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<SEC-DOCUMENT>0000026058-03-000034.txt : 20031029
<SEC-HEADER>0000026058-03-000034.hdr.sgml : 20031029
<ACCEPTANCE-DATETIME>20031029091641
ACCESSION NUMBER:		0000026058-03-000034
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20030928
FILED AS OF DATE:		20031029

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CTS CORP
		CENTRAL INDEX KEY:			0000026058
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC COMPONENTS & ACCESSORIES [3670]
		IRS NUMBER:				350225010
		STATE OF INCORPORATION:			IN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-04639
		FILM NUMBER:		03962287

	BUSINESS ADDRESS:	
		STREET 1:		905 WEST BOULEVARD NORTH
		CITY:			ELKHART
		STATE:			IN
		ZIP:			46514
		BUSINESS PHONE:		5742937511

	MAIL ADDRESS:	
		STREET 1:		905 W BLVD NORTH
		CITY:			ELKHART
		STATE:			IN
		ZIP:			46514
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>form10q-3qtr2003.htm
<DESCRIPTION>3RD QUARTER 2003
<TEXT>
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     <!-- Project Name:   q3-200310q                                                       -->
     <!-- Firm Name:      CTS Corporation                                                  -->
     <TITLE>Form 10-Q 2003 Third Quarter</TITLE>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>UNITED STATES
<BR>
SECURITIES AND
EXCHANGE COMMISSION
<BR>
WASHINGTON, D.C. 20549 </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="4"><U>FORM 10-Q</U> </FONT> </H1>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(Mark One) </FONT>

<BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE="2">
<U>&nbsp;X&nbsp;</U>&nbsp; QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the Quarterly Period Ended
<U>September 28, 2003</U>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OR
<BR>

<U>&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the Transition Period from _______________ to _______________</FONT>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Commission File Number:
1-4639</FONT>
<BR>
<BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=4><U><B>CTS CORPORATION </B></U></FONT>
<BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Exact name of
registrant as specified in its charter) </FONT></P>


<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" WIDTH="100%">

<TR VALIGN="TOP">
     <TD ALIGN="CENTER" WIDTH="12.5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER" WIDTH="25%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Indiana</FONT><HR SIZE="1" NOSHADE></TD>
     <TD ALIGN="CENTER" WIDTH="25%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER" WIDTH="20%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">35-0225010</FONT><HR SIZE="1" NOSHADE></TD>
     <TD ALIGN="CENTER" WIDTH="17.5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(State or other jurisdiction of
<BR>
incorporation or organization)
</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(IRS Employer
<BR>
Identification Number)</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
</TR>
</TABLE>
<BR>


<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" WIDTH="100%">

<TR VALIGN="TOP">
     <TD ALIGN="CENTER" WIDTH="12.5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER" WIDTH="32%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">905 West Boulevard North, Elkhart, IN</FONT><HR SIZE="1" NOSHADE></TD>
     <TD ALIGN="CENTER" WIDTH="18%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER" WIDTH="20%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">46514</FONT><HR SIZE="1" NOSHADE></TD>
     <TD ALIGN="CENTER" WIDTH="17.5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(Address of principal executive offices)</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(Zip Code)</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
</TR>
</TABLE>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Registrant&#146;s telephone number,
including area code: <U>574-293-7511</U> </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
<BR>
Yes <U>&nbsp;X&nbsp; </U>&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;</U>
<BR>
<BR>
Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
<BR>
Yes <U>&nbsp;X&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate the number of shares outstanding of
 each of the issuer&#146;s classes of common stock, as of October 22, 2003:  &nbsp;35,836,060</FONT></P>





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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CTS CORPORATION AND SUBSIDIARIES
<BR><BR>TABLE OF CONTENTS</FONT></H1><BR>


<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Page</U></FONT></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="68%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="15%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A HREF="#part1heading">PART I.</A></B></FONT></TD>
     <TD COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>FINANCIAL INFORMATION</B></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><A HREF="#financialstatements">Item 1.</A></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Financial Statements</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;1</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
         <A HREF="#earnings">Condensed Consolidated Statements of Earnings (Loss)</A></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
     &nbsp;&nbsp;&nbsp;&nbsp;- For the Three Months and Nine Months Ended September 28, 2003 <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and September 29, 2002</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR>&nbsp;1</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
      <TD COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
     <A HREF="#balancesheets">Condensed Consolidated Balance Sheets</A></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
      <TD COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
    &nbsp;&nbsp;&nbsp;&nbsp;- As of September 28, 2003, and December 31, 2002</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;2</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
      <TD COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
    <A HREF="#cashflows">Condensed Consolidated Statements of Cash Flows</A></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
      <TD COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
    &nbsp;&nbsp;&nbsp;&nbsp;- For the Nine Months Ended September 28, 2003 and September 29, 2002</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;3</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
    <A HREF="#comprehensiveearnings">Condensed Consolidated Statements of Comprehensive Earnings (Loss)</A></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
   &nbsp;&nbsp;&nbsp;&nbsp;- For the Three Months and Nine Months Ended September 28, 2003 <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and September 29, 2002</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR>&nbsp;4</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
      <TD COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
    <A HREF="#notes">Notes to Condensed Consolidated Interim Financial Statements</A></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;5</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><A HREF="#mda">Item 2.</A></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Management's Discussion and Analysis of</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Financial Condition and Results of Operations</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">13</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><A HREF="#quantitative">Item 3.</A></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Quantitative and Qualitative Disclosure about Market Risk</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">21</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><A HREF="#controlsprocedures">Item 4.</A></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Controls and Procedures</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">21</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A HREF="#part2otherinfo">PART II.</A></B></FONT></TD>
     <TD COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>OTHER INFORMATION</B></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><A HREF="#legalproceedings">Item 1.</A></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Legal Proceedings</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">21</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><A HREF="#exhibits">Item 6.</A></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Exhibits and Reports on Form 8-K</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">22</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><A HREF="#signatures">SIGNATURES</A></B></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">23</FONT></TD></TR>

</TABLE><BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>i</FONT></P>

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<A NAME="part1heading"></A>
<A NAME="financialstatements"></A>
<A NAME="earnings"></A>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>


<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION<BR><BR>
&nbsp;&nbsp;&nbsp;Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT>


<P align="CENTER"><FONT size="2"><B>CTS CORPORATION AND SUBSIDIARIES<BR>
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) - UNAUDITED</B><BR>
(In thousands, except per share amounts)
</FONT>

<CENTER>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="625" BORDER="0">
<TR valign="bottom">
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="44%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD ALIGN="CENTER" COLSPAN="7"><FONT size="1"><B>Three Months Ended</B></FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD ALIGN="CENTER" COLSPAN="7"><FONT size="1"><B>Nine Months Ended</B></FONT></TD></TR>
    <TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD colspan="7"><HR size="1" noshade></TD></TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD> </TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2"><B>Net sales</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">108,496</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">110,944</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">330,962</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">341,262</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Costs and expenses:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Cost of goods sold</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">84,841</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">87,059</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">261,704</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">273,590</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Selling, general and administrative expenses</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,651</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">42,165</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">48,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Research and development expenses</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,390</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,083</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">18,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Restructuring and impairment charges &#151; Note D</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,563</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">18,343</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,563</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">18,343</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2"><B>Operating earnings (loss)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(654</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,499</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,447</FONT></TD>
    <TD><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,746</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Other (expense)&nbsp;income:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Interest expense</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,139</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,192</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,010</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,744</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Interest income</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">225</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">281</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Other</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">298</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">150</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">323</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">682</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2" >&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Total other expense</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,766</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,929</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,462</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,781</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Earnings (loss)&nbsp;before income taxes</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,420</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(18,428</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(24,527</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Income tax benefit &#151; Note H</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,494</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,607</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,643</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,132</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Net earnings (loss)</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6,074</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(13,821</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,628</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(18,395</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">
    <B>Net earnings (loss)&nbsp;per share &#151; Note K</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;Basic</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(0.41</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(0.56</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;Diluted</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.17</FONT></TD>
    <TD><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(0.41</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.25</FONT></TD>
    <TD><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(0.56</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Cash dividends declared per share</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.03</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.03</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.09</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.09</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Average common shares outstanding:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Basic</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">34,799</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33,606</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">34,351</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">32,907</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Diluted</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35,352</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33,606</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">34,729</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">32,907</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
</TABLE>
</CENTER>
<P><FONT size="2">See notes to condensed consolidated financial statements.
</FONT>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1</FONT></P>

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<!-- MARKER PAGE="sheet:4; page: 4" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>

<A NAME="balancesheets"></A>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>


<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT><FONT size="1"> <B>(Continued)</B></FONT>


<P align="CENTER"><FONT size="2"><B>CTS CORPORATION AND SUBSIDIARIES<BR>
CONDENSED CONSOLIDATED BALANCE SHEETS</B><BR>
(In thousands of dollars)
</FONT>

<CENTER>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="625">
<TR valign="bottom">
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="75%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>December 31, 2002*</B></FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD></TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>(UNAUDITED)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>&nbsp;</B></FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="4"><FONT size="2"><B>ASSETS</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="4"><FONT size="2"><B>Current Assets</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Cash</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">19,646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">9,225</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Accounts receivable, less allowances (2003 -- $1,943; 2002 -- $1,694)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">62,812</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">63,802</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Inventories &#151; Note C</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">37,434</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">36,262</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Other current assets</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,533</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">7,212</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Deferred income taxes</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">36,027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">35,833</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Total current assets</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">164,452</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">152,334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="4"><FONT size="2"><B>Property, plant and equipment,</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="4"><FONT size="2">
    <B>&nbsp;&nbsp;&nbsp;&nbsp;less accumulated depreciation (2003 -- $255,837; 2002 -- $251,430)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">127,350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">148,632</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><FONT size="2"><B>Other Assets</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Prepaid pension asset</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">129,482</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">120,277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Intangible assets</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">38,040</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">39,923</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Assets held for sale &#151; Note E</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17,768</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">23,135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Other</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,881</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">5,731</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Total other assets</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">191,171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">189,066</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="4"><FONT size="2"><B>Total Assets</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">482,973</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">490,032</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="4"><FONT size="2"><B>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="4"><FONT size="2"><B>Current Liabilities</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Current maturities of long-term debt &#151; Note G</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">28,350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Accounts payable</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">47,342</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">44,490</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Accrued liabilities</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35,658</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">38,199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Income taxes payable &#151; Note H</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,037</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">23,517</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Total current liabilities</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">93,037</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">134,556</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="4"><FONT size="2"><B>Long-term debt </B>&#151; Note G</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">81,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">67,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="4"><FONT size="2"><B>Other long-term obligations </B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12,038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">11,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="4"><FONT size="2"><B>Deferred income taxes </B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,346</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">11,955</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="4"><FONT size="2"><B>Shareholders&#146; Equity</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Preferred stock &#151; authorized 25,000,000 shares without par value; none issued</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Common stock &#151; authorized 75,000,000 shares without par value;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">&nbsp;&nbsp;&nbsp;52,178,730 shares issued
at September 28, 2003 and</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">&nbsp;&nbsp;&nbsp;50,718,883 shares issued at December&nbsp;31, 2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">255,910</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">241,393</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Additional contributed capital</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">23,248</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">23,514</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Retained earnings</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">260,595</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">255,085</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><FONT size="2">Accumulated other comprehensive loss</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(543</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(835</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">539,210</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">519,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
      <TD colspan="4"><FONT size="2">Cost of common stock held in treasury</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="4"><FONT size="2">&nbsp;&nbsp;&nbsp;(2003 -- 16,565,558 shares;
2002 --16,618,373 shares)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(253,658</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(254,137</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Total shareholders&#146; equity</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">285,552</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">265,020</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="4"><FONT size="2"><B>
     Total Liabilities and Shareholders' Equity</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">482,973</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">490,032</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR>
      <TD colspan="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"><I><B>
*The balance sheet at December 31, 2002, has been derived from the audited financial statements at that date.</B></I></FONT><BR><BR><P><FONT size="2">See notes to condensed consolidated financial statements.
</FONT> </TD>


      <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD>
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      <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD>
      <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD>
      <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD>
      <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD></TR>
</TABLE>
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<A NAME="cashflows"></A>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION</B> </FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT><FONT size="1"> <B>(Continued)</B></FONT>


<P align="CENTER"><FONT size="2"><B>CTS CORPORATION AND SUBSIDIARIES<BR>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED</B><BR>
(In thousands of dollars)
</FONT>

<CENTER>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="625" BORDER="0">
<TR valign="bottom">
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="68%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Nine Months Ended</B></FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD></TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD> </TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2"><B>Cash flows from operating activities:</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Net earnings (loss)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,628</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(18,395</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">
Adjustments to reconcile net earnings (loss) </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">
&nbsp;&nbsp;&nbsp;&nbsp;to net cash provided by operating activities:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">25,487</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33,420</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring and impairment charges</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,563</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">18,343</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">364</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(854</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2"><B>Changes in assets and liabilities:</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Accounts receivable</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">990</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,693</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Inventories</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,172</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,172</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Other current assets</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,321</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,670</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Prepaid pension asset</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,205</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(10,820</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Accounts payable and accrued liabilities</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(13,199</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(29,241</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Other</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">342</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">523</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Total adjustments</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,849</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2"><B>Net cash provided by operations</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17,171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2"><B>Cash flows from investing activities:</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Capital expenditures</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,206</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(11,341</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Proceeds from sales of assets</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,081</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,317</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Other</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(129</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(139</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2"><B>Net cash used in investing activities</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,254</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,163</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2"><B>Cash flows from financing activities:</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"></FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Payments of long-term debt</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(92,845</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(75,088</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Proceeds from issuance of long-term debt</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">78,495</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26,050</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Issuance of common stock</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,429</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">40,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Dividends paid</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,078</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,932</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Other</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(47</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">    <B>Net cash used in financing activities</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,046</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(10,893</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">
    Effect of exchange rate on cash</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,257</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">    Net increase (decrease) in cash</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,421</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,628</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">
    Cash and equivalents at beginning of year</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,225</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">
    Cash and equivalents at end of period</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">19,646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">11,627</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2"><B>Supplemental cash flow information</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Cash paid during the period for:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Interest</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,638</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4,316</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Income taxes--net</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6,036</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4,127</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>
</TABLE>
</CENTER>
<P><FONT size="2">See notes to condensed consolidated financial statements.
</FONT>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3</FONT></P>

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<A NAME="comprehensiveearnings"></A>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT><FONT size="1"> <B>(Continued)</B></FONT>


<P align="CENTER"><FONT size="2"><B>CTS CORPORATION AND SUBSIDIARIES<BR>
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS) - UNAUDITED</B><BR>
(In thousands of dollars)
</FONT>

<CENTER>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="625">
<TR valign="bottom">
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="43%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD ALIGN="CENTER" COLSPAN="7"><FONT size="1"><B>Three Months Ended</B></FONT></TD>

<TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD ALIGN="CENTER" COLSPAN="7"><FONT size="1"><B>Nine Months Ended</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2"><B>Net earnings (loss)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6,074</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(13,821</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,628</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(18,395</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Other comprehensive earnings (loss):</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Cumulative translation adjustments</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">366</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">309</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,138</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">Deferred gain (loss) on forward contracts</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(373</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD COLSPAN="3"><FONT size="2"><B>Comprehensive earnings (loss)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6,137</FONT></TD>
    <TD><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(13,441</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,920</FONT></TD>
    <TD><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(17,630</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">See notes to condensed consolidated financial statements.
</FONT>
<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4</FONT></P>

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<!-- MARKER PAGE="sheet: 7; page: 7" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>

<A NAME="notes"></A>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>


<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT><FONT size="1"><B> (Continued)</B></FONT>


<P align="CENTER"><FONT size="2"><B>NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS - UNAUDITED</B><BR>
September 28, 2003
</FONT>

<P><FONT size="2"><B>NOTE A&#151;Basis of Presentation</B>
</FONT>

<P><FONT size="2">The accompanying condensed consolidated interim financial statements
have been prepared by CTS Corporation (CTS or the Company), without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission.&nbsp;
Certain information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been omitted
pursuant to such rules and regulations.&nbsp;The condensed consolidated interim financial statements
should be read in conjunction with the financial statements, notes thereto and other
information included in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.
</FONT>


<P><FONT size="2">The accompanying unaudited condensed consolidated interim financial statements reflect,
in the opinion of management, all adjustments (consisting of normal recurring items)
necessary for a fair statement, in all material respects, of the financial position and results
of operations for the periods presented.  &nbsp;The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reported period.  &nbsp;Actual results could differ materially from those estimates.  &nbsp;The
results of operations for the interim periods are not necessarily indicative of the results for the
entire year.
</FONT>

<P><FONT size="2">Certain reclassifications have been made for the periods
presented in the financial statements to conform to the classifications adopted
in 2003.
</FONT>


<P><FONT size="2"><B>NOTE B&#151;Employee Stock-Based Compensation</B>
</FONT>

<P><FONT size="2">CTS accounts for employee stock-based compensation using the intrinsic value method
prescribed in Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued
to Employees" and its related interpretations.  &nbsp;CTS has adopted the disclosure requirements
of the Financial Accounting Standards Board's (FASB) Financial Accounting Standard (FAS) No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure."&nbsp;  Had employee compensation cost
for CTS' fixed, stock-based compensation plans been determined based on the fair value method,
as defined by FAS No. 123, "Accounting for Stock-Based Compensation," CTS' net earnings (loss)
and net earnings (loss) per share would have been adjusted to the pro forma amounts indicated below:
</FONT>


<CENTER>
<TABLE CELLSPACING="0" CELLPADDING="0" BORDER="0" WIDTH="100%">
<TR valign="bottom">
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="50%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>

</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
<TD nowrap align="center" colspan="7"><FONT size="1"><B>Three Months Ended</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Nine Months Ended</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
 <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD NOWRAP ALIGN="center" COLSPAN="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD NOWRAP ALIGN="center" COLSPAN="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="15"><FONT size="1"><B><I>($ in thousands,<BR>except per share amounts)</I></B></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Net earnings (loss), as reported</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">6,074</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">(13,821</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">8,628</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(18,395</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Add: &nbsp;Stock-based employee compensation cost,</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD ALIGN="right"><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">
     &nbsp;&nbsp;&nbsp;&nbsp;net of tax, included in net earnings (loss)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
   <TD ALIGN="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Deduct: &nbsp;Stock-based employee compensation cost,</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD ALIGN="right"><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">
     &nbsp;&nbsp;&nbsp;&nbsp;net of tax, if fair value based method were used</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(912</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(767</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(2,180</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(2,213</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Pro forma net earnings (loss)</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">5,162</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(14,588</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">6,448</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(20,608</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
     <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><HR size="4" noshade></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><HR size="4" noshade></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Net earnings (loss) per share-basic, as reported</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">0.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(0.41</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">0.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(0.56</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Pro forma net earnings (loss) per share-basic</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT SIZE="2">0.15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(0.43</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">0.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(0.63</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Net earnings (loss) per share-diluted, as reported</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">0.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(0.41</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">0.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(0.56</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Pro forma net earnings (loss) per share-diluted</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">0.15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(0.43</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">0.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">(0.63</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT><FONT size="1"><B> (Continued)</B></FONT>

<P><FONT size="2"><B>NOTE C&#151;Inventories</B>
</FONT>
<P><FONT size="2">The components of inventory consist of the following:
</FONT>
<CENTER>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="625" BORDER="0">
<TR valign="bottom">
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="68%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>December 31, 2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B><I>($ in thousands)</I></B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Finished goods</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">10,795</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">12,503</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Work-in-process</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,385</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,346</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Raw materials</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">18,254</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">37,434</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">36,262</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P><FONT size="2"><B>NOTE D&#151;Restructuring and Impairment Charges</B>
</FONT>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the third quarter of
2003, CTS recorded a $4.6 million pre-tax impairment charge to reduce the carrying value
of certain assets, held by the Components and Sensors business segment, to their
estimated fair value. Approximately $3.3 million of the impairment charge
reflects a writedown for electronic equipment following final production of
previously announced &#147;end of life&#148; products and a re-assessment of the current
market value for equipment held for sale. An additional $1.3 million of the impairment
charge relates to excess capacity on a production line following an assessment
of future capacity needs.</FONT></P>

<P><FONT size="2">In the third quarter of 2002, CTS recorded $18.3&nbsp;million
of pre-tax restructuring and impairment charges. &nbsp;The restructuring and
impairment charges were incurred in order to effect operational improvements and
related organizational realignments primarily in the Components and Sensors
business segment involving the relocation of certain manufacturing operations.
&nbsp; CTS completed substantially all of these restructuring actions by the end
of 2002. </FONT></P>

<P><FONT size="2">The restructuring charge of $5.0&nbsp;million recorded in the
third quarter of 2002 relates primarily to organizational realignment in the
Components and Sensors business segment, and reductions in support staff for the
design of new custom variations of certain product lines. &nbsp;Included in this
amount is $4.6&nbsp;million of severance costs associated with the separation of
approximately 300 employees, substantially all of which have been severed as of
September 28, 2003. &nbsp;Approximately 67% of the employees severed were salary
and indirect employees and 33% were hourly production employees. </FONT></P>


<P><FONT size="2">The following table displays the restructuring activity and
restructuring reserve balances as of September 28, 2003 for actions initiated in
2002: </FONT></P>
<CENTER>
<TABLE CELLSPACING="0" CELLPADDING="0" BORDER="0" WIDTH="625">
<TR valign="bottom">
    <TD WIDTH="60%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Workforce</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Other</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Reductions</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Exit Costs</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="top">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="11"><FONT size="1"><B><I>($ in millions)</I></B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Third quarter of 2002 charge</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">5.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">Items paid or utilized in 2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3.4</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3.4</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">Reserve balance at
December&nbsp;31, 2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Items paid or utilized in first nine months of 2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1.0</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.3</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1.3</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Reserve balance at
September 28, 2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT><FONT size="1"><B> (Continued)</B></FONT>

<P><FONT size="2"><B>NOTE D&#151;Restructuring and Impairment Charges</B></FONT><FONT size="1"><B> (Continued)</B>
</FONT>


<P><FONT size="2">The 2002 restructuring plan also included $12.5&nbsp;million
of asset impairment charges. &nbsp;Approximately $9.8&nbsp;million of the
impairment charge was the adjustment needed to recognize impairments resulting
from the reduction in the remaining useful lives of certain manufacturing
equipment. Approximately $2.1&nbsp;million of the impairment charge related to
the write-off of leasehold improvements at its engineering and design facility
in Taiwan and at its manufacturing facility in China. &nbsp;Approximately
$0.2&nbsp;million related to impairment of certain intangible assets acquired in
the 1999 acquisition of the Component Products Division of Motorola. &nbsp;The
remaining $0.4&nbsp;million impairment charge related to adjustments to the
estimated fair value of certain assets held for sale. </FONT></P>

<P><FONT size="2">CTS also recognized a pension plan curtailment loss of
approximately $0.8 million in the third quarter of 2002, resulting from reduced
employment levels as a result of the restructuring activities.</FONT></P>

<P><FONT size="2">In 2001, CTS recorded $40.0&nbsp;million of pre-tax
restructuring and impairment charges, $14.0&nbsp;million in the second quarter
and $26.0&nbsp;million in the fourth quarter. &nbsp;Plan actions were designed
to permit the Company to operate more efficiently in the then-existing
environment and, at the same time, position the Company for success when the
economy improved. &nbsp;CTS completed these consolidations and transfers in
fiscal 2002.</FONT></P>

<P><FONT size="2">During the first nine months of 2002, CTS recorded in cost of
sales, $1.3&nbsp; million of restructuring-related, one-time charges, consisting
primarily of equipment relocation and other employee-related costs.&nbsp; No
unusual charges of this nature were incurred in the first nine months of 2003.</FONT></P>

<P><FONT size="2"><B>Note E&#151;Assets Held for Sale</B></FONT></P>

<P><FONT size="2">Assets held for sale at September 28, 2003 are comprised of
facilities, primarily the Longtan, Taiwan, building and other machinery and
equipment that has been removed from service and is to be disposed of pursuant
to the Company&#146;s restructuring activities (refer also to Note D,
&#147;Restructuring and Impairment Charges&#148;). &nbsp;The assets are held by
the Components and Sensors business segment. &nbsp;These assets are recorded at
amounts not in excess of what management currently expects to receive upon sale,
less cost of disposal; however, the amounts the Company will ultimately realize
are dependent on numerous factors, some of which are beyond management&#146;s
ability to control, and could differ materially from the amounts currently
recorded.</FONT></P>


<P><FONT size="2">As described in Note D, during the third quarter of 2003,
          CTS further impaired certain electronic equipment associated primarily
          with previously announced &#147;end-of-life&#148; products. Also
          during the first nine months of 2003, CTS sold the production
          equipment from its 3.2x5mm TCXO production line. &nbsp;This equipment
          was classified as assets held for sale at December 31,
          2002.</FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B> (Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT><FONT size="1"><B> (Continued)</B></FONT>

<P><FONT size="2"><B>Note F&#151;Financial Instruments</B>
</FONT>

<P><FONT size="2">In the second quarter of 2003, CTS entered into a series of
forward exchange contracts to manage its risk to fluctuations in foreign
currency exchange rates between the Euro and the United Kingdom Pound.
&nbsp;These contracts, which expire monthly in 2003, are designed to hedge
anticipated foreign currency transactions. &nbsp;In accordance with FAS No. 133,
&#147;Accounting for Derivative Instruments and Hedging Activities,&#148; these
forward contracts for forecasted transactions are designated as cash flow hedges
and recorded as assets or liabilities on the balance sheet at fair value.
&nbsp;Changes in the contracts&#146; fair values are recognized in accumulated
other comprehensive income until they are recognized in earnings at the time the
forecasted transaction occurs.</FONT></P>

<P><FONT size="2"><B>Note G&#151;Long-Term Debt</B></FONT>

<P><FONT size="2">On July 14, 2003, CTS entered into a new, three-year credit
agreement (the new credit agreement) containing a $55 million senior, secured
revolving credit facility, replacing the former $85 million senior, secured
credit agreement. &nbsp;The outstanding balance was $14.0 million at September
28, 2003.</FONT></P>

<P><FONT size="2">The new credit agreement categorized this debt as senior to
CTS&acute; $25 million convertible debentures. The debt is collateralized by
substantially all U.S. assets and a pledge of 65% of the capital stock of
certain non-U.S. subsidiaries. Interest rates on these borrowings fluctuate
based upon LIBOR. CTS pays a commitment fee on the undrawn portion of the
revolving credit agreement. The commitment fee varies based on performance under
certain financial covenants, and is currently 0.50 percent per annum. The new
credit agreement requires, among other things, that CTS comply with a minimum
fixed charge coverage, maximum leverage ratio and a minimum tangible net worth.
Failure of CTS to comply with these covenants could reduce the borrowing
availability under the new credit agreement. Additionally, the new credit
agreement limits the amounts allowed for dividends, capital expenditures and
acquisitions. The new credit agreement also allows for expansion of the facility
commitment to $75 million after January 14, 2004 if certain conditions are met
by CTS.</FONT></P>

<P><FONT size="2"><B>NOTE H&#151;Income Taxes Payable</B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the quarter ended
September 28, 2003, CTS recorded a tax benefit of $7.9 million resulting from the
reversal of reserves that were no longer required following the expiration of
statutory deadlines.
</FONT></P>

<P><FONT size="2"><B>NOTE I&#151;Business Segments</B></FONT></P>

<P><FONT size="2">FAS No.&nbsp;131, &#147;Disclosures about Segments of an
Enterprise and Related Information,&#148; requires companies to provide certain
information about their operating segments. &nbsp;At the beginning of the fourth
quarter of 2002, the Company renamed the reportable business segments and
realigned the product lines included in each segment to reflect changes in its
organizational structure and the manner that results are evaluated and resources
allocated by the chief operating decision maker. &nbsp;All segment data included
in these condensed consolidated financial statements reflects the reportable
business segments adopted in 2002. &nbsp;CTS has two reportable business
segments:&nbsp;1) Components and Sensors and 2) Electronics Manufacturing
Services (EMS). </FONT></P>

<P><FONT size="2">Components and sensors are products which perform specific
electronic functions for a given product family and are intended for use in
customer assemblies.&nbsp; Components and sensors consist principally of
automotive sensors and actuators used in commercial or consumer vehicles;
electronic components used in cellular handsets; quartz crystals and oscillators
used in the communications and computer markets; low temperature cofired
ceramics (LTCC)&nbsp;used in global positioning systems (GPS)&nbsp;and
electronic substrates used in various communications and automotive
applications; pointing sticks/cursor controls for computers and games for the
computer market; terminators, including ClearONE&#153; terminators, used in
computer and other high speed applications, switches, resistor networks and
potentiometers used to serve multiple markets. </FONT></P>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION</B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT><FONT size="1"><B> (Continued)</B></FONT>

<P><FONT size="2"><B>NOTE I&#151;Business Segments</B></FONT><FONT size="1"><B> (Continued)</B>
</FONT>

<P><FONT size="2">EMS includes the higher level assembly of electronic and
mechanical components into a finished subassembly or assembly performed under a
contract manufacturing agreement with an OEM or other contract manufacturer.
&nbsp;EMS also includes design of interconnect systems and complex backplanes,
global supply-chain management services and related manufacturing and design
services as may be required by the customer.
</FONT>

<P><FONT size="2">The accounting policies of the reportable segments are the
same as those described in the summary of significant accounting policies in the
Company's annual report on Form 10-K. Management evaluates performance based
upon operating earnings before interest and income taxes.
</FONT>

<P><FONT size="2">Summarized financial information concerning CTS&#146;
reportable segments, including reclassification of prior years, is shown in the
following table:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="625">
<TR valign="bottom">
    <TD width="63%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Components<BR>and Sensors</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>EMS</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B><I>($ in thousands)</I></B></FONT></TD>

</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"><B>Third Quarter 2003</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">Net sales to external customers</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">61,449</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">47,047</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">108,496</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Segment operating earnings</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,505</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,404</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,909</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">Total assets</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">406,938</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">76,035</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">482,973</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"><B>Third Quarter 2002</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Net sales to external customers</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">68,757</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">42,187</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">110,944</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">Segment operating earnings (loss)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(423</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,374</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,951</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Total assets</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">452,000</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">62,247</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">514,247</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"><B>First Nine Months of 2003</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">Net sales to external customers</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">185,768</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">145,194</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">330,962</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Segment operating earnings</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,615</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">7,395</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">11,010</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">Total assets</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">406,938</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">76,035</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">482,973</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
  <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"><B>First Nine Months of 2002</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Net sales to external customers</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">206,413</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">134,849</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">341,262</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">Segment operating earnings (loss)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(6,040</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">7,926</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,886</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Total assets</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">452,000</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">62,247</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">514,247</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER><BR>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9</FONT></P>

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<!-- MARKER PAGE="sheet: 12; page: 12" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION</B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT><FONT size="1"><B> (Continued)</B></FONT>

<P><FONT size="2"><B>NOTE I&#151;Business Segments</B></FONT><FONT size="1"><B> (Continued)</B>
</FONT>

<P><FONT size="2">Reconciling information between reportable segments and CTS'
consolidated totals is shown in the following table:
</FONT>


<CENTER>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="625" BORDER="0">
<TR valign="bottom">
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="43%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="1%">&nbsp;</TD>
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="1%">&nbsp;</TD>
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
  <TD ALIGN="CENTER" COLSPAN="7"><FONT size="1"><B>Three Months Ended</B></FONT></TD>

<TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD ALIGN="CENTER" COLSPAN="7"><FONT size="1"><B>Nine Months Ended</B></FONT></TD></TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD colspan="7"><HR size="1" noshade></TD></TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD> </TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD></TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
  <TD ALIGN="CENTER" COLSPAN="14"><FONT size="1"><B><I>($ in thousands)</I></B></FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Total segment operating earnings</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,909</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,951</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">11,010</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,886</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Restructuring, asset impairment and related</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;one-time charges - Components and Sensors</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,563</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(18,348</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,563</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(19,498</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Restructuring, asset impairment and related</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;one-time charges - EMS</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(102</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(134</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Interest expense</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,139</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,192</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,010</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,744</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Other income</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">263</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">548</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD COLSPAN="3"><FONT size="2">Earnings (loss) before income taxes</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(2,420</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(18,428</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(24,527</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
</TABLE>
</CENTER>


<P><FONT size="2"><B>NOTE J&#151;Contingencies</B></FONT><FONT size="1"></FONT>

<P><FONT size="2">Certain processes in the manufacture of CTS&#146; current and past products create
hazardous waste by-products as currently defined by federal and state laws and
regulations. &nbsp;CTS has been notified by the U.S. Environmental Protection Agency,
state environmental agencies and, in some cases, generator groups, that it is
or may be a Potentially Responsible Party (PRP)&nbsp;regarding hazardous waste
remediation at several non-CTS sites. &nbsp;In addition to these non-CTS sites, CTS
has an ongoing practice of providing reserves for probable remediation
activities at certain of its manufacturing locations and for claims and
proceedings against CTS with respect to other environmental matters. &nbsp;In the
opinion of management, based upon presently available information relating to
all such matters, either adequate provision for probable costs has been made,
or the ultimate costs resulting will not materially affect the consolidated
financial position, results of operations or cash flows of CTS.
</FONT>
<P><FONT size="2">Certain claims are pending against CTS with respect to matters arising out of
the ordinary conduct of its business. &nbsp;For all claims, in the opinion of
management, based upon presently available information,
either adequate provision for anticipated costs has been made by insurance,
accruals or otherwise, or the ultimate anticipated costs resulting will not
materially affect CTS&#146; consolidated financial position or results of
operations.
</FONT>


<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10</FONT></P>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 13; page: 13" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>


<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT><FONT size="1"><B> (Continued)</B></FONT>

<P><FONT size="2"><B>NOTE J&#151;Contingencies </B></FONT><FONT size="1"><B> (Continued)</B></FONT>

<P><FONT size="2">In 1999, CTS acquired certain assets and liabilities of the Component Products
Division of Motorola. &nbsp;The acquisition was accounted for under the purchase
method of accounting. &nbsp;As part of the purchase agreement, CTS may be obligated
to pay additional amounts. &nbsp;No amounts are due to Motorola
in 2003 for 2002 under the agreement.  &nbsp;CTS does not expect to make a material
payment under this agreement in 2004 for 2003, which is the final year of potential obligations.  &nbsp;
The maximum remaining potential payment under the acquisition agreement was $17.4&nbsp;million at
September 28, 2003.
</FONT>

<P><FONT size="2"><B>NOTE K&#151;Earnings Per Share</B></FONT><FONT size="1"></FONT>


<P><FONT size="2">FAS No.&nbsp;128, &#147;Earnings per Share,&#148; requires companies to provide a
reconciliation of the numerator and denominator of the basic and diluted
earnings per share (EPS)&nbsp;computations. &nbsp;The calculation below provides
net earnings, average common shares outstanding and the resultant earnings per share
for both basic and diluted EPS for the nine months and quarter ending September 28, 2003.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="600">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="56%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Net</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>($ in thousands,</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Earnings</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(In thousands)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Per Share</B></FONT></TD></TR>
<TR valign="bottom">
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>except per share amounts)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(Numerator)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(Denominator)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Amount</B></FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><FONT size="2"><B>Third Quarter 2003</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="2"><FONT size="2">Basic EPS</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6,074</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">34,799</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><FONT size="2">Effect of dilutive securities:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="2"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;Stock options</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">265</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;Other</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">288</FONT></TD>
    <TD><FONT size="2"><SUP>(1)</SUP></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
   <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><FONT size="2">Diluted EPS</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6,074</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35,352</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><FONT size="2"><B>First Nine Months of 2003</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="2"><FONT size="2">Basic EPS</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,628</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">34,351</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><FONT size="2">Effect of dilutive securities:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="2"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;Stock options</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">106</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;Other</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">272</FONT></TD>
    <TD><FONT size="2"><SUP>(1)</SUP></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
   <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><FONT size="2">Diluted EPS</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,628</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">34,729</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
</TABLE>
</CENTER><BR>

<!-- MARKER FORMAT-SHEET="Para Hang" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I><SUP>(1) </SUP></I> </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;<I>Includes
151 shares of CTS common stock to be issued to the former DCA shareholders who have not
yet tendered their stock certificates for exchange at September 28, 2003.</I> </FONT></TD>
</TR>
</TABLE>



<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11</FONT></P>

<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 14; page: 14" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>


<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT><FONT size="1"><B> (Continued)</B></FONT>

<P><FONT size="2"><B>NOTE K&#151;Earnings Per Share</B></FONT><FONT size="1"><B>&nbsp;(Continued)</B></FONT>

<P><FONT size="2">The following table shows the potentially dilutive securities
which have been excluded from the diluted earnings per share calculation for the
three and nine month periods ending September 28, 2003 and September 29, 2002
because they are either anti-dilutive or the exercise price exceeds the average
market price:
</FONT>

<CENTER>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0">
<TR valign="bottom">
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="48%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD ALIGN="CENTER" COLSPAN="7"><FONT size="1"><B>Three Months Ended</B></FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD ALIGN="CENTER" COLSPAN="7"><FONT size="1"><B>Nine Months Ended</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD align="center" colspan="3"><FONT size="1"><B><I>(Number of shares in thousands)</I></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>


<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Securities issuable in connection with stock purchase plans</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">245</FONT></TD>
    <TD><FONT size="2"><SUP>(1)</SUP></FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">229</FONT></TD>
    <TD><FONT size="2"><SUP>(1)</SUP></FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Stock options where the exercise price
exceeds the</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;average market price of
common shares during the period</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">779</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,564</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,262</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,059</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Stock options where the exercise price
is below the</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;average market price of
common shares during the period</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;which would be anti-dilutive</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Securities related to the subordinated convertible debt</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">831</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<BR>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT SIZE="2"><I><SUP>(1)</SUP></I> </FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT SIZE="2"><I>Includes 152 shares of CTS common stock to be issued to the former DCA
shareholders who have not yet tendered their stock certificates for
exchange at September 29, 2002.</I> </FONT></TD>
</TR>
</TABLE>

<P><FONT size="2"><B>NOTE L&#151;Accounting Pronouncements</B></FONT>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In April 2003, the FASB
issued FAS No. 149, &#147;Amendment of Statement 133 on Derivative Instruments
and Hedging Activities.&#148; &nbsp;FAS No. 149 amends and clarifies the
accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities
under FAS No. 133, &#147;Accounting for Derivative Instruments and Hedging
Activities.&#148;&nbsp;&nbsp;FAS No. 149 was generally effective for contracts
entered into or modified after June 30, 2003 and for hedging relationships
designated after June 30, 2003. &nbsp; Adoption of FAS No. 149 did not have a
significant impact on the Company&#146;s financial position or results of
operations. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In May 2003, the FASB
issued FAS No. 150, &#147;Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity.&#148; &nbsp;FAS No. 150 requires
that certain financial instruments, which under previous guidance were accounted
for as equity, must now be accounted for as liabilities. &nbsp;The financial
instruments affected include mandatorily redeemable stock, certain financial
instruments that require or may require the issuer to buy back some of its
shares in exchange for cash or other assets and certain obligations that can be
settled with shares of stock. &nbsp;FAS No. 150 was effective for financial
instruments entered into or modified after May 31, 2003 and must be applied to
CTS&acute; existing financial instruments effective June 30, 2003, the beginning
of the first interim period after June 15, 2003. &nbsp;The adoption of FAS No.
150 did not have a material impact on its results of operations or financial
condition. </FONT></P>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12</FONT></P>

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<A NAME="mda"></A>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 2.&nbsp;&nbsp;&nbsp;Management's Discussion and Analysis of Financial
Condition and Results of Operations</B></FONT><BR><BR>

<P><FONT size="2"><I>Critical Accounting Policies</I></FONT>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Management's Discussion and
Analysis of Financial Condition and Results of Operations discusses the
Company's condensed consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States
of America. This discussion includes certain non-GAAP financial measures which
CTS' management believes are useful to investors in analyzing CTS' financial
performance and results of operations over time. Reconciliations of these
non-GAAP financial measures to the most comparable GAAP financial measures are
included herein. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The preparation of these
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Management believes that
judgment and estimates related to the following critical accounting policies
could materially affect its consolidated financial statements. </FONT></P>
<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;
Estimating inventory valuation, the allowance for doubtful accounts and other
accrued liabilities
<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;Valuation of long-lived and
intangible assets and depreciation / amortization periods
<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;Income taxes
<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;Retirement plans </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In the first nine months of
2003, there have been no changes in the above critical accounting policies.
</FONT></P>
<P><FONT size="2"><B><U>Results of Operations</U></B><BR><BR>
<I>Comparison of Third Quarter 2003 and Third Quarter 2002<BR><BR>
Business Segment Discussion</I>
</FONT>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table
highlights the business segment results for the three-month periods ending
September 28, 2003 and September 29, 2002: </FONT></P>

<TABLE ALIGN="CENTER" CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="50%">


<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Electronics</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>Components</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>Manufacturing</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>&amp; Sensors</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>Services</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="7"><FONT size="1"><B><I>($ in thousands)</I></B></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"><B>Third Quarter 2003</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">Sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">61,449</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">47,047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Segment operating earnings</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,505</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,404</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">% of sales </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.4</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.1</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"><B>Third Quarter 2002</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">68,757</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">42,187</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">Segment operating earnings (loss)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(423</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,374</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">% of sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.6</FONT></TD>
    <TD><FONT size="2">)%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.6</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
</TR>
</TABLE>
<BR>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A>
</FONT></P>

<P align="left"><FONT size="2"><B>PART
I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>
(Continued)</B></FONT><BR><BR> &nbsp;&nbsp;&nbsp;<FONT size="2"><B>
Item 2.&nbsp;&nbsp;&nbsp;Management's Discussion and Analysis of
Financial Condition and Results of Operations</B></FONT><FONT
size="1"><B>&nbsp;(Continued)</B></FONT> <P><FONT size="2"><B><U>Results of
Operations</U></B></FONT><FONT size="1"><B>&nbsp;(Continued)</B></FONT>

<P><FONT size="2"> The third quarter of 2003 sales of components and sensors and
EMS products, as a percentage of total sales, were 57% and 43% respectively.
The third quarter of 2002 sales of components and sensors and EMS products, as a
percentage of total sales, were 62% and 38% respectively. Refer also to Note I,
"Business Segments," for a description of the Company's business segments.
</FONT></p>

     <P><FONT size="2">Components and Sensors business segment sales decreased
     $7.3 million or 11% from the prior year quarter. The decrease was primarily
     due to a $5.2 million reduction in end-of-life product sales and general
     softness in the computer, communications and automotive markets. The
     segment operating earnings of $1.5 million increased $1.9 million. In the
     third quarter of 2003, lower manufacturing and selling, general and
     administrative expenses of approximately $2.4 million combined with lower
     depreciation and amortization of $2.5 million caused the segment operating
     earnings improvement despite lower sales volumes in 2003 and approximately
     $1.0 million pertaining to the resolution of a customer credit recorded in
     2002.</FONT></p>

<P><FONT size="2">EMS business segment sales increased $4.9 million, or 12%,
from the prior year quarter. The incremental segment operating earnings
generated from higher sales levels were impacted by less favorable product mix.
This resulted in approximately the same level of segment operating earnings,
$2.4 million, as in the third quarter of 2002.</FONT></p>

<P><FONT size="2"><I>Total Company Discussion</I>
</FONT>

<P><FONT size="2">The following table highlights changes in significant
components of the condensed consolidated statements of earnings (loss) for the
three-month periods ended September 28, 2003 and September 29, 2002:</FONT></p>

<TABLE ALIGN="CENTER" CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="625">

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>Increase<BR>(Decrease)</B></FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD></TR>

<TR valign="bottom"> <TD><FONT size="1">&nbsp;</FONT></TD> <TD><FONT size="1">&nbsp;
</FONT></TD> <TD align="center" colspan="11"><FONT
size="1"><B><I>($ in thousands)</I></B></FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT SIZE="2"><B>Net sales</B> </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">108,496</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">110,944</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(2,448</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">Gross margin</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">23,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">23,885</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(230</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Gross margin as a percent of sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">21.8</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">21.5</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.3</FONT></TD>
    <TD><FONT size="2">%</FONT></TD></TR>

<TR valign="bottom">
    <TD COLSPAN="13">&nbsp;</TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Selling, general and administrative expenses</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,651</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,957</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">Selling, general and administrative expenses
as a percent of sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13.5</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15.0</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1.5</FONT></TD>
    <TD><FONT size="2">)%</FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD COLSPAN="13">&nbsp;</TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">Research and development expenses</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,390</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(338</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Research and development expenses as a percent of sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.7</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.9</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.2</FONT></TD>
    <TD><FONT size="2">)%</FONT></TD></TR>

<TR valign="bottom">
    <TD COLSPAN="13">&nbsp;</TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT SIZE="2">Restructuring and impairment charges</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,563</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">18,343</FONT></TD>
    <TD><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(13,780</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom">
    <TD COLSPAN="13">&nbsp;</TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT SIZE="2"><B>Operating loss</B> </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(654</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,499</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(15,845</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">Operating loss as a percent of sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.6</FONT></TD>
    <TD><FONT size="2">)%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(14.9</FONT></TD>
    <TD><FONT size="2">)%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(14.3)</FONT></TD>
    <TD><FONT size="2">%</FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD COLSPAN="13">&nbsp;</TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">Total other expense</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,766</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,929</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(163</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Loss before income taxes</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,420</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(18,428</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,008</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT SIZE="2">Income tax benefit</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,494</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,607</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,887</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD COLSPAN="13">&nbsp;</TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT SIZE="2"><B>Net earnings (loss)</B> </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">6,074</FONT></TD>
    <TD><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(13,821</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">19,895</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
</TABLE>
<BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 2.&nbsp;&nbsp;&nbsp;Management's Discussion and Analysis of Financial
Condition and Results of Operations</B></FONT><FONT size="1"><B> (Continued)</B></FONT><BR><BR>

<P><FONT size="2"><B><U>Results of Operations</U></B><FONT size="1"><B> (Continued)</B></FONT>
</FONT>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Compared to the third
quarter of 2002, total sales were down $2.4 million, or 2%. However, excluding
end-of-life product sales, net sales increased 2.6% quarter to quarter. These
end-of-life product sales relate to products described in the third quarter 2002
restructuring plan, which include Voltage Controlled Oscillators (VCO) and
Temperature Compensated Crystal Oscillators (TCXO).</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table is a
reconciliation of net sales to net sales excluding end-of-life products for the
three-month periods ended September 28, 2003 and September 29, 2002:</FONT></P>

<CENTER>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="625">


<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD align="center" colspan="3"><FONT size="1"><B>Increase<BR>(Decrease)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>Increase<BR>(Decrease)</B></FONT></TD> </TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2"><I>($ in millions)</I></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Net sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">108.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">110.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(2.4</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2.2</FONT></TD>
    <TD><FONT size="2">)%</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">End-of-life products</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5.2</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(76.5</FONT></TD>
    <TD><FONT size="2">)%</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Net sales excluding end-of-life products</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">106.9</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">104.1</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2.8</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.6</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
</TABLE>
</CENTER>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The gross margin percent
increased 0.3 percentage points over 2002, to 21.8% despite the lower net sales.
Items contributing to the gross margin percentage increase included lower
depreciation expense of $1.7 million, partially offset by $0.9 million in
unfavorable impact, primarily due to a higher mix of EMS segment sales which
inherently have lower margins compared to Component and Sensor segment sales. The
prior year quarter gross margin also included approximately $1.0 million
pertaining to the resolution of a customer credit.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Selling, general and
administrative expenses were $14.7 million, or 14% of sales, compared to $16.7
million, or 15% of sales, in the prior year quarter. The reduction was primarily
due to benefits of restructuring actions and cost reduction programs.
&nbsp;Research and development expense levels remained relatively constant.
</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the third quarter of
2003, CTS recorded a $4.6 million pre-tax impairment charge to reduce the
carrying value of certain assets, held by the Components and Sensors business
segment, to their estimated fair value. Approximately $3.3 million of the
impairment charge reflects a writedown for electronic equipment following final
production of previously announced &#147;end of life&#148; products and a
re-assessment of the current market value for equipment held for sale. An
additional $1.3 million of the impairment charge relates to excess capacity on a
production line following an assessment of future capacity needs.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The operating loss of $0.7
million improved $15.8 million compared to the prior year quarter. This
improvement was the result of lower depreciation and amortization of $2.4
million and a reduction in other operating expenses of $0.6 million, primarily
in salaries and wages. In addition, the third quarter of 2003 included a $4.6
million asset impairment charge while the third quarter of 2002 included $18.4
million of restructuring, asset impairment and restructuring-related one-time
charges and approximately $1.0 million pertaining to the resolution of a customer credit.
</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest expense, included
in other expenses, remained relatively constant at approximately $2.1 million in
both years. Interest expense in the third quarter of 2003, however, included
$0.4 million relating to the write off of debt issue costs of the former credit
agreement. Excluding the $0.4 million write-off, interest expense was lower due
to reduced outstanding debt balances. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the quarter ended
September 28, 2003, CTS recorded a tax benefit of $7.9 million resulting from
the reversal of reserves that were no longer required following the expiration
of statutory deadlines. The reserve reduction will not impact CTS' anticipated
fourth quarter 2003 effective income tax rate of 25%. </FONT></P>


<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>15</FONT></P>

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<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 2.&nbsp;&nbsp;&nbsp;Management's Discussion and Analysis of Financial
Condition and Results of Operations</B></FONT><FONT size="1"><B> (Continued)</B></FONT><BR><BR>

<P><FONT size="2"><B><U>Results of Operations</U></B><FONT size="1"><B> (Continued)</B></FONT>
</FONT>



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<A NAME=A010></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Comparison of
Nine Months 2003 and Nine Months 2002 </I></FONT></P>

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<A NAME=A011></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Business Segment
Discussion </I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table
highlights the business segment results for the nine month periods ending
September 28, 2003 and September 29, 2002: </FONT></P>



<TABLE align="center" cellspacing="0" border="0" cellpadding="0" width="50%">


<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Electronics</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>Components</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>Manufacturing</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>&amp; Sensors</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>Services</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="7"><FONT size="1"><B><I>($ in thousands)</I></B></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2"><B>First Nine Months 2003</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">Sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">185,768</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">145,194</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Segment operating earnings</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,615</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,395</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">% of sales </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.9</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.1</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2"><B>First Nine Month 2002</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">206,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">134,849</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">Segment operating earnings (loss)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,040</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,926</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">% of sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2.9</FONT></TD>
    <TD><FONT size="2">)%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.9</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the first nine
months of 2003, sales of components and sensors and EMS products, as a
percentage of total sales, were 56% and 44% respectively. The first nine
months of 2002 sales of components and sensors and EMS products, as a percentage
of total sales, were 60% and 40% respectively. Refer also to Note I, "Business
Segments," for a description of the Company's business segments. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Components and Sensors
business segment sales decreased $20.6 million, or 10%, from the prior year. The
decrease was primarily due to a reduction of end-of-life product sales of $13.7
million and a general softness in the computer, communications and automotive
markets. Despite the sales decrease, segment operating earnings improved $9.7
million. Contributing to the improvement were lower salary and wage expenses of
$10.9 million and lower depreciation and amortization expenses of $8.1 million.
These improvements were partially reduced by the impact of lower volume of
approximately $5 million and $4.1 million of favorable items occurring in 2002,
related to certain customer reimbursements.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EMS business segment sales
increased $10.3 million, or 7.7% from the prior year primarily in infrastructure
systems equipment.  The segment operating earnings of $7.4 million decreased $0.5
million primarily due to a less favorable product mix.</FONT></P>


<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 2.&nbsp;&nbsp;&nbsp;Management's Discussion and Analysis of Financial
Condition and Results of Operations</B></FONT><FONT size="1"><B> (Continued)</B></FONT><BR><BR>

<P><FONT size="2"><B><U>Results of Operations</U></B><FONT size="1"><B> (Continued)</B></FONT>
</FONT>


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<A NAME=A012></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Total Company
Discussion </I></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table
highlights changes in significant components of the condensed consolidated
statements of earnings (loss) for the nine-month periods ended September 28,
2003 and September 29, 2002: </FONT></P>


<TABLE ALIGN="CENTER" CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="625">


<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>Increase<BR>(Decrease)</B></FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD></TR>

<TR valign="bottom"> <TD><FONT size="1">&nbsp;</FONT></TD> <TD><FONT size="1">&nbsp;
</FONT></TD> <TD align="center" colspan="11"><FONT
size="1"><B><I>($ in thousands)</I></B></FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT SIZE="2"><B>Net sales</B> </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">330,962</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">341,262</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(10,300</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT SIZE="2">Gross margin</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">69,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">67,672</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,586</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Gross margin as a percent of sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20.9</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19.8</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.1</FONT></TD>
    <TD><FONT size="2">%</FONT></TD></TR>

<TR valign="bottom">
    <TD COLSPAN="13">&nbsp;</TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Selling, general and administrative expenses</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">42,165</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">48,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,366</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">Selling, general and administrative expenses
as a percent of sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12.7</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14.2</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1.5</FONT></TD>
    <TD><FONT size="2">)%</FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD COLSPAN="13">&nbsp;</TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">Research and development expenses</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,083</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">18,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,461</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Research and development expenses as a percent of sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.9</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.4</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.5</FONT></TD>
    <TD><FONT size="2">)%</FONT></TD></TR>

<TR valign="bottom">
    <TD COLSPAN="13">&nbsp;</TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT SIZE="2">Restructuring and impairment charges</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,563</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">18,343</FONT></TD>
    <TD><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(13,780</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom">
    <TD COLSPAN="13">&nbsp;</TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT SIZE="2"><B>Operating earnings (loss)</B> </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,447</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,746</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24,193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">Operating earnings (loss) as a percent of sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.9</FONT></TD>
    <TD><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5.2</FONT></TD>
    <TD><FONT size="2">)%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7.1</FONT></TD>
    <TD><FONT size="2">%</FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD COLSPAN="13">&nbsp;</TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">Total other expense</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,462</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,781</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,319</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">Earnings (loss) before income taxes</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(24,527</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">25,512</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT SIZE="2">Income tax benefit</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,643</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,132</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,511</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD COLSPAN="13">&nbsp;</TD></TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT SIZE="2"><B>Net earnings (loss)</B> </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,628</FONT></TD>
    <TD><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(18,395</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">27,023</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net sales decreased by
$10.3 million, or 3% from the first nine months of 2002. &nbsp;The decline
principally reflects the Company&#146;s decision to exit and end-of-life
certain component product lines of $13.7 million, used primarily in cell phone
applications, and a sales reduction of $6.9 million in other components and
sensor products. These decreases were partially offset by higher EMS product
sales of $10.3 million, primarily infrastructure systems. </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>End-of-life product sales
relate to products described in the third quarter 2002 restructuring plan, which
include Voltage Controlled Oscillators (VCO) and Temperature Compensated Crystal
Oscillators (TCXO), including product sales from the TCXO production line
sold in the first quarter of 2003. The following table is a reconciliation of
net sales to net sales excluding end-of-life products for the nine-month periods
ended September 28, 2003 and September 29, 2002:</FONT></P>

<CENTER>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="625">

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 28, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>September 29, 2002</B></FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD align="center" colspan="3"><FONT size="1"><B>Increase<BR>(Decrease)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><FONT size="1"><B>Increase<BR>(Decrease)</B></FONT></TD> </TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2"><I>($ in millions)</I></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT> </TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">Net sales</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">331.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">341.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(10.3</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3.0</FONT></TD>
    <TD><FONT size="2">)%</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">End-of-life products</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(13.7</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(71.7</FONT></TD>
    <TD><FONT size="2">)%</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD colspan="3"><FONT size="2">Net sales excluding end-of-life products</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">325.6</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">322.2</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3.4</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.1</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
</TABLE>
</CENTER>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 2.&nbsp;&nbsp;&nbsp;Management's Discussion and Analysis of Financial
Condition and Results of Operations</B></FONT><FONT size="1"><B> (Continued)</B></FONT><BR><BR>

<P><FONT size="2"><B><U>Results of Operations</U></B><FONT size="1"><B> (Continued)</B></FONT>
</FONT>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gross margin increased $1.6
million, or 1.1 percentage points, despite the lower sales volume. The 2003
gross margin dollar and percentage improvements were, in part, due to lower
depreciation expense of $5.3 million. Also, gross margin in the first nine
months of 2002 included $1.3 million of restructuring-related one-time charges,
and favorable adjustments of $3.1 million for a customer reimbursement and
approximately $1.0 million pertaining to the resolution of a customer credit.
</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Selling, general and
administrative expenses in 2003 were $42.2 million, or 13% of sales, compared to $48.5
million, or 14% of sales, in the first nine months of 2002. The reduction was
primarily due to benefits of the restructuring actions taken in 2002. Research
and development expenses of $16.1 million decreased $2.5 million from the first
nine months of 2002. The first nine months of 2003 included $4.6 million of asset
impairment charges and 2002 included $19.6 million of restructuring, asset
impairment and related one-time charges.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the third quarter of
2003, CTS recorded a $4.6 million pre-tax impairment charge to reduce the carrying value
of certain assets, held by the Components and Sensors business segment, to their
estimated fair value. Approximately $3.3 million of the impairment charge
reflects a writedown for electronic equipment following final production of
previously announced &#147;end of life&#148; products and a re-assessment of the current
market value for equipment held for sale. An additional $1.3 million of the impairment
charge relates to excess capacity on a production line following an assessment
of future capacity needs.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CTS announced restructuring
plans during 2002 and 2001, designed to effect operational improvements and
related organizational realignments and to size the Company to then-existing
market realities, while continuing to put a priority on positioning the Company
to be successful as the economy recovers and market growth returns. See Note D,
&#147;Restructuring and Impairment Charges,&#148; for additional explanation of
the plan actions. &nbsp;The expected 2003 pre-tax profitability improvement
associated with the 2002 restructuring and asset impairment charges is estimated
to be $17.0 million. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total other expense of $5.5
million decreased $1.3 million, primarily due to reduced interest expense of
$1.7 million on lower debt balances, partially offset by higher bank fee
amortization of $0.2 million.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the quarter ended
September 28, 2003, CTS recorded a tax benefit of $7.9 million resulting from
the reversal of reserves that were no longer required following the expiration
of statutory deadlines. The reserve reduction will not impact CTS&acute; anticipated
fourth quarter 2003 effective income tax rate of 25%.</FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the first nine months
of 2003, CTS completed the sale of its 3.2x5mm TCXO production line. The 3.2x5mm
TCXO products are used primarily in mobile handset applications and sales of
these 3.2x5mm TCXO products were insignificant in prior years. </FONT></P>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>18</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 2.&nbsp;&nbsp;&nbsp;Management's Discussion and Analysis of Financial
Condition and Results of Operations</B></FONT><FONT size="1"><B> (Continued)</B></FONT><BR><BR>

<P><FONT size="2"><B><U>Liquidity and Capital Resources</U></B></FONT>

<P><FONT size="2">On July 14, 2003, CTS entered into a new, three-year
credit agreement (the new credit agreement) containing a $55 million senior,
secured revolving credit facility, replacing the former $85 million senior,
secured credit agreement.  The new credit agreement allows for the expansion
of the facility commitment to $75 million after January 14, 2004, if certain
conditions are met.  The new credit agreement contains financial covenants
briefly described in Note G, "Long-Term Debt."  While these covenants are
typical and CTS management currently expects to be in compliance with all
financial covenants, there can be no assurance of this since certain factors,
such as forecasted future operating results, are dependent upon future events,
some of which are beyond CTS' ability to control. If CTS is unable to comply
with the financial covenants, it will seek to obtain amendments or waivers from
the lenders and/or identify other sources of liquidity such as raising
additional capital and/or the sale of certain assets, including assets held for
sale. </FONT>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the first nine
     months of 2003, net cash provided by the operating activities was $15.5
     million, issuance of common stock generated $14.4 million and proceeds from
     the sales of assets were $4.1 million. With the available cash, CTS reduced
     the outstanding balance of the revolving credit facility by $14.4 million,
     incurred capital expenditures of $6.2 million, paid dividends of $3.1
     million and increased the cash balance by $10.4 million. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the nine months
     ended September 2003, cash flow from operations was $15.5 million.
     Positively impacting cash flow from operations were net earnings of $8.6
     million and adjustments to reconcile earnings of $30.4 million, primarily
     from depreciation and amortization. Changes in assets and liabilities
     reduced cash flow from operations by $23.6 million, primarily in the
     prepaid pension asset and accounts payable and accrued liabilities. The
     reduction in accrued liabilities includes a $7.9 million tax reserve
     reversal. In the first nine months of 2002, cash flows provided by
     operating activities were $17.2 million. The net loss for the first nine
     months of 2002 combined with the increase in the pension asset and the net
     increase in working capital were more than offset by the depreciation and
     amortization and restructuring and impairment charges for the first nine
     months of 2002.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash flows used in
investing activities totaled $2.3 million through the first nine months of 2003,
including $6.2 million of capital expenditures, partially offset by $4.1 million
of proceeds from the sale of assets. Cash flows used for investing activities
totaled $9.2 million through the first nine months of 2002, including $11.3
million of capital expenditures, partially offset by $2.3 million of proceeds
from the sale of assets.
</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash flows used for
financing activities in the first nine months of 2003 were $3.0 million in 2003,
consisting primarily of net repayment of debt of $14.4 million and stock
dividends of $3.1 million, partially offset by proceeds from the issuance of
common stock of $14.4 million. Cash flows used for financing activities were
$10.9 million in the first nine months of 2002 consisting primarily of
repayments of debt of $75.1 million and dividend payments of $2.9 million. These
uses of cash were partially offset by proceeds from the issuance of common stock
of $41.0 million and convertible subordinated debentures of $25.0 million.
</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CTS&#146; capital
expenditures for 2003 are expected to total approximately $13 million, $6.2
million of which has been spent during the first nine months of the year.
&nbsp;These capital expenditures are primarily for new products and cost savings
initiatives. CTS was also obligated to make approximately $6 million of lease
payments in 2003, of which approximately $4.5 million has been paid through
September 28, 2003.</FONT></P>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19</FONT></P>

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<!-- MARKER FORMAT-SHEET="Para Default" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 2.&nbsp;&nbsp;&nbsp;Management's Discussion and Analysis of Financial
Condition and Results of Operations</B></FONT><FONT size="1"><B> (Continued)</B></FONT><BR><BR>

<P><FONT size="2"><B><U>Liquidity and Capital Resources</U></B><FONT size="1"><B> (Continued)</B></FONT>
</FONT>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CTS believes cash flows
from operations and available borrowings under its new revolving credit facility
will be adequate to fund its working capital and capital expenditure
requirements. &nbsp;However, if customer demand decreases significantly from
forecasted levels or customer pricing pressures reduce revenues or profit
margins significantly, CTS may need to find an alternative funding source.
&nbsp;In this event, CTS may choose to pursue additional equity and/or debt
financing. &nbsp;CTS may not be able to obtain additional financing, which would
be affected by general economic and market conditions, on terms acceptable to
CTS or at all. </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On December 14, 1999,
CTS&#146; shelf registration statement on Form S-3 was declared effective by the
Securities and Exchange Commission. CTS could initially offer up to $500.0
million in any combination of debt securities, common stock, preferred stock or
warrants under the registration statement. &nbsp; During the first nine months
of 2003, CTS issued $10.7 million of common stock under this registration
statement. CTS used the net proceeds of this equity issuance to repay the
revolving loan under its credit agreement. As of September 28, 2003, CTS could
offer up to $435.1 million of additional debt and/or equity securities under
this registration statement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On November 13, 2001,
CTS&#146; Form S-3 registration statement registering two million shares of CTS
common stock to be issued under CTS&#146; Direct Stock Purchase Plan was
declared effective by the Securities and Exchange Commission. &nbsp;During the
first nine months of 2003, CTS issued $3.7 million of common stock under this
registration statement. CTS used the net proceeds of these equity issuances to
repay revolving loans under its credit agreements. As of September 28, 2003, CTS
could issue up to approximately 136,000 additional shares of common stock under
this registration statement.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In April 2002, the Company
issued $25 million of five-year, 6.5% convertible, subordinated debentures.
&nbsp;These debentures are unsecured and convert into CTS common stock at a
conversion price of $20.05 per share. &nbsp;At any time after the three-year
anniversary of the issue date, the purchasers may accelerate the maturity of the
debentures. &nbsp;CTS also has the right after such three-year anniversary and
under certain circumstances, to force conversion of the debentures into common
stock. &nbsp;CTS used the net proceeds from the offering to repay the
outstanding term loans in full under its then existing credit facility, and the
balance was applied to its revolving facility. </FONT></P>

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     <P ALIGN=CENTER>_________________ </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Statements about the
Company&#146;s earnings outlook and its plans, estimates and beliefs concerning
the future are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. &nbsp;These statements are based on
management&#146;s current expectations. Actual results may differ materially
from those reflected in the forward-looking statements due to a variety of
factors which could affect the Company&#146;s operating results, liquidity and
financial condition. &nbsp;We undertake no obligation to publicly update or
revise any forward-looking statement. &nbsp;Factors that could impact future
results include among others: the general market conditions in the automotive,
computer and communications markets, and in the overall worldwide economies;
reliance on key customers; the Company&#146;s capabilities to implement measures
to improve its financial condition and flexibility; the Company&#146;s
successful execution of its ongoing cost-reduction plans; pricing pressures and
demand for the Company&#146;s products, especially if economic conditions worsen
or do not recover in the key markets; changes in the liability insurance markets
which might impact the Company&#146;s capability to obtain appropriate levels of
insurance coverage; the effect of major health concerns such as Severe Acute
Respiratory Syndrome (SARS) on our employees, customers and suppliers; and risks
associated with our international operations, including trade and tariff
barriers, exchange rates and political and geopolitical risks. &nbsp;Investors
are encouraged to examine the Company&#146;s 2002 Form 10-K, which more fully
describes the risks and uncertainties associated with the Company&#146;s
business. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>20</FONT></P>

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<A NAME="quantitative"></A>

<A NAME="controlsprocedures"></A>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 3.&nbsp;&nbsp;&nbsp;
Quantitative and Qualitative Disclosures About Market Risk</B></FONT>

<P><FONT size="2">There have been no material changes in CTS' market risk since December 31, 2002.
</FONT>

<P align="left"><FONT size="2"><B>&nbsp;&nbsp;&nbsp;Item 4.&nbsp;&nbsp;&nbsp;
Controls and Procedures</B></FONT>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CTS maintains a set of
disclosure controls and procedures designed to ensure information required to be
disclosed by CTS in reports that it files or submits under the Securities Act of
1934 is recorded, processed, summarized and reported within the time periods
specified in Securities and Exchange Commission rules and forms. Management
recognizes that a control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the
control system are met. Further, the design of a control system must reflect the
fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs. As of September 28, 2003, the end of the
quarter covered by this report, an evaluation was carried out under the
supervision and with the participation of CTS' management, including the chief
executive officer and chief financial officer, of the effectiveness of CTS'
disclosure controls and procedures. Based upon that evaluation, the chief
executive officer and chief financial officer have concluded that CTS'
disclosure controls and procedures are effective at the reasonable assurance
level referred to above. Subsequent to the date of their evaluation, there have
been no significant changes in CTS' internal controls or in other factors that
could significantly affect these controls. The company's management, including
the CEO and CFO, does not expect its disclosure controls and procedures or its
internal controls will prevent all error and all fraud.
     </FONT></P>


<A NAME="part2otherinfo"></A>

<A NAME="legalproceedings"></A>

<P align="left"><FONT size="2"><B>PART II&nbsp;&nbsp;-&nbsp;&nbsp;OTHER INFORMATION </B></FONT><BR><BR>
&nbsp;&nbsp;&nbsp;<FONT size="2"><B>Item 1.&nbsp;&nbsp;&nbsp;
Legal Proceedings</B></FONT>

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          <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certain processes
          in the manufacture of CTS&#146; current and past products create
          hazardous waste by-products as currently defined by federal and state
          laws and regulations. &nbsp;CTS has been notified by the U.S.
          Environmental Protection Agency, state environmental agencies and, in
          some cases, generator groups, that it is or may be a Potentially
          Responsible Party (PRP) regarding hazardous waste remediation at
          several non-CTS sites. &nbsp;In addition to these non-CTS sites, CTS
          has an ongoing practice of providing reserves for probable remediation
          activities at certain of its manufacturing locations and for claims
          and proceedings against CTS with respect to other environmental
          matters. &nbsp;In the opinion of management, based upon presently
          available information relating to all such matters, either adequate
          provision for probable costs has been made, or the ultimate costs
          resulting will not materially affect the consolidated financial
          position, results of operations or cash flows of CTS. </FONT></P>

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          <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certain claims
          are pending against CTS with respect to matters arising out of the
          ordinary conduct of its business. &nbsp;For all claims, in the opinion
          of management, based upon presently available information, either
          adequate provision for anticipated costs has been made by insurance,
          accruals or otherwise, or the ultimate anticipated costs resulting
          will not materially affect CTS&#146; consolidated financial position
          or results of operations. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21</FONT></P>

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<A NAME="exhibits"></A>
<A NAME="otherinformation"></A>
<A NAME="submission"></A>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<P align="left"><FONT size="2"><B>PART II&nbsp;&nbsp;-&nbsp;&nbsp;OTHER INFORMATION </B></FONT><FONT size="1"><B>(Continued)</B></FONT><BR><BR>
&nbsp;<FONT size="2"><B>&nbsp;&nbsp;&nbsp;Item 6.&nbsp;&nbsp;&nbsp;
Exhibits and Reports on Form 8-K</B></FONT>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits</FONT></P>
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<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A HREF="exhibit10-a.htm">(10) (a)</A>&nbsp;&nbsp;
CTS Corporation 2003 Excess Benefit Retirement Plan, effective July 1, 2003</FONT><BR><BR>


<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A HREF="exhibit31-a.htm">(31) (a)</A>&nbsp;&nbsp;
Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002</FONT><BR><BR>

<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A HREF="exhibit31-b.htm">(31) (b)</A>&nbsp;&nbsp;
Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002</FONT><BR><BR>

<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A HREF="exhibit32-a.htm">(32) (a)</A>&nbsp;
&nbsp;Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley <BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Act of 2002</FONT><BR><BR>

<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<A HREF="exhibit32-b.htm">(32) (b)</A>&nbsp;
&nbsp;Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley <BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Act of 2002</FONT>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reports on Form 8-K<BR><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the three-month period ending September 28, 2003,
CTS filed the following reports on Form 8-K:</FONT></P>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
    <TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
    <TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Report dated
July 21, 2003, under Item 9., Regulation FD Disclosure, containing the press
release announcing that it had entered into a new credit agreement with its four
major financial institutions.</FONT></TD></TR>
<TR VALIGN=TOP>
    <TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=TOP>
    <TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
    <TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Report dated
July 24, 2003, under item 7., Financial Statements and Exhibits, containing the
press release announcing second quarter 2003 financial results.</FONT></TD></TR>
<TR VALIGN=TOP>
    <TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=TOP>
    <TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
    <TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Report dated
August 26, 2003, under Item 5., Other Items, disclosing the sale of 1,000,000
shares of its Common Stock to an institutional investor pursuant to a previously
filed shelf registration statement on Form S-3. The Form 8-K also filed the
opinion of counsel related to this transaction.</FONT></TD></TR>
<TR VALIGN=TOP>
    <TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=TOP>
    <TD WIDTH=9%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
    <TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Report dated
September 25, 2003, under Item 9., Regulation FD Disclosure, containing a copy
of material used in an investor relations presentation. The Form 8-K also
contained a reconciliation of certain non-GAAP financial measures to the most
directly comparable GAAP financial measures.</FONT></TD></TR>
</TABLE>

<BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">Table of Contents</A> </FONT></P>

<A NAME="signatures"></A>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>SIGNATURES</U> </FONT> </H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized. </FONT></P>


<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
     <TH ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">CTS Corporation</FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TH>
     <TH ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">CTS Corporation</FONT></TH>
<TH><FONT FACE="Times new Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="30%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="25%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="30%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
</TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="30%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>/s/  Richard G. Cutter III</I></FONT></TD>
     <TD WIDTH="25%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="30%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>/s/  Vinod M. Khilnani</I></FONT></TD>
     <TD WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
</TR>

<TR VALIGN="TOP">
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT><HR SIZE="1" NOSHADE></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT><HR SIZE="1" NOSHADE></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
</TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Richard G. Cutter III<BR>Vice President, Secretary<BR>and General Counsel</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Vinod M. Khilnani<BR>Senior Vice President and<BR>Chief Financial Officer</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD>
</TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="30%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="25%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="30%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
</TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Dated:  October 28, 2003</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
</TR>
</TABLE>


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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>exhibit10-a.htm
<DESCRIPTION>(A) 2003 EXCESS BENEFIT RETIREMENT PLAN
<TEXT>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 3.2 Final//EN">
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<HEAD>
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     <!-- Control Number: 10                                                               -->
     <!-- Rev Number:                                                                      -->
     <!-- Client Name:                                                                     -->
     <!-- Project Name:   q3-200310q                                                       -->
     <!-- Firm Name:      CTS Corporation                                                  -->
     <TITLE>Exhibit (10)(a) 2003 Excess Benefit Retirement Plan</TITLE>
</HEAD>
<BODY>

<HR SIZE=5 COLOR=GRAY NOSHADE>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="form10q-3qtr2003.htm">Form 10-Q<BR>Third Quarter 2003</A></FONT></P>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT (10)(a) </FONT></H1>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2">CTS
CORPORATION</FONT> </P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2003 EXCESS
BENEFIT RETIREMENT PLAN<BR>As Adopted Effective July 1, 2003 </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CTS
CORPORATION </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2003 EXCESS
BENEFIT RETIREMENT PLAN </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE I </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Purpose </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.01&nbsp;&nbsp; <U>Purpose</U>.
&nbsp;&nbsp;It is the intention of CTS Corporation (the &#147;Company&#148;) to
maintain appropriate levels of retirement benefits for employees of the Company
or any of its subsidiaries who are entitled to benefits under the CTS
Corporation Pension Plan (the &#147;Pension Plan&#148;). Accordingly, the
Company hereby establishes the CTS Corporation 2003 Excess Benefit Retirement
Plan (the &#147;Plan&#148;). This Plan is intended to provide benefits to
eligible persons in order to maintain the level of total retirement benefits
which, but for the limitations on annual benefits and compensation which may be
taken into account under the Internal Revenue Code of 1986, as amended, (the
&#147;Code&#148;) would otherwise be payable under, or as a consequence of, the
provisions of the Pension Plan and to provide a competitive level of retirement
benefits to the Company&#146;s executives. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.02&nbsp;&nbsp; <U>Effective
Date</U>. &nbsp;&nbsp;This Plan is effective as of July 1, 2003. However, in
calculating the amounts described in Sections 3.01(a) and 3.01(b) amounts which
accrued (or would have accrued) but for the Code limitations referred to in
Section 3.01 prior to the effective date shall be taken into account.
</FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE II </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Eligibility </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.01&nbsp;&nbsp; <U>Persons
Eligible to Receive Benefits</U>. &nbsp;&nbsp;Every individual who is listed on
Appendix A shall be eligible to receive a &#147;Benefit&#148; as described in
Section 3.01. Each such individual shall be known as a &#147;Member&#148;.
</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.02&nbsp;&nbsp;
<U>Beneficiary</U>. &nbsp;&nbsp;Every individual who is eligible to receive a
Benefit under the Pension Plan by reason of being the Beneficiary of another
individual who was a Member under this Plan, shall be known as a
&#147;Beneficiary&#148;. The term &#147;Beneficiary&#148; shall include joint
pensioners, heirs-at-law, legal representatives, fiduciaries, and every other
person (other than a Member) to whom Benefits may be distributed, as determined
under the Pension Plan. A Beneficiary&#146;s right to receive Benefits under
this Plan shall be subject to the same conditions which apply to the
Beneficiary&#146;s right to receive benefits under the Pension Plan. </FONT></P>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE III </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Benefits </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.01 &nbsp;&nbsp;<U>Amount of
Benefit</U>. The amount of the Benefit which a Member (or Beneficiary, if
applicable) is eligible to receive under this Plan shall be equal to the excess
of (a) over (b): </FONT></P>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
    <TR VALIGN=TOP>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The amount of benefit which such Member would be entitled to receive under the
Pension Plan, if the percentage of Compensation (as defined in the Pension Plan)
used in determining the Member&#146;s benefit under the applicable provision of
Section 6 of the Pension Plan was, instead of 1.25%: </FONT></TD></TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.35%
if the date of determination occurs during the Member&#146;s second year of participation
in this Plan;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.45%
if the date of determination occurs during the Member&#146;s third year of participation
in this Plan;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.55%
if the date of determination occurs during the Member&#146;s fourth year of participation
in this Plan;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.65%
if the date of determination occurs during the Member&#146;s fifth year of participation
in this Plan;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.75%
if the date of determination occurs during any subsequent year of participation in this
Plan;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
and if such benefit were computed without giving effect to the limitations then
currently imposed by Code Section 401(a)(17) and Code Section 415(b) and
regulations thereunder and without regard to the benefit accrual determined
under Section 6.13 of the Pension Plan. For purposes of this Section 3.01, a
Member&#146;s date of participation in this Plan shall be the later of July 1,
2003, or the effective date that the Member is first eligible to participate in
the Plan in accordance with Article V. A Member&#146;s &#147;years of
participation&#148; will being on the Members&#146; date of participation and
each subsequent anniversary thereof. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
    <TR VALIGN=TOP>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT></TD>
    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The amount of benefit which such Member actually receives under the Pension
Plan. </FONT></TD></TR>
</TABLE>
<BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.02 &nbsp;&nbsp;<U>Payment of
     Benefits</U>. &nbsp;&nbsp;Payment of benefits shall be accomplished by
     means of unfunded payments directly from the Company. Except as provided in
     Section 3.03 and Article V, distribution of any such benefits, whether to a
     Beneficiary or a Member, shall be made at the same time and in the same
     manner and form and subject to the same conditions as the benefit provided
     by the Pension Plan. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.03&nbsp;&nbsp;
     <U>Immediate Cashout</U>. &nbsp;&nbsp;Notwithstanding the provisions of
     Section 3.02, if the Plan benefit is immediately payable to a Member or
     Beneficiary and the amount of the monthly benefit payable from the Plan to
     a Member or Beneficiary does not exceed $50, the actuarial present value of
     the immediate Plan benefit shall be paid in an immediate single lump sum
     cash payment in lieu of any other form of payment. Actuarial present values
     shall be determined using the actuarial assumptions employed under the
     Pension Plan for lump sum cashouts. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE IV </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Authority of Committee </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.01&nbsp;&nbsp;
     <U>Committee</U>. &nbsp;&nbsp;The Plan shall be approved and administered by the Compensation
Committee of the CTS Corporation Board of Directors (the "Committee"); </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.02&nbsp;&nbsp;
     <U>Authority of Committee</U>. &nbsp;&nbsp;The Committee shall have
     authority to control, delegate and manage the operation and administration
     of the Plan, including all rights and powers necessary or convenient to the
     carrying out of its functions hereunder, whether or not such rights and
     powers are specifically enumerated herein. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Without limiting the
foregoing, and in addition to the other powers set forth in this Article IV, the
Committee shall have the following express authorities: </FONT></P>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
    <TR VALIGN=TOP>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
To construe and interpret the Plan and determine the amount, manner and time of
payment of any Benefits hereunder; </FONT></TD></TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
    <TR VALIGN=TOP>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT></TD>
    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
To prescribe procedures to be followed by Members or Beneficiaries filing any
requests or applications in connection with Benefits hereunder; </FONT></TD></TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
    <TR VALIGN=TOP>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(c) </FONT></TD>
    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
To prepare and distribute, in such
manner as the Committee determines to be appropriate, information explaining the
Plan; </FONT></TD></TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
    <TR VALIGN=TOP>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(d) </FONT></TD>
    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
To receive from the Company and from Members and Beneficiaries such information
as shall be necessary for the proper administration of the Plan;</FONT></TD></TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
    <TR VALIGN=TOP>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(e) </FONT></TD>
    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
To furnish the Company, upon request, such annual and other reports with respect
to the administration of the Plan as are reasonable and appropriate;</FONT></TD></TR>
</TABLE>
<BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3</FONT></P>


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<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
    <TR VALIGN=TOP>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(f) </FONT></TD>
    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
To resolve all questions and make all factual determinations relating to any
matter for which it has administrative responsibility; and </FONT></TD></TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
    <TR VALIGN=TOP>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(g) </FONT></TD>
    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
To delegate to the CTS Corporation Employee Benefit Committee such
administrative powers and duties as it deems appropriate. </FONT></TD></TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.03&nbsp;&nbsp;
     <U>Disqualification of Committee Member</U>. &nbsp;&nbsp;No member of the
     Committee or delegate of the Committee shall vote upon any question or
     exercise any discretion under the Plan relating specifically to himself or
     his Beneficiaries.
</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.04&nbsp;&nbsp; <U>Records
     and Reports</U>. &nbsp;&nbsp;The Committee shall take all such action as it
     deems necessary or appropriate to comply with any laws or regulations now
     or hereafter in existence relating to the maintenance of records,
     notifications or registrations. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ARTICLE V</FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amendment or
Termination </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company intends the Plan to
be permanent, but reserves the right, at any time, to modify, amend or terminate
the Plan, provided, however, that no termination, amendment or modification of
or to the Plan may, without written approval of a Member, reduce the total
benefit payable under this Plan or the Pension Plan, assuming the Member
retired, died or otherwise terminated employment as of the date of such
termination, amendment or modification. Such amount shall constitute an
irrevocable obligation of the Company. The Committee hereby delegates to the
Chief Executive Officer of the Company the authority to add, in the
Officer&#146;s sole discretion, individuals to Appendix A who become members of
the Company&#146;s senior management after the Effective Date of the Plan, and
to remove those individuals from Appendix A of the CTS Corporation 1996 Excess
Benefit Retirement Plan, if they are members of that plan. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any other
provision of the Plan, if (i) a Member&#146;s employment with the Company
terminates following a Change in Control (as defined in Appendix B to the Plan)
and (ii) as a result of such termination of employment the Member becomes
entitled to change in control severance benefits under any severance agreement
between the Company and the Member, the actuarial present value of the
Member&#146;s benefit under this Plan shall be paid immediately in a single lump
sum cash payment in lieu of any other form of benefit. For purposes of
calculating the lump sum payment, the Member shall be considered to be fully
vested in both his or her benefit under this Plan and his or her benefit under
the Pension Plan. If the Plan benefit would otherwise be payable immediately to
the Member or Beneficiary, the actuarial present value shall be the present
value of the immediate Plan benefit. If the Plan benefit is not otherwise
payable immediately to the Member or Beneficiary, the actuarial present value
shall be the present value of the deferred Plan benefit payable at the normal
retirement benefit commencement date under the Pension Plan. Actuarial present
values shall be determined using the actuarial assumptions employed under the
Pension Plan for lump sum cashouts. </FONT></P>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4</FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLE VI </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Miscellaneous </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.01&nbsp;&nbsp;
<U>No Guarantee of Employment</U>. &nbsp;&nbsp;Neither the creation of this Plan nor
anything contained herein shall be construed (a) to give any Member the right to
remain in the employ of the Company or any of its subsidiaries, (b) to give any
Member or Beneficiary any benefits not specifically provided by the Plan, or (c)
to modify, in any manner, the right of the Company or any of its subsidiaries to
modify, amend, or terminate any of its employee benefit plans. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.02&nbsp;&nbsp;
<U>Rights of Participants and Beneficiaries</U>. &nbsp;&nbsp;Payment of Benefits to which
any Member or Beneficiary is entitled shall be made only to such Member or
Beneficiary. The expectation of such Benefits shall not be assignable by Member
or Beneficiaries or by operation of law, or be subject to reduction for the
debts or defaults of such Members or Beneficiaries whether to the Company or to
others, or be subject to execution or attachment. The preceding sentence shall
not apply to portions of Benefits applied at the direction of the person
eligible to receive such Benefits to the payment of premiums on life or health
insurance provided under any Company program, or to the withholding of federal
income taxes. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.03&nbsp;&nbsp;
<U>Payments in Event of Final Determination</U>. &nbsp;&nbsp;Notwithstanding any other
provision of the Plan to the contrary, if any amounts accrued under the Plan by
a Member or Beneficiary are found in a final determination to have been
includable in the gross income of the Member or Beneficiary prior to the payment
of such amounts to the Member or Beneficiary, the Company will, as soon as
practicable, pay such amounts to or on behalf of the Member or Beneficiary. For
purposes of the Plan, a &#147;final determination&#148; means (i) an assessment
of tax by the Internal Revenue Service addressed to the Member or Beneficiary
which is not timely appealed to the courts, (ii) a final determination by the
United States Tax Court or any other federal court, the time for an appeal
thereof having expired or been waived, or (iii) an opinion of counsel to the
Company with respect to a change in any applicable law, regulation or ruling, in
each case to the effect that amounts accrued under the Plan are subject to
federal income tax to the Member or Beneficiary prior to payment. No final
determination will be deemed to have occurred until the Committee has actually
received a copy of the assessment, court order or opinion which forms the basis
thereof and such other documents as it may reasonably request. </FONT></P>

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<P ALIGN=LEFT>
<FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.04&nbsp;&nbsp;
<U>Claims Procedure</U>. </FONT></P>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
    <TR VALIGN=TOP>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
If a Member or Beneficiary does not receive the benefits which the Member or
Beneficiary believes he or she is entitled to receive under the Plan, the Member
or Beneficiary may file a claim for benefits with the Committee. All claims must
be made in writing and be signed by the claimant. If the claimant does not
furnish sufficient information to enable the Committee to process the claim, the
Committee will indicate to the claimant any additional information which is
required. </FONT></TD></TR>
</TABLE>
<BR>


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    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT></TD>
    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Each claim will be approved or disapproved by the Committee within 90 days
following the receipt of the information necessary to process the claim, or
within 180 days if the Committee determines that special circumstances require
an extension of the 90-day period and the claimant is notified of the extension
within the original 90-day period. In the event the Committee denies a claim for
benefits in whole or in part, the Committee will notify the claimant in writing
of the adverse determination. Such notice by the Committee will also set forth,
in a manner calculated to be understood by the claimant, the specific reason or
reasons for the adverse determination, reference to the specific Plan provisions
on which the determination is based, a description of any additional material or
information necessary to perfect the claim with an explanation of why such
material or information is necessary and an explanation of the Plan&#146;s claim
review procedure as set forth in Section 6.04(c).</FONT></TD></TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
    <TR VALIGN=TOP>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(c) </FONT></TD>
    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
A claimant may appeal an adverse benefit determination by requesting a review of
the decision by the Committee or a person designated by the Committee. An appeal
must be submitted in writing within 60 days after receiving notification of the
adverse determination and must (i) request a review of the claim for benefits
under the Plan, (ii) set forth all of the grounds upon which the claimant&#146;s
request for review is based and any facts in support thereof, and (iii) set
forth any issues or comments which the claimant deems pertinent to the appeal.
The claimant will be given the opportunity to submit written comments,
documents, records and other information relating to the claim for benefits and
will be provided, upon written request and free of charge, reasonable access to
and copies of all documents, records and other information relevant to the claim
for benefits, provided the Committee finds the requested documents or materials
are relevant to the appeal. The Committee or the person designated by the
Committee will make a full and fair review of each appeal and any materials
submitted by the claimant relating to the claim, without regard to whether the
information was submitted or considered in the initial determination. On the
basis of its review, the Committee or person designated by the Committee will
make an independent determination of the claimant&#146;s eligibility for
benefits under the Plan. The Committee or the person designated by the Committee
will act upon each appeal within 60 days after receipt thereof unless special
circumstances require an extension of the time for processing, in which case the
Committee will notify the claimant within the initial 60-day period of such
special circumstances and will render a decision as soon as possible but not
later than 120 days after the appeal is received. The decision of the Committee
or person designated by the Committee on any claim for benefits will be final
and conclusive upon all parties thereto. In the event the Committee or person
designated by the Committee denies an appeal in whole or in part, it will give
written notice of the determination to the claimant. Such notice will set forth,
in a manner calculated to be understood by the claimant, the specific reason or
reasons for the adverse determination, reference to the specific Plan provisions
on which the determination is based, a statement that the claimant is entitled
to receive, upon request and free of charge, access to and copies of all
documents, records and other information relevant to the claim and a statement
of the claimant&#146;s right to bring an action under section <I>502(a) </I>of
the Employee Retirement Income Security Act of 1974, as amended
(&#147;ERISA&#148;), if applicable.</FONT></TD></TR>
</TABLE>
<BR>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.05&nbsp;&nbsp;
<U>Expenses and Indemnity</U>. &nbsp;&nbsp;All expenses and fees incurred in connection with
the administration of the Plan will be paid by the Company. To the fullest
extent permitted by applicable law, the Company will indemnify and save harmless
the Committee, the Board and any delegate of the Committee who is an employee of
the Company and any officers and employees of the Company against any and all
expenses, liabilities and claims, including legal fees to defend against such
liabilities and claims, arising out of their discharge in good faith of
responsibilities under or incident to the Plan, other than expenses and
liabilities arising out of willful misconduct. Without limiting the generality
of the foregoing, the Company will, promptly upon request, advance funds to
persons entitled to indemnification hereunder to the extent necessary to defray
legal and other expenses incurred in the defense of such liabilities and claims,
as and when incurred. This indemnity will not preclude such further indemnities
as may be available under insurance purchased by the Company or provided by the
Company under any bylaw, agreement or otherwise. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.06&nbsp;&nbsp;
<U>Withholding</U>. &nbsp;&nbsp;There will be deducted from each payment made under the Plan
all taxes which are required to be withheld by the Company in respect to such
payment. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.07&nbsp;&nbsp;
<U>Receipt or Release</U>. &nbsp;&nbsp;Any payment to a Member or the Member&#146;s
Beneficiary in accordance with the provisions of the Plan will, to the extent
thereof, be in full satisfaction of all claims against the Committee and the
Company with respect to the amount paid. The Committee may require such Member
or Beneficiary, as a condition precedent to such payment, to execute a receipt
and release to such effect. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.08&nbsp;&nbsp;
<U>Payments on Behalf of Persons Under Incapacity</U>. &nbsp;&nbsp;In the event that any
amount or distribution becomes payable under the Plan to a person who, in the
sole judgment of the Committee, is considered by reason of physical or mental
condition to be unable to give a valid receipt therefor, the Committee may
direct that such distribution or payment be made to any person found by the
Committee, in its sole judgment, to have assumed the care of such person. Any
distribution or payment made pursuant to such determination will, to the extent
thereof, constitute a full release and discharge of the Committee and the
Company with respect to the distribution or amount paid. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.09&nbsp;&nbsp;
<U>Successors and Assigns</U>. &nbsp;&nbsp;The Company may not assign its obligations under
this Plan, whether by contract, merger, operation of law or otherwise, unless
the assignment is to an assignee or successor entity (in either case, hereafter
called a &#147;Successor&#148;) that has stockholders&#146; equity or the
closest equivalent thereto (as measured by the most recent audited financial
statements of such Successor) equal to or greater than the stockholders&#146;
equity of the Company (as measured immediately prior to the event that causes
such entity to become a Successor to the Company). The provisions of this
Section 6.09 will be binding upon each and every Successor to the Company.
</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.10&nbsp;&nbsp;
<U>No Requirement to Fund</U>. &nbsp;&nbsp;No provisions in the Plan, either directly or
indirectly, shall be construed to require the Company to reserve, or otherwise
set aside, funds for the payment of benefits hereunder, and Members and
Beneficiaries shall have the status of general unsecured creditors with respect
to the obligation of the Company to make payments under the Plan. The Plan is
intended to provide benefits for &#147;management or highly compensated
employees&#148; within the meaning of ERISA and therefore to be exempt from the
provisions of Parts 2, 3 and 4 of the Title I of ERISA. </FONT></P>



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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.11&nbsp;&nbsp;
<U>Controlling Law</U>. &nbsp;&nbsp;To the extent not preempted by the laws of the United
States of America, the laws of the State of Indiana shall be the controlling
state law in all matters relating to the Plan and shall apply. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.12&nbsp;&nbsp;
<U>Severability</U>. &nbsp;&nbsp;If any provisions of the Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts of the Plan; and the Plan shall be construed and enforced as if
said illegal and invalid provisions had never been included herein. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.13&nbsp;&nbsp;
<U>Provisions of Pension Plan Unchanged</U>. &nbsp;&nbsp;Any benefit payable under the
Pension Plan shall be paid solely in accordance with the terms and provisions of
the Pension Plan; and nothing in the Plan shall operate or be construed in any
way to modify, amend or affect the terms and provisions of the Pension Plan.
</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.14&nbsp;&nbsp;
<U>Nature of Payments</U>. &nbsp;&nbsp;Any benefits provided hereunder shall constitute
nonqualified deferred compensation payments to the Member and shall not be taken
into account in computing the amount of salary or compensation of the Member for
the purposes of determining any pension, retirement, death or other benefits
under (a) any pension, retirement, profit-sharing, bonus, life insurance or
other employee benefit plan of the Company or any of its subsidiaries or (b) any
agreement between the Company or any subsidiary and the Member except as such
plan or agreement shall otherwise expressly provide. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.15&nbsp;&nbsp;
<U>Gender and Number</U>. &nbsp;&nbsp;Masculine gender shall include the feminine; and the
singular shall include the plural, unless the context clearly indicated
otherwise. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, CTS Corporation has caused the CTS Corporation 2003 Excess
Benefit Retirement Plan to be executed by its proper officer duly authorized by
its Board of Directors. </FONT></P>


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<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CTS CORPORATION<BR><BR>
<BR>By &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ James L. Cummins<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR><BR>
Title &nbsp;&nbsp;&nbsp;Senior Vice President Administration<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</FONT></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8</FONT></P>

</BODY>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>4
<FILENAME>exhibit31-a.htm
<DESCRIPTION>(A) CERTIFICATION UNDER SECTION 302
<TEXT>
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     <!-- Client Name:                                                                     -->
     <!-- Project Name:   q3-200310q                                                       -->
     <!-- Firm Name:      CTS Corporation                                                  -->
     <TITLE>Exhibit (31)(a)</TITLE>
</HEAD>
<BODY>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="form10q-3qtr2003.htm">Form 10-Q<BR>Third Quarter 2003</A></FONT></P>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT (31)(a) </FONT></H1>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>CERTIFICATION</U> </FONT> </H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, Donald K. Schwanz, certify that: </FONT></P>

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          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.</FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          I have reviewed this quarterly report on Form 10-Q of CTS Corporation; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.</FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Based on my knowledge, this report does not contain any untrue statement
          of a material fact or omit to state a material fact necessary to make the
          statements made, in light of the circumstances under which such statements were
          made, not misleading with respect to the period covered by this report; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.</FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Based on my knowledge, the financial statements, and other financial information
          included in this report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this report; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.</FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The registrant&#146;s other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Designed
such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in
which this report is being prepared;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Evaluated
the effectiveness of the registrant&#146;s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on
such evaluation; and  </FONT></TD>
</TR>
</TABLE>
<BR>


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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(c) </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Disclosed in
this report any change in the registrant's internal control over financial reporting
that occurred during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and</FONT></TD>
</TR>
</TABLE>
<BR>

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          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.</FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The registrant&#146;s other certifying officer and I have disclosed, based on
          our most recent evaluation of internal control over financial reporting, to the
registrant&#146;s auditors and the audit
          committee of registrant&#146;s board of directors (or persons performing the
          equivalent function): </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All
significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant&#146;s
ability to record, process,
          summarize and report financial information; and  </FONT></TD>
</TR>
</TABLE>
<BR>


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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any fraud,
whether or not material, that involves management or other employees who have a
significant role in the registrant's internal control over financial reporting.</FONT></TD>
</TR>
</TABLE>
<BR>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">

<TR VALIGN="BOTTOM">
     <TD WIDTH="30%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Date:&nbsp;&nbsp;October 28, 2003&nbsp;</FONT></TD>
     <TD WIDTH="25%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>

     <TD WIDTH="35%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>/s/  Donald K. Schwanz</I></FONT></TD>
     <TD WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
</TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>

     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT><HR SIZE="1" NOSHADE></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
</TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>

     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Donald K. Schwanz, Chairman,<BR>President and Chief Executive Officer</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD>
</TR>
</TABLE>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></P>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>5
<FILENAME>exhibit31-b.htm
<DESCRIPTION>(B) CERTIFICATION UNDER SECTION 302
<TEXT>
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<HEAD>
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     <!-- Project:        U:\PBAUCOM\Accounting\10Q\2003\3rd qtr 2003\q3-2003_10q.eep      -->
     <!-- Control Number: 10                                                               -->
     <!-- Rev Number:                                                                      -->
     <!-- Client Name:                                                                     -->
     <!-- Project Name:   q3-200310q                                                       -->
     <!-- Firm Name:      CTS Corporation                                                  -->
     <TITLE>Exhibit (31)(b)</TITLE>
</HEAD>
<BODY>


<HR SIZE=5 COLOR=GRAY NOSHADE>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="form10q-3qtr2003.htm">Form 10-Q<BR>Third Quarter 2003</A></FONT></P>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT (31)(b) </FONT></H1>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>CERTIFICATION</U> </FONT> </H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, Vinod M. Khilnani, certify that: </FONT></P>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.</FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          I have reviewed this quarterly report on Form 10-Q of CTS Corporation; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.</FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Based on my knowledge, this report does not contain any untrue statement
          of a material fact or omit to state a material fact necessary to make the
          statements made, in light of the circumstances under which such statements were
          made, not misleading with respect to the period covered by this report; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.</FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Based on my knowledge, the financial statements, and other financial information
          included in this report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this report; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
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          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.</FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The registrant&#146;s other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Designed
such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in
which this report is being prepared;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Evaluated
the effectiveness of the registrant&#146;s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on
such evaluation; and  </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(c) </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Disclosed in
this report any change in the registrant's internal control over financial reporting
that occurred during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and</FONT></TD>
</TR>
</TABLE>
<BR>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.</FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The registrant&#146;s other certifying officer and I have disclosed, based on
          our most recent evaluation of internal control over financial reporting, to the
registrant&#146;s auditors and the audit
          committee of registrant&#146;s board of directors (or persons performing the
          equivalent function): </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All
significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant&#146;s
ability to record, process,
          summarize and report financial information; and  </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any fraud,
whether or not material, that involves management or other employees who have a
significant role in the registrant's internal control over financial reporting.</FONT></TD>
</TR>
</TABLE>
<BR>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">

<TR VALIGN="BOTTOM">
     <TD WIDTH="30%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Date:&nbsp;&nbsp;October 28, 2003&nbsp;</FONT></TD>
     <TD WIDTH="25%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>

     <TD WIDTH="35%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>/s/  Vinod M. Khilnani</I></FONT></TD>
     <TD WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
</TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>

     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT><HR SIZE="1" NOSHADE></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT> </TD>
</TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>

     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Vinod M. Khilnani<BR>Senior Vice President and<BR>Chief Financial Officer</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD>
</TR>
</TABLE>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></P>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>6
<FILENAME>exhibit32-a.htm
<DESCRIPTION>(A) CERTIFICATION UNDER SECTION 906
<TEXT>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 3.2 Final//EN">
<HTML>
<HEAD>
     <!-- Created by EDGAR Ease Plus (EDGAR Ease+ 1.2c) -->
     <!-- Project:        U:\PBAUCOM\Accounting\10Q\2003\3rd qtr 2003\q3-2003_10q.eep      -->
     <!-- Control Number: 10                                                               -->
     <!-- Rev Number:                                                                      -->
     <!-- Client Name:                                                                     -->
     <!-- Project Name:   q3-200310q                                                       -->
     <!-- Firm Name:      CTS Corporation                                                  -->
     <TITLE>Exhibit (32) (a)</TITLE>
</HEAD>
<BODY>

<HR SIZE=5 COLOR=GRAY NOSHADE>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="form10q-3qtr2003.htm">Form 10-Q<BR>Second Quarter 2003</A></FONT></P>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT (32)(a) </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATION PURSUANT
TO
<BR>
18 U.S.C. SECTION 1350,
<BR>
 AS ADOPTED PURSUANT TO
<BR>
 SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002
<BR>
 </FONT></P>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In connection with the quarterly report
of CTS Corporation (the Company) on Form 10-Q for the quarter ended September 28,
2003, as filed with the Securities and Exchange Commission on the date hereof (the
Report), the undersigned officer of the Company certifies, pursuant
to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002,
that: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=91%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Report fully complies with the requirements of Section 13(a) or 15(d) of the
          Securities Exchange Act of 1934; and  </FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=91%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
information contained in the Report fairly presents, in all material           respects,
the financial condition and results of operations of the Company.  </FONT></P></TD>
</TR>
</TABLE>
<BR>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="70%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date:  &nbsp;October 28, 2003</FONT></TD>
     <TD WIDTH="30%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><I>/s/ Donald K. Schwanz</I></U> </FONT> </TD></TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Donald K. Schwanz<BR>Chairman, President and<BR>Chief Executive Officer</FONT></TD></TR>

</TABLE>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>7
<FILENAME>exhibit32-b.htm
<DESCRIPTION>(B) CERTIFICATION UNDER SECTION 906
<TEXT>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 3.2 Final//EN">
<HTML>
<HEAD>
     <!-- Created by EDGAR Ease Plus (EDGAR Ease+ 1.2c) -->
     <!-- Project:        U:\PBAUCOM\Accounting\10Q\2003\3rd qtr 2003\q3-2003_10q.eep      -->
     <!-- Control Number: 10                                                               -->
     <!-- Rev Number:                                                                      -->
     <!-- Client Name:                                                                     -->
     <!-- Project Name:   q3-200310q                                                       -->
     <!-- Firm Name:      CTS Corporation                                                  -->
     <TITLE>Exhibit (32) (b)</TITLE>
</HEAD>
<BODY>

<HR SIZE=5 COLOR=GRAY NOSHADE>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="form10q-3qtr2003.htm">Form 10-Q<BR>Second Quarter 2003</A></FONT></P>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT (32)(b) </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATION PURSUANT
TO
<BR>
18 U.S.C. SECTION 1350,
<BR>
 AS ADOPTED PURSUANT TO
<BR>
 SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002
<BR>
 </FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In connection with the
quarterly report of CTS Corporation (the Company) on Form 10-Q for
the quarter ended September 28, 2003, as filed with the Securities and Exchange
Commission on the date hereof (the Report), the undersigned officer of the
Company certifies, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss.
906 of the Sarbanes-Oxley Act of 2002, that: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=91%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Report fully complies with the requirements of Section 13(a) or 15(d) of the
          Securities Exchange Act of 1934; and  </FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Level 2" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=91%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
information contained in the Report fairly presents, in all material           respects,
the financial condition and results of operations of the Company.  </FONT></P></TD>
</TR>
</TABLE>
<BR>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="70%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date:  &nbsp;October 28, 2003</FONT></TD>
     <TD WIDTH="30%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><I>/s/ Vinod M. Khilnani</I></U> </FONT> </TD></TR>
<TR VALIGN="TOP">
     <TD>&nbsp;</TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Vinod M. Khilnani<BR>Sr. Vice President and<BR>Chief Financial Officer</FONT></TD></TR>


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</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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