8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  April 23, 2003 (April 22, 2003)

CTS CORPORATION

(Exact name of registrant as specified in its charter)

Indiana	1-4639	35-0225010
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

905 West Boulevard North, Elkhart, IN	46514
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 574-293-7511

(Former Name or Former Address, if Changed Since Last Report)

Item 7.	Financial Statements and Exhibits.
	(a)      Financial Statements of Business Acquired.            Not applicable.
	(b)      Pro Forma Financial Information.            Not applicable.
	(c)      Exhibits.
	The following exhibit is filed with this report:
	Exhibit No.           Exhibit Description
	99.1                   Press Release dated April 22, 2003
Item 9.	Regulation FD Disclosure.
	This information, required by "Item 12. Results of Operations and Financial Condition", is being furnished under "Item 9. Regulation FD Disclosure" in accordance with SEC Release No. 33-8216. On April 22, 2003, CTS Corporation issued a press release announcing financial results for the first quarter of 2003 as more fully described in the press release, a copy of which is filed as Exhibit 99.1 hereto and which information is incorporated herein by reference.

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SIGNATURES

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 hereunto duly authorized.

	CTS Corporation
	/s/ Richard G. Cutter III
	By: Richard G. Cutter III        Vice President, Secretary and        General Counsel
Dated: April 23, 2003

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EXHIBIT INDEX

Exhibit No.	Exhibit Description
99.1	Press Release dated April 22, 2003

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EX-99

EXHIBIT 99.1

newsrelease

   CTS CORPORATION Elkhart,Indiana 46514 • (574) 293-7511

April 22, 2003

FOR RELEASE: Immediately

CTS CONTINUES PROFITABLE PERFORMANCE

Delivers strong positive cash flow.

Elkhart, IN…CTS Corporation (NYSE:CTS) today announced first quarter 2003 results, with diluted earnings per share of $0.02, $0.01 better than consensus estimate.

First quarter revenues were $105.8 million, down 6% from the first quarter of 2002. The decline in sales from the year ago period primarily reflects the Company’s decision to discontinue the manufacture of certain components used in cell phone applications.

Net earnings for the first quarter were $0.6 million, or $0.02 per share diluted, versus a net loss of $1.9 million, or $0.06 loss per share diluted, in the first quarter of 2002. Last year’s first quarter included an earnings per share negative impact of $0.02 for restructuring-related one-time charges as well as $0.07 earnings per share gain from a one-time customer reimbursement.  Contributing to the earnings improvement from last year’s first quarter were lower operating expenses due to the Company’s restructuring and cost reduction programs, and lower depreciation and interest expenses.

Commenting on the first quarter results, Donald Schwanz, CTS Chairman and Chief Executive Officer, said, “I am pleased with our continuing progress in reducing our cost structure and improving profitability. While we had expected sales to decline from the fourth quarter of 2002 due to seasonal factors, it is also clear that the markets we serve continue to exhibit weakness. However, our new business development initiatives are meeting our expectations and we believe they will provide the foundation for future growth and profitability. Significant new product and customer wins were achieved in automotive sensors, components and our EMS business. In what remains a very challenging environment, our focus continues to be on margin improvement, through cost reduction and improved product mix, accelerating growth initiatives, and effectively managing our balance sheet and cash flow.”

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General Comments:

o Net cash provided by operations and investing activities was $8.2 million and $1.7 million, respectively, for the first quarter. Free cash flow, defined as cash provided by operating activities, less net cash used in or provided by investing activities, was $9.9 million. This amount includes $3.9 million of proceeds from sales of assets.

o Total debt was reduced to $85.2 million, down $10.2 million from the last quarter, and down $34.9 million from the first quarter of 2002.  Bank debt was reduced to $18.2 million.

o The total debt to capitalization ratio decreased to 24%, down from 26% at 2002 year end, and lower than the 31% at the end of the 2002 first quarter.

o During the quarter, the Company ceased production of 3.2 mm x 5 mm TCXO components used in cell phone applications and sold the production assets to TXC Corporation under a previously announced agreement. CTS announced its intent to exit this product line in 2002.

o During the quarter, the Company opened a new sales office in Shanghai to support sales development for automotive sensors and components. CTS sales of automotive sensors to the Asian market have grown from an annual amount of approximately $2 million in 2001 to an annual run-rate of over $6 million, based upon the first quarter of 2003.

o The Tianjin Economic-Technological Development Area recently ranked the CTS Tianjin, China operation as 18 of the Top 100 Companies operating in the Area for 2002.

o The Company took specific actions to mitigate the risk of SARS to the Company, its employees, customers and other stakeholders. These actions included employee education, travel restrictions, and ongoing health monitoring. The Company has also established procedures to deal with a reported illness, including backup plans to minimize potential business interruptions.

o The first quarter dividend of $0.03 per share was declared. The Company has paid dividends continuously for over 70 years.

FIRST QUARTER RESULTS - SEGMENT INFORMATION
(Dollars in millions)

		First Quarter 2003				First Quarter 2002					Fourth Quarter 2002
								Operating
		Net		Operating		Net		Earnings/			Net		Operating
		Sales		Earnings		Sales		(Loss)			Sales		Earnings
Components & Sensors		$	60.3	$	0.3	$	64.9	$	(3.1	)*	$	64.5	$	0.1
Electronics Manufacturing Services (EMS)			45.5		2.3		47.7		3.3			52.0	$	2.9
	Total	$	105.8	$	2.6	$	112.6	$	0.2	*	$	116.5	$	3.0

* Includes restructuring-related charges of $0.8 million, and gain from a customer reimbursement of $3.1 million.

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Components & Sensors: Components and sensors sales decreased by $4.6 million, or 7%, from the first quarter of 2002, primarily as a result of lower volumes for some components products used in cell phone applications, that were announced as “end of life” in the third quarter of 2002. Improved product mix in components and sensors products, combined with cost reduction from consolidation and efficiency improvement programs, generated improved positive operating earnings despite lower sales. First quarter sales were down from the fourth quarter of 2002 by $4.2 million or 7%, due to seasonal fluctuations in production schedules in the communications market, as well as lower volumes for the “end of life” products. Operating earnings improved from the fourth quarter of 2002, as a result of the profit improvement and cost reduction programs, and lower depreciation expense.

EMS: EMS sales decreased from the first quarter of 2002 by $2.2 million or 5%, primarily as a result of lower demand for networking and other infrastructure systems equipment. Profitability decreased due to lower volume and product mix within the EMS segment. Segment sales were below the fourth quarter of 2002 by $6.5 million or 13%, primarily due to the lower demand in the communications infrastructure and the data storage systems equipment served markets. Segment operating earnings were down due to lower volumes.

_________________

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

_________________

CTS Corporation is a leading designer and manufacturer of components and sensors, and EMS for the automotive, computer and communications markets. The Company manufactures products in North America, Europe and Asia. Worldwide sales coverage is accomplished through a network of direct sales personnel, independent manufacturers’ representatives and electronic distributors. The Company’s stock is traded on the NYSE under the ticker symbol “CTS.” To find out more, visit the Company’s website at www.ctscorp.com.

Contact: Vinod M. Khilnani, Sr. Vice President and Chief Financial Officer, or
George T. Newhart, Vice President Investor Relations
CTS Corporation
905 West Boulevard North
Elkhart, IN 46514
Telephone (574) 293-7511 FAX (574) 293-6146
www.ctscorp.com

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CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) - UNAUDITED
(In thousands, except per share amounts)

			Three Months Ended
			March 30, 2003			March 31, 2002
Net sales			$	105,769		$	112,593
Costs and expenses:
	Cost of goods sold			84,686			89,915	(1)
	Selling, general and administrative expenses			12,848			15,317
	Research and development expenses			5,641			7,133
		Operating earnings		2,594			228
Other expenses (income):
	Interest expense			1,972			2,670
	Other			(139	)		92
		Total other expenses		1,833			2,762
		Earnings (loss) before income taxes		761			(2,534	)
		Income tax expense (benefit)		190			(633	)
Net earnings (loss)			$	571		$	(1,901	)
Net earnings (loss) per share
	Basic		$	0.02		$	(0.06	)
	Diluted		$	0.02		$	(0.06	)
	Cash dividends paid per share		$	0.03		$	0.03
Average common shares outstanding:
	Basic			34,020			31,802
	Diluted			34,258			31,802

(1) Cost of goods sold include restructuring-related, one-time charges of $0.8 million consisting primarily of
equipment relocations and other employee-related costs, and one-time gain from a customer
reimbursement of $3.1 million.

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CTS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS - Unaudited
(In thousands of dollars)

	March 30, 2003		December 31, 2002*
	(UNAUDITED)
Cash and equivalents	$	7,661	$	9,225
Accounts receivable, net		59,783		63,802
Inventories, net		36,114		36,262
Other current assets		42,208		43,045
Total current assets		145,766		152,334
Property, plant and equipment, net		142,913		148,632
Other assets		186,928		189,066
Total Assets	$	475,607	$	490,032
Current maturities of long-term debt	$	18,200	$	28,350
Accounts payable		47,453		44,490
Other accrued liabilities		55,224		61,716
Total current liabilities		120,877		134,556
Long-term debt		67,000		67,000
Other liabilities		23,467		23,456
Shareholders’ equity		264,263		265,020
Total Liabilities and Shareholders' Equity	$	475,607	$	490,032
*The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date.

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