Summary Information Report
DIVERSIFIED. PROFITABLE. GROWING. Third Quarter 2010
Contents: Company Overview
Page 1 Company Overview CTS Corporation (NYSE: CTS) is a highly di- medical and computer markets. EMS oper-
versified, innovative designer and manu- ations provide specialty solutions to custom-
Financial Highlights facturer of sensors and actuators, elec- ers throughout the medical, defense and
Vision Statement tronic components, and a leading provider aerospace, communications and industrial
of value-added electronics manufacturing markets. We have manufacturing opera-
Page 2 Segment Overview services (EMS). Our sensors and actuators, tions located throughout North America,
Components & and electronic components serve OEMs in Europe and Asia.
Sensors Segment the automotive, communications, industrial,
$ In Millions, except per share data
Page 3 Sales by Primary
End-Market and Gross Margin Percentage
$ US Sales
140 140 25.0%
Major Customers 138.9 139.4
20.0% 21.9% 21.5%
Page 4 Growth Initiatives 130 130 20.7%
Key Business Wins 126.6 15.0%
Page 5 Business Summary 10.0%
Positioned for Growth 110 110
Page 6 Technologies
100 100 0.0%0.0%
Page 7 CTS History Q3: 09 Q1: 10 Q2: 10 Q3: 10 Q3: 09 Q1: 10 Q2: 10 Q3: 10
Page 8 Worldwide Manufacturing
Locations $ US Operating Earnings $ US Diluted EPS
6.0 6.0 0.13 0.13
Vision Statement . . .
0.0 0.0 0.00.00
CTS is a global, growth Q3: 09 Q1: 10 Q2: 10 Q3: 10 Q3: 09 Q1: 10 Q2: 10 Q3: 10
oriented sensors and
actuators, electronic What’s New
components, and • Incorporation in India providing growth opportunities
• Key New Business Wins
services company, › Sensors and Actuators: New Engine Sensor
dedicated to delivering › Electronic Components: New Frequency Control Devices
› Electronics Manufacturing Solutions: Global Homeland Security Devices
for a better, safer and For more information, please visit the Investor Relations section at:
healthier world. www.ctscorp.com
r e p o r t i n g Sales by Segment
segments Sensors &
CTS Reports its Business in Components
Two Segments: Segment
Components and Sensors Segment
Sensor and Actuator Products:
CTS manufactures an extensive line of ve- The macro trend driving growth in sensor
hicle sensors and actuators used in power- and actuator products includes:
train, safety, fuel and emissions controls sys- • Green initiatives requiring tougher 1.
tems for both light vehicle and motorcycle emissions standards, and 2.
applications. CTS has also developed and
• The need for increased fuel economy
won business to supply components to the
commercial, diesel engine markets for on
and off-highway vehicle applications. This 3.
represents approximately 31% of company
revenues. CTS expects double-digit sales CTS expects double-digit sales
growth over the next 3-5 years in sensor and
growth over the next 3-5 years 1. Non-contacting Rotary Position Sensor 2. Contacting Linear
actuator products. Position Sensor 3. Accelerator Pedal Module 4. Smart Actuator
in its Components and Sensors
Electronic Component Products:
CTS Electronic Components designs and The macro trend driving growth in elec-
manufactures ceramic and crystal based tronic component products includes:
engineered electronic components used • Strong communication growth in 3.
primarily in wireless communications infra- 4.
structure equipment; piezoelectric materi- 8.
• Social Networking markets driving
als, heat management and resistive based 7.
higher data traffic, such as You Tube,
components used in the medical, defense 5.
Facebook, Twitter and Smartphones
and aerospace, computer, consumer and
industrial equipment applications. This rep- • Demographics for health and medical
resents approximately 20% of total com- needs, defense and aerospace and 6.
pany revenues. consumer products
2. Heat Sinks 3. Potentiometers 4. Ceramic
1. Actiplex ® Filter
RF Filters 5. EMI/RFI Filters 6. Quartz Crystals 7. Miniature
Switches 8. Frequency Modules
Electronics Manufacturing Services (EMS) Segment
Electronics Manufacturing Solutions: 1.
CTS is a Tier 2 global EMS provider special- CTS EMS Strategy includes:
izing in value-added products and services • Targeting customers with complex
for the medical, aerospace and defense, needs
communications and computer markets.
• Targeting niche sectors – defense and
EMS focuses on customers with complex,
aerospace, medical and industrial 2.
high mix, medium volume needs. CTS EMS
assembles electronic and mechanical com- • Providing turnkey services, design to
ponents into finished sub-assemblies and fi- direct ship
nal products under contract manufacturing • Global capabilities
agreements with OEMs. CTS holds specialty
FDA and medical approvals, along with
aerospace and defense registrations. CTS
1. Box Builds 2. Circuit Boards
EMS expects single-digit sales growth over 3. Complete Assemblies
the next 3-5 years. 4. Rack-mount Equipment
2 Third Quarter 2010 DIVERSIFIED. PROFITABLE. GROWING.
l u o
s ma j o r ec s s t&
a m e r s
Sales by Primary End-Market and Geographic Region
Diversified markets and a global, lower cost, manufacturing footprint
uniquely positions CTS for future growth opportunities and lower risk.
Diversified Markets Global Cost–Efficient Footprint
Computer Automotive North
Medical 4% 10%
Industrial 16% Asia
Low-cost Manufacturing - 52%
Sales by Market Sales by Region
CTS serves blue-chip customers including global OEMs and Tier 1 suppliers. Supporting our diversification strategy,
there are no CTS customers with over 10% of total company sales. Key selected customers are shown below.
DIVERSIFIED. PROFITABLE. GROWING. Third Quarter 2010 3
CTS’ Growth Initiatives Include:
Record Business Wins . . .
• Penetrating new global customers As a result, CTS has lowered its concentra-
• Expanding into diesel engines, tion of top 5 customers to 24% in Q3: 2010, Last year, CTS announced
electric and hybrid cars from 37% in 2007 and 56% in 2004. The top a record number of NEW
15 customers represent 51% of total sales.
• Expanding products and program wins, totaling
technology In the third quarter of 2010, CTS incorpo- more than $300 million in
• Expanding EMS into defense/ rated in India to pursue opportunities in a projected revenues, over
aerospace, medical and rapidly growing market. the upcoming years of their
industrial markets program terms. Over 20
new production programs
Key Business Wins
Wins from major
CTS continues to win new business across below. For a complete list of business wins
its product portfolio, resulting from its R&D and other services, please visit the Investor commercial and light-
initiatives to launch new products and Relations Section of our website at: duty vehicle OEM’s, long-
its ability to penetrate new markets and term EMS contracts and
customers. Key new business wins are listed www.ctscorp.com. new Electronic Component
sales of highly engineered
Sensors and Actuator Products: products, indicate the
• Second small engine throttle position sensor for India market success of CTS’ diversification
• New advanced engine sensors for Japanese OEM for global light vehicles strategy.
• Linear design sensor for twin-stage turbocharger for European vehicles
• Small Engine throttle position sensor for India motorcycle market
• Smart Actuator for industrial diesel engine application
• Smart Actuator for light and medium-duty diesel engine application
Electronic Components Products: New
• Piezo product for high-density disk drives 2.
• Piezo product for medical ultrasound application
• OCXO for Chinese Telecomm provider
• ActiPlex® Filter for U.S. Telecomm provider
• New vertical integration photolithography process New
Electronics Manufacturing Services: 3.
Awarded manufacturing contracts from:
• North American provider of managed 5.
human identity (Homeland Security)
• Barron McCann (security)
• Coulomb (plug-in vehicles)
• Thales (defense)
1. Smart Actuator for Industrial Engine Applications 2. Contacting Accelerator Pedal Module 3. Actiplex® Ceramic
• BAE Systems (defense) RF Filter for Multiband Base Stations 4. OCXO Frequency Module 5. Electric Vehicle Charging System 6. Electron-
ics for Military Applications 7. Piezoceramic Element for Medical Ultrasound
4 Third Quarter 2010 DIVERSIFIED. PROFITABLE. GROWING.
B u s i n e s s
CTS focuses on exceeding customer
expectations through quality and Positioned for
innovative products. CTS’ diversified, Growth
global business model, combined with
a strong focus on operating excellence CTS is positioned for growth
and balance sheet management as it has managed through
the recent economic
is helping CTS reduce its risk profile
downturn by its proactive
and perform better in a challenging global cost control
economic environment. actions, lowering the
Company’s revenue break
even point. CTS continues
• Proudly Serving Customers Since 1896 to win new business and
• Publicly Traded on NYSE Since 1962 new customers. Its global
footprint provides a strong
• 4,600 Employees - 70% Outside USA customer advantage.
• Highly Engineered Products CTS’ conservative
balance sheet and
• Diversified—Global Technology Driven positive cash flow, along
strong growth potential.
DIVERSIFIED. PROFITABLE. GROWING. Third Quarter 2010 5
c t s
t e c h n o l o g i e s
CTS has a broad patent portfolio, with over 350 highly engineered and
diverse product and process patents worldwide. CTS makes significant
investments in research and development activities in order to create
competitive advantages in the markets it serves. CTS’ strong intellectual
property portfolio is a critical asset in the competitive electronic compo-
nents market. Highlighted here are key technologies that CTS utilizes to Quartz Crystals:
manufacture reliable electronic components and systems. Quartz crystals have the natural property of
generating a small electrical charge when
bent and then allowed to straighten. This
Thick Film: slight bending and straightening is known
Often used along with thin films, thick films as oscillation. Depending on the fabrica-
are paints or inks, applied to a substrate, tion, crystals can be designed to oscillate
by screen printing or spraying techniques. at a resonate frequency, which makes
Thick film inks have resistive, conductive or electronic devices such as filters, oscilla-
insulating properties. tors, and precise timing devices possible.
Electricity running through a conduc-
tive wire produces a magnetic field
that can be greatly amplified by coil-
ing the wire. Also, if a magnet is rapidly
Piezoelectronics: moved in and out of a coil of conduc-
Piezoelectric technology utilizes the natu- tive wires, an electric current is pro-
ral properties of certain materials, usually duced. Coupling this technology with
quartz and ceramics, to produce an elec- advanced control circuitry, CTS is pro-
trical charge when squeezed or pressed. ducing some of the most advanced
This technology finds many applications in motor actuators available for com-
markets as varied as computing, telecom- mercial and light-duty vehicles.
munications, medical diagnostics, printing
and sonic/sonar applications.
Ceramic materials are extremely versatile Magnetics:
and can be used in many different ways in The magnetic force that makes opposite
the electronics industry. Conductive and poles attract and like poles repel each
resistive materials can be printed on a ce- other also generates voltages in conduc-
ramic base creating resistive and resistive/ tors. This magnetic property is used as a
capacitive control circuits. detector of motion and is the basis for CTS’
extensive range of non-contacting accel-
erator pedal modules and position sensor
Advanced Manufacturing: systems.
Since its establishment over 100 years ago,
CTS has continually pushed the envelope
of manufacturing excellence. Our high vol-
ume, high quality and low overhead man-
ufacturing systems are not only utilized to
produce world-class quality products at the
most competitive pricing for our own com-
ponents, but we also utilize our engineering
and manufacturing skills for customers who
look to CTS to manufacture their products.
CTS’ Electronic Manufacturing Solutions
(EMS) services customers world-wide with
competitively priced and highly advanced
6 Third Quarter 2010 DIVERSIFIED. PROFITABLE. GROWING.
b r i e f
The Early Years
CTS Corporation was founded in 1896 in Chicago, Illinois as the Chicago Telephone
Supply Company, building telephones and switchboards primarily for the rural tele-
In 1902, the Company moved to Elkhart, Indiana to expand and lower its costs. With
the advent of radios in the 1920s, CTS began producing jacks, plugs, headphones and
variable resistors. By the 1940s CTS was supplying the U.S. Government with remote
telephone field sets for the military market. In the late 1940s and 1950s, CTS became a
leading supplier of variable resistors and switches for the new television market.
In 1960, the Company name was changed to CTS Corporation and on June 4, 1962, CTS
listed its common stock on the New York Stock Exchange.
CTS entered the data processing and computer markets in the late 1950s with new resistor
products and electronic components. From 1960 – 1980, through acquisitions and internal
development, CTS expanded its product portfolio to include crystal filters, quartz oscilla-
tors, selector switches, loudspeakers, and miniature hybrid microcircuits for applications as
varied as hearts pacemakers to missile guidance systems.
International Growth and New Markets
CTS established operations outside of the U.S. over 55 years ago with the 1953 acquisition
of its Canadian operation. During the 1960s CTS expanded its presence into Mexico and
opened its first Asian operation in Taiwan. The second Asian operation was opened in
Singapore in the late 1970s. CTS diversified geographically into the European arena with
an operation in Scotland, which provided connector and backplane manufacturing for
military applications; the forerunner of its EMS operations today. CTS also entered the au-
tomotive industry with successful products such as throttle position sensors and exhaust gas
In 1997 CTS acquired Dynamics Corporation of America, broadening its engineered fre-
quency product portfolio. The 1999 acquisition of the Components Products Division of
Motorola allowed CTS to enter the wireless markets through the manufacture of ceramic
filters, duplexers and other components. During this time, CTS also established several op-
erations in China.
More Recent Events
SMTEK International was acquired by CTS in 2004 and Orion Manufacturing in 2008; busi-
nesses serving medical, industrial and defense and aerospace markets. CTS also acquired
Tusonix, Inc. in 2008, which added electromagnetic and radio frequency interference filter
components to CTS’ product family. Expanding its global footprint, CTS established opera-
tions in the Czech Republic (2006) and Zhongshan, China (2007). CTS recently announced
an expansion in its Thailand facility to be completed by mid 2011 and also announced
incorporation in India to allow the pursuit of opportunities in rapidly growing markets. These
recent acquisitions and expansions have strengthened CTS’ position as a diversified world
leader in electronic components, vehicle sensors and actuators and electronic manufac-
The CTS Heritage Room, located at the Corporate Headquarters in Elkhart, Indiana, proudly celebrates over a century of innovation
and achievement. This exhibit features the rich heritage of CTS and the story of its high quality products and growth since 1896.
DIVERSIFIED. PROFITABLE. GROWING. Third Quarter 2010 7
F o o t p r i n t
Worldwide Manufacturing Locations SENSoRS ANd ACTuAToRS
Elkhart, Indiana, USA
Toronto, Ontario, Canada
••• •• • •
Glasgow, Scotland, UK
• • •• Ostrava, Czech Republic
• Kaohsiung, Taiwan, Republic of China
Zhongshan, People’s Republic of China
Lisle, Illinois, USA
Albuquerque, New Mexico, USA
Tucson, Arizona, USA
The CTS 2009 Annual Report is available in the
Investor Relations section of the CTS website. Nogales, Mexico
Tianjin, People’s Republic of China
Singapore, Republic of Singapore
Diversified. Profitable. Growing.
Kaohsiung, Taiwan, Republic of China
Zhongshan, People’s Republic of China
Leading the way Sensors and Ac
We believe our
to cleaner, more
effic ient vehicles tuators
products help worth protect
do just that. Improv ing and our sensor
ing fuel econom and actuator
are fundamental y and reducing
benefits of our harsh emissions Improved Qualit
motorcycle and product portfol
io serving global
commercial diesel light-vehicle, Quality remains
investing in new applications. You our numbe
technologies that can be assured We provide reliable r one focus.
will drive even that we are highly engineered
solutions. Becaus more efficient sensors and actuato
e we all share and eco-friendly rs
this one world, demanding require that exceed
ELECTRoNICS MANuFACTuRING SoLuTIoNS
committed to CTS Automotive
making it a better Products is ments.
place for all.
2009 Annual Report
Moorpark, California, USA
San Jose, California, USA
Small Engine Throttle ons
improve perform reduce emissio
ance and increase ns,
Londonderry, New Hampshire, USA
are used in
to improve reliabili
For Global OEMs
Now Serving the
Markets in India
Glasgow, Scotland, UK
Tianjin, People’s Republic of China
2009 Annual Report Smart Actuato
For New Commer
For Light & Heavy Position Sensor
2009 Annual Report
Bangkok, Ayutthya, Thailand
905 West Boulevard North
Elkhart, IN 46514