October 25, 2005

FOR RELEASE:  Immediately

CTS REPORTS STRONG THIRD QUARTER 2005 RESULTS
Earnings up 60% on Revenue Increase of 16%

Elkhart, IN, October 25, 2005…CTS Corporation (NYSE: CTS) today announced third quarter 2005 revenues of $149.2 million, a 16% increase over the third quarter of 2004.  Diluted earnings per share were $0.16, up 60% over the third quarter 2004, continuing the trend of year-over-year improved profitability. 

Third quarter revenues increased from the prior year, driven by 35% growth in EMS segment sales primarily as a result of the SMTEK acquisition. Total Components and Sensors segment sales declined 5% primarily due to lower handset application sales.  However, within the Components and Sensors segment, there was nearly 17% growth in sales of automotive sensor products and electronic communication components.

 “We continue to see solid evidence that our business strategies and growth initiatives are working,” commented Donald Schwanz, Chairman and Chief Executive Officer.  “Operating earnings improved in both the EMS and Components and Sensors business segments, helped by strong new product growth in Automotive, the SMTEK acquisition and continued tight cost controls,” added Schwanz. 

General Comments:

• Capital expenditures of $12.5 million were 2.7% of sales in the first nine months of 2005. The Company expects full-year 2005 capital expenditures to be in the range of $17 – $20 million.
   
• Year-to-date free cash flow of $17.2 million compares favorably to a cash outflow of $0.5 million for the same period last year.
   
• The company repurchased 321,600 shares of its stock in the third quarter for $3.8 million, or approximately $11.80 per share.  Year-to-date, 643,700 shares of stock have been repurchased at a total cost of $7.5 million.

THIRD QUARTER RESULTS - SEGMENT INFORMATION
(Dollars in millions)

Components & Sensors: Components and Sensors third quarter segment sales decreased by $3.1 million, or 5%, from the same period of 2004 driven primarily by lower handset component sales.  Sales of Components and Sensors into automotive applications grew 16.7% year-over-year.  Additionally, the Company saw strong growth in Component sales to the infrastructure equipment industries with 16.5% year-over-year growth.  The Company has de-emphasized Component sales for handset applications and expects those sales to continue to decline over time.  In the third quarter, remaining Component sales for handset applications were 2.7% of segment sales.  Despite lower segment sales, total operating earnings at 11.8% of sales increased $2.5 million from the prior year driven by improved margins, product-mix and cost controls.

 The third quarter Components and Sensors sales decreased from the second quarter of 2005 by $6.4 million, or 10%, reflecting normal seasonal declines in automotive markets due to scheduled OEM factory shutdowns and lower component sales into handsets, as mentioned earlier. Segment operating earnings of 11.8% of sales increased by 0.6% points, despite lower sales, due to improved cost control.

EMS: EMS third quarter 2005 sales increased by $23.3 million, or 35%, from the third quarter of 2004, primarily from the SMTEK acquisition.  Segment operating earnings of 2.4% of sales improved primarily from strong performance of the former SMTEK business.

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Conference Call
As previously announced, the Company has scheduled a conference call on Wednesday, October 26, 2005 at 11:00 a.m. Eastern Daylight Time. Those interested in participating may dial 800-553-5260 (612-332-0634, 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 October 26, 2005, through 11:59 a.m. EDT on November 2, 2005. The telephone number for the replay is 800-475-6701 (320-365-3844, if calling from outside the U.S.). The access code is 798801. There will also be a live audio webcast of the conference call, which can be accessed directly from the Web sites of CTS Corporation  (www.ctscorp.com), StreetEvents (www.StreetEvents.com), Netscape (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 and industrial markets. CTS manufactures products in North America, Europe and Asia. CTS' stock is traded on the NYSE under the ticker symbol "CTS."
 

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

Safe Harbor Statement
This press release contains certain 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, statements regarding the business and strategic benefits of the SMTEK acquisition, any financial or other guidance, and all statements that are not based on historical fact, but rather reflect our current expectations concerning future results and events. We make certain assumptions when making forward-looking statements, any of which could prove inaccurate, including, but not limited to, statements about our future operating results and business plans. The ultimate correctness of these forward-looking statements is dependent upon a number of known and unknown risks and events, and is subject to various uncertainties and other factors that may cause our actual results, performance, or achievements to be different from any future results, performance, or achievements expressed or implied by these statements.

For more detailed information on the risks and uncertainties associated with CTS' business activities, see our reports filed with the SEC. CTS undertakes no obligation to publicly update its forward-looking statements, whether as a result of market or industry changes, new information or future events.