Ken Nagy, CFA
Committed to Growth Opportunities – Smart Actuators
CTS (CTS) designs, manufactures, assembles, and sells a broad line of electronic components and sensors. The firm also provides electronics manufacturing services primarily to original equipment manufacturers (OEMs), for the automotive, computer, communications, medical, industrial, and defense and aerospace markets. The firm was established in 1896 as a provider of high-quality telephone products and was incorporated as an Indiana corporation in February 1929. Along the way CTS had a hand in numerous technologies from the radio to the space shuttle Columbia.
CTS has two reportable segments: Electronics Manufacturing Services (EMS) and Components and Sensors.
CTS is diversified, profitable and growing. Against a back drop of such macro trends in fuel efficiency, green initiatives, and data traffic for smart phones and social networking the firm is launching new products, expanding into new areas, and increasing market share.
The Company is strongly committed to the research and development required for future growth opportunities within the Components and Sensors segment.By investing into research and development for new products and markets, CTS has organically developed a $50 million a year new business in smart actuator design.
Diesel manufacturers are increasingly looking for advanced turbo charging and exhaust gas recirculation technologies to meet improved emissions requirements, boosting fuel economy and reducing engine costs.
This demand has caused rapid growth in the market for smart actuator technology in commercial and passenger vehicles.The firm has penetrated two of the largest diesel manufacturers, where there has been four contract wins in all, with smart actuators for trucks and industrial engines.
This entrance takes CTS into on-and-off highway diesel engines and trucks and introduces the firm to commercial applications like construction, mining, and agriculture.
Additionally, the penetration demonstrates the Company’s continued success in creating and implementing growth initiatives.The total commercial market for smart actuators industry is estimated at approximately $750 million to $1 billion, of which the CTS’ target market share is 10%.
Although production is anticipated to begin in 2012, management expects awarded sales of over $90 million through 2015 with the first year of significant sales at $20 million in 2013.
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