EX-99.1 CHARTER 2 ex99_1.htm EXHIBIT 99.1 INVESTOR RELATIONS PRESENTATION 4-4-06 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
%