ELKHART, IN – CTS Corp. reported fourth-quarter net earnings fell 26% to $5.7 million on a 9% drop in sales. The results include restructuring and related costs.

Sales in the fourth quarter were $162.8 million, down 9% from the same period last year, on slower automotive and electronic components sales.

The Components and Sensors segment was down 18%, on lower automotive sensor and actuator product sales. EMS sales were down 2% year-over-year, as growth in sales in the targeted defense and aerospace market was able to essentially offset previously disclosed end-of-life sales reductions to Hewlett-Packard. Excluding HP, EMS sales were up approximately 23% in the fourth quarter year-over-year. Cash from operations was $18.6 million in the quarter.

For the year, revenue rose 1% to $691.7 million and net earnings were up 23% to $29.9 million. Components and Sensors segment sales increased 4% year-over-year primarily driven by a 15% increase in electronic component sales. EMS sales fell 2% year-over-year as lower sales in the computer market were partially offset by strong growth in sales into target markets. Operating cash flow was $38.7 million in 2008. Capital expenditures for new programs to support future growth increased 10% to $17.7 million in 2008 from $16.1 million in 2007.

CTA ranks 31st worldwide on the CIRCUITS ASSEMBLY Top 50 EMS Companies list.

Global headcount has been reduced by approximately 10% in response to the downturn, the company said. Other cost-cutting measures include a worldwide pay freeze, suspension of 401(k) matching funds, temporary reductions in salaries and reductions in certain discretionary spending. Capital expenditures have been significantly reduced to a range of $10 million to $13 million, from $17.7 million last year.

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