News Release

MTS Reports Second Quarter EPS Increase of 37% on 14% Revenue Growth

Eden Prairie, Minn., April 27, 2005 – MTS Systems Corporation (NASDAQ: MTSC) today reported second quarter earnings of $0.41 per diluted share on net income of $8.5 million, an increase of 37 percent compared to earnings of $0.30 per diluted share on net income of $6.5 million for the second quarter of fiscal 2004.

“Again this quarter, MTS delivered solid revenue and earnings growth, with particularly strong performance by the Test segment in Asia,” said Sidney W. Emery, Jr., Chairman and CEO. “We improved our backlog position with strong orders in both segments. Our worldwide customer base in the ground vehicles market continues to bolster our results despite the continued weakness in the North American automotive industry. While improved capacity utilization and favorable product mix contributed to increased gross margin, we also increased operating expenditures as part of our multi-year growth initiatives. These investments will continue in the second half of the year. We anticipate second half revenue will be similar to the first half. Test segment margins will be under pressure due to product mix in backlog that will result in lower second half earnings versus the first half of the year. We anticipate achieving the high end of the previously communicated full year range of $395-$405 million in revenue and $1.48-$1.53 earnings per share.”

Emery continued, “As anticipated, orders for the second quarter were up significantly. At $127.6 million, this was an increase of 46% over the prior year, reflecting strength in both segments. Test segment orders were particularly healthy in Asia, including a $27 million multi-year project for a Japanese automotive OEM.” Backlog increased 14 percent in the quarter, from $203 million to $231 million, compared to backlog of $216 million at the end of second quarter fiscal 2004.

Revenue for the second quarter was $100.9 million, an increase of 14 percent compared to revenue of $88.3 million for the second quarter of fiscal 2004. This increase was primarily due to increased short-cycle business in both the Industrial and Test segments, as well as approximately $2 million of favorable currency translation. Second quarter income from operations was $12.7 million, an increase of 38 percent compared to $9.2 million for the second quarter of fiscal 2004, driven by increased volume and improved margins in the Test segment.

Cash, cash equivalents and short-term investments at the end of the second quarter totaled $148 million, compared to $127 million at the end of first quarter fiscal 2005. The Company repurchased 269,200 shares of its common stock during the second quarter of fiscal 2005.

Segment Results

Test Segment:

Orders for the Test segment were $110.0 million for the second quarter of fiscal 2005, an increase of 46 percent compared to orders of $75.2 million for the second quarter of fiscal 2004, primarily due to increased volume in Asia, including the previously mentioned $27 million booking. Backlog increased 14 percent in the quarter, from $194 million to $221 million, compared to backlog of $208 million at the end of second quarter fiscal 2004. Second quarter revenue was $84.9 million, an increase of 14 percent compared to $74.2 million for the second quarter of fiscal 2004, primarily due to increased short-cycle business, an increase in after-market product volume, and approximately $2 million of favorable currency translation. Second quarter gross profit as a percent of revenue was 42.1 percent, an increase of 5.9 percentage points compared to 36.2 percent for the second quarter of fiscal 2004, due to favorable product mix and improved capacity utilization. The segment reported $11.3 million in income from operations, an increase of 55 percent compared to $7.3 million for the second quarter of fiscal 2004.

Industrial Segment:

Orders for the Industrial segment were $17.6 million for the second quarter, an increase of 43 percent compared to orders of $12.3 million for the second quarter of fiscal 2004, primarily reflecting higher worldwide demand in the Sensors business. Backlog increased 11 percent in the quarter, from $9 million to $10 million, compared to backlog of $8 million at the end of second quarter fiscal 2004. Revenue was $16.0 million for the second quarter, an increase of 13 percent compared to revenue of $14.1 million for the second quarter of fiscal 2004, driven by increased volume in the Sensors business across all geographies. Segment gross profit as a percent of revenue was 42.0 percent, a decrease of 6.3 percentage points compared to 48.3 percent for the second quarter of fiscal 2004, primarily due to product mix and charges associated with excess and obsolete inventory. Income from operations was $1.4 million, a decrease of 26 percent compared to income from operations of $1.9 million for the second quarter of fiscal 2004.

Second Quarter Conference Call

A conference call will be held on Thursday, April 28, at 9:00 a.m. CDT (10:00 a.m. EDT). Call +1-773-756-0439; state the Passcode “Second Quarter” and conference leader “Chip Emery.” Telephone re-play will be available through 6:00 p.m. EDT, May 26, 2005. Call +1-203-369-1882.

If you prefer to listen live over the Internet, please log on to the web at <http://www.mts.com/news/financial_news.htm> and click on the webcast image. The call will be archived through 10:00 p.m. EDT, July 26, 2005.

About MTS Systems Corporation

MTS Systems Corporation is a leading global supplier of test systems and industrial position sensors. The Company’s testing hardware and software solutions help customers accelerate and improve their design, development, and manufacturing processes and are used for determining the mechanical behavior of materials, products, and structures. MTS’ high-performance position sensors provide controls for a variety of industrial and vehicular applications. MTS had 1,615 employees and revenue of $367 million for the fiscal year ended October 2, 2004. Additional information on MTS can be found on the worldwide web at http://www.mts.com.

This release contains “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that are subject to certain risks and uncertainties, as well as assumptions, that could cause actual results to differ materially from historical results and those presently anticipated or projected. In addition to the factors discussed above, other important risk factors are delineated in the Company’s SEC reports, including Form 10-K for the year ended October 2, 2004.