CTS Corporation Reconciliation of Gross Margin to Adjusted Gross Margin ($ in millions) 2013 Q1 Gross Margin $ Charges (credits) to reported Gross Margin : Restructuring-related costs included in cost of goods sold Flood-related expenses and losses Insurance recovery for business interruption Total adjustments to reported Gross Margin 31.2 2012 Full year $ 0.3 0.3 101.4 2012 Q3 Q4 $ 2.2 20.9 23.1 26.8 $ 0.8 5.7 6.5 26.6 Q2 $ 0.6 1.1 1.7 2011 Full year Q1 25.9 $ 22.0 0.7 5.0 5.7 $ 6.8 6.8 109.8 2011 Q4 $ 0.3 3.0 3.3 25.8 $ 31.4 $ 124.5 $ 33.3 $ 28.3 $ 31.6 $ 28.8 $ 113.1 $ Total Sales $ 149.5 $ 576.9 $ 138.3 $ 137.4 $ 154.3 $ 147.0 $ 588.5 $ 144.0 21.0% 21.6% 24.1% 20.6% 20.5% 19.6% For the first three quarters of 2012, adjusted gross margin included flood-related expenses and losses. For the fourth quarter and full-year 2012, adjusted gross margin included the insurance recovery for business interruption. The 2012 quarterly adjustments do not add to the full year amounts as the full year recovery includes the expenses separately listed in prior quarters. 19.2% $ 0.3 2.2 2.5 Adjusted Gross Margin Adjusted Gross Margin as a percentage of total sales Q3 28.3 19.6% 27.5 Q2 $ 0.8 0.8 $ 28.3 $ 146.1 19.4% 27.9 Q1 $ $ 27.9 $ 146.9 19.0% 29.2 $ 2010 Full year $ 119.9 2010 Q4 $ 0.3 0.3 29.1 $ 120.2 $ $ 151.5 $ 552.6 $ 145.0 21.7% $ 0.3 0.3 29.2 19.2% Q3 29.4 20.3% 30.0 Q2 $ $ 30.0 $ 139.4 21.5% 30.3 Q1 $ $ 30.3 $ 138.9 21.9% 30.5 $ 30.5 $ 129.4 23.6%