CTS Sees Sales Up From First Quarter But Less Than Expected

    ELKHART, Ind.--June 12, 2002--CTS Corporation today announced that it expects second quarter sales to be up modestly from the first quarter, the first sequential quarterly increase in six quarters. A loss in the range of $.08 to $.11 per share for the second quarter is also expected.
    "While we are happy to see revenue growth returning after five down quarters, sales are lower than we had expected due to lingering softness in the communications and computing markets we serve. Communications infrastructure markets have actually continued to weaken. Continued weak end-customer demand for handsets and financial difficulties within the mobile communications sector are all contributing to a very soft market," commented Don Schwanz, CTS Chairman and Chief Executive Officer. "As a result of the softer sales, earnings will not show the volume-driven improvement that we had been looking for in the second quarter," added Schwanz.
    Commenting on the outlook for the year Schwanz said, "The continued softness in the communications and computer markets makes it unlikely that we will achieve the sales growth target of 3% to 8% that we had indicated for the year, though we are expecting sales growth going forward. Our cost reduction initiatives remain on track and are expected to yield continuing earnings improvements. At this point I still expect the Company to return to net profitability before the end of the year."
    "On the positive side, our automotive and EMS businesses are doing very well and we are seeing a very positive customer response to a number of new products with significant future growth potential," Schwanz added.

    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, based on the Company's current expectations. Actual results may differ materially from those stated 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 communications, computer and automotive markets, and in the overall economy; whether the Company is able to implement measures to improve its financial condition and flexibility; the Company's successful execution of its restructuring, consolidation and 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; and risks associated with our international operations, including trade and tariff barriers, exchange rates and political 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 electronic components and assemblies for the communications, computer and automotive 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.