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):  December 18, 2007

CTS CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Indiana	1-4639	35-0225010
(State or Other Jurisdiction of Incorporation)	(Commission File Numbers)	(I.R.S. Employer Identification Nos.)
905 West Boulevard North
Elkhart, Indiana		46514
(Address of Principal Executive Offices)		(Zip Code)
Registrants' Telephone Number, Including Area Code:                    (574) 523-3800

(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:

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

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

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

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

Item 7.01 Regulation FD Disclosure.

A copy of material which will be used in an investor presentation delivered by CTS representatives from time to time is furnished as Exhibit No. 99.1 hereto and is incorporated herein by reference. This material contains certain non-GAAP financial measures.  CTS’ management believes that these non-GAAP financial measures are useful to investors in analyzing CTS financial performance and results of operations over time.  A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the appendix to Exhibit 99.1.

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	Investor Presentation Material

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

Date:  December 18, 2007

EXHIBIT INDEX

Exhibit No.	Exhibit Description
99.1	Investor Presentation Material

EX-99.1

December 2007

Investor Presentation

www.ctscorp.com

2

This presentation contains 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, any financial or other guidance, or statements that reflect
our current expectations concerning future results and events, and any other statements that are not
based solely on historical fact.Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date hereof.These forward-looking statements are
made subject to certain risks, uncertainties and other factors, which could cause our actual results,
performance or achievements to differ materially from those presented in the forward-looking
statements, including, without limitation, rapid technological change and general market conditions in
the automotive, communications and computer industries; reliance on key customers; CTS’ ability to
protect its intellectual property; pricing pressures and demand for CTS’ products; risks associated
with CTS’ international operations, including trade and tariff barriers, exchange rates and political
and geopolitical risks; and the impact of the accounting misstatements at its Moorpark and Santa
Clara, California locations, including the results or the impact of the SEC’s informal inquiry into these
misstatements.

For more detailed information on the risks and uncertainties associated with CTS’ business, see the
reports CTS files with the SEC.CTS undertakes no obligation to publicly update its forward-looking
statements to reflect new information or events or circumstances that arise after the date hereof,
including market or industry changes.

Safe Harbor Statement

3

Automotive

Electronic

Components

EMS Operations

Global Operations

4

®

®

Automotive

EC

EMS

Major Customers

5

Based on sales for the last four quarters through September 2007

Total CTS

EMS

59%

Components

& Sensors

41%

Automotive

27%

Communications

5%

Other

9%

Communications

15%

Computer

19%

Industrial/

Medical

17%

Defense/

Aerospace

8%

Segments

Sales By Market

6

Based on origin of sales

Regions

Customers

Top

2

Diversified Customer and Geographic Base

Increasing Manufacturing in Low Cost Regions

Low Cost

Manufacturing 42%

Sales Diversification

7

Overall Growth Target:7% - 12%

Growth Drivers 2007-2010

Components & Sensors Segment

–Automotive

•Increasing penetration of Asian customers (eg. Toyota, Honda, Chery)

•New products and product extensions being introduced (eg. Smart Actuators, and Turbocharger sensors)

•Tighter emissions regulations will drive growth

–For light vehicles, adjacent / commercial markets and Asian markets like China and India

–Electronic Components

•Communications infrastructure:New customers and products

•Military electronics:Network-centric military communications

•Piezoceramics:Extending range of capabilities (eg. Alpha Ceramics acquisition)

EMS Segment

–Focus on higher value-add / margin niche businesses (eg. Industrial, Defense and Aerospace, and Medical)

•Focus areas growing 20% plus per annum

•All EMS sites have achieved ISO13485 Medical Certification (New Hampshire in 2007)

•Scotland achieved AS9100 Aerospace Certification in 2007 complementing two existing facilities with similar
certifications.

•Launched NPI Center and express prototyping service

Mergers and Acquisitions

–New process to streamline target identification, evaluation and execution

–Acquired Alpha Ceramics to add “hard” piezo capabilities

–Two acquisition candidates with revenue in $15 - $25M range under negotiations

8

Realignment of Operations and
Workforce Reductions

•Workforce Reduction Announced December 12

–103 positions eliminated

–Broad-based throughout CTS, mostly non-U.S.

•Enhanced Shared Services Model and Product Line Transfers

–Combined manufacturing support functions at locations that serve more
than one business

–Transferred product lines to better serve key customers and leverage
capacity

Financial Impact

Total expected cost of $3.0 - $3.5M, mostly severance

Payback expected in one year

Expected to Contribute Six Cents to EPS in 2008

9

Strategy

•Aggressively expand product base.

–Content growth > unit growth.

•Broaden customer base.

•Leverage product/market strength into Asian market.

•Penetrate adjacent / commercial markets.

Targeting Double-Digit Growth Over

2008-2010

Automotive Products

10

Leveraging Capabilities Into New Market Segments To

Drive Profitable Growth

Expanding Automotive Business Into
Adjacent Markets

•Early Success in Serving Adjacent Markets:SETPS for
Motorcycles

•New Opportunities in Larger Commercial Applications:Smart
Actuators for Diesel Engines in Trucks, Ag and Construction
Equipment

–Brushless actuators with integrated position sensor for engine controls
uses technology based on CTS collaboration with Sonceboz SA

–Today annual revenues are under $10M.Commercial Market Size
estimated at $500 million

•CTS is Pursuing Strategic Opportunities to Potentially Achieve
$100M in Incremental Sales by 2012

11

Awarded 66 Platforms

•CTS currently supplies 10
major customers in North
America, Europe and Asia.

Total

Available

Market

(Including Pedal Sensors)

$150

$223

$266

$361

$381

$330

CTS Accelerator Pedal Modules Offer

Performance, Quality and Cost Advantages

CTS Sales $ in Millions

$400

Actual

$408

$414

Accelerator Pedal Module

12

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

New Zhongshan facility

fully operational

Asian Automotive Growth

13

Strategy

•Focus on higher margin engineered
components.

•Launch innovative and differentiating new products.

•Expand into new customers and applications.

•Leverage our global footprint and Asian manufacturing.

•Acquisitions to expand technology and product range
(eg. Alpha).

Leveraging Growth Opportunities

Electronic Components

14

Ceramic Filters

Frequency

Components/Modules

Resistor

Diversified Product/Market Portfolio

PZT

Switches

PRODUCTS

Consumer

Industrial/Other
(incl. Hydrophones/Printers)

Communications

(Primarily Infrastructure

Applications)

Computer

MARKETS

Medical

Defense/Aerospace

Based on 2006 Sales

Electronic Components - Sales

15

OCXO

RF

Module

Filter

WiMAX

Optical Networking

Cellular

Repeaters

Wireless

Base Station

Satellite
Communications

Infrastructure Sales

$ Millions

Major/New Customers

Alcatel - Lucent, Cisco,
Huawei 3-Comm, Motorola,
Nokia - Siemens, Powerwave

Electronic Components -
Communications Infrastructure

16

Sales

$ in Millions

Medical Ultrasound

Wide Format

Inkjet Printer Head

Undersea Energy

Exploration

Aerospace

Soft and Hard Piezo

Ceramic Material

•Newly acquired “hard” piezo technology to complement existing “soft”
piezo capabilities

•Potential opportunities in actuator technology due to broader capabilities

-Micro pump, haptics and linear motors

-Market size could reach > $200 million with 10%+ share

New Piezo Capabilities Is Expected to Spur

Innovation and Profitable Growth

$10M

Actuator

Driven

Alpha

Current

(Soft Pzt)

Electronic Components -
Piezo Electronic Elements

17

iTarget customers with complex needs.

iTarget niche sectors - defense, aerospace, medical
industrial.

iProvide turnkey services, design to direct ship.

iLeverage geographic footprint

–Local NPI and global volume assembly

–Global sourcing

Strategy

Electronics Manufacturing Solutions

18

TIER 2

4Medium/ Regional/Global
$200M - $2B

4Optimized to High Mix -
Medium Volume

gMedium - Large OEMs

gHigh Mix; Medium Volume

gSpecial Needs

CUSTOMER

Characteristics/Needs

EMS Companies

EMS Industry

19

Computer

First Nine Months 2007

•Complexity, design capabilities, and
higher service levels

•Stronger customer relationships

•Higher barriers to entry due to
certifications, etc.

•Higher margins

•Averaged five new customers per
quarter

Improved Customer/Market Mix

Computer

Communications

Other

68%

29%

2004

Characteristics of Target Markets

EMS Business

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

21

New Products/Acquisition Driving Sales Growth

$ in Millions

First Nine Months

Sales

22

Earnings Growing Faster Than Revenues

Note:Excludes restructuring

Consensus includes Sidoti, Bear Stearns and Goldman Sachs

EPS (adjusted)

23

Target Adjusted Return on Invested
Capital (ROIC)

OPERATING

MARGIN

AFTER-TAX

(NOPAT

Margin)

INVESTED CAPITAL TURNOVER

Overall ROIC Improvement on Track

2003

2004

2005

4%

2%

6%

8%

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0%

ROIC

10%

12%

4.0

EMS

Components

& Sensors

7.9%

2006

24

Capital Expenditures

Normal Level

3%

Controllable Working Capital*

Target

13%

* Controllable Working Capital Defined as Accounts Receivable + Inventories - Accounts Payable.

Efficient Utilization of Capital

4%

Balance Sheet Management

25

Strong Free Cash Flow Indicates Quality of Earnings

$ in Millions

Net Earnings and Free Cash Flow

26

Strong Balance Sheet

Supports Growth and Shareholder Value Initiatives

Current

Capital Structure

Total Debt to Capitalization

195

Total Debt

Cash

Debt to Capitalization

66

Equity

Capital Structure

27

Expect EPS Growth > Sales Growth

Value Proposition

•Positioned in high-growth markets.

•Positive cash flow.

•Leverageable capacity and operating structure.

•Strong balance sheet and conservative capital structure.

•Acquisitions and buybacks

28

APPENDIX

29

Position Sensors:

Throttle Valve

Exhaust Gas Re-circulating

Accelerator
Pedal Modules:

Pedal Position Sensors

Fuel Level

Sensing

Seat Belt
Tension Sensors

Electric Actuators:

Active Manifolds

Turbochargers

Diesel Systems

Automotive Product Applications

30

Enterprise Virtual Array Systems

Storage
Infrastructure

Communication
Infrastructure

GSM BTS

Network Routers

3G Apps

IP Infrastructure

CDMA BTS

Wireless LAN Arrays

Medical
Devices &
Equipment

Defense &
Aerospace

Pain Management

Glucose Monitoring

CO2 Cabinets

Blood Analysis

Ophthalmology

Heart Defibrillator

Thermal Weapons

Secure Phone System

Radar Systems

Defense Comms

Airport Explosives Detection

Industrial
Applications

CNC Lathes

Process Controls

Test & Measurement

Security

Ultra High-End Workstation

HVAC

Missile Systems

Modular Storage Arrays

RAID Cards

EMS Product Applications

31

Resistor &
Frequency Products

Frequency Filters
and RF Modules for
Infrastructure

Variable Resistors,
Encoders & Switches

Router

Storage

Test System

Game Controller

Server

Instrument

Piezoelectric

Medical Ultrasound

Wide Format

Inkjet Printer Head

Undersea Energy

Exploration

WiMAX

Wireless

Base Station

Telematics

Washing Machine

Garage Door

Opener

Home Repeater

Aerospace

Electronic Components Product
Applications

32

Electronic Components

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, SiemensVDO

C-MAC, M/A Com, Mtron, Raltron, Pericom,
Sirenza, Vectron, Z-Comm

Murata, TDK, UBE

BI Tech, Bourns, KOA, Vishay

Axiom, Celestica, Flextronics, Jabil,
LaBarge, Note, Plexus, Sanmina-SCI,
Simclar, Sypris Electronics, TT EMS

33

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

34

Note:Data shown excludes restructuring costs, income tax adjustments related to repatriation and material asset gains.

Other Financial Data - Income Statement

35

Other Financial Data -
Balance Sheet Metrics

CTS Corporation

Appendix 1

CTS Corporation
Reconciliation of Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share
	2006						2005						Full Year
	Q3		Q2		Q1		Q4			Q2			2005			2004			2003			2002
Earnings per share	$	0.16	$	0.14	$	0.13	$	0.19		$	0.10		$	0.53		$	0.53		$	0.36		$	(0.54	)
Tax affected charges (credits) to reported earnings per share:
Restructuring, restructuring-related, and asset impairment charges		0.02		0.03		0.04														0.10			0.45
Customer reimbursement																							(0.07	)
Gain on sale of excess equipment less LTCC severance								(0.02	)					(0.02	)
Gain on sale of excess Canadian land																	(0.05	)
Total tax affected adjustments to reported earnings per share		0.02		0.03		0.04		(0.02	)		-			(0.02	)		(0.05	)		0.10			0.38
Tax impact of cash repatriation								0.03			0.11			0.14
Impact of reversal of tax reserves											(0.04	)		(0.04	)					(0.22	)
Adjusted earnings per share	$	0.18	$	0.17	$	0.17	$	0.20		$	0.17		$	0.61		$	0.48		$	0.24		$	(0.16	)

Page 1

CTS Corporation

Free Cash Flow

($ in millions)

		2007		2007						2006								2005								Full Year
		YTD		Q3		Q2		Q1		Q4		Q3		Q2		Q1		Q4		Q3		Q2		Q1		2006		2005		2004		2003		2002
Cash flows provided from (used by) operations	$	31.2	$	15.7	$	11.4	$	4.1	$	18.7	$	11.1	$	14.8	$	2.6	$	14.8	$	5.1	$	13.7	$	10.9	$	47.2	$	44.5	$	14.0	$	25.7	$	24.1
Capital expenditures		(9.3)		(3.0)		(3.6)		(2.7)		(4.7)		(5.2)		(3.4)		(2.5)	$	(2.5)		(6.6)		(2.9)		(3.0)		(15.8)		(15.0)		(12.7)		(9.0)		(12.8)
Free cash flow	$	21.9	$	12.7	$	7.8	$	1.4	$	14.0	$	5.9	$	11.4	$	0.1	$	12.3	$	(1.5)	$	10.8	$	7.9	$	31.4	$	29.5	$	1.3	$	16.7	$	11.3

Page 2

CTS Corporation
Definition of Financial Term-"Controllable Working Capital as % of Annualized Sales"
($ in millions)
	December 31,			December 31,
	2006			1999
Net Accounts Receivables	$	106.0		$	124.7
Net Inventory		60.5			78.9
Accounts Payables		(78.2	)		(68.3	)
Controllable Working Capital		88.3			135.3
Controllable Working Capital %		12.7	%		20.0	%

Page 3

CTS Corporation
Definition of Financial Term-"Total Debt to Capitalization"
($ in millions)
	2007									2006												2005												2004			2003			2002			2001			2000
	Q3			Q2			Q1			Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1			Q4			Q4			Q4			Q4			Q4
Notes payable	$	1.9		$	1.5		$	3.5		$	5.4		$	9.5		$	12.1		$	14.1		$	13.3		$	3.0		$	3.0		$	3.5		$	3.3		$	-		$	-		$	-		$	7.4
Current portion of long-term debt		-			-			-			0.2			0.2			0.2			0.2			0.2			0.2			0.3			0.5			-						28.4			27.5			10.0
Long-term debt		60.0			60.0			60.0			60.6			60.6			64.3			68.2			68.3			94.7			85.6			133.9			94.2			75.9			67.0			125.0			178.0
Total debt		61.9			61.5			63.5			66.2			70.3			76.6			82.5			81.8			97.9			88.9			137.9			97.5			75.9			95.4			152.5			195.4
Total shareholders' equity		329.6			325.5			323.6			319.0			346.5			339.5			333.6			328.1			323.8			322.7			324.3			310.7			294.2			265.0			242.9			246.4
Total capitalization	$	391.6		$	387.0		$	387.1		$	385.2		$	416.8		$	416.1		$	416.1		$	409.9		$	421.7		$	411.6		$	462.2		$	408.2		$	370.1		$	360.4		$	395.4		$	441.8
Total debt to capitalization		15.8	%		15.9	%		16.4	%		17.2	%		16.9	%		18.4	%		19.8	%		20.0	%		23.2	%		21.6	%		29.8	%		23.9	%		20.5	%		26.5	%		38.6	%		44.2	%

Page 4

CTS Corporation
Reconciliation of Operating Earnings to Adjusted Operating Earnings
($ in millions)
	2006			2006			2006			2005			Full Year
	Q3			Q2			Q1			Q4			2006			2005			2004			2003			2002
Operating earnings (loss)	$	8.5		$	7.6		$	7.6		$	13.5		$	32.8		$	37.9		$	31.1		$	13.8		$	(14.8	)
Charges (credits) to reported operating earnings (loss):
Restructuring, restructuring-related, and asset impairment charges		0.8			1.4			2.1						4.3									4.6			19.6
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	)
Total adjustments to reported operating earnings (loss)		0.8			1.4			2.1			(1.2	)		4.3			(1.2	)		(2.7	)		4.6			16.5
Adjusted operating earnings, excluding the above referenced items	$	9.3		$	9.0		$	9.7		$	12.3		$	37.1		$	36.7		$	28.4		$	18.4		$	1.7
Adjusted operating earnings, excluding the above reference items,  as a percentage of total sales		5.6	%		5.4	%		6.5	%		7.9	%		5.7	%		5.9	%		5.3	%		4.0	%		0.4	%

Page 5

CTS Corporation
Reconciliation of Net Earnings to Adjusted Net Earnings
($ in millions)
	2006									2005						Full Year
	Q3			Q2			Q1			Q4			Q2			2006			2005			2004			2003			2002
Net earnings (loss)	$	6.2		$	5.3		$	5.0		$	7.5		$	3.9		$	24.2		$	20.8		$	19.9		$	12.6		$	(17.9	)
Charges (credits) to reported net earnings (loss):
Restructuring, restructuring-related, and asset impairment charges		0.8			1.4			2.1									4.3									4.6			19.6
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	)
Total adjustments to reported net earnings (loss)		0.8			1.4			2.1			(1.2	)		-			4.3			(1.2	)		(2.7	)		4.6			16.5
Total adjustments, tax affected		0.6			1.1			1.6			(0.9	)		-			3.4			(0.9	)		(2.1	)		3.4			12.4
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	)					(1.7	)					(7.9	)
Adjusted net earnings (loss)	$	6.8		$	6.4		$	6.6		$	8.1		$	6.7		$	27.6		$	24.2		$	17.8		$	8.1		$	(5.5	)
Adjusted net earnings (loss) as a percentage of total sales		4.1	%		3.9	%		4.4	%		5.2	%		4.3	%		4.2	%		3.9	%		3.3	%		1.7	%		-1.2	%

Page 6

CTS Corporation
Reconciliation of Gross Margin to Adjusted Gross Margin
($ in millions)
	Q2			Q1
	2006			2006
Gross Margin	$	31.8		$	30.0
Charges (credits) to reported gross margin:
Restructuring-related costs included in cost of goods sold		0.5			0.2
Total adjustments to reported gross margin		0.5			0.2
Adjusted gross margin	$	32.3			30.2
Adjusted gross margin as a percentage of total sales		19.5	%		20.1	%

Page 7

CTS Corporation ADJUSTED EBITDA ($ in millions)
	2007	2007			2006				2005				Full Year
	YTD	Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1	2006	2005	2004	2003	2002
Net earnings (loss)	$      17.7	$     7.8	$     5.9	$     4.0	$     7.7	$     6.2	$     5.3	$     5.0	$     7.6	$     5.9	$     3.9	$     3.4	$   24.2	$   20.8	$   19.9	$   12.6	$ (17.9)
Depreciation and amortization expense	17.0	5.4	5.8	5.8	5.9	5.8	6.5	6.7	7.2	6.2	6.8	6.9	24.9	27.1	26.1	33.6	43.4
Interest expense	2.3	0.9	0.7	0.7	0.8	0.8	1.0	1.1	1.3	1.3	1.6	1.7	3.7	5.9	5.5	7.6	10.2
Tax expense (benefit)	4.8	2.1	1.6	1.1	1.5	1.9	1.5	1.6	4.8	1.6	4.9	1.0	6.5	12.3	6.1	(6.3)	(5.9)
EBITDA	$      41.8	$   16.2	$   14.0	$   11.6	$   15.9	$   14.7	$   14.3	$   14.4	$   20.9	$   15.0	$   17.2	$   13.0	$   59.3	$   66.1	$   57.6	$   47.5	$  29.8
Charges (credits) to EBITDA:
Restructuring, restructuring-related, and asset impairment charges						0.8	1.4	2.1					4.3			4.6	19.6
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)
Total adjustments to reported EBITDA	-	-	-	-	-	0.8	1.4	2.1	(1.2)	-	-	-	4.3	(1.2)	(2.7)	4.6	16.5
Adjusted EBITDA	$      41.8	$   16.2	$   14.0	$   11.6	$   15.9	$   15.5	$   15.7	$   16.5	$   19.7	$   15.0	$   17.2	$   13.0	$   63.6	$   64.9	$   54.9	$   52.1	$  46.3
Adjusted EBITDA % of total sales	8.2%	9.3%	8.3%	7.1%	9.2%	9.4%	9.5%	11.0%	12.7%	10.1%	10.9%	8.4%	9.7%	10.5%	10.3%	11.3%	10.1%

Page 8

CTS Corporation
Definition of Financial Term -
Adjusted Return on Invested Capital
	Full Year
	2006			2005			2004			2003
Operating earnings	$	32.8		$	37.9		$	31.1		$	13.8
Charges (credits) to reported operating earnings:
Restructuring and asset impairment charges		4.3									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		4.3			(1.2	)		(2.7	)		4.6
Adjusted operating earnings	$	37.1		$	36.7		$	28.4		$	18.4
Tax rate		21	%		24	%		23	%		25	%
Tax effected adjusted operating earnings	$	29.3		$	27.9		$	21.9		$	13.8
Invested Capital:
Current Year:
Shareholders' equity	$	319.0		$	328.1		$	310.7		$	294.2
Long-term debt		60.6			68.3			94.2			75.9
Notes payable and current portion of LT debt		5.6			13.5			3.3			-
Less:  Cash		(38.6	)		(12.0	)		(61.0	)		(25.4	)
Invested capital	$	346.6			397.9			347.2			344.7
Prior Year:
Shareholders' equity		328.1			310.7			294.2			265.0
Long-term debt		68.3			94.2			75.9			67.0
Notes payable and current portion of LT debt		13.5			3.3			-			28.3
Less:  Cash		(12.0	)		(61.0	)		(25.4	)		(9.2	)
Invested capital		397.9			347.2			344.7			351.1
Adjusted invested capital	$	372.3		$	372.6		$	346.0		$	347.9
Adjusted return on invested capital		7.9	%		7.5	%		6.3	%		4.0	%
Sales	$	655.6		$	617.5		$	531.3		$	463.0
Tax effected adjusted operating earnings		29.3			27.9			21.9			13.8
Tax effected adjusted operating margin as a  percentage of sales (a)		4.5	%		4.5	%		4.1	%		3.0	%
Sales	$	655.6		$	617.5		$	531.3		$	463.0
Adjusted invested capital		372.3			372.6			346.0			347.9
Invested capital turns (b)		1.76			1.66			1.54			1.33
Adjusted return on invested capital (a) x (b)		7.9	%		7.5	%		6.3	%		4.0	%

Page 9

CTS Corporation
Reconciliation of Project Full Year Earnings Per Share to Adjusted Projected Earnings Per Share
	Year Ended December 31, 2007 (2)		Year Ended December 31, 2006 (1)
Projected GAAP earnings per share	$	0.59 - $0.62	$	0.66 - $0.69
Restructuring and related charges		0.06		0.08
Adjusted earnings per share	$	0.65 - $0.68	$	0.74 - $0.77

1. Estimate as of 10/24/2006 

2. Estimate as of 10/23/2007

Page 10