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 27, 2005 (April 26, 2005)

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)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02	Results of Operations and Financial Condition.
	On April 26, 2005, CTS Corporation issued a press release announcing financial results for the first quarter of 2005 as more fully described in the press release, a copy of which is attached as Exhibit 99.1 hereto and which information is incorporated herein by reference.
Item 9.01	Financial Statements and Exhibits.
	(a)      Financial Statements of Business Acquired.            Not applicable.
	(b)      Pro Forma Financial Information.            Not applicable.
	(c)      Exhibits.
	The following exhibits are filed with this report:
	Exhibit No.           Exhibit Description
	99.1                   Press Release dated April 26, 2005

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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
	By: Richard G. Cutter        Vice President, Secretary        and General Counsel
Dated: April 27, 2005

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EXHIBIT INDEX

Exhibit No.	Exhibit Description
99.1	Press Release dated April 26, 2005

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EX-99

EXHIBIT 99.1

newsrelease

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

April 26, 2005

FOR RELEASE: Immediately

CTS ANNOUNCES FIRST QUARTER RESULTS
MAINTAINS SALES AND EARNINGS GUIDANCE FOR 2005

Elkhart, IN ... CTS Corporation (NYSE:CTS) today announced first quarter 2005 revenues of $155.3 million, a 27% increase over the first quarter of 2004. First quarter sales included $23.2 million from SMTEK, which CTS acquired on January 31, 2005. Diluted earnings per share were $0.09, compared to $0.07 in the first quarter of 2004.

The Company reported revenue growth of 55% in its electronics manufacturing services (EMS) business segment compared to last year’s first quarter. Excluding SMTEK, EMS sales increased 16%, primarily due to stronger sales to the computer industry.

The Company had year-over-year revenue growth of 1% in its components and sensors business segment, as strong new product sales in automotive sensors were largely offset by lower sales into the mobile communications industry.

“Strong demand for our new automotive products and EMS were big drivers for first quarter sales growth. We are also delighted with the results we are achieving from SMTEK, as it has demonstrably enhanced our competitiveness in the EMS arena,” commented Donald Schwanz, CTS Chairman and Chief Executive Officer.

Based on the first quarter results and our outlook for the balance of the year, the Company is maintaining its full-year 2005 guidance, including revenue growth of 30% - 35% over 2004 and earnings per share in the $0.65 to $0.72 range. This estimate includes a negative adjustment of approximately $0.05 per share in conformance with the new accounting rules for contingently convertible debt. Note that this guidance reflects an estimated $0.02 per share favorable impact from the delayed implementation of the new accounting rules for expensing of stock options, partially offset by higher product launch costs incurred in the first quarter.

General Comments:

• The Company incurred $1.3 million in higher severance-related costs in the first quarter of 2005 versus first quarter of last year. Severance costs were primarily related to organizational consolidation intended to improve operational efficiencies.

• The Company generated $10.9 million of positive net operating cash flow in the first quarter of 2005, compared to a negative net operating cash flow of $6.7 million in the same period last year.

• Capital expenditures of $3.0 million were 1.9% of sales in the first quarter 2005. The Company expects full-year 2005 capital expenditures to be about $25 million.

• Total debt of $137.8 million increased $40.4 million from year-end, primarily to fund the SMTEK acquisition. Cash balances of $58.2 million decreased $2.8 million from year-end. Most of the cash balances are in foreign jurisdictions and are being considered for repatriation under the American Jobs Creation Act of 2004 at lower tax rates.

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FIRST QUARTER RESULTS - SEGMENT INFORMATION
(Dollars in millions)

		First Quarter 2005				First Quarter 2004				Fourth Quarter 2004
				Segment				Segment				Segment
		Net		Operating		Net		Operating		Net		Operating
		Sales		Earnings		Sales		Earnings		Sales		Earnings
Components & Sensors		$	64.2	$	3.6	$	63.5	$	3.0	$	66.0	$	6.9
Electronics Manufacturing Services (EMS)			91.1		2.1		58.6		1.9		76.5		2.8
	Total	$	155.3	$	5.7	$	122.1	$	4.9	$	142.5	$	9.7

Components & Sensors:     Components and sensors sales increased $0.7 million, or 1%, over the first quarter of 2004. Strong new automotive product sales were partially offset by lower sales in mobile communications. Segment operating earnings increased on slightly higher sales, ongoing cost improvement initiatives and changes in the allocation of certain factory costs to the EMS segment due to establishment of their new operations in shared Singapore facilities, partially offset by higher severance-related costs.

The first quarter components and sensors sales decreased from the fourth quarter of 2004 by $1.8 million, or 3%, reflecting seasonal factors. The segment operating earnings were below fourth quarter 2004 levels, primarily due to lower sales, reduced pension income and higher severance-related costs.

EMS:     EMS first quarter 2005 sales increased by $32.5 million, or 55%, over the first quarter of 2004. These results include two months of sales from SMTEK. Excluding SMTEK, EMS sales increased $9.4 million or 16%, primarily as a result of demand increases from the computer markets. Total segment operating earnings increased $0.2 million. Favorable impact of higher sales was partially offset by incurring shared Singapore factory costs between segments as discussed earlier, certain product launch related expenses and lower absorption of factory overhead costs due to reductions in inventory levels.

Compared to the fourth quarter of 2004, EMS segment sales increased by $14.7 million, or 19%. Excluding SMTEK, sales decreased $8.5 million, or 11%, due to seasonal factors. Total EMS segment operating earnings decreased $0.7 million primarily due to certain product launch related expenses, currency exchange and unfavorable product mix, offset in part by higher volumes.

Conference Call
As previously announced, the Company has scheduled a conference call on Wednesday, April 27, 2005 at 11:00 a.m. Eastern Daylight Time. Those interested in participating may dial 800-762-6067 (480-629-9566, if calling from outside the U.S.). No access code is needed. There will be a replay of the conference call available from 4:15 p.m. EDT on April 27, 2005, through 11:59 p.m. EDT on May 4, 2005. The telephone number for the replay is 800-475-6701 (320-365-3844, if calling from outside the U.S.). The access code is 778924. There will also be a live audio webcast of the conference call, which can be accessed directly from the Web sites of CTS Corporation (www.ctscorp.com), StreetEvents (www.StreetEvents.com), Netscape (www.netscape.com), CompuServe (www.compuserve.com) and others. AOL subscribers will have access through the Personal Finance section of AOL.

About CTS
CTS is a leading designer and manufacturer of electronic components and sensors and a provider of electronics manufacturing services (EMS) to OEMs in the automotive, computer and communications markets. CTS manufactures products in North America, Europe and Asia. CTS’ stock is traded on the NYSE under the ticker symbol “CTS.” To find out more, visit the CTS Web site at www.ctscorp.com.

Safe Harbor Statement
This press release contains certain statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the business and strategic benefits of the SMTEK acquisition, any financial or other guidance, and all statements that are not based on historical fact, but rather reflect our current expectations concerning future results and events. We make certain assumptions when making forward-looking statements, any of which could prove inaccurate, including, but not limited to, statements about our future operating results and business plans. The ultimate correctness of these forward-looking statements is dependent upon a number of known and unknown risks and events, and is subject to various uncertainties and other factors that may cause our actual results, performance, or achievements to be different from any future results, performance, or achievements expressed or implied by these statements.

For more detailed information on the risks and uncertainties associated with CTS’ business activities, see our reports filed with the SEC. CTS undertakes no obligation to publicly update its forward-looking statements, whether as a result of market or industry changes, new information or future events.

Contact: Vinod M. Khilnani, Sr. Vice President and Chief Financial Officer, or
Mitchell J. Walorski, Director of 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 - UNAUDITED
(In thousands, except per share amounts)

			Three Months Ended
			April 3, 2005			March 28, 2004
Net sales			$	155,330		$	122,147
Costs and expenses:
	Cost of goods sold			127,115			97,538
	Selling, general and administrative expenses			17,757			14,816
	Research and development expenses			4,787			4,884
Operating earnings				5,671			4,909
Other expenses (income):
	Interest expense			1,717			1,533
	Other			(445	)		16
		Total other expenses		1,272			1,549
		Earnings before income taxes		4,399			3,360
Income tax expense				1,012			840
Net earnings			$	3,387		$	2,520
Net earnings per share
	Basic		$	0.09		$	0.07
	Diluted		$	0.09		$	0.07
Cash dividends declared per share			$	0.03		$	0.03
Average common shares outstanding:
	Basic			36,398			35,957
	Diluted			40,979			36,243

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

			April 3, 2005		December 31, 2004*
Cash and cash equivalents			$	58,237	$	61,005
Accounts receivable, net				97,535		84,112
Inventories, net				57,124		42,734
Other current assets				19,419		16,295
	Total current assets			232,315		204,146
Property, plant and equipment, net				115,675		112,495
Other assets				246,651		205,536
		Total Assets	$	594,641	$	522,177
Notes payable and current portion of long-term debt			$	3,954	$	3,311
Accounts payable				72,731		55,614
Other accrued liabilities				44,494		44,036
	Total current liabilities			121,179		102,961
Long-term debt				133,861		94,150
Other liabilities				15,255		14,362
Shareholders’ equity				324,346		310,704
		Total Liabilities and Shareholders’ Equity	$	594,641	$	522,177
*The balance sheet at December 31, 2004 has been derived from the audited financial statements at that date.

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CTS CORPORATION AND SUBSIDIARIES
OTHER SUPPLEMENTAL INFORMATION
(In thousands of dollars)

The following table summarizes net sales excluding SMTEK for the EMS business segment:

	Quarter ending
						Percentage
	April 3, 2005			March 28, 2004		Growth
Net sales to external customers for the EMS business segment	$	91,166		$	58,628		55	%
Net sales of SMTEK subsequent to the January 31, 2005 acquisition		(23,180	)
Net sales excluding SMTEK for the EMS business segment	$	67,986		$	58,628		16	%
	Quarter ending
						Percentage
	April 3, 2005			December 31, 2004		Growth
Net sales to external customers for the EMS business segment	$	91,166		$	76,457		19	%
Net sales of SMTEK subsequent to the January 31, 2005 acquisition		(23,180	)
Net sales excluding SMTEK for the EMS business segment	$	67,986		$	76,457		(11	)%

Net sales excluding SMTEK for the EMS business segment is a non-GAAP financial measure which CTS defines as total net sales to external customers for the EMS business segment less the net sales of SMTEK subsequent to the January 31, 2005 acquisition. The most directly comparable GAAP financial measure is net sales to external customers for the EMS business segment. Management believes net sales excluding SMTEK for the EMS business segment provides useful information to investors so that comparisons to prior periods are meaningful. Management intends to use net sales excluding SMTEK for the EMS business segment as one measure to monitor and evaluate performance for the next few quarters.

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