 Adapting to New Market ConditionsLISLE, Ill., July 31, 2020 GLOBE NEWSWIRE -- CTS Corporation NYSE: CTS today announced second quarter 2020 results. Sales were 84.2 million, down 30 year-over-year. Sales to transportation customers declined 53, and sales to other end markets grew 14. Excluding 5.4 million in sales from the QTI acquisition, sales to other end markets grew 1. Net earnings were 4.9 million or 0.15 per diluted share versus 11.9 million or 0.36 last year. Adjusted diluted EPS was 0.16. Free cash flow was 9.1 million, and at quarter-end, we were net cash positive. New business wins were 105 million.I am grateful to our teams around the globe for their resilience and care for our customers and partners in this unprecedented downturn. We are adapting our cost structure due to the prolonged impact of COVID-19, said Kieran OSullivan, CEO of CTS Corporation. We received new business awards in some promising areas. Our focus remains on key strategic growth investments. We are making progress on our diversification into non-transportation markets and continue to position the business for the opportunities ahead of us.2020 GuidanceDue to ongoing market uncertainties, management is not providing revenue or earnings guidance at this time.Conference CallAs previously announced, the Company has scheduled a conference call at 11:00 a.m. EDT today to discuss the second quarter financial results. The dial-in number is 800-309-1256 720-543-0314, if calling from outside the U.S.. The passcode is 290044. There will be a replay of the conference call from 2:00 p.m. EDT today through 2:00 p.m. EST on Friday, August 14, 2020. The telephone number for the replay is 888-203-1112 719-457-0820, if calling from outside the U.S.. The replay passcode is 7215300. A live audio webcast of the conference call will be available and can be accessed directly from the Investors section of the website of CTS Corporation at CTSCTS NYSE: CTS is a leading designer and manufacturer of products that Sense, Connect, and Move. The company manufactures sensors, actuators, and electronic components in North America, Europe, and Asia, and provides engineered products to customers in the aerospacedefense, industrial, medical, telecommunicationsIT, and transportation markets.For more information, visit HarborThis document 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. Forward-looking statements are based on managements expectations, certain assumptions and currently available information. 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 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. Many of these, and other, risks and uncertainties are discussed in further detail in Item 1A. of CTS Annual Report on Form 10-K. We undertake no obligation to publicly update our forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes.ContactAshish Agrawal Vice President and Chief Financial OfficerCTS Corporation 4925 Indiana Avenue Lisle, IL 60532 USATelephone: 1 630 577-8800 E-mail: CTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED In thousands of dollars, except per share amounts Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2020 2019 2020 2019 Net sales84,197 120,684 187,272 238,308 Cost of goods sold57,630 79,480 127,806 156,490 Gross Margin26,567 41,204 59,466 81,818 Selling, general and administrative expenses14,668 17,036 31,427 34,597 Research and development expenses5,522 6,257 12,930 13,048 Restructuring charges135 911 375 2,995 Gain on sale of assets 83 122 Operating earnings6,242 17,083 14,734 31,300 Other expense income: Interest expense909 467 1,760 933 Interest income304 440 635 872 Other income expense, net256 1,107 1,726 1,010 Total other expense, net349 1,134 2,851 1,071 Earnings before income taxes5,893 15,949 11,883 30,229 Income tax expense1,036 4,006 3,218 6,867 Net earnings4,857 11,943 8,665 23,362 Earnings per share: Basic0.15 0.36 0.27 0.71 Diluted0.15 0.36 0.27 0.70 Basic weighted average common shares outstanding:32,262 32,799 32,364 32,803 Effect of dilutive securities242 406 284 422 Diluted weighted average common shares outstanding:32,504 33,205 32,648 33,225 Cash dividends declared per share0.04 0.04 0.08 0.08 CTS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS In thousands of dollars Unaudited June 30, December 31, 2020 2019 ASSETS Current Assets Cash and cash equivalents145,981 100,241 Accounts receivable, net59,798 78,008 Inventories, net44,266 42,237 Other current assets14,750 16,992 Total current assets264,795 237,478 Property, plant and equipment, net99,349 105,038 Operating lease assets, net24,369 24,644 Other Assets Prepaid pension asset64,104 62,082 Goodwill106,056 106,056 Other intangible assets, net80,622 85,215 Deferred income taxes21,278 19,795 Other2,816 3,046 Total other assets274,876 276,194 Total Assets663,389 643,354 LIABILITIES AND SHAREHOLDERS EQUITY Current Liabilities Accounts payable32,820 48,219 Operating lease obligations3,051 2,787 Accrued payroll and benefits8,725 9,564 Accrued expenses and other liabilities33,175 36,378 Total current liabilities77,771 96,948 Long-term debt141,300 99,700 Long-term operating lease obligations24,473 24,926 Long-term pension obligations6,504 6,632 Deferred income taxes6,303 5,637 Other long-term obligations6,146 4,292 Total Liabilities262,497 238,135 Commitments and Contingencies Shareholders Equity Common stock310,953 307,932 Additional contributed capital39,775 43,689 Retained earnings515,841 509,766 Accumulated other comprehensive loss93,155 91,726 Total shareholders equity before treasury stock773,414 769,661 Treasury stock372,522 364,442 Total shareholders equity400,892 405,219 Total Liabilities and Shareholders Equity663,389 643,354 CTS CORPORATION AND SUBSIDIARIES OTHER SUPPLEMENTAL INFORMATION - UNAUDITEDEarnings Per ShareThe following table reconciles GAAP diluted earnings per share to adjusted diluted earnings per share for the Company: Three Months Ended Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 GAAP diluted earnings per share0.15 0.36 0.27 0.70 Tax affected charges to reported diluted earnings per share: Restructuring charges0.01 0.02 0.01 0.07 Foreign currency gain loss0.03 0.02 0.01 0.01 Non-cash pension expense0.01 0.02 0.01 Environmental charges0.02 0.02 Discrete tax items 0.02 Adjusted diluted earnings per share0.16 0.40 0.35 0.79 Additional InformationThe following table includes other financial information not presented in the preceding financial statements. Three Months Ended Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Depreciation and amortization expense6,611 5,995 13,143 11,919 Stock-based compensation expense817 1,579 1,045 2,793 Non-GAAP Financial MeasuresAdjusted earnings per share is a non-GAAP financial measure. The most directly comparable GAAP financial measure is diluted earnings per share.CTS adjusts for these items because they are discrete events, which have a significant impact on comparable GAAP financial measures and could distort an evaluation of our normal operating performance.CTS uses an adjusted earnings per share measure to evaluate overall performance, establish plans and perform strategic analysis. Using this measure avoids distortion in the evaluation of operating results by eliminating the impact of events which are not related to normal operating performance. Because this measure is based on the exclusion or inclusion of specific items, they may not be comparable to measures used by other companies which have similar titles. CTS management compensates for this limitation when performing peer comparisons by evaluating both GAAP and non-GAAP financial measures reported by peer companies. CTS believes that this measure is useful to its management, investors and stakeholders in that it: provides a meaningful measure of CTS operating performance, reflects the results used by management in making decisions about the business, and helps review and project CTS performance over time.We recommend that investors consider both actual and adjusted measures in evaluating the performance of CTS with peer companies. 