CTS CORPORATION AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS  - UNAUDITED
(In thousands, except per share amounts)
 
        Three Months Ended   Nine Months Ended  
              October 2,        September 26,   October 2,   September 26,  
          2005        2004        2005         2004     
                       
Net sales   $149,210   $129,049   $462,886   $388,820  
Costs and expenses:                  
  Cost of goods sold   120,224   102,737   373,393   308,982  
  Selling, general and administrative expenses   16,159   16,017   51,773   47,516  
  Research and development expenses   3,976   4,693   13,330   14,250  
  Gain on sale of assets   (353)   (252)

 

 (806)   (3,319)

 (2)
Operating earnings   9,204   5,854   25,196   21,391  
                       
Other expenses (income):                  
   Interest expense   1,254   1,118   4,553   4,241  
   Other   (272)   (356)   (787)   (172)  
      Total other expenses   982   762   3,766   4,069  
      Earnings before income taxes   8,222   5,092   21,430   17,322  
Income tax expense   1,892   1,171   7,771 (1) 3,984

 
                   

Net earnings

   $6,330   $3,921   $13,659   $13,338  
                       
Net earnings per share:                  
   Basic   $0.17   $0.11   $0.37   $0.37  
   Diluted   $0.16

 

 $0.10   (2), (3) $0.35

 (1)

 $0.36   (2), (3)
                       
Cash dividends declared per share   $0.03   $0.03   $0.09   $0.09  
                       
Average common shares outstanding:                  
  Basic   36,284   35,896   36,434   35,946  
  Diluted   41,013   40,401

 

 41,072   38,335  
                       
                       
                       
(1) Income tax expense and diluted earnings per share include a net impact of $2.8 million and $0.07 per diluted share, respectively, consisting of $4.5 million of expense relating to the repatriation of foreign cash 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.