EMS: EMS first quarter 2012 sales decreased $8.9 million, or 11%, from the first quarter of 2011, due primarily to the impact from the Thailand floods. Sales decreased in communications and computer markets, partially offset by increases in industrial markets. Segment operating earnings contribution before corporate and shared services charges was $0.5 million. This was $1.4 million lower than the first quarter 2011 primarily from the lower sales and flood-related costs incurred in the first quarter 2012 in excess of insurance recoveries.

EMS first quarter 2012 sales decreased $2.7 million, or 4%, from the fourth quarter of 2011. Sales decreased in the defense and aerospace and communications markets, partially offset by increases in the industrial and medical markets. The first quarter segment operating earnings contribution before corporate and shared services charges of $0.5 million was $3.3 million unfavorable to the fourth quarter, primarily on lower sales, less favorable product mix and the lower insurance recovery of $1.6 million for property damage.

Conference Call

As previously announced, the Company has scheduled a conference call on Wednesday, April 25, 2012 at 11:00 a.m. EDT. Those interested in participating may dial 800-288-8960 (612-338-1040, if calling from outside the U.S.). No access code is needed. There will be a replay of the conference call available from 1:30 p.m. EDT on Wednesday, April 25, 2012 through 11:59 p.m. EDT on Wednesday, May 2, 2012. The telephone number for the replay is 800-475-6701 (320-365-3844, if calling from outside the U.S.). The access code is 244201. Also, please note that a live audio webcast of the conference call will be available and can be accessed directly from the Web sites of CTS Corporation www.ctscorp.com, StreetEvents www.streetevents.com, Netscape netscape.aol.com, Compuserve www.compuserve.com and others.

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, communications, medical, defense and aerospace, industrial and computer 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 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, 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 and are based on various assumptions as to future events, the occurrence of which necessarily are subject to uncertainties. These forward-looking statements are made subject to 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: changes in the economy generally and in respect to the businesses in which CTS operates; unanticipated issues in integrating acquisitions; rapid technological change; general market conditions in the automotive, communications and computer industries, as well as conditions in the industrial, defense and aerospace and medical markets; reliance on key customers; unanticipated natural or other events such as the Japan earthquake and floods in Thailand; the ability to protect our intellectual property; pricing pressures and demand for our products; and risks associated with our international operations, including trade and tariff barriers, exchange rates and political and geographical risks. For more detailed information on the risks and uncertainties associated with CTS’ business, see the reports CTS files with the Securities and Exchange Commission available at http://www.ctscorp.com/investor_relations/investor.htm. 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.
(In thousands, except per share amounts)
Three Months Ended
April 1 April 3
2012 2011
Net sales $ 146,969 $ 151,518
Costs and expenses:
Cost of goods sold 124,920 122,358
Insurance recovery for business interruption (3,627 ) -
Selling, general and administrative expenses 19,404 18,372
Research and development expenses 6,109 5,029
Insurance recovery for property damage   (1,769 )   -  
Operating earnings 1,932 5,759
Other (expense) / income:
Interest expense, net (210 ) (296 )
Other   575     1,130  
Total other income   365     834  
Earnings before income taxes 2,297 6,593
Income tax expense   14     1,477  
Net earnings $ 2,283   $ 5,116  
Net earnings per share:
Basic $ 0.07   $ 0.15  
Diluted $ 0.07   $ 0.15  
Cash dividends declared per share $ 0.035   $ 0.03  
Average common shares outstanding:
Basic 34,106 34,293
Diluted 34,718 35,075
CTS Corporation and Subsidiaries
Condensed Consolidated Balance Sheets - Unaudited
(In thousands of dollars)
April 1, December 31,
2012 2011
Cash and cash equivalents $ 84,441 $ 76,412
Accounts receivable, net 89,867 88,345
Inventories, net 92,069 92,540
Other current assets   26,838   26,089
Total current assets   293,215   283,386
Property, plant & equipment, net 89,680 84,860
Other assets 125,771 112,569
Total Assets $ 508,666 $ 480,815

Notes payable and current portion of long-term debt
$ - $ -
Accounts payable 74,559 80,468
Other accrued liabilities   41,657   43,769
Total current liabilities   116,216   124,237
Long-term debt 108,700 74,400
Other obligations 18,853 18,881
Shareholders' equity 264,897 263,297


Total Liabilities and Shareholders' Equity
$ 508,666 $ 480,815

Earnings per Share
The following table reconciles GAAP earnings per share to adjusted earnings per share for the Company:
GAAP Q1 2012 Earnings Per Share $ 0.07

Items Impacting Q1 2012 earnings per share:
Thailand flood-related interruption impact on Q1, not yet collected from insurer 0.08
Costs incurred, timing-related, to be recovered from customers in Q2, for prototype billings and rare earth material pricing 0.02
Costs incurred for non-recurring legal costs and product launch costs/product transfers 0.02
Insurance recovery for property damage and expenses for 2011 (0.05 )
Total adjustments   0.07
Q1 2012 Adjusted Earnings Per Share $ 0.14

Additional Information
The following table includes other financial information not presented in the preceding financial statements.
Three Months Ended
$ In thousands Apr 1 Apr 3

2012 2011
Depreciation and Amortization $ 4,790 $ 4,401
Equity Based Compensation 1,214 1,180

Non-GAAP financial measures are discussed below.


Non-GAAP Financial Measures

Adjusted earnings per share is a non-GAAP financial measure. The most directly comparable GAAP financial measure is diluted earnings per share.

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