ELKHART, IN -- The top financial officer of CTS Corp. yesterday suggested the economy is straining smaller EMS firms, thus opening the door for larger players.

On a conference call with analysts, president and chief financial officer Vinod M. Khilnani said, "Financial constraints on smaller tier three and tier four competitors are presenting new business opportunities for our EMS business."

CTS, which is a top 40 EMS company, had earlier reported third-quarter EMS sales of $97.5 million. Revenues were actually down $8.5 million from the year-ago quarter, but climbed 6.6% not including the loss of a lower-margin Hewlett-Packard product, which was worth some $13.5 million.

The company's EMS business also reported wins in medical, defense, industrial and computing. 

Khilnani added that aerospace products intended for defense and military customers remain strong, but the commercial business is weak, partly because of the Boeing strike. "As that settles, we expect some improvement in that side of the business going forward," he said.

"Visibility is probably several notches less these days than historically we have experienced," Khilnani said, but the company's transition away from the communication and computer markets into defense and medical have made "EMS probably more stable."

Industrial, medical, defense and communications make up about half of CTS's EMS sales. These are areas the company did not even target three to four years ago, Khilnani said.

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