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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 March 31, 2026

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 ☒ 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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer |  | ☒ |  | Accelerated filer |  | ☐
Non-accelerated filer |  | ☐ |  | 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 ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of April 22, 2026: 28,592,910.

CTS CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

|  | Page
PART I. FINANCIAL INFORMATION |  |
| Item 1. |  | Financial Statements |  | 3
|  |  | Condensed Consolidated Statements of Earnings (Unaudited) For the Three Months Ended March 31, 2026 and March 31, 2025 |  | 3
|  |  | Condensed Consolidated Statements of Comprehensive Earnings (Unaudited) For the Three Months Ended March 31, 2026 and March 31, 2025 |  | 4
|  |  | Condensed Consolidated Balance Sheets As of March 31, 2026 (Unaudited) and December 31, 2025 |  | 5
|  |  | Condensed Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, 2026 and March 31, 2025 |  | 6
|  |  | Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) For the Three Months Ended March 31, 2026 and March 31, 2025 |  | 7
|  |  | Notes to Condensed Consolidated Financial Statements ‑ (Unaudited) |  | 9
| Item 2. |  | Management’s Discussion and Analysis of Financial Condition and Results of Operations |  | 25
| Item 3. |  | Quantitative and Qualitative Disclosures about Market Risk |  | 30
| Item 4. |  | Controls and Procedures |  | 30
PART II. OTHER INFORMATION |  |
| Item 1. |  | Legal Proceedings |  | 30
| Item 1A. |  | Risk Factors |  | 30
| Item 2. |  | Unregistered Sales of Equity Securities and Use of Proceeds |  | 31
| Item 5. |  | Other Information |  | 31
| Item 6. |  | Exhibits |  | 32
SIGNATURES |  | 33

2

PART I - FINANCI AL INFORMATION

Item 1. Finan cial Statements

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEM ENTS OF EARNINGS - UNAUDITED

(In thousands, except per share amounts)

|  | Three Months Ended |
|  | March 31, |  |  | March 31, |
|  | 2026 |  |  | 2025 |
Net sales |  | $ | 139,230 |  |  | $ | 125,769 |
Cost of goods sold |  |  | 84,244 |  |  |  | 79,220 |
Gross margin |  |  | 54,986 |  |  |  | 46,549 |
Selling, general and administrative expenses |  |  | 25,984 |  |  |  | 23,623 |
Research and development expenses |  |  | 6,634 |  |  |  | 6,190 |
Restructuring charges |  |  | 386 |  |  |  | 451 |
Operating earnings |  |  | 21,982 |  |  |  | 16,285 |
Other (expense) income: |  |  |  |  |  |
Interest expense |  |  | (708 | ) |  |  | (1,167 | )
Interest income |  |  | 480 |  |  |  | 447 |
Other (expense) income, net |  |  | (81 | ) |  |  | 557 |
Total other expense, net |  |  | (309 | ) |  |  | (163 | )
Earnings before income taxes |  |  | 21,673 |  |  |  | 16,122 |
Income tax expense |  |  | 4,476 |  |  |  | 2,755 |
Net earnings |  | $ | 17,197 |  |  | $ | 13,367 |
Earnings per share: |  |  |  |  |  |
Basic |  | $ | 0.60 |  |  | $ | 0.45 |
Diluted |  | $ | 0.59 |  |  | $ | 0.44 |
Basic weighted – average common shares outstanding: |  |  | 28,689 |  |  |  | 30,013 |
Effect of dilutive securities |  |  | 313 |  |  |  | 313 |
Diluted weighted – average common shares outstanding: |  |  | 29,002 |  |  |  | 30,326 |
Cash dividends declared per share |  | $ | 0.04 |  |  | $ | 0.04 |

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 |
|  | March 31, |  |  | March 31, |
|  | 2026 |  |  | 2025 |
Net earnings |  | $ | 17,197 |  |  | $ | 13,367 |
Other comprehensive (loss) earnings: |  |  |  |  |  |
Changes in fair market value of derivatives, net of tax |  |  | 88 |  |  |  | 876 |
Changes in unrealized pension cost, net of tax |  |  | 13 |  |  |  | 14 |
Cumulative translation adjustment, net of tax |  |  | (1,930 | ) |  |  | 4,648 |
Other comprehensive (loss) earnings |  | $ | (1,829 | ) |  | $ | 5,538 |
Comprehensive earnings |  | $ | 15,368 |  |  | $ | 18,905 |

See notes to unaudited condensed consolidated financial statements.

4

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDA TED BALANCE SHEETS

(In thousands of dollars)

|  | (Unaudited) |  |  |  |
|  | March 31, |  |  | December 31, |
|  | 2026 |  |  | 2025 |
ASSETS |  |  |  |  |  |
Current Assets |  |  |  |  |  |
Cash and cash equivalents |  | $ | 90,851 |  |  | $ | 82,295 |
Accounts receivable, net of allowance of $636 and $910, respectively |  |  | 93,771 |  |  |  | 88,096 |
Inventories, net |  |  | 57,270 |  |  |  | 52,854 |
Other current assets |  |  | 24,123 |  |  |  | 29,461 |
Total current assets |  |  | 266,015 |  |  |  | 252,706 |
Property, plant and equipment, net |  |  | 89,404 |  |  |  | 89,741 |
Operating lease assets, net |  |  | 29,726 |  |  |  | 22,542 |
Other Assets |  |  |  |  |  |
Goodwill |  |  | 208,665 |  |  |  | 209,611 |
Other intangible assets, net |  |  | 148,627 |  |  |  | 153,562 |
Deferred income taxes |  |  | 24,314 |  |  |  | 25,110 |
Other |  |  | 10,404 |  |  |  | 11,039 |
Total other assets |  |  | 392,010 |  |  |  | 399,322 |
Total Assets |  | $ | 777,155 |  |  | $ | 764,311 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |
Current Liabilities |  |  |  |  |  |
Accounts payable |  | $ | 50,328 |  |  | $ | 48,220 |
Operating lease obligations |  |  | 4,098 |  |  |  | 3,453 |
Accrued payroll and benefits |  |  | 14,722 |  |  |  | 20,732 |
Accrued expenses and other liabilities |  |  | 36,261 |  |  |  | 37,283 |
Total current liabilities |  |  | 105,409 |  |  |  | 109,688 |
Long-term debt |  |  | 62,500 |  |  |  | 57,500 |
Long-term operating lease obligations |  |  | 28,363 |  |  |  | 21,841 |
Long-term pension obligations |  |  | 3,684 |  |  |  | 3,698 |
Deferred income taxes |  |  | 12,631 |  |  |  | 12,800 |
Other long-term obligations |  |  | 7,093 |  |  |  | 6,998 |
Total Liabilities |  |  | 219,680 |  |  |  | 212,525 |
Commitments and Contingencies (Note 9) |  |  |  |  |  |
Shareholders’ Equity |  |  |  |  |  |
Common stock |  |  | 326,577 |  |  |  | 324,982 |
Additional contributed capital |  |  | 41,791 |  |  |  | 43,303 |
Retained earnings |  |  | 729,518 |  |  |  | 713,467 |
Accumulated other comprehensive income |  |  | 11,919 |  |  |  | 13,748 |
Total shareholders’ equity before treasury stock |  |  | 1,109,805 |  |  |  | 1,095,500 |
Treasury stock |  |  | (552,330 | ) |  |  | (543,714 | )
Total shareholders’ equity |  |  | 557,475 |  |  |  | 551,786 |
Total Liabilities and Shareholders’ Equity |  | $ | 777,155 |  |  | $ | 764,311 |

See notes to unaudited condensed consolidated financial statements.

5

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEME NTS OF CASH FLOWS ‑ UNAUDITED

(In thousands of dollars)

|  | Three Months Ended |
|  | March 31, |  |  | March 31, |
|  | 2026 |  |  | 2025 |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |
Net earnings |  | $ | 17,197 |  |  | $ | 13,367 |
Adjustments to reconcile net earnings to net cash provided by operating activities: |  |  |  |  |  |
Depreciation and amortization |  |  | 8,810 |  |  |  | 8,494 |
Pension and other post-retirement plan expense |  |  | 72 |  |  |  | 177 |
Stock-based compensation |  |  | 2,012 |  |  |  | 1,647 |
Deferred income taxes |  |  | 772 |  |  |  | (491 | )
Change in fair value of contingent consideration liability |  |  | 53 |  |  |  | (162 | )
Loss on foreign currency hedges, net of cash |  |  | 31 |  |  |  | 168 |
Changes in assets and liabilities, net of acquisitions: |  |  |  |  |  |
Accounts receivable |  |  | (5,968 | ) |  |  | (3,040 | )
Inventories |  |  | (4,692 | ) |  |  | (1,022 | )
Operating lease assets |  |  | (7,184 | ) |  |  | 315 |
Other assets |  |  | 3,129 |  |  |  | 73 |
Accounts payable |  |  | 2,757 |  |  |  | 765 |
Accrued payroll and benefits |  |  | (6,126 | ) |  |  | (3,352 | )
Operating lease liabilities |  |  | 7,167 |  |  |  | (340 | )
Accrued expenses and other liabilities |  |  | (735 | ) |  |  | (1,041 | )
Pension and other post-retirement plans |  |  | — |  |  |  | (40 | )
Net cash provided by operating activities |  |  | 17,295 |  |  |  | 15,518 |
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |
Capital expenditures |  |  | (4,997 | ) |  |  | (4,465 | )
Short-term investments |  |  | 2,888 |  |  |  | — |
Net cash used in investing activities |  |  | (2,109 | ) |  |  | (4,465 | )
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |
Payments of long-term debt |  |  | (170,700 | ) |  |  | (264,200 | )
Proceeds from borrowings of long-term debt |  |  | 175,700 |  |  |  | 258,600 |
Purchases of treasury stock |  |  | (8,558 | ) |  |  | (6,465 | )
Dividends paid |  |  | (1,151 | ) |  |  | (1,201 | )
Taxes paid on behalf of equity award participants |  |  | (1,732 | ) |  |  | (2,634 | )
Net cash used in financing activities |  |  | (6,441 | ) |  |  | (15,900 | )
Effect of exchange rate changes on cash and cash equivalents |  |  | (189 | ) |  |  | 801 |
Net increase (decrease) in cash and cash equivalents |  |  | 8,556 |  |  |  | (4,046 | )
Cash and cash equivalents at beginning of period |  |  | 82,295 |  |  |  | 94,334 |
Cash and cash equivalents at end of period |  | $ | 90,851 |  |  | $ | 90,288 |
Supplemental cash flow information: |  |  |  |  |  |
Cash paid for interest |  | $ | 638 |  |  | $ | 1,060 |
Cash paid for income taxes, net |  | $ | 3,158 |  |  | $ | 2,912 |
Non-cash financing and investing activities: |  |  |  |  |  |
Capital expenditures incurred but not paid |  | $ | 1,169 |  |  | $ | 1,049 |
Excise taxes on purchase of treasury stock incurred not paid |  | $ | 58 |  |  | $ | 6 |

See notes to unaudited condensed consolidated financial statements.

6

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS O F SHAREHOLDERS' EQUITY - UNAUDITED

(in thousands of dollars, except shares and per share amounts)

The following summarizes the changes in total equity for the three months ended March 31, 2026:

|  | Common Stock |  |  | Additional Contributed Capital |  |  | Retained Earnings |  |  | Accumulated Other Comprehensive Income (Loss) |  |  | Treasury Stock |  |  | Total |
Balances at December 31, 2025 |  | $ | 324,982 |  |  | $ | 43,303 |  |  | $ | 713,467 |  |  | $ | 13,748 |  |  | $ | (543,714 | ) |  | $ | 551,786 |
Net earnings |  |  | — |  |  |  | — |  |  |  | 17,197 |  |  |  | — |  |  |  | — |  |  |  | 17,197 |
Changes in fair market value of derivatives, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 88 |  |  |  | — |  |  |  | 88 |
Changes in unrealized pension cost, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 13 |  |  |  | — |  |  |  | 13 |
Cumulative translation adjustment, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,930 | ) |  |  | — |  |  |  | (1,930 | )
Cash dividends of $0.04 per share |  |  | — |  |  |  | — |  |  |  | (1,146 | ) |  |  | — |  |  |  | — |  |  |  | (1,146 | )
Acquired 176,909 shares of treasury stock |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (8,616 | ) |  |  | (8,616 | )
Issued shares on vesting of restricted stock units |  |  | 1,595 |  |  |  | (3,327 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,732 | )
Stock compensation |  |  | — |  |  |  | 1,815 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,815 |
Balances at March 31, 2026 |  | $ | 326,577 |  |  | $ | 41,791 |  |  | $ | 729,518 |  |  | $ | 11,919 |  |  | $ | (552,330 | ) |  | $ | 557,475 |

See notes to unaudited condensed consolidated financial statements.

7

CTS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - UNAUDITED

(in thousands of dollars, except shares and per share amounts)

The following summarizes the changes in total equity for the three months ended March 31, 2025:

|  | Common Stock |  |  | Additional Contributed Capital |  |  | Retained Earnings |  |  | Accumulated Other Comprehensive Income (Loss) |  |  | Treasury Stock |  |  | Total |
Balances at December 31, 2024 |  | $ | 321,979 |  |  | $ | 44,662 |  |  | $ | 652,851 |  |  | $ | (4,266 | ) |  | $ | (487,018 | ) |  | $ | 528,208 |
Net earnings |  |  | — |  |  |  | — |  |  |  | 13,367 |  |  |  | — |  |  |  | — |  |  |  | 13,367 |
Changes in fair market value of derivatives, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 876 |  |  |  | — |  |  |  | 876 |
Changes in unrealized pension cost, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 14 |  |  |  | — |  |  |  | 14 |
Cumulative translation adjustment, net of tax |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,648 |  |  |  | — |  |  |  | 4,648 |
Cash dividends of $0.04 per share |  |  | — |  |  |  | — |  |  |  | (1,201 | ) |  |  | — |  |  |  | — |  |  |  | (1,201 | )
Acquired 143,541 shares of treasury stock |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (6,472 | ) |  |  | (6,472 | )
Issued shares on vesting of restricted stock units |  |  | 2,656 |  |  |  | (5,290 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,634 | )
Stock compensation |  |  | — |  |  |  | 1,432 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,432 |
Balances at March 31, 2025 |  | $ | 324,635 |  |  | $ | 40,804 |  |  | $ | 665,017 |  |  | $ | 1,272 |  |  | $ | (493,490 | ) |  | $ | 538,238 |

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)

March 31, 2026

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, 2025.

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.

During the three months ended March 31, 2026, the Company entered into a new agreement for the purchase of platinum used in the manufacturing process of certain products. The purchased platinum is presented in Property, plant and equipment, net on the Consolidated Balance Sheets. The platinum is not depreciated because it has very low physical loss and is repeatedly reclaimed and reused in our manufacturing process over a very long useful life. The physical loss of platinum in the manufacturing and reclamation process is treated as depletion and these losses are accounted for as a period expense based on actual units lost. Platinum is reviewed for impairment as part of our assessment of long-lived assets. This review considers all our platinum that is either in place in the production process; in reclamation, fabrication, or refinement in anticipation of re-use; or awaiting use to support increased capacity. Platinum is only acquired to support our operations and is not held for trading purposes.

There have been no other material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Accounting pronouncements recently adopted

ASU No. 2025-05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which allows for a practical expedient election to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset in the development of a reasonable and supportable forecast as part of estimating expected credit losses. The Company adopted ASU 2025-05 effective January 1, 2026 on a prospective basis and elected the practical expedient for the calculation of current expected credit losses. The adoption did not have a material effect on the Company’s consolidated financial statements.

Recently issued accounting pronouncements not yet adopted

ASU No. 2024-03, “Income Statement (Subtopic 220-40): Disaggregation of Income Statement Expenses”

In November 2024, the FASB issued ASU 2024-03, Income Statement (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional information about certain expenses in the notes to the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The standard can be applied either prospectively or retrospectively. The Company is currently evaluating the impact of adopting ASU 2024-03.

9

ASU No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which is intended to improve the operability and application of guidance related to capitalized software development costs. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-06.

NOTE 2 – Revenue Recognition

CTS designs and manufactures sensors, actuators, and electronic components for original equipment manufacturers and the U.S. Government. For our customer contracts, we determine the transaction price based on the consideration expected to be received by the Company in exchange for performing its obligations under the applicable contract. We allocate the transaction price to each distinct performance obligation to deliver a good or service, or a collection of goods and/or services, based on the relative standalone selling prices. We usually expect payment from our customers within 30 to 90 days from the shipping date or invoicing date, depending on our terms with the customer. None of our contracts as of March 31, 2026 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 value method based on an analysis of historical experience and current facts and circumstances, which may require 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.

Our revenue reserves contain uncertainties because they require management to make assumptions and to apply judgment to estimate the value of future credits to customers for product returns, price adjustments, and stock rotation adjustments. We base these estimates on the most likely value method considering all reasonably available information, including our historical experience and current expectations, and are reflected in the transaction price when sales are recorded.

Appro ximately 97% of o ur revenue is derived from contracts for sales of commercial products, which generally contain a single performance obligation. We generally recognize revenue at a point in time on the delivery date based on the shipping terms stipulated in the contract.

We also design, manufacture, and test products for certain customers under contracts that allow the customers to unilaterally terminate the contract for convenience, take control of any work in process, and pay us for costs incurred plus a reasonable profit. Revenue from these contracts is generally recognized over time as the work progresses, either as products are produced or services are rendered, because we generally do not have an alternative use for the completed assets produced and we have an enforceable right to payment for performance completed to date. These contracts may contain a single or multiple performance obligations. The accounting for these contracts involves applying significant judgment with respect to estimating total revenues, costs and profit for each performance obligation. We generally estimate revenue for these contracts using the costs incurred by the Company as we have determined that this method is the most representative of the Company's cumulative efforts relative to the total expected efforts to satisfy the performance obligations. Approxima tely 3% of the Company’s revenue is recognized over time.

See Note 9, “Commitments and Contingencies” for information about our product warranties.

10

Contract Assets and Liabilities

Contract assets and liabilities included in our Condensed Consolidated Balance Sheets are as follows:

|  | As of |
|  | March 31, |  |  | December 31, |  |  | December 31, |
|  | 2026 |  |  | 2025 |  |  | 2024 |
Contract Assets |  |  |  |  |  |  |  |  |
Unbilled customer receivables included in Other current assets |  | $ | 5,388 |  |  | $ | 6,688 |  |  | $ | 4,104 |
Total Contract Assets |  | $ | 5,388 |  |  | $ | 6,688 |  |  | $ | 4,104 |
Contract Liabilities |  |  |  |  |  |  |  |  |
Customer advance payments included in Accrued expenses and other liabilities |  | $ | (1,041 | ) |  | $ | (1,633 | ) |  | $ | (910 | )
Total Contract Liabilities |  | $ | (1,041 | ) |  | $ | (1,633 | ) |  | $ | (910 | )

The revenue recognized duri ng the three months ended March 31, 2026 and 2025 that was included in contract liabilities at the beginning of the period amounted to $591 and $60, respectively.

Disaggregated Revenue

The following table presents revenues disaggregated by the major markets we serve:

|  | Three months ended |
|  | March 31, 2026 |  |  | March 31, 2025 |
Transportation |  | $ | 60,158 |  |  | $ | 58,489 |
Industrial |  |  | 37,139 |  |  |  | 32,448 |
Medical |  |  | 24,517 |  |  |  | 19,131 |
Aerospace & Defense |  |  | 17,416 |  |  |  | 15,701 |
Total |  | $ | 139,230 |  |  | $ | 125,769 |

NOTE 3 – Accounts Receivable, net

The components of accounts receivable, net are as follows:

|  | As of |
|  | March 31, |  |  | December 31, |
|  | 2026 |  |  | 2025 |
Accounts receivable, gross |  | $ | 94,407 |  |  | $ | 89,006 |
Less: Allowance for credit losses |  |  | (636 | ) |  |  | (910 | )
Accounts receivable, net |  | $ | 93,771 |  |  | $ | 88,096 |

|  | As of |
|  | March 31, |  |  | December 31, |
|  | 2025 |  |  | 2024 |
Accounts receivable, gross |  | $ | 82,235 |  |  | $ | 78,379 |
Less: Allowance for credit losses |  |  | (795 | ) |  |  | (730 | )
Accounts receivable, net |  | $ | 81,440 |  |  | $ | 77,649 |

11

NOTE 4 – Inventories, net

Inventories, net consists of the following:

|  | As of |
|  | March 31, |  |  | December 31, |
|  | 2026 |  |  | 2025 |
Finished goods |  | $ | 10,705 |  |  | $ | 11,390 |
Work-in-process |  |  | 25,664 |  |  |  | 24,404 |
Raw materials |  |  | 33,968 |  |  |  | 30,726 |
Less: Inventory reserves |  |  | (13,067 | ) |  |  | (13,666 | )
Inventories, net |  | $ | 57,270 |  |  | $ | 52,854 |

NOTE 5 – Property, Plant and Equipment, net

Property, plant and equipment, net is comprised of the following:

|  | As of |
|  | March 31, |  |  | December 31, |
|  | 2026 |  |  | 2025 |
Land and land improvements |  | $ | 399 |  |  | $ | 399 |
Buildings and improvements |  |  | 73,746 |  |  |  | 73,248 |
Machinery and equipment(1) |  |  | 280,028 |  |  |  | 276,416 |
Less: Accumulated depreciation |  |  | (264,769 | ) |  |  | (260,322 | )
Property, plant and equipment, net |  | $ | 89,404 |  |  | $ | 89,741 |

(1)
Includes $2,646 of platinum which is depleted based on actual usage. See Note 1, “Basis of Presentation,” for further discussion.

Depreciation expense for the three months ended March 31, 2026 and March 31, 2025 was $4,772 and $4,463, respectively.

NOTE 6 – Goodwill and Other Intangible Assets

Goodwill

Changes in the net carrying amount of goodwill were as follows:

|  | Total |
Goodwill as of December 31, 2025 |  | $ | 209,611 |
Foreign exchange impact |  |  | (946 | )
Goodwill as of March 31, 2026 |  | $ | 208,665 |

Other Intangible Assets

Other intangible assets, net consist of the following components:

|  | As of |
|  | March 31, 2026 |
|  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Amount |
Customer lists/relationships |  | $ | 215,804 |  |  | $ | (89,439 | ) |  | $ | 126,365 |
Technology and other intangibles |  |  | 62,025 |  |  |  | (39,763 | ) |  |  | 22,262 |
Other intangible assets, net |  | $ | 277,829 |  |  | $ | (129,202 | ) |  | $ | 148,627 |

12

|  | As of |
|  | December 31, 2025 |
|  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Amount |
Customer lists/relationships |  | $ | 216,927 |  |  | $ | (86,526 | ) |  | $ | 130,401 |
Technology and other intangibles |  |  | 62,167 |  |  |  | (39,006 | ) |  |  | 23,161 |
Other intangible assets, net |  | $ | 279,094 |  |  | $ | (125,532 | ) |  | $ | 153,562 |

Amortization expense for the three months ended March 31, 2026 and March 31, 2025 was $4,038 and $4,031, respectively. The changes in the gross carrying amounts of intangible assets are due to foreign exchange impacts in the quarter.

Remaining amortization expense for other intangible assets as of March 31, 2026 is as follows:

|  | Amortization expense |
Remaining 2026 |  | $ | 12,043 |
2027 |  |  | 15,998 |
2028 |  |  | 15,963 |
2029 |  |  | 14,795 |
2030 |  |  | 14,621 |
Thereafter |  |  | 75,207 |
Total amortization expense |  | $ | 148,627 |

NOTE 7 – Costs Associated with Exit and Restructuring Activities

Restructuring charges are reported as a separate line within operating earnings in the Condensed Consolidated Statements of Earnings.

Total restructuring charges are as follows:

|  | Three Months Ended |
|  | March 31, 2026 |  |  | March 31, 2025 |
Restructuring charges |  | $ | 386 |  |  | $ | 451 |

During the quarter ended March 31, 2026, we incurred total restructuring charges of $386 related to workforce reduction costs. The workforce reduction charges incurred are for restructuring activities related to efficiency improvements.

The following table displays the restructuring liability activity included in accrued expenses and other liabilities for the three months ended March 31, 2026:

Restructuring liability at December 31, 2025 |  | $ | 192 |
Restructuring charges |  |  | 386 |
Costs paid |  |  | (260 | )
Restructuring liability at March 31, 2026 |  | $ | 318 |

13

NOTE 8 – Accrued Expenses and Other Liabilities

The components of accrued expenses and other liabilities are as follows:

|  | As of |
|  | March 31, |  |  | December 31, |
|  | 2026 |  |  | 2025 |
Accrued product-related costs |  | $ | 2,041 |  |  | $ | 1,789 |
Accrued income taxes |  |  | 7,830 |  |  |  | 7,175 |
Accrued property and other taxes |  |  | 1,354 |  |  |  | 1,071 |
Accrued professional fees |  |  | 1,227 |  |  |  | 1,454 |
Accrued customer-related liabilities |  |  | 1,769 |  |  |  | 2,602 |
Dividends payable |  |  | 1,146 |  |  |  | 1,151 |
Remediation reserves |  |  | 16,441 |  |  |  | 16,450 |
Derivative liabilities |  |  | 647 |  |  |  | 786 |
Other accrued liabilities |  |  | 3,806 |  |  |  | 4,805 |
Total accrued expenses and other liabilities |  | $ | 36,261 |  |  | $ | 37,283 |

NOTE 9 – Commitments and Contingencies

Certain processes in the manufacture of our current and past products may create by-products classified as hazardous waste. As a result, we have been notified by the U.S. Environmental Protection Agency (“EPA”), state environmental agencies and in some cases, groups of potentially responsible parties, that we may be potentially liable for environmental contamination at several sites currently or formerly owned or operated by us. Currently, none of these costs and accruals relate to sites that provide revenue generating activities for the Company. Two of those sites, Asheville, North Carolina (the “Asheville Site”) and Mountain View, California, are designated National Priorities List sites under the EPA’s Superfund program. We accrue a liability for probable remediation activities, claims, and proceedings against us with respect to environmental matters if the amount can be reasonably estimated, and provide disclosures including the nature of a loss whenever it is probable or reasonably possible that a potentially material loss may have occurred but cannot be estimated. We record contingent loss accruals on an undiscounted basis.

A roll-forward of remediation reserves included in accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets is comprised of the following:

|  | As of |
|  | March 31, |  |  | December 31, |
|  | 2026 |  |  | 2025 |
Balance at beginning of period |  | $ | 16,450 |  |  | $ | 12,192 |
Remediation expense |  |  | 248 |  |  |  | 5,465 |
Net remediation payments |  |  | (257 | ) |  |  | (1,213 | )
Other activity(1) |  |  | - |  |  |  | 6 |
Balance at end of the period |  | $ | 16,441 |  |  | $ | 16,450 |

(1)
Other activity includes currency translation adjustments not recorded through remediation expense.

14

The Company operates under and in accordance with a federal consent decree, dated March 7, 2017, with the EPA for the Asheville Site. On February 8, 2023, the Company received a letter from the EPA (the “EPA Letter”) seeking reimbursement of its past response costs and interest thereon relating to any release or threatened release of hazardous substances at the Asheville Site in the aggregate amount of $9,955 from the three potentially responsible parties associated with the Asheville Site, including the Company. Subsequently, the Department of Justice (the "DOJ") re-evaluated the EPA's past response costs and interest thereon and adjusted the amount of the costs to $8,288. On October 3, 2025, the Company presented a settlement offer as part of pre-litigation mediation and on March 16, 2026, the Company, the other potentially responsible parties, and the EPA agreed in principle on a settlement agreement in the amount of $7,610 (plus additional interest accrued on the unpaid principal from the settlement date) subject to final approval by the EPA, including a notice and comment period. The Company has updated the estimate of its portion of the settlement agreement to be $6,668, which has been recorded as of March 31, 2026. As of December 31, 2025, the liability recorded for the Asheville Site was $6,575.

Unrelated to the environmental claims described above, certain other legal claims are pending against us with respect to matters arising out of the ordinary conduct of our business.

We provide product warranties when we sell our products and accrue for estimated liabilities at the time of sale. Warranty estimates are forecasts based on the best available information and historical claims experience. We accrue for specific warranty claims if we believe that the facts of a specific claim make it probable that a liability in excess of our historical experience has been incurred and provide disclosures for specific claims whenever it is reasonably possible that a material loss may be incurred which cannot be estimated.

We cannot provide assurance that the ultimate disposition of environmental, legal, and product warranty claims will not materially exceed the amount of our accrued losses and adversely impact our consolidated financial position, results of operations, or cash flows. Our accrued liabilities and disclosures will be adjusted accordingly if additional information becomes available in the future.

NOTE 10 – Debt

Long-term debt is comprised of the following:

|  | As of |
|  | March 31, |  |  | December 31, |
|  | 2026 |  |  | 2025 |
Total credit facility |  | $ | 300,000 |  |  | $ | 300,000 |
Balance outstanding |  |  | 62,500 |  |  |  | 57,500 |
Standby letters of credit |  |  | 1,640 |  |  |  | 1,640 |
Amount available, subject to covenant restrictions |  | $ | 235,860 |  |  | $ | 240,860 |
Weighted-average interest rate |  |  | 4.75 | % |  |  | 5.48 | %

On November 24, 2025, we entered into a five-year revolving credit agreement (the “Revolving Credit Facility”) with a group of banks for a total credit facility availability of $300,000, which may be increased by at least $125,000 pursuant to the Revolving Credit Facility subject to administrative agent's approval. The Revolving Credit Facility is unsecured and replaced the prior $400,000 revolving credit facility, which would have expired on December 15, 2026. The Revolving Credit Facility matures on November 24, 2030 and modified the financial and non-financial covenants to provide the Company additional flexibility.

Borrowings in U.S. dollars under the Revolving Credit Facility bear interest, at a per annum rate equal to the applicable Term SOFR rate (but not less than 0.0%), plus the Term SOFR adjustment, and plus an applicable margin, which ranges from 1.00% to 1.75%, based on our net leverage ratio. Similarly, borrowings of alternative currencies under the Revolving Credit Facility bear interest equal to a defined risk-free reference rate, plus the applicable risk-free rate adjustment and plus an applicable margin, which ranges from 1.00% to 1.75%, based on our net leverage ratio. We use interest rate swaps to convert a portion of our revolving credit facility's outstanding balance from a variable rate of interest to a fixed rate. The contractual rate of these arrangements ranges from 2.45% to 3.36%. Refer to Note 11, “Derivative Financial Instruments,” for further discussion on the impact of interest rate swaps.

15

The Revolving Credit Facility includes a swing line sublimit of $20,000 and a letter of credit sublimit of $20,000 and an alternative currency sublimit of $150,000. We also pay a quarterly commitment fee on the unused portion of the Revolving Credit Facility. The commitment fee ranges from 0.175% to 0.25% based on our net leverage ratio.

The Revolving Credit Facility requires, in addition to customary representations and warranties, that we comply with a maximum net leverage ratio and a minimum interest coverage ratio. Failure to comply with these covenants could reduce the borrowing availability under the Revolving Credit Facility. We were in compliance with all debt covenants at March 31, 2026. The Revolving Credit Facility requires that we deliver quarterly financial statements, annual financial statements, auditor certifications, and compliance certificates within a specified number of days after the end of a quarter and year. Additionally, the Revolving Credit Facility contains restrictions limiting our ability to: dispose of assets; incur certain additional debt; repay other debt or amend subordinated debt instruments; create liens on assets; make investments, loans or advances; make acquisitions or engage in mergers or consolidations; engage in certain transactions with our subsidiaries and affiliates; and make stock repurchases and dividend payments.

We have debt issuance costs related to our long-term debt that are being amortized using the straight-line method over the life of the debt. Amortization expense for the three months ended March 31, 2026 and March 31, 2025 were $61 and $48, respectively. These costs are included in interest expense in our Consolidated Statements of Earnings.

Note 11 – Derivative Financial Instruments

Our earnings and cash flows are subject to fluctuations due to changes in foreign currency exchange rates and interest rates. We selectively use derivative financial instruments including foreign currency forward contracts as well as interest rate and cross-currency swaps to manage our exposure to these risks.

The use of derivative financial instruments exposes the Company to credit risk, which relates to the risk of nonperformance by a counterparty to the derivative contracts. We manage our credit risk by entering into derivative contracts with only highly-rated financial institutions and by using netting agreements.

The effective portion of derivative gains and losses are recorded in accumulated other comprehensive income (loss) until the hedged transaction affects earnings upon settlement, at which time they are reclassified to cost of goods sold or net sales. If it is probable that an anticipated hedged transaction will not occur by the end of the originally specified time period, we reclassify the gains or losses related to that hedge from accumulated other comprehensive income (loss) to other income (expense), net.

We assess hedge effectiveness qualitatively by verifying that the critical terms of the hedging instrument and the forecasted transaction continue to match, and that there have been no adverse developments that have increased the risk that the counterparty will default. No recognition of ineffectiveness was recorded in our Condensed Consolidated Statements of Earnings for the three months ended March 31, 2026.

Foreign Currency Hedges

We use forward contracts to mitigate currency risk related to a portion of our forecasted foreign currency revenues and costs. The currency forward contracts are designed as cash flow hedges and are recorded in the Condensed Consolidated Balance Sheets at fair value.

We continue to monitor the Company’s overall currency exposure and may elect to add cash flow hedges in the future. At March 31, 2026, we had a net unrealized gain of $4,821 in accumulated other comprehensive income (loss), $4,357 of which is expected to be reclassified to earnings within the next 12 months. The notional amount of foreign currency forward contracts outstanding was $63,224 at March 31, 2026.

16

Interest Rate Swaps

We use interest rate swaps to convert a portion of our Revolving Credit Facility’s outstanding balance from a variable rate of interest to a fixed rate. As of March 31, 2026, we have agreements to fix interest rates on $50,000 of long-term debt until December 2030. The difference to be paid or received under the terms of the swap agreements will be recognized as an adjustment to interest expense when settled.

These swaps are treated as cash flow hedges and, consequently, the changes in fair value are recorded in other comprehensive (loss) income. The estimated net amount of the existing gains that are reported in accumulated other comprehensive income (loss) that are expected to be reclassified into earnings within the next twelve months is approximately $471.

Cross-Currency Swap

The Company has operations and investments in various international locations and is subject to risks associated with changing foreign exchange rates. In order to hedge the Krone-based purchase price for the acquisition of Ferroperm Piezoceramics, A.S. (“Ferroperm”), the Company entered into a cross currency interest rate swap agreement on June 27, 2022 that synthetically swapped $25,000 of variable rate debt to Krone-denominated variable rate debt. Upon completion of the Ferroperm acquisition on June 30, 2022, the transaction was designated as a net investment hedge for accounting purposes and will mature on June 30, 2027.

Accordingly, any gains or losses on this derivative instrument are included in the foreign currency translation component of other comprehensive (loss) income until the net investment is sold, diluted or liquidated. As of March 31, 2026, we had a net unrealized loss of $1,583 in accumulated other comprehensive income (loss). Interest payments received for the cross-currency swap are excluded from the net investment hedge effectiveness assessment and are recorded in interest expense in the Condensed Consolidated Statements of Earnings. The assumptions used in measuring fair value of the cross-currency swap are considered level 2 inputs, which are based upon the Krone to U.S. Dollar exchange rate market.

The location and fair values of derivative instruments designated as hedging instruments in the Condensed Consolidated Balance Sheets as of March 31, 2026, are shown in the following table:

|  | As of |
|  | March 31, |  |  | December 31, |
|  | 2026 |  |  | 2025 |
Interest rate swaps reported in Other current assets |  | $ | 471 |  |  | $ | 455 |
Interest rate swaps reported in Other assets |  |  | 317 |  |  |  | - |
Cross-currency swap reported in Accrued expenses and other liabilities |  |  | (647 | ) |  |  | (786 | )
Foreign currency hedges reported in Other current assets |  |  | 4,515 |  |  |  | 4,767 |

The Company has elected to net its foreign currency derivative assets and liabilities in the balance sheet in accordance with ASC 210-20 (Balance Sheet, Offsetting). On a gross basis, there were foreign currency derivative assets of $4,854 and $339 foreign currency derivative liabilities at March 31, 2026.

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The effect of derivative instruments on the Condensed Consolidated Statements of Earnings is as follows:

|  | Three Months Ended |  |
|  | March 31, |  |  | March 31, |  |
|  | 2026 |  |  | 2025 |  |
Foreign Exchange Contracts: |  |  |  |  |  |  |
Amounts reclassified from AOCI to earnings: |  |  |  |  |  |  |
Net sales |  | $ | (267 | ) |  | $ | (40 | ) |
Cost of goods sold |  |  | 1,610 |  |  |  | (631 | ) |
Total net gain (loss) reclassified from AOCI to earnings |  |  | 1,343 |  |  |  | (671 | ) |
Total derivative gain (loss) on foreign exchange contracts recognized in earnings |  | $ | 1,343 |  |  | $ | (671 | ) |
Interest Rate Swaps: |  |  |  |  |  |  |
Income recorded in Interest expense |  | $ | 154 |  |  | $ | 234 |  |
Cross-Currency Swap: |  |  |  |  |  |  |
Income recorded in Interest expense |  | $ | 42 |  |  | $ | 72 |  |
Total net gain (loss) on derivatives |  | $ | 1,539 |  |  | $ | (365 | ) |

NOTE 12 – Accumulated Other Comprehensive Income (Loss)

Shareholders’ equity includes certain items classified as accumulated other comprehensive income (loss) (“AOCI”) in the Condensed Consolidated Balance Sheets, including:

•
Unrealized gains (losses) on hedges relate to interest rate swaps to convert a portion of our Revolving Credit Facility's outstanding balance from a variable rate of interest into a fixed rate, foreign currency forward contracts used to hedge our exposure to changes in exchange rates affecting certain revenues and costs denominated in foreign currencies, as well as a cross-currency swap that synthetically converts our U.S. Dollar variable rate debt to Krone-denominated variable rate debt. These hedges are designated as cash flow hedges, and we have deferred income statement recognition of gains and losses until the hedged transactions occur, at which time amounts are reclassified into earnings. Further information related to our derivative financial instruments is included in Note 11, “Derivative Financial Instruments” and Note 15, “Fair Value Measurements.”
•
Unrealized gains (losses) on pension obligations are deferred from income statement recognition until the gains or losses are realized. Amounts reclassified to income from AOCI are included in net periodic pension income (expense).
•
Cumulative translation adjustments relate to our non-U.S. subsidiary companies that have designated a functional currency other than the U.S. Dollar. We are required to translate the subsidiary functional currency financial statements to dollars using a combination of historical, period-end, and average foreign exchange rates. This combination of rates creates the foreign currency translation adjustment component of other comprehensive income (loss).

Changes in exchange rates between the functional currency and the currency in which a transaction is denominated are foreign exchange transaction gains or losses. Transaction (losses) gains for the three months ended March 31, 2026 and March 31, 2025 were $(80) and $513, respectively. The impact of these changes have been included in other income (expense) in the Condensed Consolidated Statements of Earnings.

18

The components of accumulated other comprehensive income (loss) for the three months ended March 31, 2026, are as follows:

|  |  |  |  |  |  |  | (Gain) Loss |  |  |  |
|  | As of |  |  | Gain (Loss) |  |  | Reclassified |  |  | As of |
|  | December 31, |  |  | Recognized |  |  | from AOCI |  |  | March 31, |
|  | 2025 |  |  | in OCI |  |  | to Earnings |  |  | 2026 |
Changes in fair market value of derivatives: |  |  |  |  |  |  |  |  |  |  |  |
Gross |  | $ | 5,492 |  |  | $ | 1,612 |  |  | $ | (1,497 | ) |  | $ | 5,607 |
Income tax (expense) benefit |  |  | (1,300 | ) |  |  | (379 | ) |  |  | 352 |  |  |  | (1,327 | )
Net |  |  | 4,192 |  |  |  | 1,233 |  |  |  | (1,145 | ) |  |  | 4,280 |
Changes in unrealized pension cost: |  |  |  |  |  |  |  |  |  |  |  |
Gross |  |  | (301 | ) |  |  | — |  |  |  | 12 |  |  |  | (289 | )
Income tax benefit |  |  | 261 |  |  |  | — |  |  |  | 1 |  |  |  | 262 |
Net |  |  | (40 | ) |  |  | — |  |  |  | 13 |  |  |  | (27 | )
Cumulative translation adjustment: |  |  |  |  |  |  |  |  |  |  |  |
Gross |  |  | 9,596 |  |  |  | (1,930 | ) |  |  | — |  |  |  | 7,666 |
Income tax benefit (expense) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net |  |  | 9,596 |  |  |  | (1,930 | ) |  |  | — |  |  |  | 7,666 |
Total accumulated other comprehensive income (loss) |  | $ | 13,748 |  |  | $ | (697 | ) |  | $ | (1,132 | ) |  | $ | 11,919 |

The components of accumulated other comprehensive income (loss) for the three months ended March 31, 2025, are as follows:

|  |  |  |  |  |  |  | (Gain) Loss |  |  |  |
|  | As of |  |  | Gain (Loss) |  |  | Reclassified |  |  | As of |
|  | December 31, |  |  | Recognized |  |  | from AOCI |  |  | March 31, |
|  | 2024 |  |  | in OCI |  |  | to Earnings |  |  | 2025 |
Changes in fair market value of derivatives: |  |  |  |  |  |  |  |  |  |  |  |
Gross |  | $ | (1,730 | ) |  | $ | 708 |  |  | $ | 437 |  |  | $ | (585 | )
Income tax benefit (expense) |  |  | 397 |  |  |  | (166 | ) |  |  | (103 | ) |  |  | 128 |
Net |  |  | (1,333 | ) |  |  | 542 |  |  |  | 334 |  |  |  | (457 | )
Changes in unrealized pension cost: |  |  |  |  |  |  |  |  |  |  |  |
Gross |  |  | (409 | ) |  |  | — |  |  |  | 14 |  |  |  | (395 | )
Income tax benefit |  |  | 300 |  |  |  | — |  |  |  | — |  |  |  | 300 |
Net |  |  | (109 | ) |  |  | — |  |  |  | 14 |  |  |  | (95 | )
Cumulative translation adjustment: |  |  |  |  |  |  |  |  |  |  |  |
Gross |  |  | (2,824 | ) |  |  | 4,648 |  |  |  | — |  |  |  | 1,824 |
Income tax benefit (expense) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net |  |  | (2,824 | ) |  |  | 4,648 |  |  |  | — |  |  |  | 1,824 |
Total accumulated other comprehensive (loss) income |  | $ | (4,266 | ) |  | $ | 5,190 |  |  | $ | 348 |  |  | $ | 1,272 |

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NOTE 13 – Shareholders’ Equity

Share count and par value data related to shareholders’ equity are as follows:

|  | As of |
|  | March 31, |  |  | December 31, |
|  | 2026 |  |  | 2025 |
Preferred Stock |  |  |  |  |  |
Par value per share |  | No par value |  |  | No par value |
Shares authorized |  |  | 25,000,000 |  |  |  | 25,000,000 |
Shares outstanding |  | — |  |  |  | — |
Common Stock |  |  |  |  |  |
Par value per share |  | No par value |  |  | No par value |
Shares authorized |  |  | 75,000,000 |  |  |  | 75,000,000 |
Shares issued |  |  | 57,671,728 |  |  |  | 57,628,332 |
Shares outstanding |  |  | 28,624,587 |  |  |  | 28,758,100 |
Treasury stock |  |  |  |  |  |
Shares held |  |  | 29,047,141 |  |  |  | 28,870,232 |

In November 2025, our Board of Directors approved a new share repurchase program authorizing the Company to repurchase up to $100,000 of its common stock (“2025 Repurchase Program”). This program replaces the prior share repurchase program that was approved in February 2024. The 2025 Repurchase Program has no set expiration date and authorizes repurchases from time to time in the open market (including, without limitation, the use of Rule 10b5-1 plans), or through privately negotiated transactions, and repurchases will depend on various factors, including our evaluation of general market and economic conditions, our financial condition and the trading price of our common stock. The 2025 Repurchase Program may be extended, modified, suspended or discontinued at any time.

During the three months ended March 31, 2026, 176,909 shares of common stock were repurchased for $8,644 under the 2025 repurchase program. During the three months ended March 31, 2025, 143,541 shares of common stock were repurchased for $6,650. As of March 31, 2026, approximately $81,723 remains available for future purchases.

We are subject to a 1% excise tax on stock repurchases under the United States Inflation Reduction Act of 2022 which we include in the cost of stock repurchases as a reduction of shareholders’ equity. As of March 31, 2026 and December 31, 2025, we had $575 and $517, respectively, recorded in Accrued expenses and other liabilities in the Consolidated Balance Sheet.

A roll-forward of shares of common stock outstanding is as follows:

|  | Three Months Ended |
|  | March 31, |  |  | March 31, |
|  | 2026 |  |  | 2025 |
Balance at the beginning of the year |  |  | 28,758,100 |  |  |  | 30,026,045 |
Repurchases |  |  | (176,909 | ) |  |  | (143,541 | )
Restricted share issuances |  |  | 43,396 |  |  |  | 76,807 |
Balance at the end of the period |  |  | 28,624,587 |  |  |  | 29,959,311 |

Certain potentially dilutive restricted stock units are excluded from diluted earnings per share because they are anti-dilutive. The number of outstanding awards that were anti-dilutive for the three months ended March 31, 2026 and March 31, 2025 were 6,793 and 165, respectively.

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NOTE 14 – Stock-Based Compensation

At March 31, 2026, we had five active stock-based compensation plans: the Non-Employee Directors’ Stock Retirement Plan (“Directors’ Plan”), the 2004 Omnibus Long-Term Incentive Plan (“2004 Plan”), the 2009 Omnibus Equity and Performance Incentive Plan (“2009 Plan”), the 2014 Performance and Incentive Compensation Plan (“2014 Plan”), and the 2018 Equity and Incentive Compensation Plan (“2018 Plan”). Future grants can only be made under the 2018 Plan.

The 2018 Plan allows for grants of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares, performance units, and other stock awards subject to the terms of the 2018 Plan.

The following table summarizes the compensation expense included in selling, general and administrative expenses in the Condensed Consolidated Statements of Earnings related to stock-based compensation plans:

|  | Three Months Ended |
|  | March 31, |  |  | March 31, |
|  | 2026 |  |  | 2025 |
Service-based RSUs |  | $ | 1,003 |  |  | $ | 947 |
Performance-based RSUs |  |  | 812 |  |  |  | 485 |
Cash-settled RSUs |  |  | 197 |  |  |  | 215 |
Total |  | $ | 2,012 |  |  | $ | 1,647 |
Income tax benefit |  |  | 473 |  |  |  | 387 |
Net expense |  | $ | 1,539 |  |  | $ | 1,260 |

The following table summarizes the unrecognized compensation expense related to unvested RSUs by type and the weighted-average period in which the expense is to be recognized:

|  | Unrecognized |  |  |  |
|  | Compensation |  |  | Weighted- |
|  | Expense at |  |  | Average |
|  | March 31, 2026 |  |  | Period (years) |
Service-based RSUs |  | $ | 4,897 |  |  |  | 1.58 |
Performance-based RSUs |  |  | 6,172 |  |  |  | 2.27 |
Total |  | $ | 11,069 |  |  |  | 1.96 |

We recognize expense on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards.

The following table summarizes the status of these plans as of March 31, 2026:

|  | 2018 Plan |  |  | 2014 Plan |  |  | 2009 Plan |  |  | 2004 Plan |  |  | Directors' Plan |
Awards originally available |  |  | 2,500,000 |  |  |  | 1,500,000 |  |  |  | 3,400,000 |  |  |  | 6,500,000 |  |  | N/A |
Maximum potential awards outstanding |  |  | 733,657 |  |  |  | 35,100 |  |  |  | 30,000 |  |  |  | 14,545 |  |  |  | 4,722 |
RSUs and cash-settled awards vested and released |  |  | 869,782 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Awards available for grant |  |  | 896,561 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |

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Service-Based Restricted Stock Units

The following table summarizes the service-based RSU activity for the three months ended March 31, 2026:

|  | Units |  |  | Weighted Average Grant Date Fair Value |
Outstanding at December 31, 2025 |  |  | 320,640 |  |  | $ | 34.82 |
Granted |  |  | 56,358 |  |  |  | 56.60 |
Vested and released |  |  | (50,703 | ) |  |  | 44.49 |
Forfeited |  |  | (2,002 | ) |  |  | 41.78 |
Outstanding at March 31, 2026 |  |  | 324,293 |  |  | $ | 37.04 |
Releasable at March 31, 2026 |  |  | 169,267 |  |  | $ | 26.42 |

Performance-Based Restricted Stock Units

The following table summarizes the performance-based RSU activity for the three months ended March 31, 2026:

|  | Units |  |  | Weighted Average Grant Date Fair Value |
Outstanding at December 31, 2025 |  |  | 200,598 |  |  | $ | 44.07 |
Granted |  |  | 69,645 |  |  |  | 56.80 |
Attained by performance |  |  | 5,400 |  |  |  | 43.80 |
Released |  |  | (24,466 | ) |  |  | 43.80 |
Forfeited |  |  | (30,204 | ) |  |  | 43.71 |
Outstanding at March 31, 2026 |  |  | 220,973 |  |  | $ | 48.19 |
Releasable at March 31, 2026 |  |  | — |  |  | $ | — |

Cash-Settled Restricted Stock Units

Cash-Settled RSUs entitle the holder to receive the cash equivalent of one share of common stock for each unit when the unit vests. These RSUs are issued to key employees residing in foreign locations as direct compensation. Generally, these RSUs vest over a three-year period. Cash-Settled RSUs are classified as liabilities and are remeasured at each reporting date until settled. At March 31, 2026 and December 31, 2025, we had 37,830 and 39,661 Cash-Settled RSUs outstanding, respectively. At March 31, 2026 and December 31, 2025, liabilities of $432 and $594, respectively, were included in accrued expenses and other liabilities on our Condensed Consolidated Balance Sheets.

NOTE 15 – Fair Value Measurements

The table below summarizes our financial assets and liabilities that were measured at fair value on a recurring basis at March 31, 2026:

|  | Asset (Liability) Carrying Value at March 31, 2026 |  |  | Quoted Prices in Active Markets for Identical (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Interest rate swaps |  | $ | 788 |  |  | $ | — |  |  | $ | 788 |  |  | $ | — |
Foreign currency hedges |  | $ | 4,515 |  |  | $ | — |  |  | $ | 4,515 |  |  | $ | — |
Cross-currency swap |  | $ | (647 | ) |  | $ | — |  |  | $ | (647 | ) |  | $ | — |
Qualified replacement plan assets |  | $ | 8,051 |  |  | $ | 8,051 |  |  | $ | — |  |  | $ | — |
Contingent consideration |  | $ | (3,506 | ) |  | $ | — |  |  | $ | — |  |  | $ | (3,506 | )

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The table below summarizes the financial assets and liabilities that were measured at fair value on a recurring basis at December 31, 2025:

|  | Asset (Liability) Carrying Value at December 31, 2025 |  |  | Quoted Prices in Active Markets for Identical (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Interest rate swaps |  | $ | 455 |  |  | $ | — |  |  | $ | 455 |  |  | $ | — |
Foreign currency hedges |  | $ | 4,767 |  |  | $ | — |  |  | $ | 4,767 |  |  | $ | — |
Cross-currency swap |  | $ | (786 | ) |  | $ | — |  |  | $ | (786 | ) |  | $ | — |
Qualified replacement plan assets |  | $ | 8,991 |  |  | $ | 8,991 |  |  | $ | — |  |  | $ | — |
Contingent consideration |  | $ | (3,453 | ) |  | $ | — |  |  | $ | — |  |  | $ | (3,453 | )

We use interest rate swaps to convert a portion of our Revolving Credit Facility’s outstanding balance from a variable rate of interest into a fixed rate and foreign currency forward contracts to hedge the effect of foreign currency changes on certain revenues and costs denominated in foreign currencies. The Company entered into a cross-currency swap agreement in order to manage its exposure to changes in interest rates related to foreign debt. These derivative financial instruments are measured at fair value on a recurring basis. The fair value of our interest rate swaps and foreign currency hedges were measured using standard valuation models using market-based observable inputs over the contractual terms, including forward yield curves, among others. There is a readily determinable market for these derivative instruments, but that market is not active and therefore they are classified within Level 2 of the fair value hierarchy.

The fair value of the contingent consideration requires significant judgment. The Company's fair value estimates used in the contingent consideration valuation are considered Level 3 fair value measurements. The fair value estimates were based on assumptions management believes to be reasonable, but that are inherently uncertain, including estimates of future revenues and timing of events and activities that are expected to take place.

A roll-forward of the contingent consideration is as follows:

|  | Contingent Consideration |
Balance at December 31, 2025 |  | $ | 3,453 |
Change in fair value |  |  | 53 |
Balance at March 31, 2026 |  | $ | 3,506 |

As of March 31, 2026, all contingent consideration was recorded in other long-term obligations on our Condensed Consolidated Balance Sheets.

Our long-term debt consists of the Revolving Credit Facility, which is recorded at its carrying value. There is a readily determinable market for our long-term debt and it is classified within Level 2 of the fair value hierarchy as the market is not deemed to be active. The fair value of long-term debt approximates its carrying value and was determined by valuing a similar hypothetical coupon bond and attributing that value to our long-term debt under the Revolving Credit Facility.

The qualified replacement plan assets consist of investment funds maintained for future contributions to the Company’s U.S. 401(k) program. The investments are Level 1 marketable securities and are recorded in Other Assets on our Condensed Consolidated Balance Sheets.

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NOTE 16 – Income Taxes

The effective tax rates for the three months ended March 31, 2026 and March 31, 2025 are as follows:

|  | Three Months Ended |
|  | March 31, |  |  | March 31, |
|  | 2026 |  |  | 2025 |
Effective tax rate |  |  | 20.7 | % |  |  | 17.1 | %

The increase in the effective income tax rate is primarily attributed to a change in mix of earnings taxed at higher rates. The first quarter 2025 and 2026 effective income tax rates were lower than the U.S. statutory federal income tax rate primarily due to foreign earnings that are taxed at lower rates and tax benefits recorded upon vesting of RSUs.

NOTE 17 – Segment Information

The Company designs, manufactures, and sells a broad line of sensors, connectivity components, and actuators across multiple end markets in North America, Asia, and Europe. Our Chief Operating Decision Maker (“CODM”), who is our Chair, President and Chief Executive Officer, analyzes the results of our business through one reportable segment. Our CODM evaluates the operating results and performance through Net earnings, which are reported on the Consolidated Statements of Earnings. These financial metrics are used to view operating trends, perform analytical comparisons and benchmark performance between periods and to monitor budget-to-actual variances on a monthly basis. To manage operations and make decisions regarding resources, our CODM is regularly provided and reviews expense information at a consolidated level for our Cost of goods sold, Selling, general, and administrative expenses and Research and Development expenses, which are reported on the Consolidated Statements of Earnings. As part of our strategic planning and annual operating plan, a focus is on sales growth, diversification, and profitability. The measure of segment assets is reported on the Consolidated Balance Sheet as Total Assets, but the CODM does not use discrete balance sheet information in assessing performance and allocating resources.

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Item 2. Management’s Discussion and Analysis of Fin ancial Condition and Results of Operations (“MD&A”)

(in thousands of dollars, except percentages and per share amounts)

The following discussion should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and notes included under Item 1, as well as our Consolidated Financial Statements and notes and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Overview

CTS is a global manufacturer of sensors, connectivity components, and actuators. CTS was established in 1896 as a provider of high-quality telephone products and was incorporated as an Indiana corporation in February 1929. Our principal executive offices are located in Lisle, Illinois.

We design, manufacture, and sell a broad line of sensors, connectivity components, and actuators primarily to original equipment manufacturers (“OEMs”), tier one suppliers for the aerospace and defense, industrial, medical, and transportation markets, and the U.S. Government. Our vision is to be a leading provider of sensing and motion devices as well as connectivity components, enabling an intelligent and seamless world. These devices are categorized by their ability to Sense, Connect or Move. Sense products provide vital inputs to electronic systems. Connect products allow systems to function in synchronization with other systems. Move products ensure required movements are effectively and accurately executed. We are committed to achieving our vision by continuing to invest in the development of products, technologies, and talent within these categories.

We operate manufacturing facilities in North America, Asia, and Europe. Sales and marketing are accomplished through our sales engineers. We also utilize independent manufacturers' representatives and distributors to extend our sales capability.

There is an increasing proliferation of sensing and motion applications within various markets we serve. In addition, the increasing connectivity of various devices to the internet results in greater demand for communication bandwidth and data storage, increasing the need for our connectivity products. Our success is dependent on the ability to execute our strategy to support these trends. We are subject to a number of challenges including, without limitation, periodic market softness, competition from other suppliers, changes in technology, changes in the economy generally, including inflationary and/or recessionary conditions and increased tariffs, geopolitical conflicts, availability and cost of rare earth elements, minerals, and metals, as well as the ability to add new customers, launch new products or penetrate new markets. Many of these, and other risks and uncertainties relating to the Company and our business, are discussed in further detail in Item 1A. of our Annual Report on Form 10-K and other filings made with the SEC.

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Results of Operations: First Quarter 2026 versus First Quarter 2025

The following table highlights changes in significant components of the Unaudited Condensed Consolidated Statements of Earnings for the quarters ended March 31, 2026 and March 31, 2025:

|  | Three Months Ended |  |  |  |  |  |  |  |  |  |
|  | March 31, 2026 |  |  | March 31, 2025 |  |  | Percent Change |  |  | Percentage of Net Sales – 2026 |  |  | Percentage of Net Sales – 2025 |
Net sales |  | $ | 139,230 |  |  | $ | 125,769 |  |  |  | 10.7 | % |  |  | 100.0 | % |  |  | 100.0 | %
Cost of goods sold |  |  | 84,244 |  |  |  | 79,220 |  |  |  | 6.3 |  |  |  | 60.5 |  |  |  | 63.0 |
Gross margin |  |  | 54,986 |  |  |  | 46,549 |  |  |  | 18.1 |  |  |  | 39.5 |  |  |  | 37.0 |
Selling, general and administrative expenses |  |  | 25,984 |  |  |  | 23,623 |  |  |  | 10.0 |  |  |  | 18.7 |  |  |  | 18.8 |
Research and development expenses |  |  | 6,634 |  |  |  | 6,190 |  |  |  | 7.2 |  |  |  | 4.8 |  |  |  | 4.9 |
Restructuring charges |  |  | 386 |  |  |  | 451 |  |  |  | (14.4 | ) |  |  | 0.3 |  |  |  | 0.4 |
Total operating expenses |  |  | 33,004 |  |  |  | 30,264 |  |  |  | 9.1 |  |  |  | 23.7 |  |  |  | 24.1 |
Operating earnings |  |  | 21,982 |  |  |  | 16,285 |  |  |  | 35.0 |  |  |  | 15.8 |  |  |  | 12.9 |
Total other income (expense), net |  |  | (309 | ) |  |  | (163 | ) |  |  | 89.6 |  |  |  | (0.2 | ) |  |  | (0.1 | )
Earnings before income taxes |  |  | 21,673 |  |  |  | 16,122 |  |  |  | 34.4 |  |  |  | 15.6 |  |  |  | 12.8 |
Income tax expense |  |  | 4,476 |  |  |  | 2,755 |  |  |  | 62.5 |  |  |  | 3.2 |  |  |  | 2.2 |
Net earnings |  | $ | 17,197 |  |  | $ | 13,367 |  |  |  | 28.7 | % |  |  | 12.4 | % |  |  | 10.6 | %
Earnings per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diluted net earnings per share |  | $ | 0.59 |  |  | $ | 0.44 |  |  |  |  |  |  |  |  |  |

Net sales were $139,230 in the first quarter of 2026, an increase of $13,461 or 10.7% from the first quarter of 2025. Net sales to the diversified end markets increased $11,792 or 17.5% while net sales to transportation markets increased $1,669 or 2.9%. Changes in foreign exchange rates increased net sales by $2,898, net of hedges, due to the U.S. Dollar depreciating compared to the Euro.

Gross margin was $54,986 in the first quarter of 2026, an increase of $8,437 or 18.1% from the first quarter of 2025. The increase in gross margin was driven by improved mix of sales to our diversified end markets as well as efficiency improvements. Changes in foreign exchange rates increased gross margin by $672, net of hedges, due to the U.S. Dollar depreciating compared to the Euro. See Note 11, “Derivative Financial Instruments” in the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further information. As a result, our gross margin percentage increased from 37.0% for the first quarter of 2025 to 39.5% for the first quarter of 2026.

Selling, general and administrative (“SG&A”) expenses were $25,984 or 18.7% of net sales in the first quarter of 2026, versus $23,623 or 18.8% of net sales in the first quarter of 2025. The increase in SG&A expenses is primarily related to an increase in incentive compensation expense.

Research and development (“R&D”) expenses were $6,634 or 4.8% of net sales in the first quarter of 2026 compared to $6,190 or 4.9% of net sales in the first quarter of 2025. Our R&D expenses are in line with our commitment to continue investing in research and product development to drive organic growth.

Restructuring charges were $386 or 0.3% of net sales in the first quarter of 2026 compared to $451 or 0.4% of net sales in the first quarter of 2025. The restructuring charges in the quarter ended March 31, 2026 were primarily related to efficiency enhancements. See Note 7, “Costs Associated with Exit and Restructuring Activities” in the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further information.

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Other income and expense items are summarized in the following table:

|  | Three Months Ended |
|  | March 31, |  |  | March 31, |
|  | 2026 |  |  | 2025 |
Interest expense |  | $ | (708 | ) |  | $ | (1,167 | )
Interest income |  |  | 480 |  |  |  | 447 |
Other (expense) income, net |  |  | (81 | ) |  |  | 557 |
Total other expense, net |  | $ | (309 | ) |  | $ | (163 | )

Interest expense decreased due to lower borrowings in the first quarter of 2026 compared to the first quarter of 2025.

|  | Three Months Ended |
|  | March 31, |  |  | March 31, |
|  | 2026 |  |  | 2025 |
Effective tax rate |  |  | 20.7 | % |  |  | 17.1 | %

Our effective income tax rate was 20.7% and 17.1% in the first quarters of 2026 and 2025, respectively. The increase in the effective income tax rate is primarily attributed to a change in mix of earnings taxed at higher rates.

Liquidity and Capital Resources

We historically have funded our capital and operating needs primarily through cash flows from operating activities, supported by available credit under our Revolving Credit Facility (as defined below). We believe that cash flows from operating activities and available borrowings under our Revolving Credit Facility will be adequate to fund our working capital needs, capital expenditures, investments, and debt service requirements for at least the next twelve months and for the foreseeable future thereafter. However, we may choose to pursue additional equity and debt financing to provide additional liquidity or to fund acquisitions.

Cash and cash equivalents were $90,851 at March 31, 2026, and $82,295 at December 31, 2025, of which $89,576 and $75,943, respectively, were held outside the United States. Total long-term debt was $62,500 as of March 31, 2026 and $57,500 as of December 31, 2025.

Cash Flow Overview

Cash Flows from Operating Activities

Net cash provided by operating activities was $17,295 during the three months ended March 31, 2026. Components of net cash provided by operating activities included net earnings of $17,197, depreciation and amortization expense of $8,810, other net non-cash items of $2,940, and a net cash outflow from changes in assets and liabilities of $11,652.

Net cash provided by operating activities was $15,518 during the three months ended March 31, 2025. Components of net cash provided by operating activities included net earnings of $13,367, depreciation and amortization expense of $8,494, other net non-cash items of $1,339, and a net cash outflow from changes in assets and liabilities of $7,682.

Cash Flows from Investing Activities

Net cash used in investing activities was $2,109 for the three months ended March 31, 2026, driven by capital expenditures of $4,997 partially offset by the maturity of short term investments of $2,888.

Net cash used in investing activities was $4,465 for the three months ended March 31, 2025, driven entirely by capital expenditures.

Cash Flows from Financing Activities

Net cash used in financing activities for the three months ended March 31, 2026 was $6,441. The net cash outflow was the result of treasury stock purchases of $8,558 (net of excise taxes unpaid), dividends paid of $1,151, taxes paid on behalf of equity award participants of $1,732, partially offset by net cash borrowed on long-term debt of $5,000.

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Net cash used in financing activities for the three months ended March 31, 2025 was $15,900. The net cash outflow was the result of treasury stock purchases of $6,465 (net of excise taxes unpaid), dividends paid of $1,201, taxes paid on behalf of equity award participants of $2,634, and net cash used in the paydown of long-term debt of $5,600.

Capital Resources

Revolving Credit Facility

Long‑term debt is comprised of the following:

|  | As of |
|  | March 31, |  |  | December 31, |
|  | 2026 |  |  | 2025 |
Total credit facility |  | $ | 300,000 |  |  | $ | 300,000 |
Balance outstanding |  |  | 62,500 |  |  |  | 57,500 |
Standby letters of credit |  |  | 1,640 |  |  |  | 1,640 |
Amount available, subject to covenant restrictions |  | $ | 235,860 |  |  | $ | 240,860 |

On November 24, 2025, we entered into a five-year revolving credit agreement (the “Revolving Credit Facility”) with a group of banks for a total credit facility availability of $300,000, which may be increased by at least $125,000 pursuant to the Revolving Credit Facility subject to administrative agent's approval. The Revolving Credit Facility is unsecured and replaced the prior $400,000 revolving credit facility, which would have expired on December 15, 2026. The Revolving Credit Facility matures on November 24, 2030 and modified the financial and non-financial covenants to provide the Company additional flexibility.

Borrowings in U.S. dollars under the Revolving Credit Facility bear interest, at a per annum rate equal to the applicable Term SOFR rate (but not less than 0.0%), plus the Term SOFR adjustment, and plus an applicable margin, which ranges from 1.00% to 1.75%, based on our net leverage ratio. Similarly, borrowings of alternative currencies under the Revolving Credit Facility bear interest equal to a defined risk-free reference rate, plus the applicable risk-free rate adjustment and plus an applicable margin, which ranges from 1.00% to 1.75%, based on our net leverage ratio. We use interest rate swaps to convert a portion of our revolving credit facility's outstanding balance from a variable rate of interest to a fixed rate. The contractual rate of these arrangements ranges from 2.45% to 3.36%.

The Revolving Credit Facility includes a swingline sublimit of $20,000 and a letter of credit sublimit of $20,000 and an alternative currency sublimit of $150,000. We also pay a quarterly commitment fee on the unused portion of the Revolving Credit Facility. The commitment fee ranges from 0.175% to 0.25% based on our net leverage ratio. We were in compliance with all debt covenants at March 31, 2026.

Critical Accounting Policies and Estimates

The Company’s Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP. In connection with the preparation of the Condensed Consolidated Financial Statements, the Company uses estimates and makes judgments and assumptions about future events that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures. The assumptions, estimates, and judgments are based on historical experience, current trends, and other factors the Company believes are relevant at the time it prepares the Condensed Consolidated Financial Statements.

The critical accounting policies and estimates are consistent with those discussed in Note 1, “Summary of Significant Accounting Policies,” to the Consolidated Financial Statements and the MD&A section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Refer to Note 1, “Basis of Presentation” for updates to the Company’s critical accounting policies and estimates during the three months ended March 31, 2026.

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Significant Customers

Our net sales to customers representing at least 10% of total net sales is as follows:

|  | Three Months Ended |
|  | March 31, 2026 |  |  | March 31, 2025 |
Cummins Inc. |  |  | 10.4 | % |  |  | 10.3 | %
Toyota Motor Corporation |  |  | 8.5 | % |  |  | 11.9 | %

No other customer accounted for 10% or more of total net sales during these periods.

Forward‑Looking Statements

Readers are cautioned that the statements contained in this document regarding expectations of our performance or other matters that may affect our business, results of operations, or financial condition are, or may be deemed to be, “forward-looking statements” as defined by the “safe harbor” provisions in the Private Securities Litigation Reform Act of 1995. Such statements are made in reliance on the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included or incorporated in this document, including statements regarding our strategy, financial position, guidance, funding for continued operations, cash reserves, liquidity, projected costs, plans, projects, awards and contracts, and objectives of management, among others, are forward-looking statements. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “continued,” “project,” “plan,” “goals,” “opportunity,” “appeal,” “estimate,” “potential,” “predict,” “demonstrates,” “may,” “will,” “might,” “could,” “intend,” “shall,” “possible,” “would,” “approximately,” “likely,” “outlook,” “schedule,” “on track,” “poised,” “pipeline,” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are not guarantees of future performance, conditions or results. Forward-looking statements are based on management’s expectations, certain assumptions, and currently available information. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are based on various assumptions as to future events, the occurrence of which necessarily are subject to uncertainties. These forward-looking statements are made subject to certain risks, uncertainties, and other factors, which could cause CTS’ actual results, performance, or achievements to differ materially from those presented in the forward-looking statements. Examples of factors that may affect future operating results and financial condition include, but are not limited to: supply chain disruptions (including, but not limited to, the availability and cost of rare earth elements, minerals and metals); changes in the economy generally, including inflationary and/or recessionary conditions and increased tariffs, and in respect to the businesses in which CTS operates; unanticipated issues in integrating acquisitions; the funding of contracts by the U.S. Government; the results of actions to reposition CTS’ business; rapid technological change; general market conditions in the transportation, as well as conditions in the industrial, aerospace and defense, and medical markets; reliance on key customers; unanticipated public health crises, natural disasters or other events; environmental compliance and remediation expenses; the ability to protect CTS’ intellectual property; pricing pressures and demand for CTS’ products; risks associated with CTS’ international operations, including trade and tariff barriers, exchange rates and political and geopolitical risks (including, without limitation, the impact of tariffs on China, Canada and Mexico, and other nations); the potential impact of U.S./China relations and the impact of geopolitical conflicts may have on our business, results of operations and financial condition; write offs of goodwill on our balance sheet; the amount and timing of any share repurchases; and the effect of any cybersecurity incidents on our business. Many of these, and other risks and uncertainties, are discussed in further detail in Item 1A. of CTS’s most recent Annual Report on Form 10-K and other filings made with the SEC. CTS undertakes no obligation to publicly update CTS’ forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes.

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Item 3. Quantitative and Qualita tive Disclosures About Market Risk

See Item 7A, Quantitative and Qualitative Disclosures about Market Risk, of our Annual Report on Form 10-K for the year ended December 31, 2025. During the three months ended March 31, 2026, there have been no material changes in our exposure to market risk.

Item 4. Control s and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q were effective in providing reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within CTS have been detected.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting for the quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHE R INFORMATION

Item 1. Legal Proceedings

From time to time, we are involved in litigation with respect to matters arising from the ordinary conduct of our business, and currently certain claims are pending against us. In the opinion of management, we believe we have established adequate accruals pursuant to U.S. generally accepted accounting principles for our expected future liability with respect to pending lawsuits, claims and proceedings, where the nature and extent of any such liability can be reasonably estimated based on presently available information. However, there can be no assurance that the final resolution of any existing or future lawsuits, claims or proceedings will not have a material adverse effect on our business, results of operations, financial condition, or cash flows.

See Note 9, “Commitments and Contingencies” in the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Item 1A. Ri sk Factors

There have been no changes to our risk factors from those contained in our Annual Report on Form 10-K for the year ended December 31, 2025.

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Item 2. Unregistered Sales of Equi ty and Use of Proceeds

On November 7, 2025, the Board of Directors approved a new share repurchase program (“2025 Repurchase Program”) that authorizes the Company to repurchase up to $100 million of its common stock. The 2025 Repurchase Program has no set expiration date and supersedes and replaces the $100 million repurchase program approved by the Board of Directors in February 2024.

|  |  |  |  |  |  |  | Total Number |  |  | Maximum Dollar |
|  |  |  |  |  |  |  | of Shares |  |  | Value of Shares |
|  |  |  |  |  |  |  | Purchased as |  |  | That May Yet Be |
|  | Total Number |  |  |  |  |  | Part of Publicly |  |  | Purchased Under |
|  | of Shares |  |  | Average Price |  |  | Announced |  |  | Publicly Announced |
Period |  | Purchased |  |  | Paid per Share |  |  | Programs |  |  | Plans or Programs |
January 1, 2026 - January 31, 2026 |  |  | 75,509 |  |  | $ | 47.03 |  |  |  | 75,509 |  |  | $ | 86,815,562 |
February 1, 2026 - February 28, 2026 |  |  | 28,500 |  |  | $ | 55.07 |  |  |  | 28,500 |  |  | $ | 85,246,189 |
March 1, 2026 - March 31, 2026 |  |  | 72,900 |  |  | $ | 48.33 |  |  |  | 72,900 |  |  | $ | 81,722,663 |
Total |  |  | 176,909 |  |  |  |  |  |  | 176,909 |  |  |  |

Item 5. Other Information

From time to time, our directors and officers may purchase or sell shares of our common stock in the market, including pursuant to plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended (“Rule 10b5-1 Plans”).

Kieran M. O’Sullivan, the Company’s President and Chief Executive Officer entered into a Rule 10b5-1 Plan on March 2, 2026 for the sale of up to 130,000 shares of our common stock. The plan is scheduled to terminate no later than February 25, 2028.

During the quarter ended March 31, 2026, no other director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408 of Regulation S-K).

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Item 6. Exhibits

(31)(a) | Certification pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.
(31)(b) | Certification pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.
(32)(a) | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.
(32)(b) | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.
10(a) | Form Restricted Stock Unit Agreement (Time-Based) under the CTS Corporation 2018 Equity and Incentive Compensation Plan.
10(b) | Form Restricted Stock Unit Agreement (Performance-Based) under the CTS Corporation 2018 Equity and Incentive Compensation Plan.
101.1 | The following information from CTS Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 formatted in Inline XBRL: (i) Condensed Consolidated Statements of Earnings; (ii) Condensed Consolidated Statements of Comprehensive Earnings; (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Cash Flows; (v) Condensed Consolidated Statements of Shareholders’ Equity; (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104 | The cover page from this Current Report on Form 10-Q formatted as inline XBRL

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SIGNAT URES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|  | CTS Corporation
|  | /s/ Ashish Agrawal
|  | Ashish Agrawal
|  | Vice President and Chief Financial Officer (Principal Financial Officer & Principal Accounting Officer)
|  | Dated: April 29, 2026

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