Company Quick10K Filing
CTS
Price32.39 EPS1
Shares33 P/E25
MCap1,074 P/FCF26
Net Debt-101 EBIT57
TEV973 TEV/EBIT17
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-07-31
10-Q 2020-03-31 Filed 2020-04-24
10-K 2019-12-31 Filed 2020-02-20
10-Q 2019-09-30 Filed 2019-10-24
10-Q 2019-06-30 Filed 2019-07-25
10-Q 2019-03-31 Filed 2019-04-25
10-K 2018-12-31 Filed 2019-02-22
10-Q 2018-09-30 Filed 2018-10-25
10-Q 2018-06-30 Filed 2018-07-26
10-Q 2018-03-31 Filed 2018-04-26
10-K 2017-12-31 Filed 2018-02-23
10-Q 2017-09-30 Filed 2017-10-26
10-Q 2017-06-30 Filed 2017-07-27
10-Q 2017-03-31 Filed 2017-04-27
10-K 2016-12-31 Filed 2017-02-24
10-Q 2016-09-30 Filed 2016-10-28
10-Q 2016-06-30 Filed 2016-07-29
10-Q 2016-03-31 Filed 2016-05-03
10-K 2015-12-31 Filed 2016-02-24
10-Q 2015-09-27 Filed 2015-10-27
10-Q 2015-06-28 Filed 2015-07-28
10-Q 2015-03-29 Filed 2015-04-28
10-K 2014-12-31 Filed 2015-02-24
10-Q 2014-09-28 Filed 2014-10-28
10-Q 2014-06-29 Filed 2014-07-29
10-Q 2014-03-30 Filed 2014-04-29
10-K 2013-12-31 Filed 2014-03-03
10-Q 2013-09-29 Filed 2013-10-29
10-Q 2013-06-30 Filed 2013-07-25
10-Q 2013-03-31 Filed 2013-04-25
10-K 2012-12-31 Filed 2013-02-25
10-Q 2012-09-30 Filed 2012-10-24
10-Q 2012-07-01 Filed 2012-07-24
10-Q 2012-04-01 Filed 2012-04-25
10-K 2011-12-31 Filed 2012-02-24
10-Q 2011-10-02 Filed 2011-10-26
10-Q 2011-07-03 Filed 2011-07-26
10-Q 2011-04-03 Filed 2011-04-27
10-K 2010-12-31 Filed 2011-02-24
10-Q 2010-10-03 Filed 2010-10-27
10-Q 2010-07-04 Filed 2010-07-27
10-Q 2010-04-04 Filed 2010-04-28
10-K 2009-12-31 Filed 2010-02-23
8-K 2020-07-31 Regulation FD, Exhibits
8-K 2020-07-31 Earnings, Exhibits
8-K 2020-07-02 Officers
8-K 2020-05-15
8-K 2020-05-01
8-K 2020-04-24
8-K 2020-04-23
8-K 2020-04-01
8-K 2020-03-05
8-K 2020-02-04
8-K 2020-02-04
8-K 2019-11-08
8-K 2019-10-25
8-K 2019-10-24
8-K 2019-08-01
8-K 2019-07-31
8-K 2019-07-25
8-K 2019-07-25
8-K 2019-05-17
8-K 2019-05-02
8-K 2019-04-30
8-K 2019-04-29
8-K 2019-04-25
8-K 2019-02-14
8-K 2019-02-08
8-K 2019-02-05
8-K 2019-02-05
8-K 2018-12-28
8-K 2018-10-25
8-K 2018-10-25
8-K 2018-07-27
8-K 2018-07-26
8-K 2018-05-22
8-K 2018-05-18
8-K 2018-05-18
8-K 2018-04-27
8-K 2018-04-26
8-K 2018-04-04
8-K 2018-02-07
8-K 2018-02-06
8-K 2018-01-16

CTS 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1 - Basis of Presentation
Note 2 - Revenue Recognition
Note 3 - Accounts Receivable
Note 4 - Inventories
Note 5 - Property, Plant and Equipment
Note 6 - Retirement Plans
Note 7 - Other Intangible Assets
Note 8 - Costs Associated with Exit and Restructuring Activities
Note 9 - Accrued Liabilities
Note 10 - Commitments and Contingencies
Note 11 - Debt
Note 12 - Derivative Financial Instruments
Note 13 - Accumulated Other Comprehensive (Loss) Income
Note 14 - Shareholders' Equity
Note 15 - Stock - Based Compensation
Note 16 - Fair Value Measurements
Note 17 - Income Taxes
Note 18 - Leases
Note 19 - Business Acquisitions
Note 20 - Recent Accounting Pronouncements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-10.1 ex1014thamendmentpp.htm
EX-10.2 ex1015thamendmentpp.htm
EX-31.1 cts063020exhibit31a.htm
EX-31.2 cts063020exhibit31b.htm
EX-32.1 cts063020exhibit32a.htm
EX-32.2 cts063020exhibit32b.htm

CTS Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
0.70.60.40.30.10.02012201420172020
Assets, Equity
0.20.10.10.0-0.0-0.12012201420172020
Rev, G Profit, Net Income
0.10.10.0-0.0-0.1-0.12012201420172020
Ops, Inv, Fin

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
10-Q
  
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For The Quarterly Period Ended June 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Transition Period from _______________ to _______________

Commission File Number: 1-4639
 
CTS CORPORATION
(Exact name of registrant as specified in its charter)

IN
  
35-0225010
(State or other jurisdiction of
incorporation or organization)
  
(IRS Employer
Identification Number)
4925 Indiana Avenue
 
 
Lisle
IL
 
60532
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code:
(630)
577-8800
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
Common stock, without par value
CTS
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x No    ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
  
Accelerated filer 
  
Non-accelerated filer  o
  
Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act.    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   No   x 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of July 28, 2020: 32,267,524.
 
 



CTS CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


2
 


PART I - FINANCIAL INFORMATION
Item 1.   Financial Statements
CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED
(In thousands, except per share amounts) 
 
Three Months Ended

Six Months Ended
 
June 30,

June 30,

June 30,

June 30,

2020

2019

2020

2019
Net sales
$
84,197


$
120,684


$
187,272


$
238,308

Cost of goods sold
57,630


79,480


127,806


156,490

Gross Margin
26,567


41,204


59,466


81,818

Selling, general and administrative expenses
14,668


17,036


31,427


34,597

Research and development expenses
5,522


6,257


12,930


13,048

Restructuring charges
135


911


375


2,995

Gain on sale of assets


(83
)



(122
)
Operating earnings
6,242


17,083


14,734


31,300

Other (expense) income:











Interest expense
(909
)

(467
)

(1,760
)

(933
)
Interest income
304


440


635


872

Other income (expense), net
256


(1,107
)

(1,726
)

(1,010
)
Total other (expense), net
(349
)

(1,134
)

(2,851
)

(1,071
)
Earnings before income taxes
5,893


15,949


11,883


30,229

Income tax expense
1,036


4,006


3,218


6,867

Net earnings
$
4,857


$
11,943


$
8,665


$
23,362

Earnings per share:











Basic
$
0.15


$
0.36


$
0.27


$
0.71

Diluted
$
0.15


$
0.36


$
0.27


$
0.70













Basic weighted – average common shares outstanding:
32,262


32,799


32,364


32,803

Effect of dilutive securities
242


406


284


422

Diluted weighted – average common shares outstanding:
32,504


33,205


32,648


33,225









Cash dividends declared per share
$
0.04


$
0.04


$
0.08


$
0.08

See notes to unaudited condensed consolidated financial statements.

3
 


CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS ‑ UNAUDITED
(In thousands of dollars) 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
June 30,
 
June 30,
 
2020
 
2019
 
2020
 
2019
Net earnings
$
4,857

 
$
11,943

 
$
8,665

 
$
23,362

Other comprehensive earnings (loss):
 

 
 

 
 
 
 
Changes in fair market value of derivatives, net of tax
644

 
(294
)
 
(3,770
)
 
(216
)
Changes in unrealized pension cost, net of tax
1,209

 
1,026

 
2,494

 
2,048

Cumulative translation adjustment, net of tax
(14
)
 
(87
)
 
(153
)
 
4

Other comprehensive earnings (loss)
$
1,839

 
$
645

 
$
(1,429
)
 
$
1,836

Comprehensive earnings
$
6,696

 
$
12,588

 
$
7,236

 
$
25,198

 See notes to unaudited condensed consolidated financial statements.

4
 


CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
 
(Unaudited)


 
June 30,

December 31,

2020

2019
ASSETS
 


 

Current Assets
 


 

Cash and cash equivalents
$
145,981


$
100,241

Accounts receivable, net
59,798


78,008

Inventories, net
44,266


42,237

Other current assets
14,750


16,992

Total current assets
264,795


237,478

Property, plant and equipment, net
99,349


105,038

Operating lease assets, net
24,369


24,644

Other Assets
 


 

Prepaid pension asset
64,104


62,082

Goodwill
106,056


106,056

Other intangible assets, net
80,622


85,215

Deferred income taxes
21,278


19,795

Other
2,816


3,046

Total other assets
274,876


276,194

Total Assets
$
663,389


$
643,354

LIABILITIES AND SHAREHOLDERS’ EQUITY
 


 

Current Liabilities
 


 

Accounts payable
$
32,820


$
48,219

Operating lease obligations
3,051


2,787

Accrued payroll and benefits
8,725


9,564

Accrued expenses and other liabilities
33,175


36,378

Total current liabilities
77,771


96,948

Long-term debt
141,300


99,700

Long-term operating lease obligations
24,473


24,926

Long-term pension obligations
6,504


6,632

Deferred income taxes
6,303


5,637

Other long-term obligations
6,146


4,292

Total Liabilities
262,497


238,135

Commitments and Contingencies (Note 10)





Shareholders’ Equity
 


 

Common stock
310,953


307,932

Additional contributed capital
39,775


43,689

Retained earnings
515,841


509,766

Accumulated other comprehensive loss
(93,155
)

(91,726
)
Total shareholders’ equity before treasury stock
773,414


769,661

Treasury stock
(372,522
)

(364,442
)
Total shareholders’ equity
400,892


405,219

Total Liabilities and Shareholders’ Equity
$
663,389


$
643,354

See notes to unaudited condensed consolidated financial statements.

5
 


CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ‑ UNAUDITED
(In thousands of dollars)
 
 
Six Months Ended
 
June 30,
 
June 30,
 
2020
 
2019
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net earnings 
$
8,665

 
$
23,362

Adjustments to reconcile net earnings to net cash provided by operating activities:
 

 
 

Depreciation and amortization
13,143

 
11,919

Pension and other post-retirement plan expense
1,348

 
502

Stock-based compensation
1,045

 
2,793

Asset impairment charges
1,016

 
892

Deferred income taxes
(466
)
 
1,937

Gain on sales of fixed assets

 
(122
)
(Gain) loss on foreign currency hedges, net of cash
(133
)
 
88

Changes in assets and liabilities, net of acquisition:
 

 
 

Accounts receivable
17,850

 
(5,394
)
Inventories
(2,328
)
 
360

Operating lease assets
275

 
(1,780
)
Other assets
1,460

 
(2,370
)
Accounts payable
(12,294
)
 
(1,582
)
Accrued payroll and benefits
(512
)
 
(4,713
)
Accrued liabilities
(4,026
)
 
(3,622
)
Income taxes payable
(974
)
 
(588
)
Operating lease liabilities
(189
)
 
1,986

Accrued expenses and other liabilities
(26
)
 
660

Pension and other post-retirement plans
(130
)
 
(144
)
Net cash provided by operating activities
23,724

 
24,184

CASH FLOWS FROM INVESTING ACTIVITIES:
 

 
 

Capital expenditures
(7,245
)
 
(9,430
)
Proceeds from sale of assets

 
122

Net cash used in investing activities
(7,245
)
 
(9,308
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 

 
 

Payments of long-term debt
(2,207,450
)
 
(309,100
)
Proceeds from borrowings of long-term debt
2,249,050

 
309,100

Purchase of treasury stock
(8,080
)
 
(5,002
)
Dividends paid
(2,598
)
 
(2,625
)
Taxes paid on behalf of equity award participants
(1,903
)
 
(2,637
)
Net cash provided by (used) in financing activities
29,019

 
(10,264
)
Effect of exchange rate changes on cash and cash equivalents
242

 
33

Net increase in cash and cash equivalents
45,740

 
4,645

Cash and cash equivalents at beginning of period
100,241

 
100,933

Cash and cash equivalents at end of period
$
145,981

 
$
105,578

Supplemental cash flow information:
 

 
 

Cash paid for interest
$
1,442

 
$
574

Cash paid for income taxes, net
$
4,114

 
$
5,448

Non-cash financing and investing activities:
 
 
 
Capital expenditures incurred but not paid
$
1,158

 
$
4,807

See notes to unaudited condensed consolidated financial statements.

6
 


CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - UNAUDITED
(in thousands of dollars)

The following summarizes the changes in total equity for the three and six months ended June 30, 2020:
 
Common
Stock
Additional
Contributed
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Earnings/(Loss)
Treasury
Stock
Total
Balances at December 31, 2019
$
307,932

$
43,689

$
509,766

$
(91,726
)
$
(364,442
)
$
405,219

Net earnings


3,808



3,808

Changes in fair market value of derivatives, net of tax



(4,414
)

(4,414
)
Changes in unrealized pension cost, net of tax



1,285


1,285

Cumulative translation adjustment, net of tax



(139
)

(139
)
Cash dividends of $0.04 per share


(1,298
)


(1,298
)
Acquired 220,731 shares of treasury stock




(5,304
)
(5,304
)
Issued shares on vesting of restricted stock units
2,166

(4,069
)



(1,903
)
Stock compensation

212




212

Balances at March 31, 2020
$
310,098

$
39,832

$
512,276

$
(94,994
)
$
(369,746
)
$
397,466

Net earnings


4,857



4,857

Changes in fair market value of derivatives, net of tax



644


644

Changes in unrealized pension cost, net of tax



1,209


1,209

Cumulative translation adjustment, net of tax



(14
)

(14
)
Cash dividends of $0.04 per share


(1,292
)


(1,292
)
Acquired 122,000 shares of treasury stock




(2,776
)
(2,776
)
Issued shares on vesting of restricted stock units
855

(855
)




Stock compensation

798




798

Balances at June 30, 2020
$
310,953

$
39,775

$
515,841

$
(93,155
)
$
(372,522
)
$
400,892

See notes to unaudited condensed consolidated financial statements.










7
 


CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - UNAUDITED
(in thousands of dollars)


The following summarizes the changes in total equity for the three and six months ended June 30, 2019:
 
Common
Stock
Additional
Contributed
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Earnings/(Loss)
Treasury
Stock
Total
Balances at December 31, 2018
$
306,697

$
42,820

$
478,847

$
(97,739
)
$
(352,696
)
$
377,929

Net earnings


11,419



11,419

Changes in fair market value of derivatives, net of tax



78


78

Changes in unrealized pension cost, net of tax



1,022


1,022

Cumulative translation adjustment, net of tax



91


91

Cash dividends of $0.04 per share


(1,315
)


(1,315
)
Acquired 31,500 shares of treasury stock




(849
)
(849
)
Issued shares on vesting of restricted stock units
967

(3,603
)



(2,636
)
Stock compensation

1,154




1,154

Balances at March 31, 2019
$
307,664

$
40,371

$
488,951

$
(96,548
)
$
(353,545
)
$
386,893

Net earnings


11,943



11,943

Changes in fair market value of derivatives, net of tax



(294
)

(294
)
Changes in unrealized pension cost, net of tax



1,026


1,026

Cumulative translation adjustment, net of tax



(87
)

(87
)
Cash dividends of $0.04 per share


(1,309
)


(1,309
)
Acquired 148,466 shares of treasury stock




(4,153
)
(4,153
)
Issued shares on vesting of restricted stock units
111

(111
)




Stock compensation

1,526




1,526

Balances at June 30, 2019
$
307,775

$
41,786

$
499,585

$
(95,903
)
$
(357,698
)
$
395,545

See notes to unaudited condensed consolidated financial statements.

8
 


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
(in thousands except for share and per share data)
June 30, 2020
NOTE 1—Basis of Presentation
 
The accompanying condensed consolidated financial statements have been prepared by CTS Corporation (“CTS” "we", "our", "us" or the "Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements should be read in conjunction with the financial statements, notes thereto, and other information included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2019.
 
The accompanying unaudited condensed consolidated financial statements reflect, in the opinion of management, all adjustments (consisting of normal recurring items) necessary for a fair statement, in all material respects, of the financial position and results of operations for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ materially from those estimates. The results of operations for the interim periods are not necessarily indicative of the results for the entire year. Certain reclassifications have been made to prior year amounts to conform to the current year presentation. The reclassifications had no impact on previously reported net earnings.


NOTE 2 – Revenue Recognition

The core principle of Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a five-step process to achieve that core principle:

Identify the contract(s) with a customer
Identify the performance obligations
Determine the transaction price
Allocate the transaction price
Recognize revenue when the performance obligations are met

We recognize revenue when the performance obligations specified in our contracts have been satisfied, after considering the impact of variable consideration and other factors that may affect the transaction price. Our contracts normally contain a single performance obligation that is fulfilled on the date of delivery based on shipping terms stipulated in the contract. We usually expect payment within 30 to 90 days from the shipping date, depending on our terms with the customer. None of our contracts as of June 30, 2020 contained a significant financing component. Differences between the amount of revenue recognized and the amount invoiced, collected from, or paid to our customers are recognized as contract assets or liabilities. Contract assets will be reviewed for impairment when events or circumstances indicate that they may not be recoverable.

To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing the most likely amount method based on an analysis of historical experience and current facts and circumstances, which requires significant judgment. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.














9
 


Disaggregated Revenue

The following table presents revenues disaggregated by the major markets we serve:
 
Three Months Ended
 
Six Months Ended
 
June 30, 2020
 
June 30, 2019
 
June 30, 2020
 
June 30, 2019
Transportation
$
38,129

 
$
80,343

 
$
99,663

 
$
159,184

Industrial
20,213

 
19,500

 
41,056

 
37,656

Medical
13,038

 
8,973

 
22,408

 
18,639

Aerospace & Defense
9,373

 
6,988

 
18,378

 
14,511

Telecom & IT
3,444

 
4,880

 
5,767

 
8,318

Total
$
84,197

 
$
120,684

 
$
187,272

 
$
238,308



NOTE 3 – Accounts Receivable 

The components of accounts receivable, net are as follows:
 
As of
 
June 30,
 
December 31,
 
2020
 
2019
Accounts receivable, gross
$
60,425

 
$
78,269

Less: Allowance for credit losses
(627
)
 
(261
)
Accounts receivable, net
$
59,798

 
$
78,008



NOTE 4 – Inventories 
Inventories, net consist of the following:
 
As of
 
June 30,
 
December 31,
 
2020
 
2019
Finished goods
$
8,937

 
$
9,447

Work-in-process
15,754

 
14,954

Raw materials
24,943

 
23,363

Less: Inventory reserves
(5,368
)
 
(5,527
)
Inventories, net
$
44,266

 
$
42,237


NOTE 5 – Property, Plant and Equipment
 
Property, plant and equipment is comprised of the following:
 
As of
 
June 30,
 
December 31,
 
2020
 
2019
Land and land improvements
$
1,095

 
$
1,095

Buildings and improvements
68,424

 
68,350

Machinery and equipment
226,465

 
224,312

Less: Accumulated depreciation
(196,635
)
 
(188,719
)
Property, plant and equipment, net
$
99,349

 
$
105,038

 
 
 
 
Depreciation expense for the six months ended June 30, 2020
 
 
$
8,580

Depreciation expense for the six months ended June 30, 2019
 
 
$
8,537

 

10
 


NOTE 6 – Retirement Plans
 
Pension Plans
 
Net pension expense for our domestic and foreign plans included in other income (expense) in the Condensed Consolidated Statement of Earnings is as follows:
 
Three Months Ended
 
Six Months Ended

June 30,

June 30,
 
June 30,
 
June 30,
 
2020
 
2019
 
2020
 
2019
Net pension expense
$
666

 
$
249

 
$
1,330

 
$
499


The components of net pension expense for our domestic and foreign plans include the following: 
 
Domestic Pension Plans
 
Foreign Pension Plans

Three Months Ended
 
Three Months Ended
 
June 30,

June 30,

June 30,

June 30,
 
2020
 
2019
 
2020
 
2019
Service cost
$

 
$

 
$
8

 
$
9

Interest cost
1,443

 
1,931

 
6

 
7

Expected return on plan assets(1)
(2,454
)
 
(3,047
)
 
(3
)
 
(4
)
Amortization of loss
1,622

 
1,311

 
44

 
42

Total expense, net
$
611

 
$
195

 
$
55

 
$
54

 
(1) Expected return on plan assets is net of expected investment expenses and certain administrative expenses.

 
Domestic Pension Plans
 
Foreign Pension Plans
 
Six Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
June 30,
 
June 30,
 
2020
 
2019
 
2020
 
2019
Service cost
$

 
$

 
$
15

 
$
18

Interest cost
2,886

 
3,862

 
13

 
15

Expected return on plan assets(1)
(4,908
)
 
(6,094
)
 
(7
)
 
(9
)
Amortization of loss
3,244

 
2,623

 
87

 
84

Total expense, net
$
1,222

 
$
391

 
$
108

 
$
108

(1) Expected return on plan assets is net of expected investment expenses and certain administrative expenses.

In February 2020, the CTS Board of Directors authorized management to explore termination of our U.S. based pension plan ("Plan") at management's discretion, subject to certain conditions. On June 1, 2020, we entered into the Fifth Amendment to the Plan whereby we set an effective termination date of July 31, 2020. The Plan termination process is expected to take twelve to eighteen months and requires certain approvals from both the Internal Revenue Service and Pension Benefit Guaranty Corporation. Once we receive such approvals, an insurance company will be selected to purchase annuities and fulfill the obligations of the Plan including administering payments to participants. Upon settlement of the pension liabilities, we will reclassify the related pension losses currently recorded in accumulated other comprehensive loss into earnings.  We do not expect any cash contributions from the Company to the Plan as a result of this termination because plan assets exceed estimated liabilities.
    










11
 



Other Post-retirement Benefit Plan
 
Net post-retirement expense for our other post-retirement plan includes the following components:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
June 30,
 
June 30,