UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of Earliest Event Reported): March 31, 1998
CTS CORPORATION
(Exact Name of registrant as specified in its charter)
Indiana 1-4639 35-0225010
(State of other juris- (Commission File (I.R.S. Employer
diction of incorporation) Number) Identification No.)
905 West Boulevard North, Elkhart, Indiana 46514
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (219) 293-7511
Page 1 of 2
Item 5. Other Events
The information regarding an announcement on March 31, 1998
contained in the press release, filed as Exhibit A to this
report, is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
CTS CORPORATION
Dated: March 31, 1998 /s/ Jeannine M. Davis
Jeannine M. Davis
Vice President, Secretary and
General Counsel
Page 2 of 2
March 31, 1998
FOR RELEASE: Immediately
CTS ANNOUNCES DYNAMICS INTEGRATION ACTIONS
Elkhart, IN...March 30, 1998. CTS Corporation (NYSE: CTS)
announced key steps in the integration of its acquisition of
Dynamics Corporation of America. The Dynamics acquisition was
completed in the fourth quarter of 1997.
The integration of Dynamics' IERC and Reeves-Hoffman
businesses into CTS electronics manufacturing operations has been
substantially completed. CTS has established a task force, which
includes outside advisors, to study the repositioning or possible
divestiture of Dynamics' remaining businesses (consisting of its
small appliances, power and controlled environmental systems and
fabricated metal products and equipment businesses), with the
objective of selling, closing or integrating them into CTS'
existing businesses by the end of this year. These businesses
had combined full year 1997 net sales of $100.1 million and a
total book value of $31.6 million at the end of 1997.
CTS also announced that it would close Dynamics' corporate
headquarters in Greenwich, Connecticut by June 30, 1998. In
connection with the closure, Andrew Lozyniak and Patrick Dorme,
Dynamics' chief executive officer and chief financial officer,
respectively, will be retiring effective April 1, 1998, but have
agreed to consult with CTS for a transition period. Mr. Lozyniak
has agreed to remain a member of the CTS Board of Directors
through at least the date of CTS' 1999 annual meeting of
shareholders; Mr. Dorme will leave the CTS Board on July 1, 1998.
CTS also purchased 226,360 shares of its common stock from these
executives at $32.60 per share, the average closing price for the
20 trading days ended March 25th. In addition, Mr. Lozyniak
surrendered his option to purchase 300,000 CTS shares in exchange
for a payment equal to the spread between $32.60 per share and
the $20.83 exercise price. Giving effect to these transactions,
CTS may acquire in open-market or privately negotiated
transactions up to 320,610 additional shares under its existing
Board repurchase authorization.
"We are pleased with our progress in assimilating the
Dynamics organization," said Joseph P. Walker, chairman and chief
executive officer of CTS. The closure of Dynamics' headquarters
will result in $2.4 million of annual after-tax cost savings,
including about half of that amount this year. The costs we will
incur in connection with these actions were provided for through
the 1997 transaction with DCA. Combined with the approximately
$1.0 million of annual after-tax cost savings previously
obtained, we expect that cost savings and synergies from the
acquisition will be well in excess of our original target of $2.0
million. Finally, we expect the option and share repurchase
transactions to be accretive to 1998 earnings per share," Walker
said.
# # # # #
CTS is primarily a diversified manufacturer of electronic
components for the automotive, computer equipment and
communications equipment markets. The Company, headquartered in
Elkhart, Indiana, operates 21 manufacturing plants in the United
States and abroad.
The Company's plans, estimates and beliefs concerning the
future contained in this press release are forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Actual results may differ
materially from those reflected herein due to a variety of
factors that could affect the Company's operating results,
liquidity and financial condition, such as risks associated with
the integration of acquired operations, competitive factors and
price pressures, shifts in market demand and general economic
conditions, foreign operations and developments and other
factors.
