UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for the Quarterly Period Ended September 28, 1997
CTS CORPORATION
905 West Boulevard North
Elkhart, Indiana 46514
(219)293-7511
Indiana 1-4639 35-0225010
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
The Company (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the period that the Company was required to file such
reports, and (2) has been subject to such filing requirements for
the past 90 days.
The number of shares of the Company's Common Stock outstanding at
November 7, 1997, was 5,264,167.
<PAGE>
CTS CORPORATION AND SUBSIDIARIES
INDEX
Page No.
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of
Earnings - For the Three Months and Nine Months
Ended September 28, 1997, and September 29, 1996 3
Condensed Consolidated Balance Sheets -
As of September 28, 1997, and December 31, 1996 4
Condensed Consolidated Statements of Cash
Flows - For the Nine Months Ended September 28,
1997, and September 29, 1996 5
Notes to Condensed Consolidated Financial
Statements 6-8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 9-11
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 4. Submission of Matters to a Vote of
Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12-14
SIGNATURES 15
<PAGE>
Part I. -- FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS UNAUDITED
(In thousands of dollars, except per share amounts)
<CAPTION> Three Months Ended Nine Months Ended
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net sales $89,980 $76,457 $288,731 $240,463
Costs and expenses:
Cost of goods sold 64,818 55,731 209,441 178,064
Selling, general and
administrative expenses 10,404 9,987 34,270 31,967
Research and development
expenses 3,134 2,892 9,183 7,780
Operating earnings 11,624 7,847 35,837 22,652
Other expenses (income):
Interest expense 976 337 1,649 1,124
Other (1,594) (521) (2,517) (1,986)
Total other (income) (618) (184) (868) (862)
Earnings before income
taxes 12,242 8,031 36,705 23,514
Income taxes 4,530 2,971 13,581 8,700
Net earnings before
equity in Dynamics
Corporation of
America $ 7,712 $ 5,060 $ 23,124 $ 14,814
Net loss from equity
investment in Dynamics
Corporation of America* (29) -- (29) --
Net earnings $ 7,683 $ 5,060 $ 23,095 $14,814
Net earnings per share** $ .48 $ .32 $ 1.45 $ .94
Cash dividends declared
per share** $ .06 $ .06 $ .18 $ .16
Average common and common
equivalent shares
outstanding** 15,927,087 15,794,208 15,900,369 15,775,587
* Includes CTS' share of Merger related expenses of $1,213.
** Reflects the 3 for 1 stock split in the form of a stock dividend to
shareholders of record on October 24, 1997.
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>Part I. -- FINANCIAL INFORMATION
CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
September 28, December 31,
1997 1996*
ASSETS (Unaudited)
Current Assets
Cash $ 49,578 $ 44,957
Accounts receivable, less allowances
(1997--$851; 1996--$622) 53,334 43,984
Inventories--Note B 29,901 38,761
Other current assets 5,936 3,787
Deferred income taxes 6,712 6,712
Total current assets 145,461 138,201
Property, Plant and Equipment, less accumulated
depreciation (1997--$128,546; 1996--$133,286) 59,726 56,103
Other Assets
Investment in DCA--Note D 68,364
Goodwill, less accumulated amortization
(1997--$8,868; 1996--$8,361) 3,553 4,039
Prepaid pension 55,309 50,152
Other 2,475 877
Total other assets 129,701 55,068
$334,888 $249,372
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current maturities of long-term obligations $ 4,646 2,427
Accounts payable 20,012 17,146
Accrued liabilities 45,150 31,818
Total current liabilities 69,808 51,391
Long-term Obligations--Note C 58,755 11,220
Deferred Income Taxes 16,146 16,146
Postretirement Benefits 4,311 4,383
Shareholders' Equity:
Common stock-authorized 8,000,000 shares with-
out par value; issued 5,807,031 shares** 33,805 33,540
Retained earnings 164,380 144,112
Cumulative translation adjustment (4) 1,373
198,181 179,025
Less cost of common stock held in treasury:
1997--557,442 shares; 1996--582,075 shares** 12,313 12,793
Total shareholders' equity 185,868 166,232
$334,888 $249,372
* The balance sheet at December 31, 1996, has been derived from the
audited financial statements at that date.
** Does not reflect the increase in authorized capitalization to
75,000,000 common shares and 25,000,000 preferred shares on October 16,
1997, and the 3 for 1 stock split in the form of a stock dividend to
shareholders of record on October 24, 1997.
See notes to condensed consolidated financial statements.
<PAGE>Part I. -- FINANCIAL INFORMATION
CTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED
(In thousands of dollars)
Nine Months Ended
September 28, September 29,
1997 1996
Cash flows from operating activities:
Net earnings $23,095 $14,814
Depreciation and amortization 11,224 9,552
(Increase) decrease in:
Accounts receivable (9,350) (7,043)
Inventories 8,860 648
Other current assets (2,149) (1,547)
Prepaid pension asset (5,157) (3,897)
Other (1,148) (40)
Increase in:
Accounts payable and accrued liabilities 16,198 8,135
Total adjustments 18,478 5,808
Net cash provided by operating activities 41,573 20,622
Cash flows from investing activities:
Proceeds from sale of property, plant and
equipment 1,843 724
Capital expenditures (16,115) (13,043)
Investment in DCA--Note D (68,364)
Net cash used in investing activities (82,636) (12,319)
Cash flows from financing activities:
Term loan borrowings--Note C 50,000
Credit agreement arrangement fee (937)
Payments of long-term obligations (214) (304)
Decrease in notes payable (6,685)
Dividend payments (2,822) (2,505)
Other 531 334
Net cash provided by (used in) financing
activities 46,558 (9,160)
Effect of exchange rate changes on cash (874) 232
Net increase (decrease) in cash 4,621 (625)
Cash at beginning of year 44,957 37,271
Cash at end of period $49,578 $36,646
Supplemental cash flow information
Cash paid during the period for:
Interest $ 1,302 $ 1,134
Income taxes--net $ 6,804 $ 3,855
See notes to condensed consolidated financial statements.
<PAGE>Part I. -- FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands of dollars, except per share data)
September 28, 1997
NOTE A--BASIS OF PRESENTATION
The accompanying condensed consolidated interim financial
statements have been prepared by CTS Corporation ("CTS" or
"Company"), without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission (the "SEC"). Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such rules and
regulations. The consolidated interim financial statements should
be read in conjunction with the financial statements, notes thereto
and other information included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
The accompanying unaudited consolidated interim financial
statements reflect, in the opinion of management, all adjustments
(consisting of normal recurring items) necessary for a fair
presentation, in all material respects, of the financial position
and results of operations for the periods presented. The
preparation of financial statements in accordance with generally
accepted accounting principles requires management to make
estimates and assumptions. Such estimates and assumptions affect
the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates. The results of operations for the interim periods are
not necessarily indicative of the results for the entire year.
NOTE B--INVENTORIES
The components of inventory consist of the following:
September 28, December 31,
1997 1996
Finished goods $7,475 $ 8,504
Work-in-process 10,992 17,138
Raw material 11,434 13,119
$29,901 $38,761
NOTE C--LONG-TERM OBLIGATIONS
The Company, on June 16, 1997, entered into a Credit Agreement with
a group of banks which provides financing of up to $125,000. This
six-year, unsecured credit facility consists of a $50,000 term loan
commitment and a $75,000 revolving credit facility. On June 16,
1997, the Company borrowed $50,000 under the term loan commitment
to purchase DCA common stock (See Note D--Subsequent Events).
Part I.-- FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont.)
The borrowing rate through March 31, 1998, is LIBOR plus 0.50% with
adjustments thereafter. At September 28, 1997, the rate on the
term loan was 6.2%. The Company paid an arrangement fee of $937
for this credit facility. There is a commitment fee on the unused
portion of the revolving credit facility of 0.175% per annum. The
term loan matures on a quarterly basis. These maturities, on an
annual basis, are $3,000 in 1998, $5,000 in 1999, $10,000 in 2000,
2001, and 2002, respectively, and $12,000 in 2003.
The Credit Agreement contains customary limitations and restrictive
financial covenants. The covenants include financial maintenance
tests consisting of a leverage ratio, a minimum tangible net worth
test and a fixed charge coverage ratio which is the most
restrictive of these covenants. The term loan has prepayment
provisions if certain events occur.
The Company terminated the previously existing $45,000 unsecured
revolving credit agreement.
NOTE D--SUBSEQUENT EVENTS
On October 16, 1997, the Company completed the acquisition of
Dynamics Corporation of America ("DCA") pursuant to a merger of DCA
and a subsidiary of CTS (the "Merger"). The subsidiary of CTS is
the surviving corporation and is wholly owned by the Company. CTS
shareholders on October 16, 1997, approved an increase in CTS'
authorized capitalization to 75,000,000 common shares and
25,000,000 preferred shares. CTS shareholders also approved a 3
for 1 stock split in the form of a stock dividend to CTS
shareholders of record on October 24, 1997. All per share amounts
have been restated to reflect the stock split.
DCA is a diversified manufacturer of commercial and industrial
products. Its six business units manufacture electronic
components, mobile vans and transportable shelters for specialized
electronic and diagnostic equipment, portable electric housewares
and commercial appliances, air distribution equipment, specialized
air-conditioning equipment and generator sets. DCA owned 43.9% of
the outstanding CTS common stock prior to the Merger.
In the Merger approximately 2,624,567 shares of DCA common stock were
converted into approximately 2,309,619 CTS common shares. The cost of
the acquisition will approximate $241,874 and will be accounted for as
a purchase in the fourth quarter of 1997. Results of operations for DCA
will be included with those of the Company for periods subsequent to the
Merger.
For the three-month period ended September 28, 1997, the Company's
investment in DCA has been accounted for on the equity method.
Part I.-- FINANCIAL INFORMATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont.)
The following unaudited pro forma summary is based on a preliminary
allocation of the purchase price and presents the consolidated
results of operations as if the combination had occurred as of the
beginning of the periods presented, and is not necessarily
indicative of CTS' operating results that would have occurred had
the Merger been consummated as of such dates, or of results which
may occur in the future.
Nine Months Ended Nine Months Ended
September 28, 1997 September 29, 1996
Net sales $391,438 $336,661
Net earnings 20,648 12,736
Net earnings per share $1.30* $.81*
* Reflects the 3 for 1 stock split in the form of a stock dividend
to shareholders of record on October 24, 1997.
In connection with the Merger, 400,000 options to acquire CTS stock
were granted to certain officers at $62.50 per share. Pursuant to
the terms of the grant, the options vested 100% effective with the
Merger. Based on the value of CTS shares on the date of the Merger
and the option price of $62.50 per share, a $10.2 million (net of
an estimated $6.0 million tax benefit) charge to expense was
required to be recorded. The actual tax benefit to be realized
will depend on the amounts calculated upon exercise of the options.
<PAGE>
Part I. -- FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Material Changes in Financial Condition: Comparison of
September 28, 1997, to December 31, 1996
The following table highlights significant changes in balance sheet
captions and ratios and other information related to liquidity and
capital resources:
September 28, December 31, Increase
1997 1996 (Decrease)
Cash $49,578 $44,957 $4,621
Accounts receivable, net 53,334 43,984 9,350
Inventories, net 29,901 38,761 (8,860)
Current assets 145,461 138,201 7,260
Accounts payable 20,012 17,146 2,866
Accrued liabilities 45,150 31,818 13,332
Current liabilities 69,808 51,391 18,417
Working capital 75,653 86,810 (11,157)
Current ratio 2.08 2.69 (0.61)
Long-term obligations 63,401 13,647 49,754
Net tangible worth 182,315 162,193 20,122
Ratio of long-term obligations
to net tangible worth .35 .08 .27
From December 31, 1996, to September 28, 1997, cash of CTS
Corporation and its subsidiaries ("CTS" or "Company") increased
$4.6 million. The increase in cash reflects decreased working
capital, primarily due to decreases in inventories and increased
current liabilities during 1997.
Capital expenditures were $16.1 million for the first nine months
of 1997, compared with $13.0 million for the same period a year
earlier. Capital expenditures continued to relate to increased
manufacturing capacity, new products and manufacturing improvement
programs.
The $49.8 million increase in long-term obligations is the result
of the $50.0 million term loan borrowing.
<PAGE>Part I -- FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Material Changes in Results of Operations: Comparison of Third
Quarter 1997 to Third Quarter 1996
The following table highlights changes in significant components of
the consolidated statements of earnings for the three-month periods
ending September 28, 1997, and September 29, 1996:
September 28, September 29, Increase
1997 1996 (Decrease)
Net sales $89,980 $76,457 $13,523
Gross earnings 25,162 20,726 4,436
Gross earnings as a percent
of sales 27.96% 27.11% 0.85%
Selling, general and
administrative expenses 10,404 9,987 417
Selling, general and
administrative expenses as
a percent of sales 11.56% 13.06% (1.50)%
Research and development
expenses 3,134 2,892 242
Operating earnings 11,624 7,847 3,777
Operating earnings as a percent
of sales 12.92% 10.26% 2.66%
Interest expense 976 337 639
Earnings before income taxes 12,242 8,031 4,211
Income taxes 4,530 2,971 1,559
Net earnings 7,683 5,060 2,623
Income tax rate 37.00% 37.00% --
Net sales increased by $13.5 million, or 17.7% from the third
quarter of 1996. The improvement in sales reflects continued
demand for electronic components, particularly for commercial
interconnect, microelectronics and automotive products in both
domestic and European markets.
Gross earnings improved primarily due to the sales and production
volume increases, as well as continuing efforts to control
manufacturing expenses.
Selling, general and administrative expenses as a percent of sales
decreased 1.5 percent, indicating the Company continues to
emphasize cost control over all operating expenses.
Research and development expenses increased by $0.2 million, or
8.4%, primarily due to the continuation of new product development
programs, particularly in the automotive product area.
The increase in interest expense resulted primarily from the $50.0
million borrowed under the term loan to purchase DCA common shares.
Part I -- FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Material Changes in Results of Operations: Comparison of First
Nine Months of 1997 to First Nine Months of 1996
The following table highlights changes in significant components of
the consolidated statements of earnings for the nine-month periods
ending September 28, 1997, and September 29, 1996:
September 28, September 29, Increase
1997 1996 (Decrease)
Net sales $288,731 $240,463 $48,268
Gross earnings 79,290 62,399 16,891
Gross earnings as a percent
of sales 27.46% 25.95% 1.51%
Selling, general and
administrative expenses 34,270 31,967 2,303
Selling, general and
administrative expenses as
a percent of sales 11.87% 13.29% (1.42)%
Research and development
expenses 9,183 7,780 1,403
Operating earnings 35,837 22,652 13,185
Operating earnings as a percent
of sales 12.41% 9.42% 2.99%
Interest expense 1,649 1,124 525
Earnings before income taxes 36,705 23,514 13,191
Income taxes 13,581 8,700 4,881
Net earnings 23,095 14,814 8,281
Income tax rate 37.00% 37.00% --
For the first nine months of 1997, net sales increased $48.3
million, or 20.1% compared to the first nine months of 1996, as a
result of demand for microelectronics, commercial interconnect and
automotive products in both domestic and European markets.
Gross earnings as a percent of sales have improved by 1.51% over
1996, primarily due to the sales and production volume increases
which have favorably affected operating efficiencies, as well as
continuing efforts to control manufacturing expenses.
Selling, general and administrative expenses have decreased as a
percent of sales, which reflects continuing efforts in controlling
operating expenses.
Research and development expenses have increased by $1.4 million,
or 18.0%, during the first nine months of 1997, primarily due to
the new product development programs, particularly in automotive
products.
<PAGE>
Part II -- OTHER INFORMATION
Item 1. Legal Proceedings
CTS is involved in litigation and in other administrative
proceedings with government agencies regarding the protection of
the environment, and other matters, the results of which are not
yet determinable. In the opinion of management, based upon
currently available information, adequate provision for anticipated
costs has been made, or the ultimate costs resulting from such
litigation or administrative proceedings will not materially affect
the consolidated financial position of the Company or the results
of operations.
Item 4. Submission of Matters to a Vote of Security Holders
A special meeting of the Shareholders of CTS Corporation was held
on October 16, 1997. At that meeting two matters were submitted to
a vote of the shareholders: (1) The issuance of common stock
pursuant to the Amended and Restated Agreement and Plan of Merger
(the "Merger") among the Company, a wholly-owned subsidiary of the
Company, and Dynamics Corporation of America ("DCA") and related
amendments to the Company's Articles of Incorporation; and (2) The
grant of employee stock options to certain executive officers of
CTS and DCA. Following are the tabulations of the voting results
on these issues, on which 4,229,589 shares were entitled to vote
and 3,782,012 of such shares were represented at the meeting:
Issuance of Common Stock and Related Amendments to the
Articles of Incorporation
Votes Cast For Votes Cast Against Abstentions
3,709,196 69,545 3,271
Grant of Stock Options
Votes Cast For Votes Cast Against Abstentions
3,602,429 124,224 55,359
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
(3)(a) Articles of Incorporation, as amended and restated
October 16, 1997, (incorporated by reference to
Exhibit (3)(a) to the Company's Current Report on Form
8-K, filed October 20, 1997).
Part II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K (Continued)
a. Exhibits (Continued)
(3)(b) Bylaws, effective October 16, 1997, (incorporated by
reference to Exhibit (3)(b) to the Company's Current
Report on Form 8-K, filed October 20, 1997).
(10)(a) Employment Agreement, dated as of May 9, 1997, between
the Company and Joseph P. Walker (incorporated by
reference to Exhibit (c)(2) to the Schedule 14D-1
filed by the Company on May 16, 1997).
(10)(b) Prototype indemnification agreement, with Lawrence J.
Ciancia, Patrick J. Dorme, Gerald H. Frieling, Jr.,
Andrew Lozyniak, Joseph P. Walker, Jeannine M. Davis,
George T. Newhart and Gary N. Hoipkemier, incorporated
by reference to Exhibit (10)(b) to the Company's
Annual Report on Form 10-K for 1991).
(10)(c) CTS Corporation 1986 Stock Option Plan, approved by
the shareholders on May 30, 1986, as amended and
restated on May 9, 1997, (incorporated by reference to
Exhibit 10(d) to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 29, 1997).
(10)(d) CTS Corporation 1988 Restricted Stock and Cash Bonus
Plan approved by the shareholders on April 28, 1989,
as amended and restated on May 9, 1997, (incorporated
by reference to Exhibit 10(e) to the Company's
Quarterly Report on Form 10-Q for the quarter ended
June 29, 1997).
(10)(e) CTS Corporation 1996 Stock Option Plan, approved by
the shareholders on April 26, 1996, as amended and
restated on May 9, 1997, (incorporated by reference to
Exhibit 10(f) to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 29, 1997).
(10)(f) Prototype indemnification agreement, with Stanley J.
Aris, James L. Cummins, James N. Hufford and Donald R.
Schroeder (incorporated by reference to Exhibit
(10)(g) to the Company's Annual Report on Form 10-K
for 1995).
<PAGE>Part II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K (Continued)
a. Exhibits (Continued)
(10)(g) Amended and Restated Agreement and Plan of Merger,
dated as of May 9, 1997, and amended and restated on
July 17, 1997, and further amended on October 15,
1997, among the Company, CTS First Acquisition Corp.,
a wholly owned subsidiary of the Company ("Sub"), and
DCA [incorporated by reference to Exhibit (c)(6) to
Amendment No. 3 to the Schedule 13D filed by the
Company in respect of DCA on July 18, 1997, (the
"Schedule 13-D") and Exhibit 2(a) to the Company's
Current Report on Form 8-K, filed October 20, 1997].
(10)(h) Shareholders Agreement, dated as of July 17, 1997,
among the Company, Sub, WHX Corporation ("WHX") and SB
Acquisition Corp., a subsidiary of WHX (incorporated
by reference to Exhibit (c)(7) to the Schedule 13-D).
(10)(I) Employment Agreement, dated as of May 9, 1997, between
the Company and Andrew Lozyniak (incorporated by
reference to Exhibit 10.5 of DCA's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1997, (the
"DCA 10-Q").
(10)(j) Employment Agreement, dated as of May 9, 1997, between
the Company and Patrick J. Dorme (incorporated by
reference to the DCA 10-Q).
(10)(k) Employment Agreement, dated as of May 9, 1997, between
the Company and Henry V. Kensing (incorporated by
reference to the DCA 10-Q).
(10)(l) The Form of Severance Agreement, dated April 11, 1997,
between the Company and certain officers of the
Company (incorporated by reference to Exhibit (a)(99)
of the Company's Quarterly Report on Form 10-Q for the
quarter ended March 30, 1997) and amendment thereto,
dated May 9, 1997, (incorporated by reference to
Exhibit 10(m) to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 29, 1997.
(21) Subsidiaries as of October 16, 1997, filed herewith.
(27) Financial Data Schedule (filed only electronically
with the SEC).
b. Reports on Forms 8-K
Announcement that the Effective Time for the Merger had
occurred on October 16, 1997, and describing related events;
filed October 20, 1997.
<PAGE>
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 thereunto duly authorized.
<PAGE>
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 thereunto duly authorized.
CTS CORPORATION CTS CORPORATION
/s/ Jeannine M. Davis /s/ Stanley J. Aris
Jeannine M. Davis Stanley J. Aris
Vice President, Secretary Vice President Finance
and General Counsel and Chief Financial Officer
Dated: November 12, 1997
<PAGE>
EXHIBIT 21
CTS CORPORATION AND SUBSIDIARIES
CTS Corporation (Registrant), an Indiana corporation
Subsidiaries
CTS Corporation (Delaware), a Delaware corporation
CTS of Panama, Inc., a Republic of Panama corporation
CTS Components Taiwan, Ltd.,1 a Taiwan, Republic of
China corporation
CTS Singapore Pte., Ltd., a Republic of Singapore
corporation
CTS Electro de Matamoros, S.A.,1 a Republic of Mexico
corporation
CTS Export Corporation, a Virgin Islands corporation
CTS Japan, Inc., a Japan corporation
CTS of Canada, Ltd., a Province of Ontario (Canada) corporation
CTS Manufacturing (Thailand) Ltd.,1 a Thailand corporation
CTS Electronics Hong Kong Ltd.,* a Hong Kong corporation
CTS Corporation U.K. Ltd., a United Kingdom corporation
CTS Printex, Inc., a California corporation
CTS Micro Peripherals, Inc., a California corporation
Dynamics Corporation of America, a New York corporation
International Electronic Research Corporation, a California
corporation
LTB Investment Corporation, a Delaware corporation
Corporations whose names are indented are subsidiaries of the
preceding non-indented corporations. Except as indicated, each of
the above subsidiaries is wholly-owned by its parent company.
Operations of all subsidiaries and divisions are consolidated in
the financial statements filed, except Dynamics Corporation of
America, which has been included using the equity method of
accounting.
* Less than 1% of the outstanding shares of stock is owned
of record by nominee shareholders pursuant to national
laws regarding resident or nominee ownership.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUN-30-1997
<PERIOD-END> SEP-28-1997
<CASH> 49,578
<SECURITIES> 0
<RECEIVABLES> 53,334
<ALLOWANCES> 851
<INVENTORY> 29,901
<CURRENT-ASSETS> 145,461
<PP&E> 188,272
<DEPRECIATION> 128,546
<TOTAL-ASSETS> 334,888
<CURRENT-LIABILITIES> 69,808
<BONDS> 0
0
0
<COMMON> 33,805
<OTHER-SE> 152,063
<TOTAL-LIABILITY-AND-EQUITY> 334,888
<SALES> 89,980
<TOTAL-REVENUES> 89,980
<CGS> 64,818
<TOTAL-COSTS> 78,356
<OTHER-EXPENSES> (1,594)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 976
<INCOME-PRETAX> 12,242
<INCOME-TAX> 4,530
<INCOME-CONTINUING> 7,712
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,683
<EPS-PRIMARY> .48
<EPS-DILUTED> .48
</TABLE>
