Slide 1: Forward-looking statements
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. These statements are based on management’s current expectations. Actual results may di
Slide 2: Segments and Markets
Segments Automotive Communications Mobile Computer Communications Infrastructure Other Segments and Markets Sensors and Electronic Components Electronics Manufacturing Services Markets 56% 44% 6% 41% 11% 27% 15% First Half 2003
Slide 3: Near-Term Business Strategy
Near-Term Business Strategy Communications Electronics $96M - 37% Other * $7M - 2% Automotive 23% Resistor/Electro 11% North America 53% Aggressively Grow Grow Increase Profitability Electronic Components Automotive Sensors Electronic Manufacturing Services 0.29 0.27 0.44 Electronics Manufacturing S
Slide 4: Five-Year Business Growth Targets
Five-Year Business Growth Targets Automotive Sensors Electronic Components Electronics Manufacturing Services 15 - 20% 0 - 5% 5 - 10% 5 - 10% 0 - 5% 5 - 10% 6 - 9% Market Growth Sales Growth Overall Product/Market Area $650 - $750 million in sales 8 - 10 % Operating Earnings as % of Sales Gross Marg
Slide 5: New Products Drive Earnings Growth
New Products Drive Earnings Growth 2001 2002 2003 2004 2005 2 Q3 Q4 Q5 Actual 0.2 3.2 6.2 0 0 Forecast 6.7 47.5 81.3 Forecast Actual* Belt Tension Sensor Integrated Accelerator Pedals Small Engine Throttle Position Sensors Frequency Modules ClearONE Terminators Pointing Stick Modules (with Touchpads
Slide 6: Growing Sensor Content
Growing Sensor Content 2001 2007 East 125 175 2001 2007 East 2.14 3.75 40% 75% Worldwide Market Sensor $ Content / Car Worldwide CTS Sensor $ Content / Car Six new product categories in development pipeline. Growing customer penetration in Europe, Asia and with North American transplants.
Slide 7: Belt Tension Sensor Won Platforms
Belt Tension Sensor Won 15 Platforms U.S. regulations require 100% of all new light vehicles to have enhanced occupancy sensing systems by 2006. CTS' Belt Tension Sensor provides superior measurement accuracy Served Available Market 2003 2004 2005 2006 2007 Sales 11 47 78 80 80 Target 2 16 25 31 31
Slide 8: Automotive Pedal Modules
Automotive Pedal Modules Lower part count design provides quality and reliability advantages. Offer both contacting and non-contacting technology. CTS Pedal Modules 2003 2004 2005 2006 2007 Available 83 122 159 186 212 Target 8.3 16.5 27.8 41.9 48 North 45.9 46.9 45 43.9 Trend to "integrated pedals"
Slide 9: EMS Comparative Metrics Excellent Financial Performance
EMS Comparative Metrics Excellent Financial Performance
Slide 10: Cost Structure Overhaul
Cost Structure Overhaul Other 28% Interest 10% Salary/Fringes 50% Depreciation 12% East 28 10 50 12 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Fixed Costs Reduced by $95M Per Year Other 28% Depreciation 12% Interest 10% Salary/Fringes 50% Breakeven Revenue Point Reduced to $440M Per Year Q1 Q2
Slide 11: Product Portfolio Repositioning
Product Portfolio Repositioning Comp & Sensors EMS East 0.56 0.44 $ In Millions EMS *Based upon annualizing Q2 Operating Earnings. A. Sensors B. Low Vol. Freq. C. Duplexer & Filters D. Computer Components E. High Vol. Freq. Q2:03 Target Q2:03 Target 15.0% 15 - 20% 1.8% 17 - 21% Margin Drivers Fixed
Slide 12: Balance Sheet Management
Balance Sheet Management SALES RECEIVABLES INVENTORIES 50% 55% 66% Q2 2003 vs. Q4 2000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Receivables - Net 110 98.3 91 81.6 80.1 73.3 64.9 63.8 59.8 65.7 Inventory - Net 97.2 79.2 64 50.1 43.7 43.1 41 36.3 36.1 35.1 2001 2002 97.2 110.0 35.1 65.7 '96 '97 '98 '99 '00 '01 '
Slide 13: Other Financial Data
Other Financial Data Appendix 1 CTS Corporation Definition of Financial Terms - “Segment Operating Earnings Return on Assets” ($ in millions) 2003 2002 Q2 Q1 Q4 Components Components Components EMS & Sensors EMS & Sensors EMS & Sensors 2002 net sales to external customers $ 186.9 $ 270.9 Less: 3rd q