My name is John Ferencz. I'm an analyst here at Sidoti & Company. Our next presentation of the day is CTS Corp., ticker CTS. For those who are not familiar with the name, CTS is a manufacturer of components and sensors for the automotive, industrial, medical, and aerospace, and defense markets. We are fortunate to have with us today CEO Kieran O'Sullivan. Following a 25-minute or so presentation, there'll be time for Q&A. If you have a question, please put it in the Q&A section and I'll present it to management. With that said, Kieran, thank you for being with us today. The floor is yours. John, thank you, and good afternoon, everybody. Welcome to the CTS presentation. At the outset, I'd like to say that our company is on a path of diversification, and we were a few years ago several years ago, over 70% of our business was in transportation. Today, it's more of a 50%-50% split, with our diversified markets of medical, aerospace, and defense, and industrial now making up over 50%. And with our recent acquisition of SyQwest, that will move us again, more up in the diversified markets at being larger. The focus for us then is diversification of our business, but also growing our transportation business at a good clip and making it a healthy business, keeping it a healthy business, focused on electrification, but also focused on these diversified markets and creating a better quality of earnings for the company, and we think that'll be a multiple changer over time. The other thing I'd like to point out is we have a very healthy balance sheet. As we look at organic growth, and we look at bringing cash back to shareholders through buybacks, but also through acquisitions, how we deploy capital, it's a very important aspect of how we're managing and guiding the business forward as well. You can see here the forward-looking statement. I think you're all familiar with this in terms of how it relates to the presentation and the content that we're sharing with you as well today. If you look at us here, we're a company that's all about products that sense, connect, and move. That's where we deploy our capital. That's where we deploy our talent. And you can see the revenue, $515 million over the last 12 months trailing. That's down from where it was in two years ago because of the challenges we have, like other companies in the industrial end markets, where there's been a burn-off of inventory, and that's now slowly improving with sequential improvement quarter over quarter. As I mentioned, the non-transportation or diversified markets are now closer to 50%, if you look at the current past quarter, and then last 12 months, EBITDA margin around 22%. We've been as high as 23% and as low as 21% in the range of the last year or two, and EPS tracking to $2.03. You can see here most of our revenue coming out of North America at 54%, 21% out of Europe, which has improved over the last number of years, and then the Asia portion being 25%, and that's essentially the greater part of that is coming from China. In China, we have two parts to our business: our diversified medical, industrial, and markets, and then our transportation markets. And what we do in China tends to be for that consumption in the local Chinese markets, where we've had strong relationships over many decades. When we look at the growth profile for the company, our targeted growth rate is 10%, and some years we've come close to that and hit it. Other years, like the past year, it's been a bit more challenging. And you can see here on the left-hand side, organic growth at 300-600 basis points above GDP. So when you look at a mix of organic growth and acquisitions, it implies organic growth at 5%-6%, and then the acquisitions at 4%-5% is a rough mix of how we do it. Our products tend to be highly engineered products with our customers, for the greatest part. The mega trends of automation, healthcare innovation, with minimally invasive applications, and electrification over time are gonna be constant things that you're gonna hear us talking about. We have a strong new pipeline of products. On the transportation side, one example of that is e-brake, which plays into an $800 million market, and we already play in accelerator pedal, so this is an area of competence for us. We've had our first award with a product that'll launch in probably 2027, and we're engaged with other OEMs who want to play in this space because this makes the brake more intelligent, not a dumb, hydraulic-activated system, but an electronic smart system that links up with the advanced safety applications within the vehicle as well. Our piezo formulations, I'll come back to this, in terms of the three different technologies we have, and then our medical applications, primarily on medical ultrasound on the device side, but also on therapeutics as well. We have a clear strategy for growth. Our diversification path is very clear. We're moving down this path and gaining momentum there. We continue to add new technologies organically and through acquisition. And as I mentioned, we've got a strong balance sheet for supporting organic growth and for acquisitions as well, and returning capital to shareholders. I will tell you, as we look at acquisitions these days, we're more focused on targets in North America and Europe, not so much in Asia from a risk profile perspective as well. We've got strong regional capabilities with factories all around the world, a strong leadership team with a reputation for strong execution and strategic orientation, and we're always strengthening our organizational capabilities. We've had initiatives such as the Road to 2020, and in the last few years, our Focus 2025 initiatives, which are focused on organic growth, strong customer relationships, organizational strength, and operational systems as we go across the company as well. As you can see at the bottom here, we completed the SyQwest acquisition just at the end of July, and I'll come back and talk about that a little bit more in the presentation later on. When we look at the end markets and the themes that are driving circular growth for us, you can see here automation, industrial applications around IoT, factory automation, passenger safety, primarily focused around passive safety applications, and defense automation around unmanned underwater applications, which is only increasing in our focus with the acquisition of SyQwest as well. On the healthcare innovation side, minimally invasive applications are the trend out there across the whole medical industry. Our focus is on diagnostics, primarily being ultrasound, but other applications as well. Therapeutics with companies such as Merz that we work with, and then the patient experience may be around temperature devices for comfort and convenience with incubators and also dental applications as well. On the sustainability side, just to mention one or two areas, obviously, the focus on electrification with our portfolio of new products, which are numerous, and then, reducing harmful emissions with our applications in commercial vehicle. Then also measuring, fluid, and measurement for scarce resources like water as it becomes a more critical aspect of our lives as we move forward as well. When you look at the company, most people look at us and say, "you're a $500-550 million company, you're complex," well, we're less complex than we were several years ago, but we are pretty diversified in terms of our technologies and applications. I like to describe it in two main themes you see on the left-hand side of this page. The first one is advanced ceramics. For the most part, the value that we bring to our customers here is the quality of our material formulations and piezo ceramics across three different technologies. That's a foundry in both processing, but also in tape casting and single crystal technology, and we're one of the few companies in the world with these three technologies and the combinations that you can get from these technologies as well. On the transportation side, for the most part, we're focused on magnetic technology, and our value here is that we package position sensing in safety-critical and harsh environment. There may be eight to 10 different products here, but they all have that common theme, that we package position sensing in safety-critical and harsh environments, which are mission-critical for our customers as we move forward. You can see the different technologies here, the different applications. Some examples would be went into temperature sensing because we didn't start out in it, but we know piezo ceramics, which are a fundamental part of the technology of temperature sensing as well. Moving into the next slide, this, this chart really shows our diversification journey. If you go back to 2017, we were 65% transportation. Before that, we were over 70%. And you can see today that in the last 12 months, we're more like 54% transportation, and our diversified markets of medical, aerospace, and defense, and industrial make up 46%. The reality is, in the last quarter, that was more like getting to 50%-50%, and with the addition of SyQwest, now we start to move towards our long-term target, which is to make our diversified markets larger than our transportation market. I would like to see us, over time now, move beyond that 50% goal to start thinking about 60% and 70%, so that medical, industrial, and aerospace, and defense represent that much of our revenue as a company, while we still have a strong and growing transportation business within CTS as well. When we move to the end markets, let me start here with the industrial end market, about a $3.6 billion dollar TAM. The last twelve months revenue being $118 million, and you'll see that's down more, double digits in revenue. So this has been a tough market for us over the last 18 months as we came out of that destocking period, like many, many of our peers in this space. Probably the longest destocking period I've seen in a few decades, but we're now returned to sequential growth. We talked about that in our last earnings call, and we guided for sequential growth, not as robust, but smaller than we previously anticipated, but again, moving in the right direction. And you can see here some of the areas that we focus on are sustainability with HVAC applications and temperature solutions, productivity micropositioning with our microactuators in industrial automation and in semiconductor applications, smart metering applications, where our products are replacing older mechanical products with impellers for ultrasound transducers, with time-of-flight technology, which is much more accurate and much longer-lasting in terms of its applications versus mechanical systems. And then applications like industrial printing for printing on packaging, but also printing on ceramic tiles, going into industrial and the building applications as well. On the next slide, you can see here medical markets, $1.5 billion opportunity for us. Revenue continued to grow at single digits for the last several years and several quarters. The applications, pardon me. The applications we focus on are minimally invasive applications. It's looking at the buildup of plaque in arteries or sending drug delivery through ultrasound to the region of the infected organ. A big part of what we do is high-resolution ultrasound for customers such as GE, Philips, Siemens, Samsung, Mindray in China. And over time, you'll see that this is gonna move from today's solutions with AI in the future to more portable solutions, and that will be a volume aspect of what we do in the future in improving revenues. And then the bottom left here, you can see getting into devices with wireless pacemakers, eliminating the need for wires, and also getting into hearing aids. And then finally, drug delivery in terms of what we're doing with the infected organs, delivering the solution through our ultrasonic capabilities to the organs within the body for treatment. And on top of this, we do therapeutic applications for skin applications, but also in the area of cancer treatments as well. So we're very excited about our medical market and what we're doing here, and how we're growing, and how we can expand this business going forward as well. Moving into aerospace and defense, a $1.5 billion opportunity for us. Over $50 million, growing at single digits. A strong backlog in this business. In the U.S., we're the primary ceramic supplier to the U.S. Navy. Our products tend to focus on areas such as sonar, forward-looking arrays, towed arrays, but also into temperature applications in satellites, and RF anti-jamming applications that go into classified areas, and that's a growing area for us as we add customers. And then into vibration applications with sensors, primarily in the aerospace. But you can see here all mission-critical applications, and a little later on, as I mentioned, I'll come back to our SyQwest acquisition, which expands our capability not just in these areas, but into new products as we go forward as well, and be moving beyond being a component supplier in the ceramic space, in aerospace and defense. Moving to transportation, we've seen some headwinds here. Interest rates have made it a bit more challenging for our customers in this space, but we also have faced two headwinds that I wanna be very clear about. Our Japanese OEMs, as they operate in the Chinese market, have been losing some share as they compete with domestic OEMs, and we've seen some softness in the commercial vehicle side, which we talked about, where we play and have good products and have strong relationships with our customers and next-generation products, but some second sourcing in that area that we're navigating carefully through as we grow our next-generation products as well. The things we're also excited about here is the new products. Products like e-brake, which I mentioned. We're a number two player in the world in accelerator modules, and we aim to have a strong and similar position in e-brake, where we've won our first product. It's in development and will launch later in 2027 but also, we're engaged with several strong OEMs who wanna have this product in this area, and we expect to announce new awards as we move forward in the year ahead. Our e-brake or dry pad product is something that's an innovation that's probably gonna go out beyond 2030, but doing testing applications with our customers for how this fits into not just EVs, but also a much more autonomous applications where the footwell has to have a certain configuration that's different from what you see today and then also in terms of current sensing, where we're already winning in commercial vehicle, already shipping in light vehicle markets, and also winning here with these types of products in the industrial markets as well so we feel good about this market. It's been a little challenging of late. I was reading just about the interest rate changes before I came on this presentation, and over time, that's gonna help these big-ticket items in the marketplace as well. Not something immediate, but over time. When we look at our execution capabilities, you can see here strong improvements, but the big thing here is to be the partner in smart solutions for our customers, so we're bringing that highly engineered capability that drives this product profile that gives us a higher margin. As you see here, 472 basis points, and the capabilities that we have here, improving here from an execution capability. Also, the conversion of cash from adjusted operating cash flow and free cash flow at 100%, returning money to shareholders. We spent a lot of time in the last years working on the front end of our business, on our go-to-market capabilities with our engineering sales, our distribution, but also our resident engineers, which is something that gains a lot of traction for us with our customers, and now over that period of time, have completed nine acquisitions as well. When we look at our capital allocation framework, you can see here our strong operating cash flow converting into 15%-18% of our sales. Leverage ratio in the 1.0-2.5, we're well below that 2.5. We've been asked questions recently in terms of the SyQwest acquisition. Will we be taking a break from acquisitions going forward? That is not the case. We're very active in working our pipeline. We've got a strong balance sheet. We wanna use that in the right and appropriate way. And then from a growth perspective, we deploy 4% of sales to CapEx. That used to be higher as we went through the conversion of our ERP systems, which has been finished at all sites, with the exception of the latest acquisition. And then from a growth perspective, 60%-80% of that cash flow moving towards acquisitions. And on the right-hand side here, you can see here 20%-40% moving towards returning dividends and repurchase of shares, giving value back to shareholders as well. From an acquisition perspective here, you can see the things that we look at are overall the strategic fit, but the attractive financials. We're not looking to acquire fixer-uppers. We've repositioned our company. We want high quality of earnings companies as we move forward. We wanna enhance the technology portfolio, expand the products and the applications and the customers across the globe, and make sure we're enhancing that end market capability and geographic expansion to line up with our diversification strategy, moving beyond the 50% of our sales coming from diversified markets as well. And then, from an acquisition perspective, getting a return on capital in excess of our cost of capital over a 3 to 5-year time period, depending on the type of acquisition, making sure that acquisition is accretive to earnings in the first year, and obviously looking for synergistic opportunities on the growth, but also on the cost side of what we're doing as well, and maintain appropriate discipline in our balance sheet as we move forward, too. And just a few words about the SyQwest acquisition. This was a really good acquisition for us, and in kind of line with what we've done in the past, we've known SyQwest for more than 10 years. They've been a customer of us for our ceramic products. But this clearly gives us a strength in our strategy in the defense area. We've moved from being a component supplier of ceramic applications and rings, up into a supplier of sensors and full transducers, and moving into subsystem areas as we go forward, especially with the Navy and the large Tier ones in this space. The relationship with NAVSEA, with Crane, with customers, and on the Progeny side of what's going on here, Northrop Grumman, other customers, big Tier ones, strong relationships with them and with Saab, both in North America and Europe. The company is based in Cranston, Rhode Island. A great team. We're keeping that management team in place. This is a growth platform for us, with a quality of earnings that's gonna be accretive to our gross margins and our EPS within the first 12 months. And it accelerates our diversification, in terms of now moving us beyond the 50% of our revenue coming from diversified markets, moves us up the value chain, as I described, and takes us not just into sonar arrays, forward-looking and towed, but outboard electronics, further integrates us into unmanned applications, in terms of the applications we get into here. And then also, we have the capability to move into other areas like sono buoys, with our combined capabilities as we move forward as well. So we're very pleased with how the acquisition is going, the integration and you're gonna hear a lot more about our progress here, since this is a growth platform for us for the company going forward as well. Very briefly then, to start to begin to wrap up the presentation, you can see here we peaked in 2022 in revenues, where we got some of that extra demand coming from the over-ordering, and now we're coming back into that range of getting to the bottom of the de-stocking and getting back into a growth phase. Our guide is $525-540, and our EPS $2.05-2.25 in range, and we expect to improve in that year-over-year as we go forward with our organic growth and with our diversification efforts as well. I do wanna call out here, you can see here the softness in the commercial vehicle market, the recovery in industrial taking longer than we previously expected and some softness in the light vehicle market with the headwinds in China that we're navigating through. But at the same time, we're growing and adding new customers to combat these trends, and we feel very good about our progress in medical and aerospace and defense, and over time, all these markets will be growing. And again, I wanna emphasize the industrial, which has been the largest part of the headwind, is now back to sequential growth, small, but moving in the right direction as well. And then finally, as you look at our financial framework, we wanna get back to that 10% revenue growth. Our gross margins have been, you know, as high as 36% and 37%, and more recently, down in the 34% range. And that's gonna move back with the mix and the volume changes to the mid-35%-37% area. We expect to get to the higher end of this range as we improve the diversification scale across our company as we go forward as well. R&D and CapEx, you can expect to stay in these ranges. And then gross, the SG&A will scale down as we grow the business and scale the business as we go forward as well. So with that, I'm gonna pause here because that completes the presentation, John, and I'm happy to take any questions. Thank you, Kieran. If you have a question, please put it in the Q&A section, and I'll present it to Kieran. Kieran, I'd like to start with your transportation side of your business. Clearly, there's been a slowing pace of EV adoption. Can you talk about how that impacts CTS one way or the other? Yeah, John, fortunately, and the good thing for us is that, as we've talked about, in the past, even before EV came along, our products tend to be agnostic to the drive chain—drivetrain, excuse me, but that's moving in a good direction for us. We feel good about the EV path we're on. We're already getting traction and sales with the current sensing. The larger revenues that are EV-dependent come with the e-brake, which is revenue in 2027. The rest of the products go on hybrid, which has been a growth area when EV goes down, so we feel that mix is working okay for us. It's as we get out into 2027 and 2028, we want to make sure the adoption of EV is moving in the right direction, so it's not a headwind for us. Got it. Got it. Looking at the SyQwest acquisition, will that be run as an independent operation? And are there any potential synergies you see between that business and your legacy business? Two or three things in that, John. One is, we're running it as a standalone business at the moment. We're integrating its financials. It was a private company into a public company. There's certain things we have to do there from a controls, but we're very pleased with the strength of the management team. Bob Tarini and his team there are doing a really excellent job. So we're running this as a growth platform, making sure it has the independence to do what it needs to do, and supporting it with our products as well. But on the other side of that is, we're also very much aware that we can expand the capabilities of the business beyond what it's doing in terms of sonar, outboard electronics, torpedoes, but also in the sonobuoys as well as we go forward. So there's other markets we can pivot into here and help them, when backed by a larger public company, with a better balance sheet, to get bigger contracts as we go forward as well. So we feel very good about the team, the strategic direction we have here. This was always the way we wanted to go. And, you know, from a subsystem perspective, this team is really dynamic and very capable, and the confidence they've built with the Navy in terms of what we can do and deliver is really, really solid. A question from the audience about the industrial markets. Can you talk a little bit about the weakness in the industrial markets, and when are you seeing the rebound in the industrial markets? Yeah, I think the best. Well, first of all, our industrial market is very broad, so it's, we're in many areas. We're in pool and spa, we're in HVAC, we're in industrial printing, we're in different applications for sensors and controls as well. We've seen incremental sequential growth, as we talked about in our last earnings call, and we expect that to continue, not at the level we thought of at the end of the year, but we do expect it to continue to improve. The way I would frame it, John, is I think there's three components here that's causing this rebound to be softer. One is the burn-off of inventory, which has happened pretty well, but there's also some out there beyond distribution and EMS that's still a little bit of a hangover, that's creating some of that softness still. The second thing is, those industrial customers that have exposure to China are seeing some more softness than they would've seen in the past, and they still have that to navigate through. And then the final thing is, I would describe it as our customers who have growth are much more disciplined on their inventory than they would've been pre-2022. Even though the demand is there, they're making sure they're cutting off inventory, maybe before the end of the quarter, to make sure they hit their targets in inventory, and then opening up again as the new quarter starts. We're seeing a discipline there that wasn't there before. It's likely an overcorrection, and the pendulum swinging back, that'll balance out over time. That's how I'd best describe it. Since you got the slide up, can we talk a little bit about these long-term targets? What's the timeframe of achieving these targets, or is it just an open-ended, long-term outlook? John, I would say when you look at CapEx and R&D, we're already very much in that range. The SG&A will come as we scale the business. The adjusted gross margin, that one, it's pretty clear to us, as we move the diversification above 60%-70%, we're gonna hit the higher end of that range. Today, we're moving beyond 50%, so we're starting to move in that direction. Then, on the revenue side, we feel that we're doing the right things on organic growth with new opportunities that we have. It'll take a little bit of time here as the markets rebound. You know, 2024 doesn't feel like a bumper year in terms of end market demand, but we feel like we're doing the right things. And then on the acquisition, that's literally, you know, 4%-5% of that growth. That all depends on getting the right acquisition. Some years we've hit that. I'd like to see us be more consistent in hitting that going forward with the good balance sheet that we have. Just last on the acquisitions, I mean, you've gotten—you've got, you've taken out some very small companies and much larger companies. Any thoughts about the size of M&A targets on a go-forward basis, given your track record? It's really been all over the board. Yeah, I would say, John, you're gonna see us do less of the smaller acquisitions, more of the ones that are in the $20-50 million in revenue. And we would like to do something larger, that's gonna kinda help that transformation happen faster. But to be honest with you, that's got to be the right acquisition that we feel good that we can execute and deliver on, but that's something very much in our focus and something that our board discusses with us very clearly, too. Kieran, we are out of time. Any closing comments? No, I just wanna thank everybody for our time. I know, I know the markets have been tough of late, and it's been tough for investors, but we're fundamentally focused on the foundation of the business. We have a record of execution, and we want to get into higher quality growth markets, and that's what we're doing, and that's where we're focused. All right. Thank you, sir. Thank you for presenting at the Sidoti & Company Conference. Have a great day. Great. Thank you, John. Thanks, everybody, for your time. Bye-bye. Bye now.