May 23, 2007

FOR RELEASE:  Immediately

CTS ANNOUNCES FIRST QUARTER 2007 RESULTS
Revenues Increase 8% Year-over-Year

Elkhart, IN…CTS Corporation (NYSE: CTS) today announced first quarter 2007 revenues of $163.3 million and net earnings of $4.0 million, or $0.11 per diluted share.

First quarter 2007 revenue increased 8% over the first quarter of 2006 driven by the EMS segment where sales climbed 13%. Components and Sensors segment sales increased 3%, primarily from  strong automotive new product demand, offset by weakness in electronic component demand.

First quarter 2007 earnings of $4.0 million, or $0.11 per diluted share, were less than net earnings of $5.0 million, or $0.13 per diluted share, in the first quarter of 2006.  First quarter 2007 net earnings were adversely impacted by $0.8 million, or approximately $0.02 per share, of costs associated with the internal investigation and account reconciliations at CTS’ California EMS locations. First quarter 2006 diluted earnings per share included restructuring and related costs of $0.04 per share for the consolidation of the Berne, Indiana operation and reflected a favorable insurance claim settlement of $0.03 per diluted share.

Commenting on first quarter results, Donald Schwanz, CTS Chairman and Chief Executive Officer, stated, “Our automotive products performed well during the first quarter. Sales were up 18% over the first quarter of 2006 and have averaged 14% growth over the last five quarters.” 

Based on current expectations for the rest of the year, we are reducing our full-year 2007 guidance for sales growth to 5% - 8% over 2006.  This is down from the range of 7% - 10% previously anticipated and reflects expectations for softer demand for automotive products, certain electronic components and EMS services.  Full-year diluted earnings per share are now expected to be in a range of $0.71 to $0.75, down from the previously projected $0.76 to $0.80, reflecting the impact of lower sales, operational inefficiencies due to the start-up of our Czech Republic facility and somewhat higher costs associated with the internal investigation.

Capital expenditures of $2.7 million were 1.6% of sales in the first quarter 2007. Free cash flow in the first quarter was $1.4 million compared to essentially breakeven in the first quarter of 2006.
　

SEGMENT INFORMATION
(Dollars in millions)                                                                                                                                                                            

Components & Sensors: Components and sensors sales increased $1.9 million, or 3%, over the first quarter of 2006 primarily on higher automotive component demand, partially offset by declines in electronic component sales.  Despite the favorable impact of higher sales, segment operating earnings decreased $5.6 million from first quarter 2006 earnings.  Approximately $2.7 million of the earnings decrease resulted from several unusual items which occurred in the first quarter of 2006, including higher than normal royalty payments, a gain on sale of assets and a favorable settlement of an insurance claim.  The remaining unfavorable year-over-year change resulted from less favorable product mix and higher operating expenses, including incremental legal and accounting fees. 

Components and sensors sales increased $3.8 million, or 6%, from the fourth quarter of 2006 reflecting strong automotive product demand.  Despite the favorable impact of higher sales, segment operating earnings decreased $1.4 million from the fourth quarter primarily from lower royalty income and increased operating expenses including incremental legal and accounting fees.

EMS: EMS sales increased $10.9 million, or 13%, from the first quarter of 2006 driven primarily by higher sales into the defense and aerospace, industrial and communications markets, partially offset by lower demand in the computer market. The segment operating earnings, which were at breakeven, improved $0.8 million from first quarter 2006 operating loss of $0.8 million primarily due to higher volumes and more favorable product mix, partially offset by incremental legal and accounting fees.

Compared to the fourth quarter of 2006, EMS segment sales decreased $14.1 million, or 13%. Total segment operating earnings decreased $2.8 million primarily from lower volumes and incremental legal and accounting fees.

Conference Call
As previously announced, the Company has scheduled a conference call on Thursday, May 24, 2007 at 11:00 a.m. Eastern Daylight Time. Those interested in participating may dial 800-230-1085 (612-332-0637, if calling from outside the U.S.). No access code is needed. There will be a replay of the conference call available from 4:15 p.m. EDT on May 24, 2007, through 11:59 p.m. EDT on May 31, 2007. The telephone number for the replay is 800-475-6701 (320-365-3844, if calling from outside the U.S.). The access code is 873723.  There will also be a live audio webcast of the conference call which can be accessed directly from the Web sites of CTS Corporation (http://www.ctscorp.com), StreetEvents (http://www.streetevents.com), Netscape (http://www.netscape.com), Compuserve (www.compuserve.com) and others. AOL subscribers will have access through the Personal Finance section of AOL.

About CTS
CTS is a leading designer and manufacturer of electronic components and sensors and a provider of electronics manufacturing services (EMS) to OEMs in the automotive, computer, communications, medical, defense and aerospace and industrial markets. CTS manufactures products in North America, Europe and Asia. CTS' stock is traded on the NYSE under the ticker symbol "CTS.” 

Safe Harbor Statement
This press release contains statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements include, but are not limited to, any financial or other guidance, statements that reflect our current expectations concerning future results and events, and any other statements that are not based solely on historical fact.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  These forward-looking statements are made subject to certain risks, uncertainties and other factors, which could cause our actual results, performance or achievements to differ materially from those presented in the forward-looking statements, including, without limitation, rapid technological change and general market conditions in the automotive, communications and computer industries; reliance on key customers; CTS’ ability to protect its 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; and the impact of the accounting misstatements at its California EMS locations.  For more detailed information on the risks and uncertainties associated with CTS’ business, see the reports CTS files with the SEC.  CTS undertakes no obligation to publicly update its forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
OTHER SUPPLEMENTAL INFORMATION