CTS Q1 2009 Earnings Call Transcript

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2009-04-29 12:13:24.0

Tags: Seeking Alpha, CTS Corp.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). And we have a question from the line of John Franzreb with Sidoti & Company. Please go ahead.

John Franzreb - Sidoti & Company

Good morning, everybody.

Vinod Khilnani

Good morning, John.

Donna Belusar

Good morning, John.

John Franzreb - Sidoti & Company

First question is, the update on Hewlett-Packard. If I heard you correctly, you said that there was $8.3 million in the quarter. When can you expect that business to finally settle off?

Vinod Khilnani

I think John, as you know, that business has continued to come down. And I believe, we have said in the past that we expect that business to pretty much get pretty close to wrapped up by the middle of 2009.

John Franzreb - Sidoti & Company

So, almost by the end of the second quarter, we should be done?

Vinod Khilnani

Yeah. We will continue to do some business with Hewlett-Packard as we have said in the past, which is higher margin service kind of a business. But, that will be very small.

John Franzreb - Sidoti & Company

Okay. And you touched and expanded a little of business in China. You mentioned, ZTE. Just kind of update us on tell communication equipment sales to China, what's going on there? Can you just talk a little bit about that Vinod?

Vinod Khilnani

Sure. As you know we have expanded our operations and sales in China. And frankly, Asia in general. And I can say that, not only from sensors and actuator point of view, but also from electronic components point of view.

You asked a question specifically from electronic components point of view, and we have tried to expand our relationship with companies, which we believe, are growing faster than other companies, and are continuing to expand their market shares.

So, we are positioning CTS to grow their business with those players, who we believe, are going to be winners and expand their market share more.

And when we did that, ZTE and Huawei showed up at the top of our list. And for the last couple of years, we have been trying very hard to penetrate those. And recently, we have had a lot of successes, and we continue to penetrate and do more business with those companies.

And in the first quarter, especially, our interactions and the prototype were and activity with these two companies accelerated, rather noticeably, with their engineering and technical people visiting our locations in the U.S. and further discussing the opportunity we may have with them.

 

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