MTS SYSTEMS CORP. $68 (Nasdaq symbol MTSC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 15.3 million; Market cap: $1.0 billion; Price-to-sales ratio: 1.9; Dividend yield: 1.8%; TSINetwork Rating: Average; www.mts.com) makes equipment and software that manufacturers use to test the behaviour of materials, machines and structures. This helps its clients reduce errors and costs.

The company recently announced a new restructur-ing plan, including job cuts and technology investments. This initiative should make its testing division, which supplies 80% of its revenue, more productive. MTS gets the remaining 20% of its revenue by making sensors for industrial equipment.

The company feels this plan will save it $5 million in its current fiscal year and $6 million annually in subsequent years.

Without restructuring costs, MTS earned $12.0 million in its fiscal 2014 first quarter, which ended December 28, 2013. That’s down 12.6% from $13.8 million a year earlier. Earnings per share fell 11.4%, to $0.78 from $0.88, on fewer shares outstanding.

Revenue fell 3.0%, to $138.4 million from $142.7 million. The testing division’s revenue fell 6.3%, as customers delayed equipment orders. However, the sensors division’s revenue rose 15.4%, mainly due to more orders from some of its larger customers.

The stock has gained nearly 20% in the past year. It now trades at 18.7 times MTS’s projected fiscal 2014 earnings of $3.63 a share. That’s still an acceptable p/e ratio for a firm that dominates its niche markets.

The company has no long-term debt and holds cash of $53.5 million, or $3.50 a share. That gives it plenty of flexibility to buy back more shares or raise its $1.20-a-share dividend, which yields 1.8%.

MTS Systems is a buy.