EX-99.1 CHARTER 2 ex99_1.htm EXHIBIT 99.1 INVESTOR RELATIONS PRESENTATION 4-4-06
April 2006
1

Safe Harbor Statement
2

EMS Operations
Electronic Components
Automotive Sensors
Global Operations
3

Segments
Automotive
Communications
Other
Computer
Electronic
Components
and
Sensors
Electronics
Manufacturing
Services
Markets
41%
59%
6%
21%
23%
31%
23%
7%
2%
8%
29%
3%
14%
Consumer
Military & Aerospace
Security
Medical
11%
5%
1%
Industrial
8%
8%
Segments and Markets
4

- Automotive Sensors
- Electronic Components
Electronics Manufacturing Services
13 - 18%
4 - 7%
8 - 12%
9 - 13%
Annual Sales Growth
Overall
Product/Market Area
(2005 - 2008)
Components & Sensors:
10 - 14%
Business Growth Targets
5

Strategy
•
Aggressively expand product base.
–
Content growth > unit growth.
•
Broaden customer base.
•
Leverage product/market strength into Asian market.
Targeting Double-Digit Growth
Automotive Products
6

Awarded 43 Platforms
Industry trend is to adopt integrated
pedals for complexity and cost
reduction
Total
Available
Market
(Including Pedal Sensors)
$150
$223
$266
$326
$363
$305
CTS Accelerator Pedal Modules Offer
Performance, Quality and Cost Advantages
CTS Sales $ in Millions
$393
Actual
Accelerator Pedal Module
7

CTS Sales $ in Millions
Asia Over 50% of
Growth
Actual
10 Year Projected Growth In Vehicle Sales
(17M Units)
China regulations driving
local content
CTS Operations in
Taiwan and China
Asian Automotive Growth
8

Strategy
•
Focus on high margin engineered electronic
components.
•
Aggressively introduce new products and expand the
customer base.
•
Leverage our global footprint and Asian
manufacturing.
Improving Financial Performance
Electronic Components
9

Communications
Handset
Communications
Infrastructure
Computing and
Other Markets
Focused on Higher Margin Growth
Markets
Electronic Components –
Markets Served
10

OCXO
RF
Module
Filter
WiMAX
Optical Networking
Telematics
Cellular
Repeaters
Wireless
Base Station
Satellite
Communications
3 Design Wins
32 Design Wins
65 Design Wins
1 Design Win
20 Design Wins
10 Design Wins
Electronic Components –
Products/Applications 2005 Design Wins
11

i
Target customers with complex needs.
i
Offer full-service flexibility.
i
Leverage geographic footprint.
–
Global sourcing.
–
Local NPI Ù global completion.
i
Grow organically and through acquisitions.
Strategy
Electronics Manufacturing Solutions
12

TIER 1
4
Large/Global > $2B.
4
Optimized to Low Mix - High Volume.
TIER 2
4
Medium/ Regional/Global $200M - $2B.
4
Optimized to High Mix - Med. Volume.
TIER 3/4
4
Small/Regional < $200M.
4
Optimized to High Mix - Low Volume.
g
Large OEMs
g
Low Mix; High Volume
g
Very Price Sensitive
g
Med. - Large OEMs.
g
High Mix; Med. Volume.
g
Special Needs.
g
Small - Med. OEMs
g
Generally Local / Regional
g
High Mix; Low - Med. Volume
CUSTOMER
Characteristics/Needs
EMS Companies
EMS Industry
13

Growth Focused on High
Margin Segments
95%
71%
Top 5 EMS Customers
Communications
Other
Industrial
Medical
Computer
Sales By Market
Aerospace/
Defense
More Complex
Less Complex
High Volume
/ Low Mix
Low Volume
/ High Mix
CTS
Markets
EMS Business
14

Financial Summary
Definitions and reconciliation of non-GAAP financial terms are included in
the Appendix of this presentation and on CTS’ Web site at
www.ctscorp.com
15

New Products/Acquisition Driving Sales Growth
$ in Millions
2005
2004
2003
2002
Sales
16

2002
2003
Earnings Growing Faster Than Revenues
2004
2005
Adjusted EPS
17

Expense Leverage Contributing to Earnings Growth
12%
12.5%
Target
Adjusted Operating Expenses
(Percent of Sales)
18

Cumulative
Free Cash Flow
$ in Millions
Strong Cash Earnings and Free Cash Flow
Cumulative
Cash Earnings
Cumulative Free Cash Flow
19

Capital Expenditures
Normal
Range
5%
3%
Controllable Working Capital*
Target
Range
13%
10%
* Controllable Working Capital Defined as Accounts Receivable + Inventories - Accounts Payable.
Efficient Utilization of Capital
Balance Sheet Management
20

Leverage Ratio Within Target Range of 20% - 30%
Balanced Maturities
Current
Capital Structure
Total Debt to Capitalization
195
82
Total Debt
Cash
Debt to Capitalization
Balance Sheet Management
21

Target Adjusted Return on Assets
5.0%
12.0%
1.0
1.5
1.7
2.5
EMS
Components
& Sensors
OPERATING
MARGIN
7.0%
8.0%
ASSET TURNS
Target Range
Target
Range
EMS: 55%
of Sales
EMS: 65%
of Sales
Both Segments Have Comparable ROA Targets
2003
2004
2005
CTS
CTS
CTS
22

Growth Strategies are Working
Expect EPS Growth > Sales Growth
Value Proposition
•
Positioned in high-growth markets.
•
Positive cash flow to fund growth.
•
Leverageable capacity and operating structure.
•
Strong balance sheet and conservative capital structure.
23

APPENDIX
24

Profitability
Growth
Corporate Strategies
•
Seek high-growth niche markets
•
Focus on “design to purpose”
products and services
•
Leverage technology to create
differentiated products
•
Grow through product and
market extensions
Core Strengths
•
Application engineering
•
Materials technology
•
Manufacturing execution
•
Low-cost production
•
Continuous product cost reduction
•
Global footprint
Business Model
25

Strengthen CTS as a provider of high-mix EMS services
CTS’ Strength In
SMTEK’s Strength In
Brings An Expanded Set of Complementary
Capabilities to Customers
§
PCBA design for manufacture and test
§
Complex PCBA operations
§
Flexible test capability
§
Market-specific certifications
§
Backplane and enclosure design
§
High-mix box build operations
§
Global sourcing
§
Direct-to-end-customer logistics
Acquisition Strategy
26

CTS Sales
North America and Europe
l
Growing customer penetration – Shifting to Tier I
l
New products provide more value-add – Higher unit prices
Growing Automotive Product
Content
27

Position Sensors:
(Contacting & Non-Contacting)
Throttle
Exhaust Gas Recirculating
Active Manifold Monitoring
Actuators:
Manifold Tuning
Secondary Runner
Tumble & Swirl Valves
Pedal Modules:
(Contacting & Non-Contacting)
Pedal Position Sensors
Memory Seat
Position Sensors
Fuel Level
Sensing
Safety Systems:
Occupant Classification Systems
Belt Tension Sensors
Electronic Throttle
Sensors
Automotive Product Applications
28

Awarded 5 Platforms
Trend toward active manifolds driven by:
-
Lower emissions requirements.
-
Better fuel economy.
-
Improved vehicle performance
(engine torque).
$65
$71
$86
$131
$194
$266
Total
Available
Market
CTS’ innovative solution provides performance
and reliability advantages
$335
$ in Millions
Actual
Active Manifold Actuators
29

CTS’ Belt Tension Sensor provides
superior measurement accuracy
Awarded 25 Platforms
U.S. regulations require 100% of
all new light vehicles to have
enhanced occupancy sensing
systems by 2006.
30+% Market Share
$13
$33
$80
$69
$63
Total
Available
Market
$78
$ in Millions
Belt Tension Sensor
30

Major CTS Competitors
PRODUCTS
Automotive Products
Frequency Products - Infrastructure
Ceramic Filters
Resistor Networks
Electronics Manufacturing Services
COMPETITION
AB Electronics, Alps, Bosch, Delphi,
Denso, Hella, Mikuni, Siemens
C-MAC, M/A Com, Mtron, Raltron, Pericom,
Sirenza, Vectron, Z-Comm
Murata, TDK, UBE
BI Tech, Bourns, KOA, Vishay
Celestica, Flextronics, Jabil, LaBarge,
Mack Technologies, Pemstar, Plexus,
Sanmina-SCI, Suntron, Solectron
31

Note: Data shown excludes all restructuring and related one-time charges, asset impairments, customer reimbursement, income tax
adjustment and material asset gains, except adjusted EBITDA, which includes the customer reimbursement only.
Financial Summary
32

Note: Data shown excludes income tax adjustment and material asset
gains.
Other Financial Data –
Income Statement
33

Other Financial Data –
Balance Sheet Metrics
34

CTS Corporation
Regulation G Appendix

CTS Corporation |
Reconciliation of Earnings Per Share to Adjusted Earnings Per Share |
|  | 2005 |  | 2005 |  | 2004 |  |  |  | 2003 |  | 2002 |  | Full Year |
|  | Q4 |  | Q2 |  | Q2 |  |  |  | Q3 |  | Q3 |  | Q2 |  | Q1 |  | 2005 |  | 2004 |  | 2003 |  | 2002 |  | 2001 |
Earnings per share |  | $ | 0.22 |  | $ | 0.10 |  | $ | 0.18 |  |  | (1 | ) | $ | 0.17 |  | $ | (0.41 | ) | $ | (0.08 | ) | $ | (0.06 | ) | $ | 0.57 |  | $ | 0.53 |  | $ | 0.36 |  | $ | (0.54 | ) | $ | (1.61 | )
Tax affected charges (credits) to reported earnings per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restructuring and asset impairment charges |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.10 |  |  | 0.41 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.10 |  |  | 0.42 |  |  | 1.07 |
Restructuring-related, one-time charges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.01 |  |  | 0.02 |  |  |  |  |  |  |  |  |  |  |  | 0.03 |  |  | 0.28 |
Customer reimbursement |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (0.07 | ) |  |  |  |  |  |  |  |  |  |  | (0.07 | ) |  |  |
Gain on sale of excess equipment less LTCC severance |  |  | (0.02 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (0.02 | ) |  |  |  |  |  |  |  |  |  |  |  |
Gain on sale of excess Canadian land |  |  |  |  |  |  |  |  | (0.05 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (0.05 | ) |  |  |  |  |  |  |  |  |
Total tax affected adjustments to reported earnings per share |  |  | (0.02 | ) |  | - |  |  | (0.05 | ) |  |  |  |  | 0.10 |  |  | 0.41 |  |  | 0.01 |  |  | (0.05 | ) |  | (0.02 | ) |  | (0.05 | ) |  | 0.10 |  |  | 0.38 |  |  | 1.35 |
Tax impact of cash repatriation, net of tax benefit relating to reversal |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
of income tax reserves in certain foreign jurisdictions |  |  | 0.03 |  |  | 0.11 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.10 |  |  |  |  |  |  |  |  |  |  |  |  |
Impact of reversal of tax reserves |  |  |  |  |  | (0.04 | ) |  |  |  |  |  |  |  | (0.22 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (0.22 | ) |  |  |  |  |  |
Adjusted earnings per share |  | $ | 0.23 |  | $ | 0.17 |  | $ | 0.13 |  |  |  |  | $ | 0.05 |  | $ | - |  | $ | (0.07 | ) | $ | (0.11 | ) | $ | 0.65 |  | $ | 0.48 |  | $ | 0.24 |  | $ | (0.16 | ) | $ | (0.26 | )
(1) Diluted earnings per share for the second quarter of 2004 has been restated to reflect the impact of adopting Emerging Issues Taks Force (EITF) No. 04-08,
"The Effect of Contingently Convertible Debt on Diluted Earnings Per Share". EITF No. 04-08 was issued and became effective in the fourth quarter of 2004.

CTS Corporation
Reconciliation of Operating Expenses to Adjusted Operating Expenses
($ in millions)
|  | Full Year |
|  | 2005 |  | 2004 |  | 2003 |  | 2002 |
Selling, general and administrative expenses |  | $ | 68.0 |  | $ | 63.5 |  | $ | 56.9 |  | $ | 63.3 |
Research and development expenses |  |  | 17.1 |  |  | 19.0 |  |  | 21.5 |  |  | 24.1 |
Restructuring and impairment charges |  |  | - |  |  | - |  |  | 4.6 |  |  | 18.3 |
Gain on sale of assets |  |  | (3.1 | ) |  | (3.9 | ) |  | - |  |  | - |
Total reported operating expenses |  |  | 82.0 |  |  | 78.6 |  |  | 83.0 |  |  | 105.7 |
Less restructuring and impairment charges |  |  | - |  |  | - |  |  | 4.6 |  |  | 18.3 |
Less gain on sale of excess equipment |  |  | (1.2 | ) |  | - |  |  | - |  |  | - |
Less gain on sale of excess Canadian land |  |  | - |  |  | (2.7 | ) |  | - |  |  | - |
Adjusted operating expenses |  | $ | 83.2 |  | $ | 81.3 |  | $ | 78.4 |  | $ | 87.4 |
Adjusted operating expenses as a percentage of sales |  |  | 13.5 | % |  | 15.3 | % |  | 16.9 | % |  | 19.1 | %

CTS Corporation
Definition of Financial Term-"Controllable Working Capital as % of Sales"
($ in millions)
|  | December 31, |  | December 31, |
|  | 2005 |  | 1999 |
Net Accounts Receivables |  | $ | 91.3 |  | $ | 124.7 |
Net Inventory |  |  | 60.6 |  |  | 78.9 |
Accounts Payables |  |  | (67.2 | ) |  | (68.3 | )
Controllable Working Capital |  |  | 84.7 |  |  | 135.3 |
Annualized sales |  |  | 617.5 |  |  | 677.1 |
Controllable Working Capital % |  |  | 13.7 | % |  | 20.0 | %

CTS Corporation |
Definition of Financial Term-"Total Debt to Capitalization" |
($ in millions) |
|  | 2005 |  | 2004 |  | 2003 |  | 2002 |  | 2001 |  | December 31, |
|  | Q4 |  | Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q4 |  | 2000 |
Notes payable |  | $ | 13.3 |  | $ | 3.0 |  | $ | 3.0 |  | $ | 3.5 |  | $ | 3.3 |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | 7.4 |
Current portion of long-term debt |  |  | 0.2 |  |  | 0.2 |  |  | 0.3 |  |  | 0.4 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 18.2 |  |  | 28.4 |  |  | 27.5 |  |  | 10.0 |
Long-term debt |  |  | 68.3 |  |  | 94.7 |  |  | 85.6 |  |  | 133.9 |  |  | 94.2 |  |  | 87.0 |  |  | 85.0 |  |  | 81.2 |  |  | 75.9 |  |  | 81.0 |  |  | 85.3 |  |  | 67.0 |  |  | 67.0 |  |  | 125.0 |  |  | 178.0 |
Total debt |  |  | 81.8 |  |  | 97.9 |  |  | 88.9 |  |  | 137.8 |  |  | 97.5 |  |  | 87.0 |  |  | 85.0 |  |  | 81.2 |  |  | 75.9 |  |  | 81.0 |  |  | 85.3 |  |  | 85.2 |  |  | 95.4 |  |  | 152.5 |  |  | 195.4 |
Total shareholders' equity |  |  | 329.6 |  |  | 324.2 |  |  | 322.7 |  |  | 324.3 |  |  | 310.7 |  |  | 303.6 |  |  | 302.7 |  |  | 296.4 |  |  | 294.2 |  |  | 285.6 |  |  | 268.7 |  |  | 264.3 |  |  | 265.0 |  |  | 242.9 |  |  | 246.4 |
Total capitalization |  | $ | 411.4 |  | $ | 422.1 |  | $ | 411.6 |  | $ | 462.1 |  | $ | 408.2 |  | $ | 390.6 |  | $ | 387.7 |  | $ | 377.6 |  | $ | 370.1 |  | $ | 366.6 |  | $ | 354.0 |  | $ | 349.5 |  | $ | 360.4 |  | $ | 395.4 |  | $ | 441.8 |
Total debt to capitalization |  |  | 19.9 | % |  | 23.2 | % |  | 21.6 | % |  | 29.8 | % |  | 23.9 | % |  | 22.3 | % |  | 21.9 | % |  | 21.5 | % |  | 20.5 | % |  | 22.1 | % |  | 24.1 | % |  | 24.4 | % |  | 26.5 | % |  | 38.6 | % |  | 44.2 | %

CTS Corporation
Free Cash Flow
($ in millions)
|  | 2005 |  | 2004 |  | 2003 |  | Full Year |
|  | Q4 |  | Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3 |  | Q2 |  | Q1 |  | 2005 |  | 2004 |  | 2003 |  | 2002 |  | 2001 |
Cash flows provided from (used by) operations |  | $ | 14.8 |  | $ | 5.1 |  | $ | 13.7 |  | $ | 10.9 |  | $ | 4.3 |  | $ | 5.0 |  | $ | 11.4 |  | $ | (6.7 | ) | $ | 10.2 |  | $ | 8.6 |  | $ | (1.3 | ) | $ | 8.2 |  | $ | 44.5 |  | $ | 14.0 |  | $ | 25.7 |  | $ | 24.1 |  | $ | 65.8 |
Capital expenditures |  | $ | (2.5 | ) | $ | (6.6 | ) | $ | (2.9 | ) | $ | (3.0 | ) | $ | (2.6 | ) | $ | (3.9 | ) |  | (4.2 | ) |  | (2.0 | ) |  | (2.8 | ) |  | (1.7 | ) |  | (2.3 | ) |  | (2.2 | ) |  | (15.0 | ) |  | (12.7 | ) |  | (9.0 | ) |  | (12.8 | ) |  | (77.7 | )
Free cash flow |  | $ | 12.3 |  | $ | (1.5 | ) | $ | 10.8 |  | $ | 7.9 |  | $ | 1.7 |  | $ | 1.1 |  | $ | 7.2 |  | $ | (8.7 | ) | $ | 7.4 |  | $ | 6.9 |  | $ | (3.6 | ) | $ | 6.0 |  | $ | 29.5 |  | $ | 1.3 |  | $ | 16.7 |  | $ | 11.3 |  | $ | (11.9 | )

CTS Corporation
Cumulative Free Cash Flow
($in millions)
|  | Cumulative |  | Full Year |  | Cumulative |  | Full Year |  | Full Year |
|  | (2003-2005) |  | 2005 |  | 2003-2004 |  | 2004 |  | 2003 |
Net earnings |  | $ | 54.8 |  | $ | 22.2 |  | $ | 32.6 |  | $ | 20.0 |  | $ | 12.6 |
Depreciation and amortization |  |  | 86.8 |  |  | 27.1 |  |  | 59.7 |  |  | 26.1 |  |  | 33.6 |
Restructuring and impairment charges |  |  | 4.6 |  |  | - |  |  | 4.6 |  |  | - |  |  | 4.6 |
Gain on asset sales |  |  | (7.0 | ) |  | (3.1 | ) |  | (3.9 | ) |  | (3.9 | ) |  | - |
Deferred income taxes |  |  | 9.6 |  |  | 9.1 |  |  | 0.5 |  |  | 0.2 |  |  | 0.3 |
Equity-based compensation and other |  |  | 5.0 |  |  | 2.7 |  |  | 2.3 |  |  | 1.7 |  |  | 0.6 |
Cumulative prepaid pension asset |  |  | (31.7 | ) |  | (8.7 | ) |  | (23.0 | ) |  | (10.9 | ) |  | (12.1 | )
Cash earnings |  |  | 122.1 |  |  | 49.3 |  |  | 72.8 |  |  | 33.2 |  |  | 39.6 |
Working capital & other |  |  | (37.9 | ) |  | (4.8 | ) |  | (33.1 | ) |  | (19.2 | ) |  | (13.9 | )
Cash flow from operations |  |  | 84.2 |  |  | 44.5 |  |  | 39.7 |  |  | 14.0 |  |  | 25.7 |
Capital expenditures |  |  | (36.7 | ) |  | (15.0 | ) |  | (21.7 | ) |  | (12.7 | ) |  | (9.0 | )
Free cash flow |  | $ | 47.5 |  | $ | 29.5 |  | $ | 18.0 |  | $ | 1.3 |  | $ | 16.7 |

CTS Corporation
Reconciliation of Operating Earnings to Adjusted Operating Earnings
($ in millions)
|  | 2005 |  | 2004 |  | 2003 |  | Full Year |
|  | Q4 |  | Q2 |  | Q3 |  | 2005 |  | 2004 |  | 2003 |  | 2002 |  | 2001 |
Operating earnings (loss) |  | $ | 15.1 |  | $ | 10.6 |  | $ | (0.7 | ) | $ | 40.3 |  | $ | 31.1 |  | $ | 13.8 |  | $ | (14.8 | ) | $ | (48.5 | )
Charges (credits) to reported operating earnings (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restructuring and asset impairment charges |  |  |  |  |  |  |  |  | 4.6 |  |  |  |  |  |  |  |  | 4.6 |  |  | 18.3 |  |  | 40.0 |
Restructuring-related, one-time charges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.3 |  |  | 10.7 |
Customer reimbursement |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (3.1 | ) |  |  |
Gain on sale of excess equipment less LTCC severance |  |  | (1.2 | ) |  |  |  |  |  |  |  | (1.2 | ) |  |  |  |  |  |  |  |  |  |  |  |
Gain on sale of excess Canadian land |  |  |  |  |  | (2.7 | ) |  |  |  |  |  |  |  | (2.7 | ) |  |  |  |  |  |  |  |  |
Total adjustments to reported operating earnings (loss) |  |  | (1.2 | ) |  | (2.7 | ) |  | 4.6 |  |  | (1.2 | ) |  | (2.7 | ) |  | 4.6 |  |  | 16.5 |  |  | 50.7 |
Adjusted operating earnings |  | $ | 13.9 |  | $ | 7.9 |  | $ | 3.9 |  | $ | 39.1 |  | $ | 28.4 |  | $ | 18.4 |  | $ | 1.7 |  | $ | 2.2 |
Adjusted operating earnings as a percentage of total sales |  |  | 9.0 | % |  | 5.7 | % |  | 3.6 | % |  | 6.3 | % |  | 5.3 | % |  | 4.0 | % |  | 0.4 | % |  | 0.4 | %

CTS Corporation
Reconciliation of Net Earnings to Adjusted Net Earnings
($ in millions)
|  | 2005 |  | 2005 |  | 2004 |  | 2003 |  | Full Year |
|  | Q4 |  | Q2 |  | Q2 |  | Q3 |  | 2005 |  | 2004 |  | 2003 |  | 2002 |  | 2001 |
Net earnings (loss) |  | $ | 8.6 |  | $ | 3.9 |  | $ | 6.9 |  | $ | 6.1 |  | $ | 22.2 |  | $ | 19.9 |  | $ | 12.6 |  | $ | (17.9 | ) | $ | (45.4 | )
Charges (credits) to reported net earnings (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restructuring and asset impairment charges |  |  |  |  |  |  |  |  |  |  |  | 4.6 |  |  |  |  |  |  |  |  | 4.6 |  |  | 18.3 |  |  | 40.0 |
Restructuring-related, one-time charges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.3 |  |  | 10.7 |
Customer reimbursement |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (3.1 | ) |  |  |
Gain on sale of excess equipment less LTCC severance |  |  | (1.2 | ) |  |  |  |  |  |  |  |  |  |  | (1.2 | ) |  |  |  |  |  |  |  |  |  |  |  |
Gain on sale of excess Canadian land |  |  | - |  |  | - |  |  | (2.7 | ) |  |  |  |  | - |  |  | (2.7 | ) |  |  |  |  |  |  |  |  |
Total adjustments to reported net earnings (loss) |  |  | (1.2 | ) |  | - |  |  | (2.7 | ) |  | 4.6 |  |  | (1.2 | ) |  | (2.7 | ) |  | 4.6 |  |  | 16.5 |  |  | 50.7 |
Total adjustments, tax affected |  |  | (0.9 | ) |  | - |  |  | (2.1 | ) |  | 3.4 |  |  | (0.9 | ) |  | (2.1 | ) |  | 3.4 |  |  | 12.4 |  |  | 38.1 |
Tax impact of cash repatriation, net of tax benefit relating to reversal of income tax reserves in certain |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
foreign jurisdictions |  |  | 1.5 |  |  | 4.5 |  |  |  |  |  |  |  |  | 6.0 |  |  |  |  |  |  |  |  |  |  |  |  |
Impact of reversal of tax reserves |  |  | - |  |  | (1.7 | ) |  |  |  |  | (7.9 | ) |  | (1.7 | ) |  |  |  |  | (7.9 | ) |  |  |  |  |  |
Adjusted net earnings (loss) |  | $ | 9.2 |  | $ | 6.8 |  | $ | 4.8 |  | $ | 1.6 |  | $ | 25.6 |  | $ | 17.8 |  | $ | 8.1 |  | $ | (5.5 | ) | $ | (7.3 | )
Adjusted net earnings (loss) as a percentage of total sales |  |  | 6.0 | % |  | 4.3 | % |  | 3.5 | % |  | 1.5 | % |  | 4.1 | % |  | 3.3 | % |  | 1.7 | % |  | -1.2 | % |  | -1.3 | %

CTS Corporation
ADJUSTED EBITDA
($ in millions)
|  | 2005 |  | 2004 |  | 2003 |  | Full Year |
|  | Q4 |  | Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3 |  | Q2 |  | Q1 |  | 2005 |  | 2004 |  | 2003 |  | 2002 |  | 2001 |
Net earnings (loss) |  | $ | 8.6 |  | $ | 6.3 |  | $ | 3.9 |  | $ | 3.4 |  | $ | 6.6 |  | $ | 3.9 |  | $ | 6.9 |  | $ | 2.5 |  | $ | 3.9 |  | $ | 6.1 |  | $ | 2.0 |  | $ | 0.6 |  | $ | 22.2 |  | $ | 19.9 |  | $ | 12.6 |  | $ | (17.9 | ) | $ | (45.4 | )
Depreciation and amortization expense |  |  | 7.2 |  |  | 6.2 |  |  | 6.8 |  |  | 6.9 |  |  | 6.4 |  |  | 5.7 |  |  | 6.7 |  |  | 7.3 |  |  | 8.1 |  |  | 8.2 |  |  | 8.5 |  |  | 8.8 |  |  | 27.1 |  |  | 26.1 |  |  | 33.6 |  |  | 43.4 |  |  | 51.7 |
Interest expense |  |  | 1.3 |  |  | 1.3 |  |  | 1.6 |  |  | 1.7 |  |  | 1.3 |  |  | 1.1 |  |  | 1.6 |  |  | 1.5 |  |  | 1.7 |  |  | 2.1 |  |  | 1.9 |  |  | 1.9 |  |  | 5.9 |  |  | 5.5 |  |  | 7.6 |  |  | 10.2 |  |  | 12.8 |
Tax expense (benefit) |  |  | 5.4 |  |  | 1.9 |  |  | 4.9 |  |  | 1.0 |  |  | 2.0 |  |  | 1.2 |  |  | 2.0 |  |  | 0.9 |  |  | 1.3 |  |  | (8.5 | ) |  | 0.7 |  |  | 0.2 |  |  | 13.2 |  |  | 6.1 |  |  | (6.3 | ) |  | (5.9 | ) |  | (15.1 | )
EBITDA |  | $ | 22.5 |  | $ | 15.7 |  | $ | 17.2 |  | $ | 13.0 |  | $ | 16.3 |  | $ | 11.9 |  | $ | 17.2 |  | $ | 12.2 |  | $ | 15.0 |  | $ | 7.9 |  | $ | 13.1 |  | $ | 11.5 |  | $ | 68.4 |  | $ | 57.6 |  | $ | 47.5 |  | $ | 29.8 |  | $ | 4.0 |
Charges (credits) to EBITDA: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restructuring and asset impairment charges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4.6 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4.6 |  |  | 18.3 |  |  | 40.0 |
Restructuring-related, one-time charges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.3 |  |  | 10.7 |
Customer reimbursement |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (3.1 | ) |  |  |
Gain on sale of excess equipment less LTCC severance |  |  | (1.2 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1.2 | ) |  |  |  |  |  |  |  |  |  |  |  |
Gain on sale of excess Canadian Land |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2.7 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2.7 | ) |  |  |  |  |  |  |  |  |
Total adjustments to reported EBITDA |  |  | (1.2 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (2.7 | ) |  |  |  |  |  |  |  | 4.6 |  |  |  |  |  |  |  |  | (1.2 | ) |  | (2.7 | ) |  | 4.6 |  |  | 16.5 |  |  | 50.7 |
Adjusted EBITDA |  | $ | 21.3 |  | $ | 15.7 |  | $ | 17.2 |  | $ | 13.0 |  | $ | 16.3 |  | $ | 11.9 |  | $ | 14.5 |  | $ | 12.2 |  | $ | 15.0 |  | $ | 12.5 |  | $ | 13.1 |  | $ | 11.5 |  | $ | 67.2 |  | $ | 54.9 |  | $ | 52.1 |  | $ | 46.3 |  | $ | 54.7 |
Adjusted EBITDA % of total sales |  |  | 13.8 | % |  | 10.5 | % |  | 10.9 | % |  | 8.4 | % |  | 11.4 | % |  | 9.2 | % |  | 10.5 | % |  | 10.0 | % |  | 11.4 | % |  | 11.5 | % |  | 11.2 | % |  | 10.9 | % |  | 10.9 | % |  | 10.3 | % |  | 11.3 | % |  | 10.1 | % |  | 9.5 | %

CTS Corporation
Definition of Financial Term -
Adjusted Return on Assets
|  | Full Year |
|  | 2005 |  | 2004 |  | 2003 |
Operating earnings |  | $ | 40.3 |  | $ | 31.1 |  | $ | 13.8 |
Charges (credits) to reported operating earnings : |  |  |  |  |  |  |  |  |  |
Restructuring and asset impairment charges |  |  |  |  |  |  |  |  | 4.6 |
Gain on sale of excess equipment less LTCC severance |  |  | (1.2 | ) |  |  |  |  |  |
Gain on sale of excess Canadian land |  |  |  |  |  | (2.7 | ) |  |  |
Total adjustments to reported operating earnings |  |  | (1.2 | ) |  | (2.7 | ) |  | 4.6 |
Adjusted operating earnings |  | $ | 39.1 |  | $ | 28.4 |  | $ | 18.4 |
Current Year: |  |  |  |  |  |  |  |  |  |
Total Assets |  | $ | 533.9 |  | $ | 522.2 |  | $ | 482.3 |
Less Cash |  |  | 12.0 |  |  | 61.0 |  |  | 25.3 |
Adjusted Assets at end of current year |  |  | 521.9 |  |  | 461.2 |  |  | 456.9 |
Prior Year: |  |  |  |  |  |  |  |  |  |
Total Assets |  |  | 522.2 |  |  | 482.3 |  |  | 490.0 |
Less Cash |  |  | 61.0 |  |  | 25.3 |  |  | 9.2 |
Adjusted Assets at end of current year |  |  | 461.2 |  |  | 456.9 |  |  | 480.8 |
Adjusted Average Assets |  | $ | 491.5 |  | $ | 459.0 |  | $ | 468.9 |
Adjusted Return on Assets |  |  | 8.0 | % |  | 6.2 | % |  | 3.9 | %
Sales |  | $ | 617.5 |  | $ | 531.3 |  | $ | 463.0 |
Adjusted Operating Earnings |  |  | 39.1 |  |  | 28.4 |  |  | 18.4 |
Adjusted Operating Margin(a) |  |  | 6.3 | % |  | 5.3 | % |  | 4.0 | %
Sales |  | $ | 617.5 |  | $ | 531.3 |  | $ | 463.0 |
Average Assets |  |  | 491.5 |  |  | 459.0 |  |  | 468.9 |
Asset Turns(b) |  |  | 1.26 |  |  | 1.16 |  |  | 0.99 |
Adjusted Return on Assets (a) x (b) |  |  | 8.0 | % |  | 6.2 | % |  | 3.9 | %