April 2, 2007

FOR RELEASE:  Immediately

CTS Corporation Announces Substantial Completion of Independent Investigation

Elkhart, IN…CTS Corporation (NYSE: CTS) today announced that it has substantially completed its previously announced internal investigation and account reconciliations at the Company’s EMS Moorpark, California manufacturing facility.  The investigation was conducted under the oversight of the Board’s Audit Committee with the assistance of independent forensic accountants and outside counsel.

The investigation has confirmed earlier findings of management, reported on February 9, 2007, which indicated that the net impact on the Company’s earnings is expected to be approximately $4 million in the aggregate when adjusted for the reduced tax rate and reduced variable compensation accrual.  The investigation has also confirmed that substantially all of the problematic entries in the accounts at issue were made by or caused to be made by the former Plant Controller for the Moorpark EMS facility, and not discovered by management until shortly before the February 9 release.  Site management has started the process to further enhance the internal control environment at the Moorpark facility, and steps are being taken to improve operating efficiencies and pricing models to recover margin shortfall going forward. 

The Moorpark facility was acquired by CTS Corporation as part of its SMTEK acquisition in the first quarter of 2005.  The findings of the investigation have been forwarded to the Company’s independent registered public accounting firm for audit review and approval.

Based on timing of the above events, the Company currently anticipates issuing its earnings release for the fourth quarter and full year 2006 and filing its 2006 Annual Report on Form 10-K and amended quarterly reports on Form 10-Qs by the end of April 2007.
 

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, including the potential impact of the accounting issues described above.  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 results of the investigation into the accounting issues described above.  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.