October 24, 2006

FOR RELEASE:  Immediately

CTS ANNOUNCES THIRD QUARTER 2006 RESULTS
Third Quarter Sales Increased 11% Year-Over-Year

Elkhart, IN…CTS Corporation (NYSE: CTS) today announced third quarter 2006 revenues of $165.7 million, an 11% increase over the third quarter of 2005. Diluted earnings per share were $0.15, which included a charge of approximately $0.02 per share for the previously announced consolidation of the Berne, Indiana operation and the further impairment of an idle facility lease. In the comparable period last year, third quarter 2005 diluted earnings per share were $0.16.

The third quarter revenue increase from the prior year was driven by a 13% increase in EMS business segment sales, mainly in the defense, communications and medical markets.  Components and Sensors segment sales increased 8% primarily from increased automotive component demand and higher sales into infrastructure applications.  Partially offsetting the sales increases were reductions in component sales for handset applications and the fourth quarter 2005 divestiture of the Low Temperature Co-fired Ceramic (LTCC) product line.

“Despite a challenging quarter from an operational perspective, relating to problems with a new automotive product launch, year-over-year sales trends remain positive, reflecting continued success with our growth initiatives.  During the third quarter, we won two additional platforms for our accelerator pedal module and continued the strong pace of design wins for electronic components in infrastructure applications,” said Donald Schwanz, CTS Chairman and Chief Executive Officer.

Based on the nine-months results and the outlook for the balance of the year, we are maintaining our prior full-year 2006 guidance of 6% - 8% in sales growth over 2005.  Additionally, we are revising our earnings per share guidance down from a range of $0.75 to $0.80 to a range of $0.74 to $0.77, excluding $0.08 per share for full-year restructuring and related charges.

Capital expenditures of $5.3 million were 3.2% of sales in the third quarter of 2006.  The full year capital expenditures are expected to be in the range of $16 - $19 million.  Free cash flow of $5.8 million was generated in the third quarter 2006 compared to a negative $1.5 million in the same period last year.

The Berne consolidation was completed in the third quarter of 2006, on schedule and slightly under budget.
 

SEGMENT INFORMATION
(Dollars in millions) 

Components & Sensors: Components and sensors sales increased $4.7 million, or 8%, over the third quarter of 2005 primarily on the strength of automotive component demand and electronic component sales for infrastructure applications. As noted earlier, sales increases were partially reduced by lower component sales for mobile handset applications and LTCC product sales.  Segment operating earnings decreased $1.5 million primarily due to lower gross margins from problems with a new automotive product launch. This resulted in lower production yields and higher overtime, rework and re-design costs. While we have made substantial progress in resolving this issue, we do expect some unfavorable impact to continue in the fourth quarter. In addition, commodity price increases, unfavorable currency impact and Czech Republic start-up costs affected the third quarter adversely. This was partially offset by the favorable impact of higher volumes and the gain on sale of fixed assets.

Components and sensors sales decreased $6.8 million or 10% from the second quarter of 2006 primarily reflecting normal seasonal declines in automotive markets due to scheduled OEM factory shutdowns. Segment operating earnings decreased $2.4 million from the second quarter primarily from the impact of lower volumes and higher automotive launch-related costs, partially offset by the gain on sale of fixed assets and lower operating expenses.

EMS: EMS sales increased $11.7 million or 13% from the third quarter of 2005 driven primarily by increased sales in the defense, communications and medical markets partially reduced by lower sales in the computer market. Segment operating earnings increased $1.2 million primarily on higher volumes and improved product mix partially offset by unfavorable currency impacts.

Compared to the second quarter of 2006, EMS segment sales increased $6.6 million or 7% primarily from improved sales in the medical, industrial and defense markets. Segment operating earnings increased $0.8 million primarily on higher volumes.

CTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED
CTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
CTS CORPORATION AND SUBSIDIARIES OTHER SUPPLEMENTAL INFORMATION

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Conference Call
As previously announced, the Company has scheduled a conference call on Wednesday, October 25, 2006 at 11:00 a.m. Eastern Daylight Time. Those interested in participating may dial 800-230-1092 (612-288-0318, 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 25, 2006, through 11:59 p.m. EDT on November 1, 2006. The telephone number for the replay is 800-475-6701 (320-365-3844, if calling from outside the U.S.). The access code is 843762. 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.” 

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.  For more detailed information on the risks and uncertainties associated with CTS’ business, see our reports filed 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.