MTS Reports Fiscal Year 2020 Fourth Quarter & Full Year Financial Results.

EDEN PRAIRIE, Minn: MTS Systems Corporation (Nasdaq: MTSC), a leading global supplier of advanced test systems, motion simulators and precision sensors, today reported financial results for its fiscal year 2020 fourth quarter and full year ended October 3, 2020.

FULL YEAR FINANCIAL AND OPERATING HIGHLIGHTS

Generated operating cash flow of $47.8 million

Grew backlog to $457.6 million, an increase of 8.9% over prior year

Reported revenue of $828.6 million, a decline of 7.2% over prior year

Reported GAAP diluted loss per share of $14.16, including $15.16 of non-cash impairment of assets

Delivered adjusted diluted earnings per share of $2.03, including $0.93 of amortization expense

MERGER AGREEMENT

On December 8, 2020, we entered into a definitive agreement under which Amphenol Corporation (NYSE: APH) will acquire MTS for $58.50 per share in cash, or approximately $1.7 billion, including the assumption of outstanding debt and liabilities, net of cash. The acquisition is expected to close by the middle of 2021, subject to certain regulatory approvals, shareholder approval and other customary closing conditions.

HIGHLIGHTS FOR THE FISCAL YEAR 2020 FOURTH QUARTER

Revenue

Revenue was $215.1 million, down 4.0% compared to the same prior year period, due to volume declines in Test & Simulation and Sensors. Both businesses were negatively impacted by COVID-19 due to the closure of customer sites, travel restrictions and delayed customer spending. Test & Simulation revenue decreased primarily due to a decline in volume from softness in our ground vehicles, simulation and materials sectors, coupled with lower service volume. The decline was partially offset by top-line contributions from the acquisition of the R&D entities in Denmark (R&D) of $18.8 million, which was completed early in the second quarter of fiscal year 2020. Sensors revenue declined due to softness in all sectors except our test sector, which included continued U.S. Department of Defense volume growth and a full quarter of revenue from Endevco, which closed during the fourth quarter of fiscal year 2019. There were no material cancellations of orders or backlog in the fourth quarter.

Orders

Test & Simulation orders during the quarter were $135.2 million, up 16.0% compared to the prior year primarily driven by the addition of wind energy orders from the acquisition of R&D and an increase in service orders as customers sites have resumed more normalized activities. The increase was partially offset by lower orders in our materials and structures sectors and our product rationalization efforts in China.

Sensors orders during the quarter were $80.7 million, down 10.5% compared to the same prior year period primarily driven by a large Department of Defense order in our test sector that did not repeat in fiscal year 2020, as well as lower orders in our industrial sector reflecting the global impact of...