CTS CORPORATION AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS  - UNAUDITED
(In thousands, except per share amounts)
 
        Three Months Ended   Twelve Months Ended  
              July 3,        June 27,   July 3,   June 27,  
          2005        2004        2005         2004     
                       
Net sales   $158,346   $137,624   $313,676   $259,771  
Costs and expenses:                  
  Cost of goods sold   126,054   108,707   253,169   206,245  
  Selling, general and administrative expenses   17,697   16,622   35,614   31,499  
  Research and development expenses   4,567   4,673   9,354   9,557  
  Gain on sale of assets   (293)   (3,006)

 (2)

 (453)   (3,067)

 (2)
Operating earnings   10,321   10,628   15,992   15,537  
                       
Other expenses (income):                  
   Interest expense   1,582   1,590   3,299   3,123  
   Other   (70)   168   (515)   184  
      Total other expenses   1,512   1,758   2,784   3,307  
      Earnings before income taxes   8,809   8,870   13,208   12,230  
Income tax expense   4,867 (1) 1,973   5,879 (1) 2,813

 (2)
                   

Net earnings

   $3,942   $6,897   $7,329   $9,417  
                       
Net earnings per share:                  
   Basic   $0.11   $0.19   $0.20   $0.26  
   Diluted   $0.10

 (1)

 $0.18   (2), (3) $0.19

 (1)

 $0.26   (2), (3)
                       
Cash dividends declared per share   $0.03   $0.03   $0.06   $0.06  
                       
Average common shares outstanding:                  
  Basic   36,621   35,986   35,508   35,971  
  Diluted   41,226   38,363

 (3)

 41,101   37,303  (3)
                       
                       
                       
(1) Income tax expense and diluted earnings per share include a net impact of $2.8 billion and $0.07 per diluted share, respectively, consisting of $4.5 million of expense relating to the repatriation of foreign to the United States under the provisions of the American Jobs Creation Act of 2004 and a $1.7 million benefit relating to the reversal of income tax reserves due to the successful resolution of tax issues in certain foreign jurisdictions.
(2) The 2004 gain on sale of assets includes $2.7 million pre-tax, or $2.1 million after-tax and $0.05 per diluted share, gain related to the sale of excess land in Canada.
(3) Diluted earnings per share for 2004 were restated to reflect the impact of adopting Emerging Issues Task Force (EITF) No. 04-08, "The Effect of Contingently Convertible Debt on Diluted Earnings Per Share."  EITF No. 04-08 was issued and became effective in the fourth quarter of 2004 and accordingly, earlier were restated to show diluted earnings per share computed on a consistent basis.