unchanged sentences
2025-2027 Performance RSUs
−Removed: February 7, 2024
60 % sales growth,
40 % operating cash flow, RTSR modifier
+Added: Evolution 2030 Performance RSUs
+Added: 70 % sales target,
+Added: 30 % gross margin percentage target
+Added: Evolution 2030 Performance RSUs
+Added: 70 % sales target,
+Added: 30 % gross margin percentage target
+Added: CTS CORPORATION 64
Cash-Settled Restricted Stock Units
6 unchanged sentences
NOTE 18 — Fair Value Measurements
−Removed: The table below summarizes the financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2024 and the gain recorded during the year ended December 31, 2024:
+Added: The table below summarizes the financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2025 and the gain (loss) recorded during the year ended December 31, 2025:
Asset (Liability) Carrying
14 unchanged sentences
Contingent consideration
−Removed: CTS CORPORATION 63
We use interest rate swaps to convert a portion of our Revolving Credit Facility’s outstanding balance from a variable rate of interest into a fixed rate and foreign currency forward contracts to hedge the effect of foreign currency changes on certain revenues and costs denominated in foreign currencies.
3 unchanged sentences
There is a readily determinable market for these derivative instruments, but that market is not active and therefore they are classified within Level 2 of the fair value hierarchy.
−Removed: The QRP assets consist of investment funds maintained for future contributions to the Company’s U.S.
+Added: The qualified replacement plan ("QRP") assets consist of investment funds maintained for future contributions to the Company’s U.S.
The investments are Level 1 marketable securities and are recorded in Other Assets on our Consolidated Balance Sheets.
6 unchanged sentences
A roll-forward of the contingent consideration is as follows:
+Added: CTS CORPORATION 65
Consideration
Balance at December 31, 2024
−Removed: Acquisition date fair value of contingent consideration
Change in fair value
7 unchanged sentences
Years Ended December 31,
−Removed: CTS CORPORATION 64
Significant components of income tax provision/(benefit) are as follows:
3 unchanged sentences
Total provision for income taxes
+Added: CTS CORPORATION 66
+Added: Total amount of income taxes paid during each period are as follows:
+Added: As of December 31,
+Added: Czech Republic
+Added: Total Non-U.S.
+Added: Total taxes paid:
Significant components of our deferred tax assets and liabilities are as follows:
24 unchanged sentences
Total net deferred tax assets
+Added: CTS CORPORATION 67
At each reporting date, we weigh all available positive and negative evidence to assess whether it is more-likely-than-not that the Company's deferred tax assets, including deferred tax assets associated with accumulated loss carry-forwards and tax credits in the various jurisdictions in which it operates, will be realized.
4 unchanged sentences
The deferred tax assets expire in various years primarily between 2026 and 2045 .
−Removed: CTS CORPORATION 65
Generally, we assess if it is more-likely-than-not that our net deferred tax assets will be realized during the available carry-forward periods.
12 unchanged sentences
Based on those projections, management believes it is more-likely-than-not that we will realize the benefits of these tax credit carry-forwards.
+Added: CTS CORPORATION 68
The following table reconciles taxes at the U.S.
1 unchanged sentence
Years Ended December 31,
−Removed: Taxes at the U.S.
−Removed: statutory rate
−Removed: State income taxes, net of federal income tax benefit
−Removed: earnings taxed at rates different than the U.S.
−Removed: statutory rate
−Removed: Foreign source earnings, net of associated foreign tax credits
−Removed: Benefit of tax credits
+Added: US Federal Statutory Rate
+Added: State and local income taxes, net of federal income tax benefit (a)
+Added: Foreign Tax Effects
+Added: Statutory Rate Difference
+Added: Withholding Taxes
+Added: Statutory Rate Difference
Non-deductible expenses
−Removed: Stock compensation - excess tax benefits
−Removed: Adjustment to valuation allowances
+Added: Statutory Rate Difference
+Added: Non-taxable Interest
+Added: Statutory Rate Difference
+Added: Withholding Taxes
+Added: Other Foreign Jurisdiction
+Added: Effects of Cross- Border Tax Laws
+Added: Global Intangible Low-Taxed Income (GILTI)
+Added: Foreign-Derived Intangible Income (FDII)
+Added: Withholding Taxes
+Added: Effects of Changes in Tax Laws and Rates
+Added: Research & Experimental Credits
+Added: Changes in valuation allowances
+Added: Non-deductible or Non-Taxable items
+Added: Stock compensation
+Added: Executive compensation
+Added: Contingent liabilities
Change in unrecognized tax benefits
−Removed: Impacts of unremitted foreign earnings
−Removed: Entity rationalization
−Removed: Excise tax paid upon U.S.
−Removed: pension termination
−Removed: Effective income tax rate
−Removed: In 2020, the Company began the termination of the U.S.-based pension plan.
−Removed: In 2022, the remaining assets of the pension plan were liquidated and reverted back to CTS.
−Removed: These funds are subject to both income and excise taxes.
−Removed: The excise taxes of $ 6,803 are nondeductible for U.S.
−Removed: tax purposes.
−Removed: Further information related to our pension termination is included in Note 7, "Retirement Plans."
+Added: (a) State Taxes in California, Indiana, Massachusetts, New Mexico, and Rhode Island made up the majority (greater than 50 percent) of the tax effect in this category
Under current U.S.
4 unchanged sentences
In accordance with guidance issued by the FASB staff, the Company has adopted an accounting policy to treat any Global Intangible Low-Taxed Income inclusions as an expense in the period the tax was incurred.
+Added: CTS CORPORATION 69
We recognize the financial statement benefit of a tax position when it is more-likely-than-not, based on its technical merits, that the position will be sustained upon examination.
1 unchanged sentence
As of December 31, 2025 , we have approximately $ 1,951 of unrecognized tax benefits, which if recognized, would impact the effective tax rate.
−Removed: We do not anticipate any significant changes in our unrecognized tax benefits within the next 12 months.
+Added: We anticipate reducing our unrecognized tax benefits by approximately $ 468 in the next 12 months.
+Added: The One Big Beautiful Bill Act (the "OBBBA") was signed into law on July 4, 2025.
+Added: The OBBBA contains significant tax law changes with various effective dates after its enactment date and made permanent the expiring tax provisions of the 2017 Tax Cuts and Jobs Act.
+Added: The OBBBA also includes changes to the taxation of foreign derived intangible income, global intangible low-taxed income, interest expense, and research & developmental expenses.
+Added: The impacts of these changes are reflected in the tax expense for 2025, resulting in a provisional non-cash charge of approximately $ 979 .
A reconciliation of the beginning and ending unrecognized tax benefits is provided below:
5 unchanged sentences
Balance at December 31
−Removed: CTS CORPORATION 66
Our continuing practice is to recognize interest and/or penalties related to unrecognized tax benefits as income tax expense.
22 unchanged sentences
Consolidated net sales
+Added: CTS CORPORATION 70
Sales are attributed to countries based upon the origin of the sale.
30 unchanged sentences
In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework (2013 framework).
−Removed: We have excluded from the scope of our assessment of internal control over financial reporting the operations and related assets of SyQwest, LLC, which we acquired in 2024.
−Removed: At December 31, 2024 and for the period from acquisition through December 31, 2024 total assets and revenues subject to SyQwest's internal control over financial reporting represented 18% and 3% of our consolidated total assets and total revenues as of and for the year ended December 31, 2024.
Based on our assessment under the framework in Internal Control—Integrated Framework (2013 framework), our management concluded that our internal control over financial reporting was effective as of December 31, 2025.
19 unchanged sentences
We believe that our audit provides a reasonable basis for our opinion.
−Removed: Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting of SyQwest, LLC, a wholly-owned subsidiary, whose financial statements reflect total assets and revenues constituting 18 and 3 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.
−Removed: As indicated in Management’s Report, SyQwest, LLC was acquired during 2024.
−Removed: Management’s assertion on the effectiveness of the Company’s internal control over financial reporting excluded internal control over financial reporting of SyQwest, LLC.
Definition and limitations of internal control over financial reporting
77 unchanged sentences
CTS Corporation 2014 Performance and Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Form 8-K, filed with the SEC on May 22, 2014).*
−Removed: Credit Agreement by and among CTS Corporation, the Lenders from time to time parties thereto, and BMO Harris Bank N.A, as L/C Issuer and Administrative Agent dated December 15, 2021 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the SEC on December 17, 2021).
+Added: Credit Agreement by and among CTS Corporation, and its subsidiary CTS Denmark Holding A/S, the Lenders from time to time parties thereto, and Wells Fargo Bank N.A, as L/C Issuer Swing Line Lender and Administrative Agent dated November 24, 2025 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the SEC on November 24, 2025).
CTS Corporation Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Form 8-K, filed with the SEC on February 18, 2015)
1 unchanged sentence
CTS CORPORATION 77
−Removed: Form Restricted Stock Unit Agreement (service-based) under the CTS Corporation 2018 Equity and Incentive Compensation Plan, covering grants made in 2021, 2022 and 2023, (incorporated by reference to Exhibit 10(a) to Form 10-Q filed with the SEC on April 27, 2023).
−Removed: Form Restricted Stock Unit Agreement (performance-based) under the CTS Corporation 2018 Equity and Incentive Compensation Plan, covering certain grants made in 2020, (incorporated by reference to Exhibit 10(b) to Form 10-Q filed with the SEC on April 27, 2023).
−Removed: Form Restricted Stock Unit Agreement (performance-based) under the CTS Corporation 2018 Equity and Incentive Compensation Plan, covering grants made in 2021, (incorporated by reference to Exhibit 10(c) to Form 10-Q filed with the SEC on April 27, 2023).
−Removed: Form Restricted Stock Unit Agreement (performance-based) under the CTS Corporation 2018 Equity and Incentive Compensation Plan, covering grants made in 2022, (incorporated by reference to Exhibit 10(d) to Form 10-Q filed with the SEC on April 27, 2023).
−Removed: Form Restricted Stock Unit Agreement (performance-based) under the CTS Corporation 2018 Equity and Incentive Compensation Plan, covering grants made in 2023, (incorporated by reference to Exhibit 10(e) to Form 10-Q filed with the SEC on April 27, 2023).
−Removed: Insider Trading Policy
+Added: Form Restricted Stock Unit Agreement (service-based) under the CTS Corporation 2018 Equity and Incentive Compensation Plan, (incorporated by reference to Exhibit 10(a) to Form 10-Q filed with the SEC on April 27, 2023).
+Added: Form Restricted Stock Unit Agreement (performance-based) under the CTS Corporation 2018 Equity and Incentive Compensation Plan, (incorporated by reference to Exhibit 10(e) to Form 10-Q filed with the SEC on April 27, 2023).
+Added: Insider Trading Policy (incorporated by reference to Exhibit 19 to the Annual Report Form 10-K for the year ended December 31, 2024 filed with the SEC on February 26, 2025).
Consent of Grant Thornton LLP.
5 unchanged sentences
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
−Removed: Compensation Clawback Policy
+Added: Compensation Clawback Policy (incorporated by reference to Exhibit 97 to the Annual Report Form 10-K for the year ended December 31, 2024 filed with the SEC on February 26, 2025).
The following financial statements from the Company's Annual Report on Form 10-K for the year ended December 31, 2025, formatted in Inline XBRL:
2 unchanged sentences
* Management contract or compensatory plan or arrangement.
+Added: ** Certain exhibits and schedules to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
+Added: The registrant agrees to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon request.
Form 10-K Summary
25 unchanged sentences
/s/ Amy Dodrill
+Added: February 24, 2026
+Added: /s/ Kimberly Banks MacKay
+Added: Kimberly Banks MacKay
CTS CORPORATION 79
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.