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<SEC-DOCUMENT>0000026058-04-000024.txt : 20040423
<SEC-HEADER>0000026058-04-000024.hdr.sgml : 20040423
<ACCEPTANCE-DATETIME>20040422180422
ACCESSION NUMBER:		0000026058-04-000024
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20040328
FILED AS OF DATE:		20040423

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:		04749072

	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-1qtr2004.htm
<DESCRIPTION>FIRST QUARTER 2004
<TEXT>
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     <!-- Firm Name:      CTS Corporation                                                  -->
     <TITLE>Form 10-Q First Quarter 2004</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=4>UNITED STATES
<BR>
SECURITIES AND
EXCHANGE COMMISSION
<BR>
</FONT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>WASHINGTON, D.C. 20549 </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="5"><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>March 28, 2004</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=6><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
April 21, 2004: &nbsp;36,073,941</FONT></P>

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<A NAME="tableofcontents"></A>
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="3">&nbsp;&nbsp;&nbsp;<U><B>
TABLE OF CONTENTS</B></U> </FONT> </P>
<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="#part1">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">Item 1.</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><A HREF="#financial">
Financial Statements</A></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&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</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 ended March 28, 2004 and March 30, 2003</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&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 March 28, 2004, and December 31, 2003</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&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 Three Months Ended March 28, 2004 and March 30, 2003</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&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="#comprehensive">Condensed Consolidated Statements of Comprehensive Earnings</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 Ended March 28, 2004 and March 30, 2003</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&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 Financial Statements</A></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&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">Item 2.</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
<A   HREF="#mda">Management&#146;s   Discussion  and  Analysis<BR>of   Financial
Condition and Results of Operations</A></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR>10</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">Item 3.</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
<A HREF="#quantative">Quantitative and Qualitative Disclosure about Market Risk</A></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">15</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">Item 4.</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
<A HREF="#controls">Controls and Procedures</A></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">15</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="#part2">
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">Item 1.</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><A HREF="#legal">
Legal Proceedings</A></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">15</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">Item 6.</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><A HREF="#exhibits">
Exhibits and Reports on Form 8-K</A></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">15</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">17</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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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="#tableofcontents">
Table of Contents</A> </FONT></P>

<A NAME="part1"></A>

<P align="left"><FONT size="2"><B>PART I&nbsp;&nbsp;-&nbsp;&nbsp;FINANCIAL INFORMATION</B></FONT></P>

<A NAME="financial"></A>

<P align="left"><FONT size="2"><B>
Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT></P>

<A NAME="earnings"></A>

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

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" WIDTH="625" BORDER="0">
<TR valign="bottom">
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="64%">&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>Three 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>March 28, 2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>March 30, 2003</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="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Net sales</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">122,147</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">105,769</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">
Costs and expenses:</FONT></DIV></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="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Cost of goods sold</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">97,538</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">84,686</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom" bgcolor="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Selling, general and administrative expenses</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">14,816</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">12,848</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Research and development expenses</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">4,884</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">5,641</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="#c5eafa">
    <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>
Operating earnings</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,909</FONT></TD>
    <TD nowrap><FONT size="2"><B>&nbsp;</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">2,594</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Other (expense)&nbsp;income:</FONT></DIV></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="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Interest expense</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,533</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">(1,972</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom" bgcolor="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Interest income</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">102</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">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Other</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">(118</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">90</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="#c5eafa">
    <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">
Total other expense</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,549</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">(1,833</FONT></TD>
    <TD nowrap><FONT size="2">)</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">
    <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 before income taxes</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,360</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">761</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom" bgcolor="#c5eafa">

    <TD COLSPAN="3"><FONT size="2">Income tax expense</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">840</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">190</FONT></TD>
    <TD nowrap><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">
    <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</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,520</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2"> 571</FONT></TD>
    <TD nowrap><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="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"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
    <B>Net earnings per share &#151; Note J</B></FONT></DIV></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="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><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="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Basic</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.07</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.02</FONT></TD>
    <TD nowrap><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="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><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Diluted</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.07</FONT></TD>
    <TD nowrap><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2"> 0.02</FONT></TD>
    <TD nowrap><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="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="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Cash dividends declared per share</FONT></DIV></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></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="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"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Average common shares outstanding:</FONT></DIV></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="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Basic</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">35,957</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">34,020</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom" bgcolor="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Diluted</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">36,243</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">34,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
</TABLE>

<P><FONT size="2">See notes to condensed consolidated financial statements.
</FONT>

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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="balancesheets"></A>

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


<TABLE ALIGN="CENTER" CELLSPACING="0" BORDER="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 nowrap align="center" colspan="3"><FONT size="1"><B>March 28, 2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>December 31, 2003*</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 nowrap align="center" colspan="3"><FONT size="1"><B>(UNAUDITED)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>&nbsp;</B></FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
ASSETS</B></FONT></DIV></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"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Current Assets</B></FONT></DIV></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="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD COLSPAN="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Cash and cash equivalents</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">32,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="right"><FONT size="2">$</FONT></TD>
    <TD ALIGN="right"><FONT size="2">25,346</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Accounts receivable, less allowances (2004 &#151; $1,640; 2003 &#151; $1,585)</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">83,663</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">72,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom" bgcolor="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Inventories &#151; Note C</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">38,676</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">31,925</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Other current assets</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">7,065</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">6,697</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Deferred 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">28,530</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">28,508</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><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">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">
Total current assets</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">190,795</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">164,766</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Property, plant and equipment,</B><BR>
    <B>less accumulated depreciation (2004 &#151; $275,133; 2003 &#151; $261,838)</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">118,148</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">122,481</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Other Assets</B></FONT></DIV></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"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Prepaid pension asset &#151; Note G</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">135,387</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">132,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Intangible assets</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">36,880</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">37,456</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Assets held for sale &#151; Note D</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">16,683</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">17,583</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Other</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">6,968</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">7,004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><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">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">
Total other assets</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">195,918</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">195,003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><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="#c5eafa">
    <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Total Assets</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">504,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">482,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><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="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="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
LIABILITIES AND SHAREHOLDERS&#146; EQUITY</B></FONT></DIV></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"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Current Liabilities</B></FONT></DIV></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"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Accounts payable</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">59,120</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">52,252</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Accrued liabilities &#151; Note D</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">51,670</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">43,437</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><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">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">
Total current liabilities</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">110,790</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">95,689</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Long-term debt &#151; Note F</B></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">81,200</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">75,880</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Other long-term obligations </B></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">11,101</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">11,133</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Deferred income taxes </B></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">5,379</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">5,357</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Shareholders&#146; Equity</B></FONT></DIV></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"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Preferred stock &#151; authorized 25,000,000 shares without par value; none issued</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">&#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="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Common stock &#151; authorized 75,000,000 shares without par value;<BR>
52,639,667 shares issued at March&nbsp;28, 2004 and<BR>
52,632,088 shares issued at December&nbsp;31, 2003</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">263,048</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">262,748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Additional contributed capital</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">21,613</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">21,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Retained earnings</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">264,864</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">263,430</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Accumulated other comprehensive earnings</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">529</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">151</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><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="#c5eafa">
    <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
&nbsp;</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">550,054</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">547,849</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Cost of common stock held in treasury<BR>(2004 &#151; 16,565,926 shares;
2003 &#151; 16,565,558 shares)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(253,663</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">(253,658</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><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="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">
Total shareholders&#146; equity</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">296,391</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">294,191</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><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">
    <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
     Total Liabilities and Shareholders&#146; Equity</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">504,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">482,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="4"><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="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="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"><I><B>
*The balance sheet at December 31, 2003, 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>
    <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>
    <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT> </TD></TR>
</TABLE>

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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="cashflows"></A>

<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>

<TABLE ALIGN="CENTER" CELLSPACING="0" BORDER="0"CELLPADDING="0" WIDTH="625">
<TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="66%">&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>Three 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>March 28, 2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>March 30, 2003</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 colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Cash flows from operating activities:</B></FONT></DIV></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="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Net earnings</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="RIGHT"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">571</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Adjustments to reconcile net earnings to net cash<BR>provided by (used in) operating activities:</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"><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><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
&nbsp;Depreciation and amortization</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">7,260</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">8,812</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><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
&nbsp;Changes in assets and liabilities:</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">&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="#c5eafa">
    <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">
&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</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">(11,373</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">4,019</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><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
&nbsp;&nbsp;&nbsp;&nbsp;Inventories</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">(6,751</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">148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <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">
&nbsp;&nbsp;&nbsp;&nbsp;Other current assets</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">(369</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">1,002</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><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
&nbsp;&nbsp;&nbsp;&nbsp;Prepaid pension asset</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">(2,427</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">(3,115</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <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">
&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</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">3,778</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">(3,540</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><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
&nbsp;Other</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">622</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">302</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="#c5eafa">
    <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">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total adjustments</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">(9,260</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">7,628</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">
    <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>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net cash provided by (used in) operations</B></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">(6,740</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">8,199</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><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="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Cash flows from investing activities:</B></FONT></DIV></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="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Capital expenditures</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,980</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">(2,220</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Proceeds and deposits on asset sales</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,869</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">3,892</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="#c5eafa">
    <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>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net cash provided by investing activities</B></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">9,889</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">1,672</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><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="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Cash flows from financing activities:</B></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">&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"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Payments of long-term debt</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(25,935</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">(10,150</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Proceeds from issuance of long-term debt</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">31,255</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="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Dividends paid</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
   <TD align="right"><FONT size="2">(1,169</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">(1,025</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Other</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
  <TD align="right"><FONT size="2">(49</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">249</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="#c5eafa">
    <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>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net cash provided by (used in) financing activities</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,102</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">(10,926</FONT></TD>
    <TD><FONT size="2">)</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><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="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
    Effect of exchange rate on cash and cash equivalents</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
   <TD align="right"><FONT size="2">264</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">(509</FONT></TD>
    <TD><FONT size="2">)</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="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
    Net increase (decrease) in cash and cash equivalents</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,515</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">)</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><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="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
    Cash and cash equivalents at beginning of year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
   <TD align="right"><FONT size="2">25,346</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">9,225</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="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
    Cash and cash equivalents at end of period</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="RIGHT"><FONT size="2">$</FONT></TD>
   <TD align="right"><FONT size="2">32,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD ALIGN="RIGHT"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">7,661</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="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"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Supplemental cash flow information</B></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">&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"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Cash paid during the period for:</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">&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><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Interest</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">234</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">360</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Income taxes&#151;net</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,312</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,424</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>
</TABLE>

<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>3</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="comprehensive"></A>

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

<TABLE ALIGN="CENTER" 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>Three 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>March 28, 2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>March 30, 2003</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="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Net earnings</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">571</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">
Other comprehensive earnings (loss):</FONT></DIV></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="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Cumulative translation adjustment</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">347</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">(504</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Deferred gain on forward contracts</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">31</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">
    <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">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
Comprehensive earnings</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">67</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="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>

<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>4</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="notes"></A>

<P  align="CENTER"><FONT  size="2"><B>NOTES TO CONDENSED  CONSOLIDATED FINANCIAL
STATEMENTS - UNAUDITED</B><BR> March 28, 2004
</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   unaudited  condensed   consolidated   interim  financial
statements  should be read in conjunction with the financial  statements,  notes
thereto and other information  included in the  Company&#146;s  Annual Report on
Form 10-K for the year ended December 31, 2003.
</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"><B>NOTE B&#151;Stock-Based Employee Compensation</B>
</FONT>

<P><FONT  size="2">CTS  accounts for stock-based employee compensation using the
intrinsic value method  prescribed in Accounting  Principles Board (APB) Opinion
No. 25,  &#147;Accounting  for Stock Issued to  Employees&#148;  and its related
interpretations.  &nbsp;CTS  has  adopted  the  disclosure  requirements  of the
Financial Accounting Standards Board&#146;s (FASB) Financial Accounting Standard
(FAS) No. 148,  &#147;Accounting  for Stock-Based  Compensation - Transition and
Disclosure.&#148;&nbsp;  Had employee  compensation  cost for  CTS&#146;  fixed,
stock-based  compensation  plans been determined based on the fair value method,
as defined by FAS No. 123, &#147;Accounting for Stock-Based  Compensation,&#148;
CTS&#146;  net earnings  and net earnings per share would have been  adjusted to
the pro forma amounts indicated below:
</FONT>



<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" WIDTH="600" 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>Three 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>March 28, 2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>March 30, 2003</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 ALIGN="LEFT" COLSPAN="3"><FONT size="1"><B><I>
($ in thousands, except per share amounts)</I></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD COLSPAN="8"><FONT size="1">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Net earnings, as reported</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">571</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">
     Add:&nbsp;&nbsp;&nbsp;&nbsp;Stock-based employee compensation cost,<BR>
net of tax, included in net earnings</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">&#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" BGCOLOR="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
 Deduct:&nbsp;&nbsp;&nbsp;&nbsp;Stock-based employee compensation cost,<BR>
net of tax, if fair value based method were used</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">(288</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">(381</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</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>
    <TD>&nbsp;</TD></TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Proforma net earnings</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,232</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">190</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</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>
    <TD>&nbsp;</TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Net earnings per share-basic, as reported</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.02</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">
Proforma net earnings per share-basic</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">0.06</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">0.01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Net earnings per share-diluted, as reported</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">0.07</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">0.02</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">
Proforma net earnings per share-diluted</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.06</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<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><FONT size="2"><B>NOTE C&#151;Inventories</B></FONT>

<P><FONT size="2">Inventory consist of the following:</FONT>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" WIDTH="400" BORDER="0">
<TR valign="bottom">
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="64%">&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>March 28, 2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>December 31, 2003</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 ALIGN="LEFT" COLSPAN="3"><FONT size="1"><B><I>($ in thousands)</I></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Finished goods</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">10,076</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">8,047</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">
Work-in-process</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">6,792</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">7,779</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Raw materials</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">21,808</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">16,099</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">
    <TD><FONT size="2">&nbsp;</FONT></TD>
 <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Total inventories</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">38,676</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">31,925</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="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>

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

<P><FONT  size="2">Assets held for sale at March&nbsp;28,  2004 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. &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. The Company routinely monitors the estimated value of all
assets held for sale and records  adjustments to these values as necessary.  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><FONT  size="2">During  the  first  quarter  of  2004,  CTS  entered  into an
agreement to sell its Longtan,  Taiwan  facility.  As of March 28, 2004, CTS had
received cash deposits totaling $11.7 million.  Included in CTS&#146;  March 28,
2004 accrued  liability  balance is $11.7  million  relating to these  deposits.
Refer  also to Note K,  &#147;Subsequent  Event.&#148;  </FONT>

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

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<P><FONT  FACE="Times New Roman,  Times,  Serif"  SIZE=2>In the first quarter of
2004, 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.  These  contracts,  which  expire  monthly in 2004,  are
designed to hedge anticipated foreign currency transactions.  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.  Changes in the contracts&#146;  fair values, which
totaled  $31,000  at  March  28,  2004,  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 F&#151;Long-Term Debt</B></FONT>

<P><FONT  size="2">CTS has a credit  agreement  containing a $55 million senior,
secured  revolving  credit  facility  that had an  outstanding  balance of $16.2
million at March 28, 2004. The credit agreement  categorized this debt as senior
to CTS&#146; $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 credit
agreement.  The  commitment  fee  varies  based  on  performance  under  certain
financial  covenants  and is  currently  0.375  percent  per  annum.  The credit
agreement  requires,  among other  things,  that CTS comply with a minimum fixed
charge  coverage,  a maximum  leverage  ratio and a minimum  tangible net worth.
Failure  of CTS to comply  with  these  covenants  could  reduce  the  borrowing
availability  under the credit  agreement.  Additionally,  the credit  agreement
limits the amounts allowed for dividends, capital expenditures and acquisitions.
The credit agreement expires in July 2006.</FONT>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the first quarter of
2004, CTS paid $2 million of the industrial  revenue bonds that are due in 2013.
The remaining outstanding  industrial revenue bonds balance of $40 million had a
weighted-average interest rate of 7.5% at March 28, 2004. </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<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><FONT size="2"><B>NOTE G&#151;Retirement Plans</B></FONT>

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<P><FONT  FACE="Times New Roman,  Times,  Serif"  SIZE=2>Net  pension (income) /
postretirement  expense for the three  months ended March 28, 2004 and March 30,
2003 includes the following components: </FONT></P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" WIDTH="600">
<TR valign="bottom">
    <TD WIDTH="4%"></TD>
    <TD WIDTH="46%"></TD>
    <TD WIDTH="4%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="5%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="4%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="5%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="4%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="5%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="3%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="5%"></TD>
    <TD WIDTH="2%"></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>Pension</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Other Postretirement</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 nowrap align="center" colspan="7"><FONT size="1"><B>Plans</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Benefit Plan</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 nowrap align="left" 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>March 28, 2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>March 30, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>March 28, 2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>March 30, 2003</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>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Service cost</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,340</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,227</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Interest cost</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,823</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">2,727</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">78</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">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Expected return on plan assets <I><SUP>(1)</SUP></I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
   <TD align="right"><FONT size="2">(6,763</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">(6,731</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">&#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="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Amortization of unrecognized:</FONT></DIV></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 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 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><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Transition obligation</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">(118</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">(140</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">&#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" BGCOLOR="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Prior service cost</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">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">221</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><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="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Recognized (gain) loss</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">160</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">(234</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">&#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="2"><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>
    <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="#c5eafa">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Net (income) expense</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(2,333</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">(2,930</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="2"><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="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>
    <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>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%"><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>Expected  return  on plan  assets  is net of
expected investment expenses and certain administrative expenses.</I></FONT></TD></TR>
</TABLE>


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

<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;CTS  has  two  reportable
business   segments:&nbsp;1)   Components   and  Sensors   and  2)   Electronics
Manufacturing Services (EMS).</FONT>

<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,  communications  infrastructure
and  computer  markets;   low  temperature  cofired  ceramic  (LTCC)  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><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&#146;s   annual   report  on  Form  10-K.   &nbsp;Management   evaluates
performance   based  upon  operating   earnings   before   interest  and  income
taxes.</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><FONT size="2"><B>NOTE H&#151;Business Segments&nbsp;&nbsp;</B></FONT><FONT size="1"><B>
(Continued)</B></FONT>

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

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" WIDTH="400">
<TR valign="bottom">
    <TD WIDTH="50%">&nbsp;</TD>
    <TD WIDTH="6%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="6%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="6%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="6%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="8%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="6%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD></TR>

<TR valign="bottom">
    <TD><FONT size="1"><B><I>($ in thousands)</I></B></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><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><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
First Quarter 2004</B></FONT></DIV></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="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Net sales to external customers</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">63,519</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">58,628</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">122,147</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Segment operating earnings</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,051</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">1,858</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">4,909</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Total assets</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">409,257</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">95,604</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">504,861</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><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><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><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
First Quarter 2003</B></FONT></DIV></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="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Net sales to external customers</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">60,325</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">45,444</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">105,769</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Segment operating earnings</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">323</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,271</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">2,594</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Total assets</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">405,649</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">69,958</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">475,607</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>
</TABLE>

<P><FONT  size="2">Reconciling  information  between  reportable  segments&#146;
operating  earnings and CTS&#146;  consolidated  pre-tax  income is shown in the
following table:</FONT>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" WIDTH="400" 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 COLSPAN="3"><FONT size="1"><B><I>($ in thousands)</I></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>First Quarter<BR>2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>First Quarter<BR>2003</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></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Total segment operating earnings</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">4,909</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,594</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">
Interest expense</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">(1,533</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">(1,972</FONT></TD>
    <TD><FONT size="2">)</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Interest income</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">102</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">49</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">
Other income (expense)</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">(118</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">90</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="#c5eafa">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Earnings before income taxes</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">3,360</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">761</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="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>

<P><FONT size="2"><B>NOTE I&#151;Contingencies</B></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, results of operations or cash
flows.</FONT>


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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><FONT size="2"><B>NOTE J&#151;Earnings Per Share</B>
</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
calculations  below provide net earnings,  average common shares outstanding and
the resultant earnings per share for both basic and diluted EPS for the quarters
ending March 28, 2004 and March&nbsp;30, 2003.</FONT>


<TABLE ALIGN="CENTER" CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="600">
<TR valign="bottom">
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="49%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="4%">&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="left" colspan="2"><FONT size="1"><B>&nbsp;</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="left" colspan="2"><FONT SIZE="1"><B><I>
($ in thousands, except per share amounts)</I></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">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
First Quarter 2004</B></FONT></DIV></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="#c5eafa">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Basic EPS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35,957</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Effect of dilutive securities:</FONT></DIV></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">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px">
<FONT SIZE="2">Stock options</FONT></DIV></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">144</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="#c5eafa">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px">
<FONT SIZE="2">Other</FONT></DIV></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">142</FONT></TD>
    <TD><FONT size="1"><I>&nbsp;(1)</I></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"><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>
    <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="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Diluted EPS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">36,243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="2"><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="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">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
First Quarter 2003</B></FONT></DIV></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="#c5eafa">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Basic EPS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">571</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">34,020</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Effect of other dilutive securities</FONT></DIV></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">238</FONT></TD>
    <TD><FONT size="1"><I>&nbsp;(1)</I></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"><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>
    <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="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Diluted EPS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">571</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">34,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">0.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD colspan="2"><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="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>
<BR>

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<TABLE WIDTH="600" ALIGN="CENTER" 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  28 and 151  shares of CTS common  stock for
the  quarters  ending  March 28, 2004 and March 30,  2003,  respectively,  to be
issued  to  the  former  DCA  shareholders. </I> </FONT></TD></TR>

</TABLE>

<P><FONT size="2">The  following table shows the potentially dilutive securities
which have been excluded from the first quarter 2004 and 2003 dilutive  earnings
per share  calculations  because they are either  anti-dilutive  or the exercise
price exceeds the average market price.</FONT>

<TABLE ALIGN="CENTER" CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="600">
<TR valign="bottom">
    <TD WIDTH="78%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="7%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="1%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD></TR>

<TR valign="bottom">
    <TD NOWRAP ALIGN="center"><FONT size="1"><B>&nbsp;</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>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="7"><FONT size="1"><B>Three 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><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 ALIGN="LEFT"><FONT size="1"><B><I>(Number of shares in thousands)</I></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>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>March 28, 2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>March 30, 2003</B></FONT></TD></TR>

<TR valign="bottom">
    <TD ALIGN="center"><HR size="1" noshade></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 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><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Stock options where the exercise price exceeds
the average market price of </FONT></DIV></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">&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><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
&nbsp;&nbsp;&nbsp;common shares during the period</FONT></DIV></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">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">676</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">1,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Securities related to the subordinated convertible
debt</FONT></DIV></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">&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></TR>
</TABLE>

<P><FONT size="2"><B>NOTE K&#151;Subsequent Event</B>
</FONT>

<P><FONT  FACE="Times New Roman, Times, Serif"  SIZE=2>In April 2004,
CTS sold its Longtan,  Taiwan facility for total proceeds of approximately $16.6
million,  of which $11.7 million was received in the first quarter of 2004.  The
Longtan  facility  was  included  in assets  held for sale on the March 28, 2004
Condensed Consolidated Balance Sheet. The total proceeds, less costs of disposal,
approximate the carrying value of the asset.</FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9</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="mda"></A>

<P  align="left"><FONT  size="2"><B>Item  2.&nbsp;&nbsp;&nbsp;
Management&#146;s  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations</B></FONT>

<P><FONT size="2"><I>Overview</I></FONT>

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<P><FONT  FACE="Times New Roman,  Times,  Serif"  SIZE=2>CTS  is  a  global
manufacturer  of components and sensors to the  automotive,  communications  and
computer markets. The Company also offers specialized electronic  manufacturing,
design and  supply-chain  services to industrial,  communications  and computing
infrastructure  original equipment  manufacturers (OEMs). Sales and marketing is
accomplished  through  CTS  sales  engineers,   independent  manufacturers&#146;
representatives  and  distributors.  Sales are  reported  through  two  business
segments,  Components and Sensors and Electronics  Manufacturing Services (EMS),
which  represent  52% and 48%, respectively, of CTS&#146;  total sales in the first  quarter of
2004 and 57% and 43%, respectively, in the first quarter of 2003. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As discussed in more detail
throughout the MD&amp;A</FONT></P>

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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>&#149; </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>Sales increased
$16.4  million,  or 15%, in the first  quarter of 2004 over the first quarter of
2003, primarily in EMS.
<BR> <BR></FONT></TD></TR>
</TABLE>

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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>&#149; </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>  Gross
margins,  as a percentage of sales, were 20.1% and 19.9% in the first quarter of
2004 and 2003,  respectively.  Gross margin dollars increased by $3.5 million in
the first quarter of 2004.<BR><BR>
</FONT></TD></TR>
</TABLE>

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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>&#149; </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>Selling, general
and administrative expenses increased by $2.0 million. As a percentage of sales,
these expenses remained  unchanged at 12.1%.  However,  research and development
expenses decreased by $0.8 million.<BR><BR>
</FONT></TD></TR>
</TABLE>

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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>&#149; </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>Interest
expense  decreased  by $0.4 million in the first quarter of 2004.<BR><BR>
</FONT></TD></TR>
</TABLE>


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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>&#149; </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>Net earnings of
$2.5 million in the first quarter of 2004 were $1.9 million higher than the $0.6
million in the first quarter of 2003.<BR><BR>
</FONT></TD></TR>
</TABLE>

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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>&#149; </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>Cash and cash
equivalents  increased  by $7.5  million to $32.9  million in the first  quarter of
2004. <BR><BR></FONT></TD></TR>
</TABLE>

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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>&#149; </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>Debt  balances
were $81.2  million at the end of the first  quarter of 2004,  compared to $75.9
million on  December  31,  2003. </FONT></TD></TR>
</TABLE>

<P><FONT size="2"><I>Outlook</I></FONT>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CTS currently expects sales
growth and earnings for the full year of 2004 as follows: <BR><BR></FONT></P>

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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>&#149; </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>Following the
first quarter results,  the full year expectations for sales growth are now in
the 7-10% range for 2004.<BR><BR></FONT></TD></TR>
</TABLE>

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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>&#149; </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>Net earnings per
share  are  expected  to  improve  for the full  year of 2004,  to  $0.43-$0.47,
primarily as a result of increased  volumes,  improved cost  structure and lower
interest  expense.  Although pension income is declining from 2003 levels,  this
decrease is expected to be essentially offset by an anticipated gain on the sale
of excess land in Canada.
</FONT></TD></TR>
</TABLE>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10</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><FONT size="2"><I>Critical Accounting Policies</I></FONT>

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<P><FONT  FACE="Times New Roman, Times, Serif"  SIZE=2>Management&#146;s
Discussion  and  Analysis  of  Financial  Condition  and  Results of  Operations
discusses the Company&#146;s condensed consolidated financial statements,  which
have been prepared in accordance with accounting  principles  generally accepted
in the United States of America.  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>

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<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>


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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>&#149; </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>Estimating
inventory  valuation,  the  allowance  for doubtful  accounts and other accrued
liabilities. </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>&#149; </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>Valuation of
long-lived  and  intangible   assets  and   depreciation/amortization   periods.
</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>&#149; </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>Income taxes
</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>&#149; </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>Retirement
plans  </FONT></TD></TR>
</TABLE>
<BR>

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<P><FONT  FACE="Times New Roman,  Times, Serif" SIZE=2>In the first three months
of 2004, 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>Business Segment Discussion</I></FONT>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CTS has two  reportable
business  segments:  1) Components and Sensors and 2) Electronics  Manufacturing
Services. For additional information on business segments, refer to Note H
- - &#147;Business Segments.&#148; </FONT></P>

<TABLE ALIGN="CENTER" cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="68%"></TD>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="5%"></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><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 nowrap align="center" colspan="3"><FONT size="1"><B>Components</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Manufacturing</B></FONT></TD></TR>

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

<TR valign="bottom">
    <TD><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><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
First Quarter 2004</B></FONT></DIV></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="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Net sales to external customers</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">63,519</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">58,628</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Segment operating earnings </FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,051</FONT></TD>
    <TD nowrap><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">1,858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
% of segment sales </FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.8</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">3.2</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><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><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>
First Quarter 2003</B></FONT></DIV></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="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Net sales to external customers</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">60,325</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">45,444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Segment operating earnings</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">323</FONT></TD>
    <TD nowrap><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">2,271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
% of segment sales </FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.5</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">5.0</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD></TR>

</TABLE>

<P><FONT size="2">The Components and Sensors business segment experienced a $3.2
million  sales  increase  in the  first  quarter  of 2004,  or 5% from the first
quarter of 2003. The increase in sales was attributable  primarily to automotive
products.  Segment operating  earnings  increased from $0.3 million in the first
quarter of 2003 to $3.1 million in the first quarter of 2004, primarily due to a
volume impact of  approximately  $1 million and the positive  impact of improved
product mix, reduced  manufacturing  costs, and the effects of currency changes.
In total, depreciation and amortization expenses were $1.8 million less than the
first quarter of 2003.</FONT></p>


<P><FONT  size="2">The  EMS segment  experienced a 2004 sales  increase of $13.2
million,  or 29% from the first quarter of 2003. The revenue  increase  resulted
primarily  from  higher  demand for  communications  infrastructure  systems and
networking  equipment,  partially offset by price reductions.  Segment operating
earnings  decreased  $0.4 million in the first  quarter of 2004 to $1.9 million.
The decreased  earnings were driven by the negative effects of currency changes,
initial  start-up  costs  related to opening our EMS  operation in Singapore and
price reductions not fully offset by cost reductions.
</FONT></p>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11</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><FONT size="2"><I>Comparison of First Quarter 2004 and First Quarter 2003</I>
</FONT>

<P><FONT   size="2">The   following  table  highlights  changes  in  significant
components of the condensed  consolidated  statements of earnings for the
three-month periods ended March 28, 2004 and March 30, 2003:</FONT></p>

<TABLE ALIGN="CENTER" CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="625">
<TR valign="bottom">
    <TD WIDTH="65%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="5%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="5%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="2%"></TD>
    <TD WIDTH="3%"></TD>
    <TD WIDTH="5%"></TD>
    <TD WIDTH="3%"></TD></TR>

<TR valign="bottom">
    <TD><FONT size="1"><B><I>($ in thousands)</I></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>March 28, 2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>March 30, 2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Increase<BR>(Decrease)</B></FONT></TD></TR>

<TR valign="bottom">
    <TD><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="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Net sales</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">122,147</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">105,769</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">16,378</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Gross margin</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24,609</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">21,083</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">3,526</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
&nbsp;&nbsp;&nbsp;% of net sales</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20.1</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">19.9</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">0.2</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD></TR>

<TR valign="bottom">
    <TD WIDTH="65%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD></TR>

<TR VALIGN="BOTTOM">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Selling, general and administrative expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,816</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">12,848</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">1,968</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
&nbsp;&nbsp;&nbsp;% of net sales</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12.1</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">12.1</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">0.0</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD></TR>

<TR VALIGN="BOTTOM">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Research and development expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,884</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">5,641</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">(757</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
&nbsp;&nbsp;&nbsp;% of net sales</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.0</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">5.3</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">(1.3</FONT></TD>
    <TD nowrap><FONT size="2">)%</FONT></TD></TR>

<TR valign="bottom">
    <TD WIDTH="65%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD></TR>

<TR VALIGN="BOTTOM">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Operating earnings</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,909</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">2,594</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">2,315</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Operating earnings as a percent of sales</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.0</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">2.5</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">1.5</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD></TR>

<TR valign="bottom">
    <TD WIDTH="65%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD></TR>

<TR VALIGN="BOTTOM">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Interest expense</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,533</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">1,972</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">(439</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Earnings before income taxes</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,360</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">761</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">2,599</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Income tax expense</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">840</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">190</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">650</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD WIDTH="65%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="2%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD>
    <TD WIDTH="5%">&nbsp;</TD>
    <TD WIDTH="3%">&nbsp;</TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#c5eafa">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Net earnings</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,520</FONT></TD>
    <TD nowrap><FONT size="2"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">571</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">1,949</FONT></TD>
    <TD nowrap><FONT size="2">&nbsp;</FONT></TD></TR>

<TR VALIGN="BOTTOM">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
&nbsp;&nbsp;&nbsp;% of net sales</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.1</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">0.5</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">1.6</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD></TR>

</TABLE>
<BR>

<P><FONT  size="2">Net  sales increased by $16.4 million in the first quarter of
2004, or 15% from the first  quarter of 2003,  primarily due to the EMS increase
of $13.2 million, related to increased demand for communications  infrastructure
systems and  networking  equipment.  In addition,  Components  and Sensors sales
increased  $3.2 million,  primarily  related to increased  demand for automotive
products.</FONT></p>

<P><FONT  size="2">Gross  margin  increased $3.5 million in the first quarter of
2004 from the first  quarter  of 2003,  primarily  due to  increased  sales.  In
addition,  favorable impacts include lower depreciation expense,  better product
mix  within  the  Components  and  Sensors  segment  and  higher  absorption  of
manufacturing  fixed costs.  CTS  continues  to benefit  from a decreasing  cost
structure  resulting from improved  operational  efficiencies.  These  favorable
items  offset  the  unfavorable  impact of reduced  pension  income and a higher
percent of EMS segment sales,  which  inherently  have a lower gross margin than
Components and Sensors segment sales.</FONT></p>

<P><FONT  size="2">Selling,  general  and  administrative  expenses  were  $14.8
million  in the  first  quarter  of  2004  versus  $12.8  million  in the  prior
year&#146;s  quarter.  The  increase  was  spread  over  many  categories,
including    expenses    for    incentive    compensation    and    professional
services.  As a percentage of sales, these expenses remained unchanged at 12.1%.</FONT></p>

<P><FONT size="2">Research and development expenses decreased by $0.8 million to
$4.9  million  in the first  quarter  of 2004,  from the first  quarter of 2003,
primarily due to the  realignment  and  refocusing  of research and  development
efforts around key business development initiatives and opportunities within the
Components and Sensors business segment.  &nbsp;Significant ongoing research and
development  activities  continue in Components and Sensors to support  expanded
applications and new product development.  Research and development expenditures
in the EMS business  segment are typically much lower than in the Components and
Sensors business segment.</FONT></p>

<P><FONT  size="2">Operating  earnings  increased  $2.3 million  in the first
quarter of 2004  compared to the first  quarter of 2003. In the first quarter of
2004,  the  improved  gross margin of $3.5  million  primarily  due to increased
volume and lower depreciation  expense, was partially offset by higher operating
expenses of $1.2 million.</FONT></p>

<P><FONT  size="2">Interest expense of $1.5 million decreased by $0.4 million in
the first quarter of 2004 from the first quarter of 2003  primarily due to lower
interest rates.
</FONT>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12</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><FONT size="2"><B><U>Liquidity and Capital Resources</U></B></FONT>

<P><FONT size="2"><I>Overview</I></FONT>


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<P><FONT  FACE="Times New Roman,  Times, Serif" SIZE=2>Cash and cash equivalents
increased to $32.9  million at March 28, 2004 from $25.3 million at December 31,
2003.  Total debt was $81.2  million,  up $5.3 million from $75.9 million at the
end of 2003. Total debt as a percentage of total  capitalization  was 22% in the
first quarter of 2004 versus 21% at the end of 2003. During the first quarter of
2004: </FONT></P>


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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>&#149; </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>CTS paid $2
million of the industrial revenue bonds due in 2013.
</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>&#149; </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>A  wholly-owned
subsidiary of CTS, organized  under the laws of Taiwan,  received  approximately
$11.7  million of deposits  related to the pending sale of the  Longtan,  Taiwan
facility.  The sale was completed in April 2004.  See Note K -  &#147;Subsequent
Event&#148; for further details.
</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>&#149; </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>The net increase
in cash and cash  equivalents  at the end of the first  quarter of 2004 was $7.5
million  compared  to a decrease of $1.6  million for the first three  months of
2003.</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>&#149; </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>Free cash flow,
which CTS defines as the sum of net cash used in  operating  activities  of $6.8
million and net cash provided by investing  activities of $9.9 million, was $3.1
million.  In the first quarter of 2003, net cash provided by operations was $8.2
million  and net  cash  provided  by  investing  activities  was  $1.7  million,
resulting in free cash flow of $9.9 million.
</FONT></TD></TR>
</TABLE>
<BR>

<P><FONT size="2"><I>Operating Activities</I></FONT>

<P><FONT  size="2">CTS used $6.7 million of cash in operating  activities in the
first quarter of 2004. Accounts receivable increased $11.4 million from December
31, 2003.  Although the first  quarter of 2004 sales were $10 million lower than
the fourth  quarter of 2003,  March  2004  sales  were $7  million  higher  than
December 2003.  Inventory increased $6.8 million in the first quarter of 2004 as
orders  increased  and to  temporarily  support the transfer of  production to a
manufacturing  facility closer to a CTS end customer.  In addition,  the prepaid
pension asset  increased $2.4 million in the first quarter of 2004 from December
31, 2003.  These uses of cash were partially offset by cash provided through net
earnings of $2.5  million,  depreciation  and  amortization  of $7.3 million and
increased accounts payable and accrued liabilities of $3.8 million.
</FONT></p>

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<P><FONT  FACE="Times New Roman,  Times,  Serif"  SIZE=2>In the first quarter of
2003,  cash flows provided by operations  were $8.2 million.  Components of cash
flow from operations include positive earnings of $0.6 million, depreciation and
amortization of $8.8 million and favorable changes in current assets and current
liabilities of $1.9 million, partially reduced by a $3.1 million increase in the
prepaid pension asset. </FONT></P>

<P><FONT size="2"><I>Investing Activities</I></FONT>

<P><FONT  size="2">Cash  flows  provided by  investing  activities  totaled $9.9
million  through the first quarter of 2004,  including $11.7 million of proceeds
from deposits related to the sale of the Longtan,  Taiwan  facility.
The  proceeds were partially  offset by $2.0 million of capital  expenditures.
&nbsp;In the first quarter of 2003, cash flows provided by investing  activities
totaled  $1.7  million,  including  $3.9  million of  proceeds  from the sale of
assets, partially offset by $2.2 million of capital expenditures.</FONT></p>

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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><FONT size="2"><I>Financing Activities</I></FONT>

<P><FONT  size="2">Cash flows provided by financing activities were $4.1 million
in the first quarter of 2004,  primarily due to net proceeds from increased debt
of  $5.3  million  partially  offset  by  dividend  payments  of  $1.2  million.
&nbsp;Cash  flows used by financing  activities  were $10.9 million in the first
quarter of 2003,  consisting primarily of repayment of debt of $10.2 million and
dividend payments of $1.0 million.</FONT></p>

<P><FONT size="2"><I>Capital Resources</I></FONT>



<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CTS has a credit agreement
containing a $55 million senior,  secured  revolving credit facility that had an
outstanding  balance of $16.2  million at March 28, 2004.  The credit  agreement
categorized this debt as senior to CTS&#146; $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.  The  interest  rate under the credit
agreement  is equal  to  LIBOR  plus a margin  which  ranges  from  1.75%-2.25%,
depending on the performance  under certain  financial  covenants.  The interest
rate as of March 28, 2004 was 2.84 percent per annum.  CTS pays a commitment fee
on the undrawn portion of the credit agreement.  The commitment fee varies based
on performance under certain financial  covenants and is currently 0.375 percent
per annum. The credit agreement  requires,  among other things,  that CTS comply
with a minimum fixed charge  coverage,  a maximum  leverage  ratio and a minimum
tangible net worth.  Failure of CTS to comply with these  covenants could reduce
the borrowing availability under the credit agreement.  Additionally, the credit
agreement  limits the amounts allowed for dividends,  capital  expenditures  and
acquisitions.  Effective January 14, 2004, CTS met certain  conditions under the
credit agreement which allow it to expand the credit facility to $75 million, if
desired in the future. The credit agreement expires in July 2006.</FONT></P>

<P><FONT   size="2">CTS  believes  cash  flows  from  operations  and  available
borrowings  under its  revolving  credit  facility  will be adequate to fund its
working capital, capital expenditures and debt service requirements.  &nbsp; CTS
may  choose  to  pursue   additional   equity  and/or  debt  financing  to  fund
acquisitions  and/or to reduce its  overall  interest  expense  or  improve  its
capital structure.</FONT></p>

<P><FONT 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  quarter  of 2004,  CTS did not  issue  any
securities under this  registration  statement.  &nbsp;As of March 28, 2004, CTS
could offer up to $435.1  million of additional  debt and/or  equity  securities
under this registration statement.</FONT></p>

<P><FONT  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;As  of March 28,  2004,  CTS could issue up to
approximately  49,000  additional shares of common stock under this registration
statement.</FONT>

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


<P  align="center"><FONT  size="2"><B>Forward-Looking Statements</B></FONT>

<P><FONT size="2">Statements about the Company&#146;s earnings outlook and its
plans,  estimates and beliefs  concerning  the future are  &#147;forward-looking
statements&#148;  within the meaning of the Private Securities Litigation Reform
Act of 1995.  These  statements  are  based on  management&#146;s  expectations,
certain  assumptions  and currently  available  information.  Actual results may
differ materially from those reflected in the forward-looking  statements due to
a variety of geopolitical,  economic,  health,  industry and other factors which
could affect the  Company&#146;s  operating  results,  liquidity  and  financial
condition.  We  undertake  no  obligations  to  publicly  update or  revise  any
forward-looking  statement.  Examples of factors which may affect future results
include,  but are not limited to: rapid  technological  change,  general  market
conditions in the automotive,  communications and computer industries;  reliance
on key  customers;  the ability to protect our  intellectual  property;  pricing
pressures  and  demand  for  our  products;   and  risks   associated  with  our
international  operations,  including trade and tariff barriers,  exchange rates
and political and  geopolitical  risks.  Investors are encouraged to examine the
Company&#146;s  2003  Form  10-K,  which  more  fully  describes  the  risks and
uncertainties associated with the Company&#146;s business.</FONT>
<BR>

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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="quantative"></A>

<P align="left"><FONT size="2"><B>Item 3.&nbsp;&nbsp;&nbsp;
Quantitative and Qualitative Disclosures About Market Risk</B></FONT>

<P><FONT  size="2">During the first quarter of 2004, CTS entered into a series
of  forward  exchange   contracts.   Refer  also  to  Note  E,   &#147;Financial
Instruments,&#148;   of  the  Notes  to  the  Condensed  Consolidated  Financial
Statements,  for a discussion  relating to these  contracts.  There have been no
other   material   changes  in   CTS&#146;   market  risk  since   December  31,
2003.</FONT></P>

<A NAME="controls"></A>

<P align="left"><FONT size="2"><B>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 March 28, 2004, the end of the quarter
covered by this report,  an evaluation was carried out under the supervision and
with the  participation of CTS&#146;  management,  including the chief executive
officer  and  chief  financial  officer,   of  the  effectiveness  of  CTS&#146;
disclosure  controls  and  procedures.  Based  upon that  evaluation,  the chief
executive  officer and chief  financial  officer have  concluded  that CTS&#146;
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&#146;  internal  controls  over  financial
reporting   or  in  other   factors  that  could   significantly   affect  these
controls.</FONT></P>


<A NAME="part2"></A>

<P align="left"><FONT size="2"><B>PART II&nbsp;&nbsp;-&nbsp;&nbsp;
OTHER INFORMATION </B></FONT></P>

<A NAME="legal"></A>

<P align="left"><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.  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,
results of operations or cash flows. </FONT></P>

<A NAME="exhibits"></A>

<FONT size="2"><B>Item 6.&nbsp;&nbsp;&nbsp;
Exhibits and Reports on Form 8-K</B></FONT>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits</FONT></P>
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<TD WIDTH=9% ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<A HREF="exhibit31-a.htm">(31)(a)</A></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT  FACE="Times New Roman,  Times, Serif"  SIZE=2>Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. </FONT></TD></TR>
</TABLE>
<BR>

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<TD WIDTH=9% ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<A HREF="exhibit31-b.htm">(31)(b)</A></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT  FACE="Times New Roman,  Times, Serif"  SIZE=2>Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. </FONT></TD></TR>
</TABLE>
<BR>

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<TD WIDTH=9% ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<A HREF="exhibit32-a.htm">(32)(a)</A></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT  FACE="Times New Roman,  Times, Serif"  SIZE=2>Certification
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.</FONT></TD></TR>
</TABLE>
<BR>

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<TD WIDTH=9% ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<A HREF="exhibit32-b.htm">(32)(b)</A></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=88%><FONT  FACE="Times New Roman,  Times, Serif"  SIZE=2>Certification
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.</FONT></TD></TR>
</TABLE>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>15</FONT></P>

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Table of Contents</A></FONT></P>

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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</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the three-month
period  ending  March 28,  2004,  CTS filed the  following  reports on Form 8-K:
</FONT></P>

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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>&#149; </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>Report
dated January 7, 2004,  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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<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>&#149; </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>Report dated
January 7, 2004, under Item 12., Results of Operations and Financial Conditions,
containing  the press  release  containing  expected  financial  results for the
fourth quarter of 2003.
</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>&#149; </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>Report dated
January  27,  2004,   under  Item  12.,  Results  of  Operations  and  Financial
Conditions,  containing the press release  announcing  financial results for the
fourth  quarter  and full  year  ending  December  31,  2003.  The Form 8-K also
contained  a  reconciliation  of  certain  non-GAAP  financial  measures  to the
comparable GAAP financial measures.
</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>&#149; </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>Report dated
February  10,  2004,  under  Item  12.,  Results  of  Operations  and  Financial
Conditions,     containing    CTS&#146;     Condensed    Consolidated    Balance
Sheets&#151;Unaudited  for the years ended  December  31, 2003  (unaudited)  and
December 31, 2002. </FONT></TD></TR>
</TABLE>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16</FONT></P>

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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:  April 22, 2004</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>
<BR><BR><BR><BR><BR>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>3
<FILENAME>exhibit31-a.htm
<DESCRIPTION>(A) CERTIFICATION UNDER SECTION 302
<TEXT>
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     <!-- Firm Name:      CTS Corporation                                                  -->
     <TITLE>Exhibit (31)(a)</TITLE>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="form10q-1qtr2004.htm">Form 10-Q<BR>First Quarter 2004</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>
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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>


<!-- MARKER FORMAT-SHEET="Para Hang Level 1" FSL="Default" -->
<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&#146;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>

<!-- MARKER FORMAT-SHEET="Para Hang Level 1" FSL="Default" -->
<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>


<!-- MARKER FORMAT-SHEET="Para Hang Level 1" FSL="Default" -->
<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&#146;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;April 22, 2004&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>

</BODY>
</HTML>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>4
<FILENAME>exhibit31-b.htm
<DESCRIPTION>(B) CERTIFICATION UNDER SECTION 302
<TEXT>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 3.2 Final//EN">
<HTML>
<HEAD>
     <!-- Created by EDGAR Ease Plus (EDGAR Ease+ 1.4a) -->
     <!-- Project:        U:\PBAUCOM\Accounting\10Q\2004\Q1-2004\form10q-1qtr2004.eep      -->
     <!-- Control Number: 18                                                               -->
     <!-- Rev Number:                                                                      -->
     <!-- Client Name:                                                                     -->
     <!-- Project Name:   2004 First Quarter 10-Q                                          -->
     <!-- Firm Name:      CTS Corporation                                                  -->
     <TITLE>Exhibit (31)(b)</TITLE>
</HEAD>
<BODY>



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<HR ALIGN=LEFT WIDTH=100% COLOR="#000000" SIZE=2 NOSHADE STYLE="margin-top: -5px">
<HR ALIGN=LEFT WIDTH=100% COLOR="#000000" SIZE=1 NOSHADE STYLE="margin-top: -10px">

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="form10q-1qtr2004.htm">
Form 10-Q<BR>First Quarter 2004</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 (31)(b) </FONT></H1>


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

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, Vinod M. Khilnani, certify that: </FONT></P>

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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>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>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lv 0-TNR" FSL="Project" -->
     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <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>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lv 0-TNR" FSL="Project" -->
     <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>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lv 0-TNR" FSL="Project" -->
     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <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>

<!-- MARKER FORMAT-SHEET="Para Hang Level 1" FSL="Default" -->
<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>

<!-- MARKER FORMAT-SHEET="Para Hang Level 1" FSL="Default" -->
<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>


<!-- MARKER FORMAT-SHEET="Para Hang Level 1" FSL="Default" -->
<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&#146;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>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lv 0-TNR" FSL="Project" -->
     <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>

<!-- MARKER FORMAT-SHEET="Para Hang Level 1" FSL="Default" -->
<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>


<!-- MARKER FORMAT-SHEET="Para Hang Level 1" FSL="Default" -->
<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&#146;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;April 22, 2004&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>

</BODY>
</HTML>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>5
<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+ 1.4a) -->
     <!-- Project:        U:\PBAUCOM\Accounting\10Q\2004\Q1-2004\form10q-1qtr2004.eep      -->
     <!-- Control Number: 18                                                               -->
     <!-- Rev Number:                                                                      -->
     <!-- Client Name:                                                                     -->
     <!-- Project Name:   2004 First Quarter 10-Q                                          -->
     <!-- Firm Name:      CTS Corporation                                                  -->
     <TITLE>Exhibit (32)(a)</TITLE>
</HEAD>
<BODY>


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<HR ALIGN=LEFT WIDTH=100% COLOR="#000000" SIZE=2 NOSHADE STYLE="margin-top: -5px">
<HR ALIGN=LEFT WIDTH=100% COLOR="#000000" SIZE=1 NOSHADE STYLE="margin-top: -10px">


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="form10q-1qtr2004.htm">
Form 10-Q<BR>First Quarter 2004</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 March 28,
2004, 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>

<!-- 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>(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;April 22, 2004</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<BR><BR><BR></FONT></TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="4%"></TD>
<TD WIDTH="90%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A signed
original of this written statement required by Section 906 has been provided to
CTS Corporation and will be retained by CTS Corporation and furnished to the
Securities and Exchange Commission or its staff upon request.</FONT></TD>
     <TD WIDTH="6%"></TD></TR>
</TABLE>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>6
<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+ 1.4a) -->
     <!-- Project:        U:\PBAUCOM\Accounting\10Q\2004\Q1-2004\form10q-1qtr2004.eep      -->
     <!-- Control Number: 18                                                               -->
     <!-- Rev Number:                                                                      -->
     <!-- Client Name:                                                                     -->
     <!-- Project Name:   2004 First Quarter 10-Q                                          -->
     <!-- Firm Name:      CTS Corporation                                                  -->
     <TITLE>Exhibit (32)(b)</TITLE>
</HEAD>
<BODY>


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<HR ALIGN=LEFT WIDTH=100% COLOR="#000000" SIZE=2 NOSHADE STYLE="margin-top: -5px">
<HR ALIGN=LEFT WIDTH=100% COLOR="#000000" SIZE=1 NOSHADE STYLE="margin-top: -10px">

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><A HREF="form10q-1qtr2004.htm">
Form 10-Q<BR>First Quarter 2004</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>



<!-- 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 March 28, 2004, 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>

<!-- 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>(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>
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     <TD WIDTH="70%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date:  &nbsp;April 22, 2004</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>
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     <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<BR><BR><BR><BR></FONT></TD></TR>
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<TD WIDTH="90%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A signed
original of this written statement required by Section 906 has been provided to
CTS Corporation and will be retained by CTS Corporation and furnished to the
Securities and Exchange Commission or its staff upon request.</FONT></TD>
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