10-K

UNITED STATES
SECURITIES & EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-K

x	Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 28, 2007
	or
o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________ to _______________
	Commission File No. 1-5375

TECHNITROL, INC.
(Exact name of registrant as specified in Charter)

PENNSYLVANIA	23-1292472
(State of Incorporation)	(IRS Employer Identification Number)

1210 Northbrook Drive, Suite 470, Trevose, Pennsylvania	19053
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code:	215-355-2900

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Name of each Exchange on which registered
Common Stock par value $0.125 per share	New York Stock Exchange
Common Stock Purchase Rights	New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes x No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days.     Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     x

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Act). Large accelerated filer x     Accelerated filer o     Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes o No x

The aggregate market value of voting stock held by non-affiliates as of June 29, 2007 is $1,161,026,000 computed by reference to the closing price on the New York Stock Exchange on such date.

	Number of shares outstanding
Title of each class	February 25, 2008
Common stock par value $0.125 per share	40,900,893

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement to be used in connection with the registrant’s 2008 Annual Shareholders Meeting are incorporated by reference into Part III of this Form 10-K where indicated.

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TABLE OF CONTENTS

		PAGE
PART I
Item 1.	Business	3
Item 1a.	Risk Factors	9
Item 1b.	Unresolved Staff Comments	14
Item 2.	Properties	15
Item 3.	Legal Proceedings	15
Item 4.	Submission of Matters to a Vote of Security Holders	15
PART II
Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters	16
Item 6.	Selected Financial Data	18
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 7a.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 8.	Financial Statements and Supplementary Data	31
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	31
Item 9a.	Controls and Procedures	32
Item 9b.	Other Matters	33
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	34
Item 11.	Executive Compensation	34
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	34
Item 13.	Certain Relationships and Related Transactions	35
Item 14.	Principal Accounting Fees and Services	35
PART IV
Item 15.	Exhibits and Financial Statement Schedule	36
Exhibits
Signatures

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Part I

Item 1 Business

General

          Technitrol, Inc. is a global producer of precision-engineered electronic components and electrical contact products and materials. We sometimes refer to Technitrol, Inc. as “Technitrol”, “we” or “our”. We believe we are a leading global producer of these products and materials in the primary markets we serve, based on our estimates of the size of our primary markets in annual revenues and our share of those markets relative to our competitors. Our electronic components are used in virtually all types of electronic products to manage and regulate electronic signals and power. Our electrical contact products and materials are used in any device in which the continuation or interruption of electrical currents is necessary. In each case, our products are critical to the functioning of the end product.

          Our world-class design and manufacturing capabilities, together with the breadth of our product offerings, provide us with a competitive advantage that enables us to anticipate and deliver highly-customized solutions for our customers’ product needs. In addition, our global presence enables us to participate in many relevant product and geographic markets and provides us with proximity to our global customer base. This allows us to better understand and more easily satisfy our customers’ unique design and product requirements.

          We operate our business in two distinct segments: the electronic components segment, which operates under the name Electronics, and the electrical contact products segment, which operates under the name Electrical. Electronics and Electrical are known in their primary markets as Pulse and AMI Doduco, respectively.

          We incorporated in Pennsylvania on April 10, 1947 and we are headquartered in Trevose, Pennsylvania. Our mailing address is 1210 Northbrook Drive, Suite 470, Trevose, PA 19053-8406, and our telephone number is 215-355-2900. Our website is www.technitrol.com.

Electronics

          Electronics designs and manufactures a wide variety of highly-customized electronic components and modules. Many of these components and modules capture wireless communication signals, filter out radio frequency interference, adjust and ensure proper current and voltage and activate certain automotive functions. These products are often referred to as antennas, chokes, inductors, filters, transformers and coils. Electronics sells its products primarily to multinational original equipment manufacturers, contract manufacturers and distributors.

          We sometimes refer to the Electronics business, excluding products made by factories which we acquired in the Full Rise Electronic Co., Ltd. (“FRE”) acquisition in 2004, the LK Products Oy (“LK”) acquisition in 2005, the ERA Group (“ERA”) and Larsen Group (“Larsen”) acquisitions in 2006, as the wirewound magnetics division. We refer to LK, together with certain assets that we acquired with Larsen and FRE, as the antenna division. We refer to the automotive coils of ERA as the automotive division.

Electronics’ products are used in a broad array of industries, including:
•	wireless terminals, such as handsets;
•	consumer electronics;
•	enterprise networking;
•	military/aerospace;
•	power conversion;
•	telecommunications; and
•	automotive.
Representative end products that use Electronics’ components and modules include:
•	antenna systems for non-cellular wireless and automotive systems;
•	terminal devices, primarily handsets;
•	broadband access equipment including cable modems and digital subscriber line, or DSL, devices for telephone central office and home use;
•	Ethernet switches;
•	military/aerospace navigation and weapon guidance systems;
•	power supplies;

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• routers;

• televisions and DVD players;

• laptop computers;

• video game consoles;

• voice over internet equipment; and

• automotive drivetrains.

          Electronics’ products are generally characterized by relatively short life cycles and rapid technological change, allowing us to utilize our design and engineering expertise to meet our customers’ constantly evolving needs. We believe that the industries served by Electronics have been, and will continue to be, characterized by ongoing product innovation that will drive growth in the electronic components industry.

          Electronics generated $671.6 million, or 65.4% our revenues, for the year ended December 28, 2007, and $627.5 million, or 65.8% of our revenues, for the year ended December 29, 2006. Note 19 to the consolidated financial statements contains additional segment information.

Electrical

          Electrical is the only global manufacturer which produces a full array of precious metal electrical contact products that range from materials used in the fabrication of electrical contacts to completed contact subassemblies. Contact products complete or interrupt electrical circuits in virtually every electrical device. Electrical provides its customers with a broad array of highly engineered products and tools designed to meet unique customer needs. Electrical sells products primarily to multinational original equipment manufacturers.

Electrical’s products are used in a broad array of industries, including:
•	household appliances;
•	automotive;
•	residential and non-residential construction circuitry;
•	commercial and industrial controls;
•	electric power distribution; and
•	consumer electronics.
Representative end products that use Electrical’s products include:
•	electrical circuit breakers;
•	motor and temperature control devices;
•	power substations;
•	sensors;
•	switches and relays;
•	telephone and computer equipment; and
•	wiring devices.

          Electrical’s products are generally characterized by longer life cycles and slower technological change than those of Electronics. We believe that technological developments in some of the industries served by Electrical, particularly in the electric power, appliance and automotive industries, along with opportunities arising from customer outsourcing and consolidation of the electrical contact industry, present growth opportunities for Electrical.

          Electrical generated $355.0 million, or 34.6% of our revenues, for the year ended December 28, 2007, and $326.6 million, or 34.2% of our revenues, for the year December 29, 2006. Note 19 to the consolidated financial statements contains additional segment information.

          In 2005, we received approximately $6.7 million for the sale of Electrical’s bimetal and metal cladding operations. We have reflected the results of the bimetal and metal cladding operations as discontinued operations on the Consolidated Statements of Operations for all periods presented.

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Products

          Electronics designs and manufactures a wide array of electronic components and modules. These products are highly-customized to address our customers’ needs. The following table contains a list of some of Electronics’ key products:

Primary Products	Function	Application
Internal handset antenna and handset antenna modules	Captures communications signals in mobile handsets, personal digital assistants and notebook computers	Cell phones, other mobile terminal and information devices
Mobile and portable antennas	Transmit non-cellular signals	Global positioning systems, automotive antennas and machine to machine communication
Discrete filter or choke	Separates high and low frequency signals	Network switches, routers, hubs and personal computers Phone, fax and alarm systems used with digital subscriber lines, or DSL
Filtered connector, which combines a filter with a connector and stand alone connector products	Removes interference, or noise, from circuitry and connects electronic applications	Local area networks, or LANs, and wide area networks, or WANs, equipment for personal computers and video game consoles
Inductor/chip inductor	Regulates electrical current under conditions of varying load	AC/DC & DC/DC power supplies Mobile phones and portable devices
Power transformer	Modifies circuit voltage	AC/DC & DC/DC power supplies
Signal transformer	Limits distortion of signal as it passes from one medium to another	Analog circuitry Military/aerospace navigation and weapon guidance systems
Automotive ignition coils	Provides power for automotive ignition	Ignition systems for automotive gasoline engines
Other automotive coils	Provides power for a variety of automotive electronic functions	Automotive management systems such as safety, communication, navigation, fuel efficiency and emissions control

          Electrical designs and manufactures a wide array of contact materials, parts and completed contact subassemblies. The following table contains a list of some of Electrical’s key products:

Primary Products	Function	Application
Contact prematerial such as wire and metal tapes	Raw materials	Made into our customers’ and competitors’ electrical contact parts
Electrical contact parts, either discrete or affixed to precision stamped parts	Complete or interrupt an electrical circuit	Electrical switches, relays, circuit breakers and motor controls
Component subassemblies	Integrate contact with precision stampings and plastic housings	Sensors and control devices

Sales, Marketing and Distribution

          Electronics and Electrical sell products predominantly through separate worldwide direct sales forces. Given the highly technical nature of our customers’ needs, our direct salespeople typically team up with members of our engineering staff to discuss a sale with a customer’s purchasing and engineering personnel. During the sales process, there is close interaction between our engineers and those in our customers’ organizations. This interaction extends throughout a product’s life cycle, engendering strong customer relationships. As of December 28, 2007, Electronics had approximately 73 salespeople and 10 sales offices worldwide and Electrical had approximately 32 salespeople and 7 sales offices worldwide.

          We provide technical and sales support for our direct and indirect sales force. We believe that our coordinated sales effort provides a high level of market penetration and efficient coverage of our customers on a cost-effective basis.

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Customers and End Markets

          We sell our products and services to original equipment manufacturers and original design manufacturers, which design, build and market end-user products. Electronics also sells its products to contract electronic manufacturers. We sometimes refer to original equipment manufacturers as “OEMs”, original design manufacturers as “ODMs” and contract equipment manufacturers as “CEMs.” ODMs contract with OEMs to design the OEMs products. CEMs contract with OEMs to manufacture the OEM’s products. Many OEMs use CEMs primarily or exclusively to build their products. Independent distributors sell components and materials to both OEMs and CEMs. Nonetheless, OEMs generally control the decision as to which component designs best meet their needs. Accordingly, we consider OEMs to be customers for our products even if they design products through ODMs or purchase our products through CEMs or independent distributors. In order to maximize our sales opportunities, Electronics’ engineering and sales teams maintain close relationships with OEMs, ODMs, CEMs and distributors.

          For the year ended December 28, 2007, one customer of Electronics accounted for more than 10% of our consolidated net sales. In the year ended December 29, 2006, no single customer accounted for more than 10% of our consolidated net sales. However, a group of affiliated customers, when aggregated, were greater than 10%. These customers are a major cell phone manufacturer and a CEM for the cell phone manufacturer. Sales to our ten largest customers accounted for 47.5% of net sales for the year ended December 28, 2007 and 38.0% of net sales for the year ended December 29, 2006.

          An increasing percentage of our sales in recent years has been outside of the United States. For the year ended December 28, 2007, 88.1% of our net sales were outside of the United States. During the years ended December 29, 2006 and December 30, 2005, 86.9% and 83.7%, respectively, of our net sales were to customers outside of the United States. Sales made by Electronics to its customers outside the United States accounted for 89.4% of its net sales for the year ended December 28, 2007, 89.6% of its net sales for the year ended December 29, 2006 and 85.2% for the year ended December 30, 2005. Sales made by Electrical to its customers outside the United States accounted for 85.8% of its net sales for the year ended December 28, 2007, 81.8% of its net sales for the year ended December 29, 2006 and 81.6% of its net sales for the year ended December 30, 2005.

Manufacturing

          We have developed our manufacturing processes in ways intended to maximize our profitability. Accordingly, the manufacturing of Electronics’ wirewound magnetics products tends to be labor intensive and highly variable. This model enables us to increase and decrease production rapidly to contain costs during slower periods, reflecting the relatively greater degree of cyclicality in these product lines. Conversely, the Electronics antenna and automotive divisions’ manufacturing plants are highly mechanized or, in some cases, automated and therefore very sensitive to the volume of production. These product lines tend to be less cyclical than those of wirewound magnetics. Electrical’s products tend to have longer life cycles and longer time to market. As a result, we have automated or mechanized many functions at Electrical’s facilities and vertically integrated our products in an attempt to utilize all of our manufacturing capabilities to create products that are higher value added and at a lower cost.

          Generally, our engineers design products to meet our customers’ product needs and then we mass-produce the products once a contract is awarded by, or orders are received from, our customer. To a much lesser extent, we also service customers that design their own components and outsource production of these components to us. We then build the components to the customer’s design.

          The absolute productive capacity of our facilities is difficult to quantify due to the continually changing extent of utilization. In any facility, maximum capacity and utilization vary periodically depending on the segment’s manufacturing strategies, the product being manufactured, current market conditions and customer demand. Therefore, we cannot accurately estimate our utilization of overall production capacity at a given time.

Research, Development and Engineering

          Our research, development and engineering efforts are focused on the design and development of innovative products in collaboration with our customers. We work closely with OEMs and ODMs to identify their design and engineering requirements. We maintain strategically located design centers throughout the world where proximity to customers enables us to better understand and more readily satisfy their design and engineering needs. Our design process is a disciplined and orderly process that uses a product data management system to track the level of design activity enabling us to manage and improve how our engineers design products. We typically own the customized designs used to make products.

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         Electronics’ research, development and engineering expenditures were $35.1 million for the year ended December 28, 2007, $35.0 million for the year ended December 29, 2006 and $21.4 million for the year ended December 30, 2005. The increase at Electronics over the past three years is primarily due to the inclusion of development and engineering expenditures of acquired companies since the date of acquisition. Electrical’s research, development and engineering expenditures were $5.3 million for the year ended December 28, 2007, $4.6 million for the year ended December 29, 2006 and $4.1 million for the year ended December 30, 2005. Over the past three years, Electrical has invested in research, development and engineering in order to improve our technological expertise and focus on product development. We intend to continue investing in personnel and new technologies so that our consolidated net sales will be positively impacted by factors such as improved product performance and a broader product portfolio.

Competition

         We believe we are a market leader in the primary markets we serve based on our estimates of the size of those markets in annual revenues and our share of those markets relative to our competitors. We do not believe that any one company competes with all of the product lines of either Electronics or Electrical on a global basis. However, both Electronics and Electrical frequently encounter strong competition within individual product lines, both domestically and internationally. In addition, several OEMs internally, or through CEMs, manufacture some of the products offered by Electronics and Electrical. We believe that this represents an opportunity to capture additional market share as OEMs decide to outsource component manufacturing. Therefore, we constantly work to identify these opportunities and to convince these OEMs that our economies of scale, purchasing power and manufacturing core competencies enable us to produce these products more efficiently. Increasingly, Electronics’ competitors are located in Asia and enjoy very low cost structures and very low cost of capital. Many of these competitors aggressively seek market share at the detriment of profits.

Competitive factors in the markets for our products include:
•	price;
•	product quality and reliability;
•	global design and manufacturing capabilities;
•	breadth of product line;
•	customer service; and
•	delivery time.

         We believe we are competitive in each of these factors. Product quality and reliability, as well as design and manufacturing capabilities, are enhanced through our commitment to continually invest in and improve our manufacturing and designing resources and our close relationships with our customers’ engineers. The breadth of our product offering provides customers with the ability to satisfy their entire electronic component or electrical contact needs through one supplier. Our global presence enables us to deepen our relationship with our customers and to better understand and more easily satisfy the needs of local markets. In addition, our ability to purchase raw materials in large quantities and our focus on continually reducing our production expenses reduces our manufacturing costs and enables us to price our products competitively.

Employees

         As of December 28, 2007, we had approximately 26,100 full-time employees as compared to 28,100 as of December 29, 2006. The number of employees at year-end includes employees of certain subcontractors that are integral to our operations in the People’s Republic of China (“PRC” or “China”). Such employees numbered approximately 14,100 and 17,000 as of December 28, 2007 and December 29, 2006, respectively. The decrease in employees from 2006 to 2007 was primarily the result of higher voluntary terminations of hourly employees in the PRC during December 2007 as compared to December 2006. We believe this increase in voluntary terminations was also experienced by other companies with manufacturing operations in the PRC. Of the 26,100 full-time employees, approximately 700 were located in the United States. There are no employees in the United States covered by collective-bargaining agreements. We have not experienced any major work stoppages and consider our relations with our employees to be good.

Raw Materials

Raw materials necessary for the manufacture of our products include:
•	precious metals such as silver;
•	base metals such as copper and brass; and
•	ferrite cores.

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          Currently, we do not have significant difficulty obtaining any of our raw materials and do not anticipate that we will face any significant difficulties in the near future. However, many of the raw materials we use are considered commodities, such as copper, tungsten, nickel, silver and gold, and the market prices of a number of these commodities have been volatile in the last several years. Although we are not dependent on any one particular source of supply, several of our raw materials are sold by a limited number of suppliers, which could affect the price of these materials. Should prices rise or a shortage occur in any necessary raw material, our manufacturing costs will likely increase, which may result in lower margins if we are unable to pass along the price increases to our customers.

          Electrical uses precious metals, primarily silver, in manufacturing many of its electrical contacts, contact materials and contact subassemblies. Historically, we have leased or held these precious metals through consignment arrangements with our suppliers. Leasing and consignment costs have historically been substantially below the costs to borrow funds to purchase the metals and these arrangements eliminate the effect of fluctuations in the market price associated with owned precious metal. Electrical’s terms of sale generally allow us to charge customers for the fabricated market value of silver on the day after we ship the silver bearing product to the customer. See additional discussions of precious metals beginning on page 21.

Backlog

          Our backlog of orders at December 28, 2007 was $94.8 million compared to $115.1 million at December 29, 2006. We expect to ship the majority of the backlog over the next six months. Customers can cancel orders at any time, sometimes requiring a payment of cancellation charges. We do not believe that our backlog is an accurate indicator of near-term business activity because short lead times, increased use of vendor managed inventory and other similar consignment type arrangements tend to distort the significance of backlog. Orders from these arrangements typically are not reflected in backlog.

Intellectual Property

          We own many patents and have acquired the use of patents of others under license agreements, which impose restrictions on other’s ability to utilize the intellectual property. We seek to limit disclosure of our intellectual property by requiring employees and consultants with access to our proprietary information to enter into confidentiality agreements with us and by restricting access to our proprietary information.

          Existing legal protections afford only limited protection for our products. For example, others may independently develop similar or competing products or attempt to copy or use aspects of our products that we regard as proprietary. Furthermore, intellectual property law may not fully protect products or technology that we consider to be our own, and claims of intellectual property infringement may be asserted against us or against our customers in connection with their use of our products.

          While our intellectual property is important to us in the aggregate, we do not believe any individual patent, trademark, or license is material to our business or operations.

Environmental

          Our manufacturing operations are subject to a variety of local, state, federal, and international environmental laws and regulations governing air emissions, wastewater discharges, the storage, use, handling, disposal and remediation of hazardous substances and wastes and employee health and safety. It is our policy to meet or exceed the environmental standards set by these laws. However, in the normal course of business, environmental issues may arise. We may incur increased costs associated with environmental compliance and cleanup projects necessitated by the identification of new environmental issues or new environmental laws and regulations.

Available Information

          We make available free of charge on our website, www.technitrol.com, all materials that we file electronically with the Securities and Exchange Commission (“SEC”), including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports and all Board and Committee charters, as soon as reasonably practicable after we electronically file or furnish such materials to the SEC.

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Item 1a Risk Factors

Factors That May Affect Our Future Results (Cautionary Statements for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995)

          Our disclosures and analysis in this report contain forward-looking statements. Forward-looking statements reflect our current expectations of future events or future financial performance. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They often use words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, and similar terms. These forward-looking statements are based on our current plans and expectations.

          Any or all of our forward-looking statements in this report may prove to be incorrect. They may be affected by inaccurate assumptions we might make or by risks and uncertainties which are either unknown or not fully known or understood. Accordingly, actual outcomes and results may differ materially from what is expressed or forecasted in this report.

          We sometimes provide forecasts of future financial performance. The risks and uncertainties described under “Risk Factors” as well as other risks identified from time to time in other Securities and Exchange Commission reports, registration statements and public announcements, among others, should be considered in evaluating our prospects for the future. We undertake no obligation to release updates or revisions to any forward-looking statement, whether as a result of new information, future events or otherwise.

          The following factors represent what we believe are the major risks and uncertainties in our business. They are listed in no particular order.

Cyclical changes in the markets we serve could result in a significant decrease in demand for our products and reduce our profitability.

          Our components are used in various products for the electronic and electrical markets. These markets are cyclical. Generally, the demand for our components reflects the demand for products in the electronic and electrical equipment markets. A contraction in demand would result in a decrease in sales of our products, as our customers:

• may cancel many existing orders;

• may introduce fewer new products;

• may discontinue current products; and

• may decrease their inventory levels.

          A decrease in demand for our products would have a significant adverse effect on our operating results and profitability. Accordingly, we may experience volatility in both our revenues and profits.

Reduced prices for our products may adversely affect our profit margins if we are unable to reduce our costs of production.

          The average selling prices for our products tend to decrease over their life cycle. In addition, foreign currency movements and the desire to retain market share increase the pressure on our customers to seek lower prices from their suppliers. As a result, our customers are likely to continue to demand lower prices from us. To maintain our margins and remain profitable, we must continue to meet our customers’ design needs while reducing costs through efficient raw material procurement and process and product improvements. Our profit margins will suffer if we are unable to reduce our costs of production as sales prices decline.

An inability to adequately respond to changes in technology, applicable standards or customer needs may decrease our sales.

          Electronics operates in an industry characterized by rapid change caused by the frequent emergence of new technologies and standards. Generally, we expect life cycles for our products in the electronic components industry to be relatively short. This requires us to anticipate and respond rapidly to changes in industry standards and customer needs and to develop and introduce new and enhanced products on a timely and cost effective basis. Our engineering and development teams place a priority on working closely with our customers to design innovative products and improve our manufacturing processes. Similarly, at Electrical, the performance and cost of electrical contacts are closely linked to alloys used in their production. Improving performance and reducing costs for our customers requires continuing

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development of new alloys and products. Our inability to react to changes in technology, standards or customer needs quickly and efficiently may decrease our sales or margins.

If our inventories become obsolete, our future performance and operating results will be adversely affected.

          The life cycles of our products depend heavily upon the life cycles of the end products into which our products are designed. Many of Electronics’ products have very short life cycles which are measured in quarters. Products with short life cycles require us to closely manage our production and inventory levels. Inventory may become obsolete because of adverse changes in end market demand. During market slowdowns, this may result in significant charges for inventory write-offs. Our future operating results may be adversely affected by material levels of obsolete or excess inventories.

An inability to capitalize on our recent or future acquisitions may adversely affect our business.

          We have completed several acquisitions in recent years. We continually seek acquisitions to grow our business. We may fail to derive significant benefits from our acquisitions. In addition, if we fail to achieve sufficient financial performance from an acquisition, long-lived assets, such as property, plant and equipment, goodwill and other intangibles, could become impaired, resulting in our recognition of an impairment loss.

	The success of any of our acquisitions depends on our ability to:
•	successfully execute the integration or consolidation of the acquired operations into our existing businesses;
•	develop or modify the financial reporting and information systems of the acquired entity to ensure overall financial integrity and adequacy of internal control procedures;
•	identify and take advantage of cost reduction opportunities; and
•	further penetrate the markets for the product capabilities acquired.

          Integration of acquisitions may take longer than we expect and may never be achieved to the extent originally anticipated. This could result in lower than anticipated business growth or higher than anticipated costs. In addition, acquisitions may:

• cause a disruption in our ongoing business;

• distract our managers;

• unduly burden our other resources; and

• result in an inability to maintain our historical standards, procedures and controls, which may result in non-compliance with external laws and regulations.

Integration of acquisitions into the acquiring segment may limit the ability of investors to track the performance of individual acquisitions and to analyze trends in our operating results.

          Our historical practice has been to rapidly integrate acquisitions into the existing business of the acquiring segment and to report financial performance on the segment level. As a result of this practice, we do not separately track the standalone performance of acquisitions after the date of the transaction. Consequently, investors cannot quantify the financial performance and success of any individual acquisition or the financial performance and success of a particular segment excluding the impact of acquisitions. In addition, our practice of rapidly integrating acquisitions into the financial performance of each segment may limit the ability of investors to analyze any trends in our operating results over time.

An inability to identify, consummate or integrate acquisitions may slow our future growth.

          We plan to continue to identify and consummate additional acquisitions to further diversify our business and to penetrate important markets. We may not be able to identify suitable acquisition candidates at reasonable prices. Even if we identify promising acquisition candidates, the timing, price, structure and success of future acquisitions are uncertain. An inability to consummate or integrate attractive acquisitions may reduce our growth rate and our ability to penetrate new markets.

If our customers terminate their existing agreements, or do not enter into new agreements or submit additional purchase orders for our products, our business will suffer.

          Most of our sales are made on a purchase order basis, as needed by our customers. In addition, to the extent we have agreements in place with our customers, most of these agreements are either short term in nature or provide our

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customers with the ability to terminate the arrangement with little or no prior notice. Such agreements typically do not provide us with any material recourse in the event of non-renewal or early termination. We will lose business and our revenues will decrease if a significant number of customers:

• do not submit additional purchase orders;

• do not enter into new agreements with us; or

• elect to terminate their relationship with us.

If we do not effectively manage our business in the face of fluctuations in the size of our organization, our business may be disrupted.

          We have grown both organically and as a result of acquisitions. However, we significantly reduce or expand our workforce and facilities in response to rapid changes in demand for our products due to prevailing global market conditions. These rapid fluctuations place strains on our resources and systems. If we do not effectively manage our resources and systems, our businesses may be adversely affected.

Uncertainty in demand for our products may result in increased costs of production, an inability to service our customers, or higher inventory levels which may adversely affect our results of operations and financial condition.

          We have very little visibility into our customers’ future purchasing patterns and are highly dependent on our customers’ forecasts. These forecasts are non-binding and often highly unreliable. Given the fluctuation in growth rates and cyclical demand for our products, as well as our reliance on often-imprecise customer forecasts, it is difficult to accurately manage our production schedule, equipment and personnel needs and our raw material and working capital requirements.

	Our failure to effectively manage these issues may result in:
•	production delays;
•	increased costs of production;
•	excessive inventory levels and reduced financial liquidity;
•	an inability to make timely deliveries; and
•	a decrease in profits.

A decrease in availability of our key raw materials could adversely affect our profit margins.

	We use several types of raw materials in the manufacturing of our products, including:
•	precious metals such as silver;
•	other base metals such as copper and brass; and
•	ferrite cores.

          Some of these materials are produced by a limited number of suppliers. We may be unable to obtain these raw materials in sufficient quantities or in a timely manner to meet the demand for our products. The lack of availability or a delay in obtaining any of the raw materials used in our products could adversely affect our manufacturing costs and profit margins. In addition, if the price of our raw materials increases significantly over a short period of time due to increased market demand or shortage of supply, customers may be unwilling to bear the increased price for our products and we may be forced to sell our products containing these materials at prices that reduce our profit margins.

Costs associated with precious metals and base metals may not be recoverable.

          Some of our raw materials, such as precious metals and certain base metals, are considered commodities and are subject to price volatility. We attempt to limit our exposure to fluctuations in the cost of precious materials, including silver, by holding the majority of our precious metal inventory through leasing or consignment arrangements with our suppliers. We then typically purchase the precious metal from our supplier at the current market price on the day after shipment to our customer and pass this cost on to our customer. We try to limit our exposure to base metal price fluctuations by attempting to pass through the cost of base metals to our customers, typically by indexing the cost of the base metal, so that our cost of the base metal closely relates to the price we charge our customers, but we may not always be successful in indexing these costs or fully passing through costs to our customers.

          Leasing/consignment fee increases are primarily caused by increases in interest rates or volatility in the price of the consigned material. Fees charged by the consignor are driven by interest rates and the market price of the consigned

11

material. The market price of the consigned material is determined by the supply of, and the demand for, the material. Consignment fees may increase if interest rates or the price of the consigned material increase.

	Our results of operations and liquidity will be negatively impacted if:
•	we are unable to enter into new leasing or consignment arrangements with similarly favorable terms after our existing agreements terminate;
•	our leasing or consignment fees increase significantly in a short period of time and we are unable to recover these increased costs through higher sale prices; and
•	we are unable to pass through higher base metals costs to our customers.

Competition may result in lower prices for our products and reduced sales.

          Both Electronics and Electrical frequently encounter strong competition within individual product lines from various competitors throughout the world. We compete principally on the basis of:

•	product quality and reliability;
•	global design and manufacturing capabilities;
•	breadth of product line;
•	customer service;
•	price; and
•	on-time delivery.
	Our inability to successfully compete on any or all of the above factors may result in reduced sales.

Fluctuations in foreign currency exchange rates may adversely affect our operating results.

          We manufacture and sell our products in various regions of the world and export and import these products to and from a large number of countries. Fluctuations in exchange rates could negatively impact our cost of production and sales which, in turn, could decrease our operating results and cash flow. In addition, if the functional currency of our manufacturing costs strengthened compared to the functional currency of our competitors’ manufacturing costs, our products may become more costly than our competitors’. Although we engage in limited hedging transactions, including foreign currency contracts, to reduce our transaction and economic exposure to foreign currency fluctuations, these measures may not eliminate or substantially reduce our risk in the future.

Our international operations subject us to the risks of unfavorable political, regulatory, labor and tax conditions in other countries.

          We manufacture and assemble most of our products in locations outside the United States, including China, Mexico and Tunisia and a majority of our revenues are derived from sales to customers outside the United States. Our future operations and earnings may be adversely affected by the risks related to, or any other problems arising from, operating in international locations and markets.

	Risks inherent in doing business internationally may include:
•	the inability to repatriate cash on a timely basis;
•	economic and political instability;
•	expropriation and nationalization;
•	trade restrictions;
•	capital and exchange control programs;
•	transportation delays;
•	foreign currency fluctuations; and
•	unexpected changes in the laws and policies of the United States or of the countries in which we manufacture and sell our products.

          Electronics has the majority of its non-automotive manufacturing operations in the PRC. Our presence in the PRC has enabled Electronics to maintain lower manufacturing costs and to adjust our work force to demand levels for our products. Although the PRC has a large and growing economy, the potential economic, political, legal and labor developments entail uncertainties and risks. For example, wages have been increasing over the last several years in the southern coastal provinces. While the PRC has been receptive to foreign investment, we cannot be certain that its current policies will continue indefinitely into the future. In the event of any changes that adversely affect our ability to

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conduct our operations within the PRC, our businesses may suffer. We also have manufacturing operations in Tunisia and Mexico, which are subject to unique risks, including earthquakes in Tunisia and those associated with Middle Eastern and Mexican geo-political events.

          We have benefited over recent years from favorable tax treatment as a result of our international operations. We operate in countries where we realize favorable income tax treatment relative to the U.S. statutory rate. We have also been granted special tax incentives commonly known as tax holidays in countries such as the PRC and Tunisia. This favorable situation could change if these countries were to increase rates or discontinue the special tax incentives, or if we discontinue our manufacturing operations in any of these countries and do not replace the operations with operations in other locations with similar tax incentives. For example, the withholding tax rate on dividend payments from most of our PRC subsidiaries is expected to be 5% starting in 2008. In addition, the corporate income tax rate for PRC companies will be 15% or 25% after the applicable holiday and transition period expire, depending on whether the company qualifies as a high-technology company or meets other conditions. Accordingly, in the event of changes in laws and regulations affecting our international operations, we may not be able to continue to take advantage of similar benefits in the future.

Shifting our operations between regions may entail considerable expense.

          In the past we have shifted our operations from one region to another in order to maximize manufacturing and operational efficiency. We may close one or more additional factories in the future. This could entail significant one-time earnings charges to account for severance, long-lived asset impairments, write-offs, write downs and moving expenses, as well as certain adverse tax consequences including the loss of specialized tax incentives or non-deductible expenses. In addition, as we implement transfers of our operations we may experience disruptions, including strikes or other types of labor unrest resulting from layoffs or termination of employees.

Liquidity requirements could necessitate movements of existing cash balances which may be subject to restrictions or cause unfavorable tax and earnings consequences.

          A significant portion of our cash is held offshore by our international subsidiaries and is predominantly denominated in currencies other than the U.S. dollar. While we intend to use a significant amount of the cash held overseas to fund our international operations and growth, if we encounter a significant domestic need for liquidity that we cannot fulfill through borrowings, equity offerings, or other internal or external sources, we may experience unfavorable tax and earnings consequences if this cash is transferred to the United States. These adverse consequences would occur if the transfer of cash into the United States is taxed and no offsetting foreign tax credit is available to offset the U.S. tax liability, resulting in lower earnings. In addition, we may be prohibited from transferring cash from the PRC. For example, foreign exchange ceilings imposed by local governments and sometimes lengthy approval processes which foreign governments require for international cash transfers may delay our internal cash transfers from time to time. We have not experienced any significant liquidity restrictions in any country in which we operate and none are presently foreseen.

          With the exception of approximately $25.1 million of retained earnings as of December 28, 2007 in primarily the PRC that are restricted in accordance with the PRC Foreign Investment Enterprises Law, substantially all retained earnings are free from legal or contractual restrictions. This law restricts 10% of our net earnings in the PRC, up to a maximum amount equal to 50% of the total capital we have invested in the PRC.

Losing the services of our executive officers or our other highly qualified and experienced employees could adversely affect our business.

          Our success depends upon the continued contributions of our executive officers and management, many of whom have many years of experience and would be extremely difficult to replace. We must also attract and maintain experienced and highly skilled engineering, sales and marketing and managerial personnel. Competition for qualified personnel is intense in our industries, and we may not be successful in hiring and retaining these people. If we lose the services of our executive officers or cannot attract and retain other qualified personnel, our businesses could be adversely affected.

Public health epidemics (such as flu strains, or severe acute respiratory syndrome) or other natural disasters (such as earthquakes or fires) may disrupt operations in affected regions and affect operating results.

          Electronics and, to a lesser extent, Electrical, maintain extensive manufacturing operations in the PRC and other emerging economies, as do many of our customers and suppliers. A sustained interruption of our manufacturing operations, or those of our customers or suppliers, resulting from complications caused by a public health epidemic or other natural disasters could have a material adverse effect on our business and results of operations.

13

The unavailability of insurance against certain business risks may adversely affect our future operating results.

          As part of our comprehensive risk management program, we purchase insurance coverage against certain business risks. If any of our insurance carriers discontinues an insurance policy or significantly reduces available coverage or increases in the deductibles and we cannot find another insurance carrier to write comparable coverage at similar costs, we may be subject to increased costs of uninsured losses which may adversely affect our operating results.

Environmental liability and compliance obligations may affect our operations and results.

          Our manufacturing operations are subject to a variety of environmental laws and regulations as well as internal programs and policies governing:

• air emissions;

• wastewater discharges;

• the storage, use, handling, disposal and remediation of hazardous substances, wastes and chemicals; and

• employee health and safety.

          If violations of environmental laws should occur, we could be held liable for damages, penalties, fines and remedial actions for contamination discovered at our present or former facilities. Our operations and results could be adversely affected by any material obligations arising from existing laws or new regulations that may be enacted in the future. We may also be held liable for past disposal of hazardous substances generated by our business or businesses we acquire.

An increase in our debt levels could adversely affect our financial position, liquidity and perception of our financial condition in the financial markets.

          We entered into an agreement on January 8, 2008 with JPMorgan Chase Bank, N.A. and J.P. Morgan Securities, Inc. to arrange and syndicate a $200.0 million senior term loan facility and a $300.0 million senior revolving credit facility. The principal purpose of this agreement, which is expected to close at the end of February 2008, is to fund the acquisition of Sonion A/S. Borrowing against this agreement will increase our outstanding debt. Because this financing will decrease our ratio of earnings to fixed charges and adversely affect other leverage criteria, the marketplace could react negatively to our new debt levels, which in turn could affect our share price. Covenants with our lenders under this agreement, that require our compliance with specific financial ratios, may also make it difficult for us to obtain additional financing on acceptable terms for future acquisitions and other corporate needs. Although at present we anticipate no difficulty in meeting such covenants in the normal course of operations, our ability to remain in compliance with the covenants may be adversely affected by future events beyond our control. If we breach any of these covenants, than we may be declared to be in default. This may result in our lenders electing to declare our outstanding borrowings immediately due and payable and terminate all commitments to extend further credit. If the lenders accelerate the repayment of borrowings, we cannot provide assurance that we will have sufficient assets to repay our credit facilities and other indebtedness. See “Liquidity and Capital Resources” in Item 7.

Our results may be negatively affected by changing interest rates.

          We are subject to market risk from exposure to changes in interest rates. We do not expect changes in interest rates to have a material effect on income or cash flows in the future, although there can be no assurances that interest rates will not significantly change. To address the risk of changing interest rates, we may utilize derivatives or other financial instruments.

Item 1b Unresolved Staff Comments

          None

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Item 2 Properties

          We are headquartered in Trevose, Pennsylvania where we lease approximately 8,000 square feet of office space. Through Electronics and Electrical, we operated 23 manufacturing plants in 6 countries as of December 28, 2007. We continually seek to size our operations in order to maximize cost efficiencies. Accordingly, in the future, we may take further actions to increase or decrease our manufacturing capacity. To maximize production efficiencies, we seek, whenever practical, to establish manufacturing facilities in countries where we can take advantage of lower labor costs and, if available, various government incentives and tax benefits. We also seek to maintain facilities in those regions where we market our products in order to maintain a local presence in proximity to our customers.

          The following is a list of the locations of our principal manufacturing facilities at December 28, 2007:

Electronics Location (1)	Approx. Square Ft. (3)	Owned/Leased	Approx. Percentage Used For Manufacturing
Ningbo, PRC (2)	363,000	Owned	80%
Zhuhai, PRC	341,000	Leased	100%
Dongguan, PRC	231,000	Leased	100%
Suzhou, PRC	132,000	Leased	100%
Zhongshan, PRC	128,000	Leased	80%
Mianyang, PRC	116,000	Leased	100%
Shenzhen, PRC	68,000	Leased	100%
Herrenberg, Germany	55,000	Leased	80%
Bizerte, Tunisia	38,000	Owned	90%
Vancouver, Washington	25,000	Leased	60%
Bristol, Pennsylvania	20,000	Leased	60%
Meinerzagen, Germany	16,000	Leased	80%
Total	1,533,000

(1)	In addition to these manufacturing locations, Electronics has 279,000 square feet of space which is used for engineering, sales and administrative support functions at various locations, including Electronics’ headquarters in San Diego, California. In addition, Electronics leases approximately 1,703,000 square feet of space for dormitories, canteens and other employee-related facilities in the PRC.
(2)	Primarily facilities of Full Rise Electronic Co., Ltd. (“FRE”), a majority-owned subsidiary.
(3)	Consists of aggregate square footage in each locality where manufacturing facilities are located. More than one manufacturing facility may be located within each locality.

Electrical Location (1)	Approx. Square Ft.	Owned/Leased	Approx. Percentage Used For Manufacturing
Pforzheim, Germany	490,000	Owned	65%
Sinsheim, Germany	222,000	Owned	60%
Export, Pennsylvania	115,000	Leased	80%
Tianjin, PRC	62,000	Leased	100%
Mexico City, Mexico	44,000	Leased	80%
Luquillo, Puerto Rico	32,000	Owned	80%
Madrid, Spain	31,000	Owned	90%
Total	996,000

(1) Engineering, sales and administrative support functions for Electrical are generally contained in each of these locations.

Item 3 Legal Proceedings

          We are a party to various legal proceedings and other actions. See discussion in Note 11 to the consolidated financial statements. We expect litigation to arise in the normal course of business. Although it is difficult to predict the outcome of any legal proceeding, we do not believe these proceedings and actions will, individually or in the aggregate, have a material adverse effect on our consolidated financial condition or results of operations.

Item 4 Submission of Matters to a Vote of Security Holders

          None

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Part II

Item 5 Market for Registrant’s Common Equity and Related Stockholder Matters

          Our common stock is traded on the New York Stock Exchange under the ticker symbol “TNL”. The following table reflects the highest and lowest sales prices in each quarter of the last two years.

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
2007 High		$	26.77		$	29.23		$	29.10		$	30.50
2007 Low		$	21.06		$	25.18		$	22.00		$	24.87
2006 High		$	24.04		$	28.55		$	30.85		$	32.28
2006 Low		$	16.78		$	20.01		$	18.20		$	22.50

          On December 28, 2007, there were approximately 1,025 registered holders of our common stock, which has a par value of $0.125 per share and is the only class of stock that we have outstanding. See additional discussion on restricted earnings of subsidiaries in Item 7, Liquidity and Capital Resources, and in Note 12 of our consolidated financial statements.

          We used $14.3 million for dividend payments during the year ended December 28, 2007. On October 26, 2007, we announced a quarterly cash dividend of $0.0875 per common share, payable on January 18, 2008 to shareholders of record on January 4, 2008. This quarterly dividend will result in a cash payment to shareholders of approximately $3.6 million in the first quarter of 2008. We expect to continue making quarterly dividend payments for the foreseeable future. We used $14.2 million and $10.6 million for dividend payments during the years ended December 29, 2006 and December 30, 2005.

          Information as of December 28, 2007 concerning plans under which our equity securities are authorized for issuance are as follows:

Plan Category	Number of shares to be issued upon exercise of options, grant of restricted shares or other incentive shares		Weighted average exercise price of outstanding options			Number of securities remaining available for future issuance
Equity compensation plans approved by security holders		6,005,000		$	18.96		2,942,589
Equity compensation plans not approved by security holders		0			0		0
Total		6,005,000		$	18.96		2,942,589

          On May 15, 1981, our shareholders approved an incentive compensation plan (“ICP”) intended to enable us to obtain and retain the services of employees by providing them with incentives that may be created by the Board of Directors Compensation Committee under the ICP. Subsequent amendments to the plan were approved by our shareholders including an amendment on May 23, 2001 which increased the total number of shares of our common stock which may be granted under the plan to 4,900,000. Our 2001 Stock Option Plan and the Restricted Stock Plan II were adopted under the ICP. In addition to the ICP, plans approved by us include a 105,000 share Board of Director Stock Plan and a 1,000,000 share Employee Stock Purchase Plan (“ESPP”). During 2004, the operation of the ESPP was suspended following an evaluation of its affiliated expense and perceived value by employees. Of the 2,942,589 shares remaining available for future issuance, 2,095,209 shares are attributable to our Incentive Compensation Plan, 812,099 shares are attributable to our ESPP, and 35,281 shares are attributable to our Board of Director Stock Plan. Note 13 to the consolidated financial statements contains additional information regarding our stock-based compensation plans.

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Comparison of Five-Year Cumulative Total Return

          The following graph compares the growth in value on a total-return basis of $100 investments in Technitrol, the Russell 2000® Index and the Dow Jones Electrical Components and Equipment Industry Group Index between December 27, 2002 and December 28, 2007. Total-return data reflect closing share prices on the final day of each Technitrol fiscal year. Cash dividends paid are considered as if reinvested. The graph does not reflect intra-year price fluctuations.

          The Russell 2000® Index consists of the 2,000 smallest companies and about 10% of the total market capitalization of the Russell 3000® Index. The Russell 3000 represents about 98% of the investable U.S. equity market. As of the latest reconstitution, the average market capitalization of the Russell 2000 was approximately $705.4 million.

          At December 28, 2007, the Dow Jones U.S. Electrical Components and Equipment Index included the common stock of Amphenol Corp., Anixter International, Inc., Arrow Electronics, Inc., Avnet, Inc., AVX Corp., Baldor Electric Co., Belden CDT, Inc., Benchmark Electronics, Inc., Commscope, Inc., Cooper Industries Ltd. Class A, CTS Corp., Emerson Electric Co., Energy Conversion Devices, Inc., Flextronics International, Ltd., General Cable Corp., GrafTech International Ltd., Hubbell Inc. Class B, Itron, Inc., Jabil Circuit, Inc., Kemet Corp., Littelfuse, Inc., Methode Electronics, Inc., Molex, Inc. and Molex, Inc. Class A, Park Electrochemical Corp., Plexus Corp., Power-One, Inc., Powerwave Technologies, Inc., Regal-Beloit Corp., Sanmina-SCI Corp., SunPower Corp. Class A, SPX Corp., Technitrol, Inc., Thomas & Betts Corp., Tyco Electronics Ltd., Wesco International, Inc. and Vishay Intertechnology, Inc.

	2002		2003		2004		2005		2006		2007
Technitrol	$	100.00	$	122.99	$	108.18	$	103.50	$	146.78	$	180.82
Russell 2000® Index	$	100.00	$	146.27	$	173.80	$	181.71	$	215.09	$	213.30
Dow Jones U.S. Electrical Components & Equipment Index	$	100.00	$	164.52	$	155.14	$	159.23	$	179.57	$	217.49

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Item 6 Selected Financial Data (in thousands, except per share amounts)

	2007		2006(7)(6)		2005(6)(5)			2004(4)(3)			2003
Net sales	$	1,026,555	$	954,096	$	616,378		$	561,298		$	494,856
Earnings (loss) from continuing operations before cumulative effect of accounting changes	$	61,657	$	56,895	$	(25,828	)	$	7,107		$	12,333
Cumulative effect of accounting changes, net of income taxes		—		75		(564	)		—			—
Net earnings (loss) from discontinued operations		—		233		(472	)		(179	)		(345	)
Net earnings (loss)	$	61,657	$	57,203	$	(26,864	)	$	6,928		$	11,988
Basic earnings per share:
Earnings (loss) from continuing operations before cumulative effect of accounting changes	$	1.52	$	1.41	$	(0.65	)	$	0.18		$	0.31
Cumulative effect of accounting changes, net of income taxes		—		0.00		(0.01	)		—			—
Net earnings (loss) from discontinued operations		—		0.01		(0.01	)		(0.01	)		(0.01	)
Net earnings (loss)	$	1.52	$	1.42	$	(0.67	)	$	0.17		$	0.30
Diluted earnings per share:
Earnings (loss) from continuing operations before cumulative effect of accounting changes	$	1.51	$	1.40	$	(0.65	)	$	0.18		$	0.31
Cumulative effect of accounting changes, net of income taxes		—		0.00		(0.01	)		—			—
Net earnings (loss) from discontinued operations		—		0.01		(0.01	)		(0.01	)		(0.01	)
Net earnings (loss)	$	1.51	$	1.41	$	(0.67	)	$	0.17		$	0.30
Total assets	$	821,353	$	769,480	$	684,902		$	636,528		$	588,894
Total long-term debt	$	10,467	$	57,391	$	83,492		$	7,255		$	6,837
Shareholders’ equity	$	561,079	$	479,029	$	417,264		$	464,862		$	448,750
Net worth per share	$	13.72	$	11.76	$	10.30		$	11.49		$	11.14
Working capital (1)	$	231,817	$	189,004	$	209,841		$	238,898		$	199,770
Current ratio		2.2 to 1		2.0 to 1		2.1 to 1			2.9 to 1			2.7 to 1
Number of shares outstanding:
Weighted average, including common stock equivalents		40,794		40,594		40,297			40,411			40,171
Year end		40,901		40,751		40,529			40,448			40,279
Dividends declared per share (2)	$	0.35	$	0.35	$	0.35		$	—		$	—
Price range per share:
High	$	30.50	$	32.28	$	19.03		$	23.28		$	24.43
Low	$	21.06	$	16.78	$	12.20		$	16.10		$	13.50

(1)	Includes cash and cash equivalents and current installments of long-term debt.
(2)	On February 2, 2005 we resumed the practice of paying a quarterly dividend.
(3)	During 2004, we recorded $18.5 million in intangible asset impairments, less a $2.2 million tax benefit.
(4)	On September 13, 2004 we acquired a majority interest in FRE, and began consolidating FRE’s results, less a minority interest. Our investment in FRE was previously accounted for under the equity method.
(5)	On September 8, 2005, we purchased LK Products Oy for $111.1 million in cash.
(6)	During 2005, we recorded a charge for a cumulative effect of accounting change of $0.6 million net of an income tax benefit which is included in net (loss) earnings from continuing operations. Additionally, we recorded a $38.5 million intangible asset impairment and an $8.9 million fixed asset impairment, less a $0.2 million tax benefit. See Note 1 to the consolidated financial statements for a description of an immaterial change to prior year financial statements.
(7)	On January 4, 2006, we acquired the ERA Group for $53.4 million in cash financed primarily through borrowings from our multi-currency credit facility.

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Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

          This discussion and analysis of our financial condition and results of operations as well as other sections of this report, contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. Actual results may differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in “Risk Factors” section of this report on page 9 through 14.

Overview

          We are a global producer of precision-engineered electronic components and modules and electrical contact products and materials. We believe we are a leading global producer of these products and materials in the primary markets we serve based on our estimates of the size of our primary markets in annual revenues and our share of those markets relative to our competitors.

We operate our business in two segments:
	•	our Electronic Components Group (“Electronics”) which is known in its markets as Pulse, and
	•	our Electrical Contact Products Group (“Electrical”) which is known in its markets as AMI Doduco.

          General. We define net sales as gross sales less returns and allowances. We sometimes refer to net sales as revenue.

          Historically, the gross margin at Electronics has been significantly higher than at Electrical. As a result, the mix of net sales generated by Electronics and Electrical during a period affects our consolidated gross margin. Our gross margin is also affected by our acquisitions, product mix within each segment and capacity utilization, particularly in higher fixed-cost operations in Electrical and Electronics’ antenna and automotive divisions. Gross margin in Electrical is also affected by prices of precious and non-precious metals, which are passed through to customers at varying margins. Electronics’ markets are characterized by relatively short product life cycles compared to those of our Electrical segment. As a result, significant product turnover occurs each year in Electronics. Electrical has a relatively long-lived and mature product line, with less turnover, and with less frequent variation in the prices of products sold, relative to Electronics. Many of Electrical’s products are sold under annual (or longer) purchase contracts. Therefore, Electrical’s revenues historically have not been subject to significant price fluctuations. Changes in unit volume and unit prices will affect our net sales and gross margin from period to period. However, due to the constantly changing amount of part numbers we offer and frequent changes in our average selling prices, we cannot quantify the impact of changes in unit volume and unit prices on our net sales and gross margin in any given period. Changes in foreign exchange rates, especially the U.S. dollar to the euro and the U.S. dollar to the Chinese renminbi, also affect U.S. dollar reported sales.

          Acquisitions. Acquisitions have been an important part of our growth strategy. In many cases, our move into new product lines and extensions of our existing product lines or markets have been facilitated by acquisitions. Our acquisitions continually change the mix of our net sales. We have made numerous acquisitions in recent years which have increased our penetration into our primary markets and expanded our presence in new markets. We purchased the assets of Larsen in December 2006. Larsen was headquartered in Vancouver, Washington and manufactured advanced antenna systems for non-cellular wireless and automotive applications. ERA was acquired in January 2006 for approximately $53.4 million, net of cash acquired. ERA was based in Herrenberg, Germany and was a leading producer of electronic coils and transformers primarily for the European automotive, heating/ventilation/air conditioning and appliance markets. LK was acquired in September 2005 for approximately $111.1 million, net of cash acquired. LK was based in Kempele, Finland, and was a producer of internal antennas and integrated modules for mobile communications and information devices. We began making investments in FRE in 2001 and now own a majority of the outstanding common shares. FRE is based in Taiwan and manufactured connector products, including single and multiple port jacks, and supplies such products to Electronics under a cooperation agreement. In January of 2008, we announced our acquisition of Sonion A/S for approximately $385 million excluding transaction costs. Sonion is headquartered in Roskilde, Denmark and produces microacoustic transducers and micromechanical components used in hearing instruments, acoustic devices, medical devices and mobile communication devices. Closing of this transaction is expected before the end of February 2008. We plan to continue pursuing acquisition opportunities in the future.

19

          Divestiture. In 2005, we received approximately $6.7 million for the sale of Electrical’s bimetal and metal cladding operations. We have reflected the results of the bimetal and metal cladding operations as discontinued operations on the Consolidated Statements of Operations for all periods presented.

          Technology. Our products must change along with changes in technology, design, and preferences of consumers and other end users of our products, as well as changes in regulatory requirements. We address this need by continuing to invest in new product development and by maintaining a diverse product portfolio which contains both mature and emerging technologies in order to meet customer demands.

          Management Focus. Our executives focus on a number of important factors in evaluating our financial condition and operational performance. For example, we use economic profit, revenue growth, gross profit as a percentage of revenue, and operating profit as a percent of revenue. We define economic profit as after-tax operating profit less our cost of capital. Operating leverage or incremental operating profit as a percentage of incremental sales is also reviewed, as this is believed to reflect the benefit of absorbing fixed overhead and operating expenses. In evaluating working capital management, liquidity and cash flow, our executives also use performance measures such as days sales outstanding, days payable outstanding, inventory turnover, cash conversion efficiency and free cash flow. Additionally, as the continued success of our business is largely dependent on meeting and exceeding our customers’ expectations, non-financial performance measures relating to on-time delivery and quality assist our management in monitoring customer satisfaction on an on-going basis.

          Cost Reduction Programs. As a result of our focus on both economic and operating profit, we continue to aggressively size both segments so that costs are optimally matched to current and anticipated future revenues and unit demand. The amounts of additional charges will depend on specific actions taken. The actions taken over the past several years such as plant closures, plant relocations, asset impairments and reduction in personnel at the affected locations have resulted in the elimination of a variety of costs. The majority of these eliminated costs represent the annual salaries and benefits of terminated employees, including both those directly related to manufacturing and those providing selling, general and administrative services. The eliminated costs also include depreciation savings from disposed equipment, rental payments from the termination of lease agreements and amortization savings from the impairment of identifiable intangible assets. We have also lowered overhead costs as a result of relocating factories to lower-cost locations.

          In the year ended December 28, 2007, we accrued $18.0 million for cost reduction actions primarily at Electronics. These include severance and related payments of $12.5 million related to the termination of manufacturing and support personnel and $5.5 million to write down the value of certain fixed assets to their disposal value. The majority of these accruals will be paid by December 26, 2008.

          In the year ended December 29, 2006, we accrued $8.8 million for a number of actions to streamline operations at Electronics and Electrical. These include severance and related payments to manufacturing and support personnel of $6.8 million and $2.0 million to write down the value of certain fixed assets to their disposal values. The majority of these accruals were paid by December 28, 2007.

          In the year ended December 30, 2005, we accrued $7.0 million of severance and asset impairment expenses at Electronics and Electrical. These include $4.4 million related to the termination of manufacturing and support personnel and $2.6 million to write down the value of certain fixed assets to their disposal values. The majority of these accruals were paid by December 29, 2006. Additionally, we recorded a $47.4 million impairment charge of Electronics consumer division assets consisting of $27.0 million of goodwill, $11.5 million of identifiable intangibles, and $8.9 million of property, plant, and equipment. These impairments resulted from updated cash flow projections which reflect the shift of production by Electronics to China-based locations, decreasing average selling prices for television transformers resulting from competition with Asian companies selling in U.S. dollars, and weakness in the European television market for flyback transformers.

          International Operations. As of December 28, 2007, we had manufacturing operations in six countries and had significant net sales in the U.S. dollar, euro and Chinese renminbi. A majority of our sales in recent years has been outside of the United States. Changing exchange rates often impact our financial results and our period-over-period comparisons. This is particularly true of movements in the exchange rate between the U.S. dollar and the renminbi and the U.S. dollar and the euro. Sales and net earnings denominated in currencies other than the U.S. dollar may result in higher or lower dollar sales and net earnings upon translation for our U.S. consolidated financial statements. Electrical’s European operations and Electronics’ automotive division sales are denominated primarily in euro. Electronics’ antenna division sales are denominated primarily in euro and renminbi. Additionally, we may also experience a positive or

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negative translation adjustment to equity because our investments in our non-U.S. dollar-functional subsidiaries may be worth more or less in U.S. dollars after translation for our U.S. consolidated financial statements. Foreign currency gains or losses may also be incurred when non-functional currency-denominated transactions are remeasured to an operation’s functional currency for financial reporting purposes. If a higher percentage of our transactions are denominated in non-U.S. currencies, increased exposure to currency fluctuations may result.

          In order to reduce our exposure to currency fluctuations, we may purchase currency exchange forward contracts and/or currency options. These contracts guarantee a predetermined range of exchange rates at the time the contract is purchased. This allows us to shift the majority of the risk of currency fluctuations from the date of the contract to a third party for a fee. In determining the use of forward exchange contracts and currency options, we consider the amount of sales, purchases and net assets or liabilities denominated in local currencies, the type of currency, and the costs associated with the contracts. As of December 28, 2007, we did not have any forward contracts or currency options in place. During January 2008, we entered into a forward contract to sell forward approximately $400 million in exchange for approximately 2,025 million Danish Kroner in connection with the anticipated Sonion A/S acquisition.

          Precious Metals. Our Electrical segment uses silver, as well as other precious metals, in manufacturing some of its electrical contacts, contact materials and contact subassemblies. Historically, we have leased or held these materials through consignment-type arrangements with our suppliers. Leasing and consignment costs have typically been lower than the costs to borrow funds to purchase the metals and, more importantly, these arrangements eliminate the effects of fluctuations in the market price of owned precious metal and enable us to minimize our inventories. Electrical’s terms of sale generally allow us to charge customers for precious metal content based on the market value of precious metal on the day after shipment to the customer. Our suppliers invoice us based on the market value of the precious metal on the day after shipment to the customer as well. Thus far, we have been successful in managing the costs associated with our precious metals. While limited amounts are purchased for use in production, the majority of our precious metal inventory continues to be leased or held on consignment. If our leasing/consignment fees increase significantly in a short period of time, and we are unable to recover these increased costs through higher sale prices, a negative impact on our results of operations and liquidity may result. Leasing/consignment fee increases are primarily caused by increases in interest rates or volatility in the price of the consigned material.

          Income Taxes. Our effective income tax rate is affected by the proportion of our income earned in high-tax jurisdictions such as those in Europe and the U.S. and income earned in low-tax jurisdictions, such as Tunisia, Hong Kong and the PRC. This mix of income can vary significantly from one period to another. Additionally, the deductibility of restructuring, asset impairment charges and other expenses will affect the effective income tax rate from period to period. We have benefited over the years from favorable tax incentives and other tax policies, however, there is no guarantee as to how long these benefits will continue to exist. Also, changes in operations, changes in tax legislation and changes in tax estimates, judgments and forecasts may also affect our tax rate from period to period.

          Except in limited circumstances, we have not provided for U.S. federal income and foreign withholding taxes on our non-U.S. subsidiaries’ undistributed earnings as per Accounting Principles Board (“APB”) Opinion No. 23, Accounting for Income Taxes - Special Areas (“APB 23”). Such earnings may include pre-acquisition earnings of foreign entities acquired through stock purchases, and, with the exception of approximately $40.0 million, are intended to be reinvested outside of the U.S. indefinitely.

Critical Accounting Policies

          The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requires us to make judgments, assumptions and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Note 1 to the consolidated financial statements on pages 42 through 44 describes the significant accounting policies and methods used in the preparation of the consolidated financial statements. Estimates are used for, but not limited to, the accounting for inventory, goodwill and identifiable intangibles, income taxes, defined benefit plans, contingency accruals and severance and asset impairment. Actual results could differ from these estimates. The following critical accounting policies are impacted significantly by judgments, assumptions and estimates used in the preparation of the consolidated financial statements.

          Inventory. We carry our inventories at lower of cost or market. We establish inventory provisions to write down excess and obsolete inventory to market value. We utilize historical trends and customer forecasts to estimate expected usage of on-hand inventory. In addition, inventory purchases are based upon future demand forecasts estimated by taking into account actual sales of our products over recent historical periods and customer forecasts. If there is a sudden and significant decrease in demand for our products or there is a higher risk of inventory obsolescence because of rapidly changing technology or customer requirements, we may be required to write down our inventory and our gross margin could be negatively affected. However, if we were to sell or use a significant portion of inventory already written down, our gross margin could be positively affected.

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          Goodwill and Identifiable Intangibles. We assess the carrying cost of goodwill and identifiable intangible assets with indefinite lives on an annual basis and on an interim basis in certain circumstances. This assessment is based on comparing fair value to carrying cost. Fair value is based on estimating future cash flows using various growth assumptions and discounting based on a present value factor. Assigning a useful life and periodically reassessing the remaining useful life (for purposes of systematic amortization) is also predicated on various economic assumptions. The fair value of our intangible assets is also impacted by other factors such as changing technology, declines in demand that lead to excess capacity and other factors. In addition to the various assumptions, judgments and estimates mentioned above, we may strategically realign our resources and consider restructuring, disposing of, or otherwise exiting businesses in response to changes in industry or market conditions, which could result in an impairment of goodwill or other intangibles. While we believe the estimates and assumptions used in determining the fair value of goodwill and identifiable assets are reasonable, a change in those assumptions could affect their valuation.

          Income Taxes. We use the asset and liability method of accounting for income taxes. Under this method, income tax expense/benefit is recognized for the amount of taxes payable or refundable for the current year and for deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns. We must make assumptions, judgments and estimates to determine our current provision for income taxes and also our deferred tax assets and liabilities and any valuation allowance to be recorded against a deferred tax asset. Our judgments, assumptions and estimates relative to the provision for income tax take into account current tax laws, our interpretation of current tax laws and possible outcomes of current and future audits conducted by foreign and domestic tax authorities. Changes in tax law or our interpretation of tax laws and the resolution of current and future tax audits could significantly impact the amounts provided for income taxes in our consolidated financial statements. Our assumptions, judgments and estimates relative to the value of a deferred tax asset also take into account predictions of the amount and category of future taxable income. Actual operating results and the underlying amount and category of income in future years could render our current assumptions, judgments and estimates of recoverable net deferred taxes inaccurate. Any of the assumptions, judgments and estimates mentioned above could cause our actual income tax obligations to differ from our estimates.

          Defined Benefit Plans. The costs and obligations of our defined benefit plans are dependent on actuarial assumptions. The three most critical assumptions used, which impact the net periodic pension expense (income) and the benefit obligation, are the discount rate, expected return on plan assets and rate of compensation increase. The discount rate is determined based on high-quality fixed income investments that match the duration of expected benefit payments. We use the market rate for Aa rated corporate bonds for this assumption. The expected return on plan assets represents a forward projection of the average rate of earnings expected on the pension assets. We have estimated this rate based on historical returns of similarly diversified portfolios. The rate of compensation increase represents the long-term assumption for expected increases to salaries for pay-related plans. These key assumptions are evaluated annually. Changes in these assumptions can result in different expense and liability amounts, as well as a change in future contributions to the plans. See Note 9 for further details of the primary assumptions used in determining the cost and obligations of our defined benefit plans.

          Contingency Accruals. During the normal course of business, a variety of issues may arise, which may result in litigation, environmental compliance and other contingent obligations. In developing our contingency accruals we consider both the likelihood of a loss or incurrence of a liability as well as our ability to reasonably estimate the amount of exposure. We record contingency accruals when a liability is probable and the amount can be reasonably estimated. We periodically evaluate available information to assess whether contingency accruals should be adjusted. Our evaluation includes an assessment of legal interpretations, judicial proceedings, recent case law and specific changes or developments regarding known claims. We could be required to record additional expenses in future periods if our initial estimates were too low, or reverse part of the charges that we recorded initially if our estimates were too high. Additionally, litigation costs incurred in connection with a contingency are expensed as incurred.

          Severance and Asset Impairment. We record severance, tangible asset impairments and other restructuring charges such as lease terminations, in response to declines in demand that lead to excess capacity, changing technology and other factors. These costs, which we refer to as restructuring costs, are expensed during the period in which we determine that we will incur those costs, and all of the requirements for accrual are met in accordance with the applicable accounting guidance. Restructuring costs are recorded based upon our best estimates at the time the action is initiated. Our actual expenditures for the restructuring activities may differ from the initially recorded costs. If this occurs, we could be required either to record additional expenses in future periods if our initial estimates were too low, or reverse part of the charges that we recorded initially if our initial estimates were too high. In the case of acquisition-related restructuring costs, depending on whether certain requirements are met in accordance with the applicable accounting guidance, such costs would generally require a change in value of the goodwill appearing on our balance sheet, which may not affect our earnings. Additionally, the cash flow impact of the activity may not be recognized in the same period the expense is incurred.

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New Accounting Pronouncements

          In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (“SFAS 160”). This statement will change the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity. This statement is effective for fiscal years beginning after December 15, 2008. We are currently evaluating the effect that SFAS 160 will have on our consolidated financial statements.

          In December 2007, FASB issued Statement No. 141 (revised 2007), Business Combinations (“SFAS 141R”). This statement will change the accounting for business combinations in a number of areas including the treatment of contingent consideration, contingencies, acquisition costs, in-process research and development costs and restructuring costs. In addition, SFAS 141R changes the measurement period for deferred tax asset valuation allowances and acquired income tax uncertainties in a business combination. This statement is effective for fiscal years beginning after December 15, 2008. We are currently evaluating the effect that SFAS 141R will have on our consolidated financial statements.

          In February 2007, FASB issued Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). This statement provides the option to report certain financial assets and liabilities at fair value, with the intent to mitigate volatility in financial reporting that can occur when related assets and liabilities are recorded on different bases. This statement is effective for us beginning December 29, 2007. We do not believe the adoption of this statement will have a material impact on our financial statements.

          In September 2006, FASB issued Statement No. 157, Fair Value Measurements (“SFAS 157”). This statement defines fair value, establishes a framework for measuring fair value in GAAP, and enhances disclosures about fair value measurements. SFAS 157 applies when other accounting pronouncements require fair value measurements; it does not require new fair value measurements. This statement is effective for fiscal years beginning after November 15, 2008. We do not believe the adoption of this statement will have a material impact on our financial statements.

          In July 2006, FASB issued its Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109, (“FIN 48”), which clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with Statement No. 109, Accounting for Income Taxes. This interpretation prescribes a minimum recognition threshold (more likely than not or greater than 50 percent) and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return or otherwise. We adopted this interpretation on December 30, 2006. See Note 8 to the consolidated financial statements for details regarding the adoption of this interpretation.

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Results of Operations

          Year ended December 28, 2007 compared to the year ended December 29, 2006

          The table below shows our results of operations and the absolute and percentage change in those results from period to period (in thousands):

							Change			Change			Results as % of Net Sales
	2007			2006			$			%			2007			2006
Net sales	$	1,026,555		$	954,096		$	72,459			7.6	%		100.0	%		100.0	%
Cost of sales		793,570			735,006			(58,564	)		(8.0	)		77.3			77.0
Gross profit		232,985			219,090			13,895			6.3			22.7			23.0
Selling, general and administrative expenses		141,571			138,971			(2,600	)		(1.9	)		13.8			14.6
Severance and asset impairment expense		18,019			8,829			(9,190	)		(104.1	)		1.8			0.9
Operating profit		73,395			71,290			2,105			3.0			7.1			7.5
Interest expense, net		(3,641	)		(5,328	)		1,687			31.7			0.4			0.6
Other (expense) income, net		(334	)		4,124			(4,458	)		(108.1	)		0.0			0.4
Earnings from continuing operations before income taxes, minority interest and cumulative effect of accounting change		69,420			70,086			(666	)		(1.0	)		6.7			7.3
Income taxes		7,507			11,680			4,173			35.7			0.7			1.2
Minority interest expense		256			1,511			1,255			83.1			0.0			0.2
Net earnings from continuing operations before cumulative effect of accounting change	$	61,657		$	56,895		$	4,762			8.4	%		6.0	%		5.9	%

          Net Sales. Our sales increase from the comparable period in the prior year was primarily attributable to higher euro-to-U.S. dollar exchange rates, increased demand for the communication products of Electronics, the inclusion of net sales from the Larsen acquisition by Electronics and higher pass-through costs for silver and other metals at Electrical.

The following table shows our net sales by segment (in thousands):

					Change		Change
	2007		2006		$		%
Electronics	$	671,569	$	627,505	$	44,064	7.0%
Electrical		354,986		326,591		28,395	8.7%
Total	$	1,026,555	$	954,096	$	72,459	7.6%

          Cost of Sales. As a result of higher sales, our cost of sales increased. Our consolidated gross margin for the year ended December 28, 2007 was 22.7% compared to 23.0% for the year ended December 29, 2006. The primary factors that resulted in our consolidated gross margin decrease in the current period were the continuing integration costs of the Electronics automotive division, and an increase in wages, social benefits, value-added taxes and material costs in China.

          Selling, General and Administrative Expenses. Total selling, general and administrative expenses have increased primarily due to higher research, development and engineering expenses, intangible amortization related to the Larsen acquisition, incentive compensation costs and stock compensation expenses. Overall, operating expenses as a percent of our net sales have declined due to the cost reduction actions that we took over the last year and lower spending.

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          Research, development and engineering expenses are included in selling, general and administrative expenses. We refer to research, development and engineering expenses as RD&E. For the year ended December 28, 2007 and December 29, 2006, respectively, RD&E by segment was as follows (in thousands):

	2007			2006
Electronics	$	35,137		$	35,045
Percentage of segment sales		5.2	%		5.6	%
Electrical	$	5,260		$	4,540
Percentage of segment sales		1.5	%		1.4	%

          Higher RD&E spending in 2007 over the comparable period in 2006 is a result of increased spending at Electrical’s European operations. Net sales have increased more rapidly than RD&E spending at Electronics due to strong end-user demand for communications products. We believe that future sales in the electronic components markets will be driven by next-generation products.

          Severance and Asset Impairment Expense. The increase in severance and asset impairment is primarily due to our plan to transfer the production operations of Electronics’ automotive division.

          We recorded approximately $18.0 million for severance and asset impairment expense for the year ended December 28, 2007, which was primarily in connection with our plan to transfer production from Electronics’ German and Tunisian locations to China and impairment expenses on long-lived assets of Electronics’ consumer division. Severance and related expenses were $12.5 million and asset impairment charges of $5.5 million were incurred to write down the value of certain fixed assets to their disposal value. The majority of these accruals will be paid by December 26, 2008.

          In the year ended December 29, 2006, we accrued $8.8 million for a number of actions to streamline operations at Electronics and Electrical. These include severance and related payments to manufacturing and support personnel of $6.8 million and $2.0 million to write down the value of certain fixed assets to their disposal values. The majority of these accruals were paid by December 28, 2007.

          Interest. The decrease in net interest expense in 2007 is due to lower interest charges resulting from decreased borrowings from our multi-currency credit facility and decreased precious metal leasing costs, coupled with an increase in interest income due to higher invested cash in the 2007 period than in 2006. Recurring aggregate components of interest expense such as bank commitment fees, approximated those of 2006.

          Other. The change from other income in 2006 to other expense in 2007 is primarily attributable to foreign exchange losses of approximately $0.5 million in the 2007 period as compared to foreign exchange gains of approximately $3.9 million in the 2006 period. On average, the euro to U.S. dollar exchange rate strengthened in 2007 as compared to 2006. During 2007, our intercompany loan program allowed us to reduce our exposure to foreign exchange gains and losses, which resulted in intercompany foreign exchange gains being partially offset by intercompany foreign exchange losses.

          Income Taxes. The effective income tax rate for the year ended December 28, 2007 was 10.8% compared to 16.7% for the year ended December 29, 2006. The decrease in the effective income tax rate is primarily a result of realizing retroactive tax benefits of approximately $2.1 million due to the restructuring of non-U.S. subsidiaries during the year ended December 28, 2007, changes in valuation allowances, the usage of tax losses and a higher proportion of net earnings being recognized in lower tax jurisdictions in 2007 as compared to the same period in 2006.

          Minority Interest. The decrease in minority interest expense was due to a reduction in net earnings at FRE in 2007.

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          Year ended December 29, 2006 compared to the year ended December 30, 2005

          The table below shows our results of operations and the absolute and percentage change in those results from period to period (in thousands):

							Change			Change			Results as % of Net Sales
	2006			2005			$			%			2006			2005
Net sales	$	954,096		$	616,378		$	337,718			54.8	%		100.0	%		100.0	%
Cost of sales		735,006			473,535			(261,471	)		(55.2	)		77.0			76.8
Gross profit		219,090			142,843			76,247			53.4			23.0			23.2
Selling, general and administrative expenses		138,971			106,797			(32,174	)		(30.1	)		14.6			17.3
Severance and asset impairment expense		8,829			54,436			45,607			83.8			0.9			8.8
Operating profit (loss)		71,290			(18,390	)		89,680			487.7			7.5			(3.0	)
Interest (expense) income, net		(5,328	)		1,352			(6,680	)		(494.1	)		0.6			0.2
Other income (expense), net		4,124			(1,690	)		5,814			344.0			0.4			0.3
Earnings (loss) from continuing operations before income taxes, minority interest and cumulative effect of accounting change		70,086			(18,728	)		88,814			474.2			7.3			(3.0	)
Income taxes		11,680			6,161			(5,519	)		(89.6	)		1.2			0.9
Minority interest expense		1,511			939			(572	)		(60.9	)		0.2			0.2
Net earnings (loss) from continuing operations before cumulative effect of accounting change	$	56,895		$	(25,828	)	$	82,723			320.3	%		5.9	%		(4.2	%)

          Net Sales. Our sales increase from 2005 was primarily attributable to the inclusion of a full year of antenna division net sales at Electronics, the addition of automotive division net sales beginning in January 2006 at Electronics and higher pass-through costs of precious and non-precious metals at Electrical.

The following table shows our net sales by segment (in thousands):

					Change		Change
	2006		2005		$		%
Electronics	$	627,505	$	361,552	$	265,953	73.6%
Electrical		326,591		254,826		71,765	28.2%
Total	$	954,096	$	616,378	$	337,718	54.8%

          Cost of Sales. As a result of higher sales, our cost of sales increased. Also, included in our cost of sales for the year-ended December 29, 2006 is approximately $5.0 million of accelerated depreciation related to equipment taken out of service before the end of its originally intended useful life. Our consolidated gross margin for the year ended December 29, 2006 was 23.0%, compared with 23.2% in the year ended December 30, 2005.

          Selling, General and Administrative Expenses. The increase in total selling, general and administrative expenses for the year ended December 29, 2006 is primarily a result of the inclusion of a full year of spending at Electronics’ antenna division and automotive division spending since the acquisition date in January 2006. As a percentage of net sales, selling, general and administrative expenses was 14.6% in the year ended December 29, 2006 versus 17.3% in the comparable period of 2005, or a decrease of 2.7% of net sales. Decreased spending as a percentage of net sales was a result of an overall leveraging of operating costs across a larger sales base. Additionally, our restructuring actions have reduced our operating costs and contributed to lower operating expenses as a percentage of net sales.

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          Research, development and engineering expenses are included in selling, general and administrative expenses. We refer to research, development and engineering expenses as RD&E. For the year ended December 29, 2006 and December 30, 2005 respectively, RD&E by segment was as follows (in thousands):

	2006			2005
Electronics	$	35,045		$	21,359
Percentage of segment sales		5.6	%		5.9	%
Electrical	$	4,540		$	4,137
Percentage of segment sales		1.4	%		1.6	%

          Higher RD&E spending in 2006 at Electronics is attributable to activities at the antenna and automotive divisions since their acquisition dates. As a percentage of sales, RD&E spending was lower in 2006 than in 2005. Strong end-user demand at Electronics and Electrical, as well as higher pass-through costs of silver and other metals at Electrical, resulted in increased sales which were greater on a percentage basis than increases in RD&E spending. We believe that future sales in the electronic components markets will be driven by next-generation products and the higher spending reflects such investment.

          Severance and Asset Impairment Expense. The decrease in severance and asset impairment expense in 2006 is primarily attributable to $47.4 million of asset impairments related to the Electronics consumer division which were recognized in the 2005 period.

          In the year ended December 29, 2006, we accrued $8.8 million for a number of actions to streamline operations at Electronics and Electrical. These include severance and related payments to manufacturing and support personnel of $6.8 million and asset impairment charges of $2.0 million to write down the value of certain fixed assets to their disposal values. The majority of these accruals were paid by December 28, 2007.

          In the year ended December 30, 2005, we accrued $7.0 million for a number of actions to streamline operations at Electronics and Electrical. These include $4.4 million related to the termination of manufacturing and support personnel and $2.6 million to write down the value of certain fixed assets to their disposal values. The majority of these accruals were paid by December 29, 2006. Additionally, we recorded a $47.4 million impairment charge of Electronics consumer division assets consisting of $27.0 million of goodwill, $11.5 million of identifiable intangibles, and $8.9 million of property, plant, and equipment. These impairments resulted from updated cash flow projections which reflected the shift of production by Electronics to China-based locations, decreasing average selling prices for television transformers resulting from competition with Asian companies selling in U.S. dollars, and weakness in the European television market for flyback transformers.

          Interest. The increase in interest expense in the 2006 period is primarily attributable to higher precious metal leasing costs, expenses resulting from increased average borrowings from our multi-currency credit facility and a lower balance of invested cash in the 2006 period as compared to 2005. Recurring aggregate components of interest expense, such as bank commitment fees, approximated those of 2005.

          Other Income (Expense). The change from other expense to other income is primarily attributable to foreign exchange gains of approximately $3.9 million in the 2006 period as compared to foreign exchange losses of approximately $2.2 million in the 2005 period. On average, the euro to US dollar exchange rate increased during 2006 whereas it decreased during 2005. This factor, along with increased international activity in 2006, resulted in an overall increase of foreign exchange gains.

          Income Taxes. The effective income tax rate for the year ended December 29, 2006 was 16.7% compared to (32.9%) for the year ended December 30, 2005. The tax rate in 2006 reflects a higher proportion of income being attributable to low-tax jurisdictions. Also, in 2005 the non-deductibility of the Electronics consumer division impairment charge, a $7.3 million charge related to a dividend and the effect of non-deductible restructuring expenses in high-tax jurisdictions negatively impacted the tax rate. Refer to Note 8 to the consolidated financial statements for details regarding the dividend.

          Minority Interest. The increase in minority interest expense was due to the improved financial performance of FRE, which was offset by our increased ownership percentage of FRE in the 2006 period as compared to 2005.

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Liquidity and Capital Resources

          Working capital as of December 28, 2007 was $231.8 million, compared to $189.0 million as of December 29, 2006. This increase of $42.8 million was primarily due to increases in cash, trade receivables, inventories and a reclassification of approximately $19.8 million of tax reserves from current to long-term liabilities in connection with our adoption of FASB Interpretation No. 48. These increases were partially offset by increases in accounts payable and accrued expenses. Cash and cash equivalents, which are included in working capital, were $116.3 million as of December 28, 2007 as compared to $87.2 million as of December 29, 2006.

          We present our statement of cash flows using the indirect method as permitted under Financial Accounting Standards Board Statement No. 95, Statement of Cash Flows. Our management has found that investors and analysts typically refer to changes in accounts receivable, inventory, and other components of working capital when analyzing operating cash flows. Also, changes in working capital are more directly related to the way we manage our business for cash flow than are items such as cash receipts from the sale of goods, as would appear using the direct method.

          Net cash provided by operating activities was $100.1 million for the year ended December 28, 2007 as compared to $78.5 million in the comparable period of 2006, an increase of $21.6 million. This increase was primarily attributable to higher net earnings and more aggressive management of current assets and liabilities.

          Capital expenditures were $21.6 million during the year ended December 28, 2007 and $25.4 million in the comparable period of 2006. The decrease of $3.8 million in the 2007 period compared to 2006 was due primarily to lower expenditures at Electronics. We make capital expenditures as necessary to expand production capacity, to improve our operating efficiency and to maintain or improve safety in our facilities and we plan to continue making such expenditures in the future.

          We entered into a credit agreement on October 14, 2005 providing for $200.0 million of credit capacity. The facility consists of an aggregate U.S. dollar-equivalent revolving line of credit in the principal amount of up to $200.0 million, and provides for borrowings in multiple currencies including but not limited to U.S. dollars, euros, and Japanese yen, including individual sub-limits of:

– a U.S. dollar-based swing-line loan not to exceed $20.0 million;

– a multicurrency facility providing for the issuance of letters of credit in an aggregate amount not to exceed the U.S. dollar equivalent of $25.0 million; and

– a Singapore sub-facility not to exceed the U.S. dollar equivalent of $50.0 million.

          The credit agreement permits us to request one or more increases in the total commitment not to exceed $100.0 million, provided the minimum increase is $25.0 million, subject to bank approval. The total amount outstanding under the credit facility may not exceed $200.0 million, provided we do not request an increase in total commitment.

          Outstanding borrowings are subject to two financial covenants, both of which are computed on a rolling twelve-month basis as of the most recent quarter-end. The first is maximum debt outstanding amounting to three and one-half times our earnings before interest, taxes, depreciation and amortization (EBITDA), as defined by the credit agreement. The second is maximum debt service expenses amounting to two and one-half times our cash interest expense, as defined by the credit agreement. The credit agreement also contains covenants specifying capital expenditure limitations and other customary provisions. We are in compliance with these covenants as of December 28, 2007.

          We pay a commitment fee on the unborrowed portion of the commitment, which ranges from 0.15% to 0.25% of the total commitment, depending on our debt-to-EBITDA ratio, as defined above. The interest rate for each currency’s borrowing will be a combination of the base rate for that currency plus a credit margin spread. The base rate is different for each currency. The credit margin spread is the same for each currency and is 0.60% to 1.25%, depending on our debt-to-EBITDA ratio, as defined in the credit agreement. Each of our domestic subsidiaries with net worth equal to or greater than $10 million has guaranteed all obligations incurred under the credit facility.

          We had six standby letters of credit outstanding at December 28, 2007 in the aggregate amount of $1.7 million securing transactions entered into in the ordinary course of business.

          Principal payments on long-term debt were $47.6 million during the year ended December 28, 2007, and were $25.8 million in the comparable period of 2006. As of December 28, 2007, we had $2.9 million of outstanding borrowings under this five-year revolving credit agreement, primarily to fund acquisitions. Our total credit available, including standby letters of credit, as of December 28, 2007 was approximately $195.4 million. Please refer to Note 7 in the Notes to Consolidated Financial Statements.

28

          We entered into an agreement on January 8, 2008 with JPMorgan Chase Bank, N.A. and J.P. Morgan Securities Inc. to arrange and syndicate a $200.0 million senior term loan facility and a $300.0 million senior revolving credit facility, to be used for the acquisition of Sonion A/S and for other corporate purposes. These facilities will replace our current credit agreement entered into October 15, 2005. Closing on these facilities is expected to occur in February 2008. The facility is expected to provide for borrowings in U.S. dollars, euros or Japanese yen, including individual sub-limits of:

– a multicurrency facility providing for the issuance of letters of credit in an aggregate amount not to exceed the U.S. dollar equivalent of $25.0 million; and

– a Singapore sub-facility not to exceed the U.S. dollar equivalent of $50.0 million.

          The credit agreement permits us to request one or more increases in the total commitment not to exceed $100.0 million, subject to bank approval.

          We will pay a commitment fee on the unborrowed portion of the commitment, dependent on our debt-to-EBITDA ratio, as defined by the credit agreement. The interest rate for each currency’s borrowing will be a combination of the base rate for that currency plus a credit margin spread. The base rate is different for each currency. The credit margin spread is the same for each currency and is dependent on our debt-to-EBITDA ratio, as defined in the credit agreement.

          We also have an obligation outstanding due in August 2009 under an unsecured term loan agreement in Germany for the borrowing of approximately 5.1 million euros as of December 28 2007.

          We used $14.3 million for dividend payments during the year ended December 28, 2007. On October 26, 2007, we announced a quarterly cash dividend of $0.0875 per common share, payable on January 18, 2008 to shareholders of record on January 4, 2008. This quarterly dividend will result in a cash payment to shareholders of approximately $3.6 million in the first quarter of 2008. We expect to continue making quarterly dividend payments for the foreseeable future.

          We had commercial commitments outstanding at December 28, 2007 of approximately $185.9 million due under precious metal consignment-type leases. This represents an increase of $50.1 million from the $135.8 million outstanding as of December 29, 2006 and is attributable to higher average silver prices and an increased quantity of leased precious metal during 2007.

          As of December 28, 2007, future payments related to contractual obligations were as follows (in thousands):

	Amounts expected to be paid by period
	Total		Less than 1 year			1 to 3 years			3 to 5 years			Thereafter
Debt (1)	$	10,467		$	—		$	10,467		$	—		$	—
Operating leases (2)		22,432			9,726			9,596			2,300			810
Estimated interest payments (3)		708			425			283			—			—
	$	33,607		$	10,151		$	20,346		$	2,300		$	810

(1)	Excludes long-term borrowings anticipated in connection with our acquisition of Sonion A/S.
(2)	Excludes approximately $185.9 million due under precious metal consignment–type leases.
(3)	Excludes interest payments resulting from long-term borrowings anticipated in connection with our acquisition of Sonion A/S.

          We have excluded from the table above unrecognized tax benefits as defined in FIN 48 due to the uncertainty of the amount and the period of payment. As of December 28, 2007, we had unrecognized tax benefits of approximately $23.6 million. See Note 8 to the consolidated financial statements.

          We believe that the combination of cash on hand, cash generated by operations and borrowings under the credit agreement will be sufficient to satisfy our operating cash requirements in the foreseeable future. In addition, we may use internally generated funds or obtain borrowings or additional equity offerings for acquisitions of suitable businesses or assets. We have not experienced any significant liquidity restrictions in any country in which we operate and none are foreseen. However, foreign exchange ceilings imposed by local governments and the sometimes lengthy approval processes which foreign governments require for international cash transfers may delay our internal cash movements from time to time. We expect to reinvest these earnings outside of the United States because we anticipate

29

that a significant portion of our opportunities for growth in the coming years will be abroad. We have not accrued U.S. income and foreign withholding taxes on foreign earnings that have been indefinitely invested abroad. If these earnings were brought back to the United States, significant tax liabilities could be incurred in the United States as several countries in which we operate have tax rates significantly lower than the U.S. statutory rate.

          In October 2004, the American Jobs Creation Act of 2004 (“AJCA”) was signed into law. The AJCA contained a series of provisions, several of which are pertinent to us. The AJCA created a temporary incentive for U.S. multi-national corporations to repatriate accumulated income abroad by providing an 85% dividends received deduction for certain dividends from controlled foreign corporations. Based on this legislation and 2005 guidance by the Department of Treasury, the Company repatriated $52.0 million of foreign earnings with a charge of $7.3 million to income taxes. After this repatriation, we continue to have undistributed earnings among our foreign subsidiaries, with the exception of approximately $40.0 million, considered to be indefinitely reinvested, and in accordance with APB 23, no provision for U.S. federal or state income taxes had been provided on these undistributed earnings.

          All retained earnings are free from legal or contractual restrictions as of December 28, 2007, with the exception of approximately $25.1 million of retained earnings primarily in the PRC, that are restricted in accordance with Section 58 of the PRC Foreign Investment Enterprises Law. Included in the $25.1 million is $4.9 million of retained earnings of FRE, a majority-owned subsidiary. The amount restricted in accordance with the PRC Foreign Investment Enterprise Law is applicable to all foreign investment enterprises doing business in the PRC. The restriction applies to 10% of our net earnings in the PRC, limited to 50% of the total capital invested in the PRC.

Item 7a Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

          Our financial instruments, including cash and cash equivalents and long-term debt, are exposed to changes in interest rates in both the U.S. and abroad. We invest our excess cash in short-term, investment-grade interest-bearing securities. We generally limit our exposure to any one financial institution to the extent practical. Our board has adopted policies relating to these risks and continually monitors compliance with these policies.

          Our existing credit facility has variable interest rates. Accordingly, interest expense may increase if we borrow and if the rates associated with our borrowings move higher. In addition, we may pursue additional or alternative financing for growth opportunities in one or both segments. We may use interest rate swaps or other financial derivatives in order to manage the risk associated with changes in market interest rates. However, we have not used any of these instruments to date.

          The table below presents principal amounts in U.S. dollars (or equivalent U.S. dollars with respect to non-U.S. denominated debt) and related weighted average interest rates by year of maturity for our debt obligations. The column captioned “Approximate Fair Value” sets forth the carrying value of our long-term debt as of December 28, 2007.

          As our long-term borrowings under our credit facility are subject to variable interest rates, we estimate that the carrying amount of our variable rate long-term debt approximates fair value (in thousands):

																	Approx. Fair Value
													There- After
	2008		2009			2010			2011		2012				Total
Liabilities
Long-term debt
Fixed rate:
Euro (1)		—	$	7,524			—			—		—		—	$	7,524	$	7,561
Weighted average interest rate		—		5.65	%		—			—		—		—
Variable rate:
Euro (1)		—		—		$	2,943			—		—		—	$	2,943	$	2,943
Weighted average interest rate		—		—			5.19	%		—		—		—

(1) U.S. dollar equivalent

30

Foreign Currency Risk

          As of December 28, 2007, we had a substantial amount of cash denominated in currencies other than the U.S. dollar. We conduct business in various foreign currencies, including those of emerging market countries in Asia as well as European countries. We may utilize derivative financial instruments, primarily forward exchange contracts in connection with fair value hedges, to manage foreign currency risks. In accordance with FASB Statement No. 133, Accounting for Derivative Instruments and Hedging (“SFAS 133”), gains and losses related to fair value hedges are recognized in income along with adjustments of carrying amounts of the hedged items. Therefore, all of our forward exchange contracts are marked-to-market, and unrealized gains and losses are included in current period net income. These contracts guarantee a predetermined rate of exchange at the time the contract is purchased. This would allow us to shift the majority of the risk of currency fluctuations from the date of the contract to a third party for a fee. We believe there could be two potential risks of holding these instruments. The first is that the foreign currency being hedged could move in a direction which could create a better economic outcome than if hedging had not taken place. The second risk is that the counterparty to a currency hedge defaults on its obligations. In the past, we reduced the risk of counterparty default by entering into relatively short-term hedges with well capitalized and highly rated banks. In determining the use of forward exchange contracts, we would consider the amount of sales and purchases made in local currencies, the type of currency and the costs associated with the contracts. As of December 28, 2007, we had no foreign currency forward contracts outstanding.

          The table below provides information about our other non-derivative, non-U.S. dollar denominated financial instruments and presents the information in equivalent U.S. dollars. Amounts set forth under “Liabilities” represent principal amounts and related weighted average interest rates by year of maturity for our foreign currency debt obligations. The column captioned “Approximate Fair Value” sets forth the carrying value of our foreign currency long-term debt as of December 28, 2007.

          As our long-term borrowings under our credit facility are subject to variable interest rates, we estimate that the carrying amount of our variable rate long-term debt approximates fair value. (in thousands):

																	Approx. Fair Value
													There- After
	2008		2009			2010			2011		2012				Total
Assets
Cash and equivalents
Renminbi (1)	$	19,773		—			—			—		—		—	$	19,773	$	19,773
Euro (1)	$	42,187		—			—			—		—		—	$	42,187	$	42,187
Other currencies (1)	$	10,009		—			—			—		—		—	$	10,009	$	10,009
Liabilities
Long-term debt
Fixed rate:
Euro (1)		—	$	7,524			—			—		—		—	$	7,524	$	7,561
Weighted average interest rate		—		5.65	%		—			—		—		—
Variable rate:
Euro (1)		—		—		$	2,943			—		—		—	$	2,943	$	2,943
Weighted average interest rate		—		—			5.19	%		—		—		—

(1) U.S. dollar equivalent

Item 8 Financial Statements and Supplementary Data

          Information required by this item is incorporated by reference from the Report of Independent Registered Public Accounting Firm on page 37 and from the consolidated financial statements and supplementary schedules on pages 38 through 64.

Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

          None

31

Item 9a Controls and Procedures

Controls and Procedures

          Based on their evaluation as of December 28, 2007, our Chief Executive Officer and Chief Financial Officer, have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective to ensure that information required to be disclosed by us in the reports that we file or submit is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

          Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Our management assessed the effectiveness of our internal control over financial reporting as of December 28, 2007. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Our management has concluded that, as of December 28, 2007, our internal control over financial reporting is effective based on these criteria. Our independent registered public accounting firm has issued an audit report on the effectiveness of our internal control over financial reporting, which is included herein.

          There were no changes in our internal controls over financial reporting during the quarter ended December 28, 2007 that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

          Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Technitrol, Inc. have been detected.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Technitrol, Inc.:

We have audited Technitrol, Inc. and subsidiaries’ internal control over financial reporting as of December 28, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Technitrol, Inc. and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the

32

transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Technitrol, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 28, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Technitrol, Inc. and subsidiaries as of December 28, 2007 and December 29, 2006, and the related consolidated statements of operations, cash flows, and shareholders’ equity for each of the years in the three-year period ended December 28, 2007, and our report dated February 25, 2008 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Philadelphia, Pennsylvania
February 25, 2008

Item 9b Other Matters

          None

33

Part III

Item 10 Directors, Executive Officers and Corporate Governance

          The disclosure required by this item is incorporated by reference to the sections entitled, “Directors and Executive Officers,” “Corporate Governance” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive proxy statement to be used in connection with our 2008 Annual Shareholders Meeting.

          We make available free of charge within the “About Technitrol” section of our Internet website, at www.technitrol.com, and in print to any shareholder who requests, our Statement of Principles Policy and all of our Board and Committee charters. Requests for copies may be directed to Investor Relations, Technitrol, Inc., 1210 Northbrook Drive, Suite 470, Trevose, PA 19053-8406, or telephone 215-355-2900, extension 8428. We intend to disclose any amendments to our Statement of Principles Policy, and any waiver from a provision of our Statement of Principles Policy, on our Internet website within five business days following such amendment or waiver. The information contained on or connected to our Internet website is not incorporated by reference into this Form 10-K and should not be considered part of this or any other report that we file with or furnish to the SEC.

Item 11 Executive Compensation

          The disclosure required by this item is incorporated by reference to the sections entitled, “Executive Compensation,” “Compensation Committee Report,” “Summary Compensation Table,”, “Grants of Plan-Based Awards Table,” “Outstanding Equity Award at Fiscal Year-End table,” “Option Exercises and Stock Vested Table,” “Pension Benefits Table,” “Nonqualified Deferred Compensation Table,” “Potential Payments Upon Termination or Change in Control,” “Executive Employment Arrangements,” “Director Compensation” and “Compensation Committee Interlocks and Insider Participation” in our definitive proxy statement to be used in connection with our 2008 Annual Shareholders Meeting.

Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

          The disclosure required by this item is (i) included under Part II, Item 5, and (ii) incorporated by reference to the sections entitled, “Persons Owning More Than Five Percent of Our Stock” and “Stock Owned by Directors and Officers” in our definitive proxy statement to be used in connection with our 2008 Annual Shareholders Meeting.

          Information as of December 28, 2007 concerning plans under which our equity securities are authorized for issuance are as follows:

Plan Category	Number of shares to be issued upon exercise of options, grant of restricted shares or other incentive shares		Weighted average exercise price of outstanding options			Number of securities remaining available for future issuance
Equity compensation plans
approved by security holders		6,005,000		$	18.96		2,942,589
Equity compensation plans not
approved by security holders		0			0		0
Total		6,005,000		$	18.96		2,942,589

          On May 15, 1981, our shareholders approved an incentive compensation plan (ICP) intended to enable us to obtain and retain the services of employees by providing them with incentives that may be created by the Board of Directors Compensation Committee under the ICP. Subsequent amendments to the plan were approved by our shareholders including an amendment on May 23, 2001 which increased the total number of shares of our common stock which may be granted under the plan to 4,900,000 shares. Our 2001 Stock Option Plan and the Restricted Stock Plan II were adopted under the ICP. In addition to the ICP, plans approved by us include a 105,000 share Board of Director Stock Plan and a 1,000,000 share Employee Stock Purchase Plan (“ESPP”).

34

During 2004, the operation of the ESPP was suspended following an evaluation of its affiliated expense and perceived value by employees. Of the 2,942,589 shares remaining available for future issuance, 2,095,209 shares are attributable to our Incentive Compensation Plan, 812,099 shares are attributable to our ESPP, and 35,281 shares are attributable to our Board of Director Stock Plan. Note 13 to the consolidated financial statements contains additional information regarding our stock based compensation plans.

Item 13 Certain Relationships, Related Transactions and Director Independence

          The disclosure required by this item is incorporated by reference to the sections entitled “Certain Relationships and Related Transactions” and “Independent Directors” in our definitive proxy statement to be used in connection with our 2008 Annual Shareholders Meeting.

Item 14 Principal Accountant Fees and Services

          The disclosure required by this item is incorporated by reference to the section entitled “Audit and Other Fees Paid to Independent Accountant” in our definitive proxy statement to be used in connection with our 2008 Annual Shareholders Meeting.

35

Part IV

Item 15 Exhibits and Financial Statement Schedule

(a)	Documents filed as part of this report
	Financial Statements

	PAGE
Report of Independent Registered Public Accounting Firm	37
Consolidated Balance Sheets – December 28, 2007 and December 29, 2006	38
Consolidated Statements of Operations – Years ended December 28, 2007, December 29, 2006 and December 30, 2005	39
Consolidated Statements of Cash Flows – Years ended December 28, 2007, December 29, 2006 and December 30, 2005	40
Consolidated Statements of Changes in Shareholders’ Equity – Years ended December 28, 2007, December 29, 2006 and December 30, 2005	41
Notes to Consolidated Financial Statements	42
Financial Statement Schedule
Schedule II, Valuation and Qualifying Accounts	64

(b) Exhibits

Information required by this item is contained in the “Exhibit Index” found on page 65 through 67 of this report.

36

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Technitrol, Inc.:

We have audited the accompanying consolidated balance sheets of Technitrol, Inc. and subsidiaries (the “Company”) as of December 28, 2007 and December 29, 2006, and the related consolidated statements of operations, cash flows, and changes in shareholders’ equity for each of the years in the three-year period ended December 28, 2007. In connection with our audits of the consolidated financial statements, we also have audited the related financial statement schedule. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Technitrol, Inc. and subsidiaries as of December 28, 2007 and December 29, 2006, and the results of their operations and their cash flows for each of the years in the three-year period ended December 28, 2007, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

As discussed in Note 8 to the consolidated financial statements, the Company adopted the provisions of Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109, effective December 30, 2006. As disclosed in Notes 1 and 13, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, using the modified prospective approach, effective December 31, 2005. As disclosed in Note 9, the Company adopted the provisions of Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, as of December 29, 2006. Also, as disclosed in Note 10, the Company adopted Financial Accounting Standards Board Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations, in 2005.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 28, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 25, 2008 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Philadelphia, Pennsylvania
February 25, 2008

37

Technitrol, Inc. and Subsidiaries
Consolidated Balance Sheets

December 28, 2007 and December 29, 2006
In thousands, except per share data

	2007		2006
Assets
Current assets:
Cash and cash equivalents	$	116,289	$	87,195
Trade receivables, net		164,859		160,083
Inventories		122,115		106,397
Prepaid expenses and other current assets		24,864		31,121
Total current assets		428,127		384,796
Property, plant and equipment		261,171		248,209
Less accumulated depreciation		163,404		140,863
Net property, plant and equipment		97,767		107,346
Deferred income taxes		22,753		16,135
Goodwill, net		224,656		219,128
Other intangibles, net		34,794		32,334
Other assets		13,256		9,741
	$	821,353	$	769,480
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt	$	—	$	60
Short-term debt		—		1,771
Accounts payable		104,214		97,593
Accrued expenses and other current liabilities		92,096		96,368
Total current liabilities		196,310		195,792
Long-term liabilities:
Long-term debt, excluding current installments		10,467		57,331
Deferred income taxes		12,528		13,323
Other long-term liabilities		31,022		14,314
Commitments and contingencies (Note 11)
Minority interest		9,947		9,691
Shareholders’ equity:
Common stock: 175,000,000 shares authorized; 40,900,893 and 40,750,693 outstanding in 2007 and 2006, respectively; $0.125 par value per share and additional paid-in capital		222,593		218,919
Retained earnings		289,048		241,684
Other comprehensive income		49,438		18,426
Total shareholders’ equity		561,079		479,029
	$	821,353	$	769,480

See accompanying Notes to Consolidated Financial Statements.

38

Technitrol, Inc. and Subsidiaries
Consolidated Statements of Operations

Years ended December 28, 2007, December 29, 2006 and December 30, 2005
In thousands, except per share data

	2007			2006			2005
Net sales	$	1,026,555		$	954,096		$	616,378
Cost of sales		793,570			735,006			473,535
Gross profit		232,985			219,090			142,843
Selling, general and administrative expenses		141,571			138,971			106,797
Severance and asset impairment expense		18,019			8,829			54,436
Operating profit (loss)		73,395			71,290			(18,390	)
Other (expense) income:
Interest income		1,893			1,223			3,480
Interest expense		(5,534	)		(6,551	)		(2,128	)
Other, net		(334	)		4,124			(1,690	)
Earnings (loss) from continuing operations before income taxes, minority interest, and cumulative effect of accounting changes		69,420			70,086			(18,728	)
Income taxes		7,507			11,680			6,161
Minority interest expense		256			1,511			939
Earnings (loss) from continuing operations before cumulative effect of accounting changes		61,657			56,895			(25,828	)
Cumulative effect of accounting changes, net of income taxes		—			75			(564	)
Net earnings (loss) from discontinued operations		—			233			(472	)
Net earnings (loss)	$	61,657		$	57,203		$	(26,864	)
Per share data:
Basic earnings (loss) per share:
Earnings (loss) from continuing operations before cumulative effect of accounting changes	$	1.52		$	1.41		$	(0.65	)
Cumulative effect of accounting changes, net of income taxes		—			0.00			(0.01	)
Net earnings (loss) from discontinued operations		—			0.01			(0.01	)
Net earnings (loss)	$	1.52		$	1.42		$	(0.67	)
Diluted earnings (loss) per share:
Earnings (loss) from continuing operations before cumulative effect of accounting changes	$	1.51		$	1.40		$	(0.65	)
Cumulative effect of accounting changes, net of income taxes		—			0.00			(0.01	)
Net earnings (loss) from discontinued operations		—			0.01			(0.01	)
Net earnings (loss)	$	1.51		$	1.41		$	(0.67	)

See accompanying Notes to Consolidated Financial Statements.

39

Technitrol, Inc. and Subsidiaries
Consolidated Statements of Cash Flows

Years ended December 28, 2007, December 29, 2006 and December 30, 2005
In thousands

	2007			2006			2005
Cash flows from operating activities-continuing operations:
Net earnings (loss)	$	61,657		$	57,203		$	(26,864	)
(Earnings) loss from discontinued operations, net		—			(233	)		472
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Cumulative effect of accounting changes, net of income taxes		—			(75	)		564
Depreciation and amortization		33,351			33,883			22,158
Tax effect of stock compensation		(40	)		(110	)		(37	)
Stock incentive plan expense		3,730			3,283			3,562
Minority interest in net earnings of consolidated subsidiary		256			1,511			939
Loss on disposal or sale of assets		177			431			10,660
Intangible asset impairment, net of income taxes		—			—			38,447
Deferred taxes		7,687			(2,937	)		7,749
Severance and asset impairment expense, net of cash payments (excluding loss on disposal of assets and intangible asset impairments, net of taxes)		11,250			980			1,137
Inventory write downs		9,122			8,051			5,334
Changes in assets and liabilities, net of effect of acquisitions and divestitures:
Trade receivables		4,831			(9,645	)		(19,381	)
Inventories		(18,354	)		(21,896	)		(2,787	)
Prepaid expenses and other current assets		2,063			(758	)		1,592
Accounts payable		(181	)		12,735			18,277
Accrued expenses		(16,811	)		(2,128	)		(14,798	)
Other, net		1,376			(1,832	)		(2,455	)
Net cash provided by operating activities		100,114			78,463			44,569
Cash flows from investing activities-continuing operations:
Acquisitions, net of cash acquired of $1,285 and $357 in 2006 and 2005, respectively		—			(91,824	)		(90,012	)
Proceeds from sale of business		—			—			6,724
Capital expenditures, excluding acquisitions		(21,582	)		(25,357	)		(16,253	)
Purchases of grantor trust investments available for sale		(141	)		(7,151	)		—
Proceeds from sale of property, plant and equipment		7,119			3,565			2,009
Foreign currency impact on intercompany lending		(413	)		(6,106	)		8,868
Net cash used in investing activities		(15,017	)		(126,873	)		(88,664	)
Cash flows from financing activities-continuing operations:
Principal payments on short-term debt, net		(1,771	)		(2,445	)		(3,498	)
Principal (payments) borrowings on long-term debt, net		(47,639	)		(25,800	)		77,119
Dividends paid		(14,293	)		(14,227	)		(10,634	)
Exercise of stock options		971			2,407			—
Tax effect of stock compensation		40			110			—
Net cash (used in) provided by financing activities		(62,692	)		(39,955	)		62,987
Net effect of exchange rate changes on cash		6,689			(592	)		(1,101	)
Cash flows of discontinued operations:
Net cash provided by (used in) operating activities		—			528			(72	)
Net cash provided by (used in) investing activities		—			1,960			(7	)
Net increase (decrease) in cash and cash equivalents from discontinued operations		—			2,488			(79	)
Net increase (decrease) in cash and cash equivalents		29,094			(86,469	)		17,712
Cash and cash equivalents at beginning of year		87,195			173,664			155,952
Cash and cash equivalents at end of year	$	116,289		$	87,195		$	173,664

See accompanying Notes to Consolidated Financial Statements.

40

Technitrol, Inc. and Subsidiaries
Consolidated Statements of Changes in Shareholders’ Equity

Years ended December 28, 2007, December 29, 2006 and December 30, 2005
In thousands, except per share data

									Other
												Accumu- lated other compre- hensive income
	Common stock and paid-in capital														Compre- hensive income (loss)
									Deferred compen- sation
						Retained earnings
	Shares		Amount
Balance at December 31, 2004		40,448	$	213,694		$	239,752		$	(1,968	)	$	13,384
Stock options, awards and related compensation		81		1,903			—			734			—
Tax effect of stock compensation		—		(37	)		—			—			—
Dividends declared ($0.35 per share)		—		—			(14,180	)		—			—
Currency translation adjustments		—		—			—			—			(9,156	)	$	(9,156	)
Unrealized holding gains on securities		—		—			—			—			2			2
Net loss		—		—			(26,864	)		—			—			(26,864	)
Comprehensive loss															$	(36,018	)
Balance at December 30, 2005		40,529	$	215,560		$	198,708		$	(1,234	)	$	4,230
Reclassification due to SFAS 123(R) adoption		—		(1,234	)		—			1,234			—
Stock options, awards and related compensation		222		4,483			—			—			—
Tax effect of stock compensation		—		110			—			—			—
Adjustments due to SFAS 158 adoption		—		—			—			—			976
Dividends declared ($0.35 per share)		—		—			(14,227	)		—			—
Currency translation adjustments		—		—			—			—			13,012		$	13,012
Unrealized holding gains on securities		—		—			—			—			208			208
Net earnings		—		—			57,203						—			57,203
Comprehensive income															$	70,423
Balance at December 29, 2006		40,751	$	218,919		$	241,684		$	—		$	18,426
Stock options, awards and related compensation		150		3,634			—			—			—
Tax effect of stock compensation		—		40			—			—			—
Adjustments to defined benefits plans		—		—			—			—			(848	)
Dividends declared ($0.35 per share)		—		—			(14,293	)		—			—
Currency translation adjustments		—		—			—			—			31,416		$	31,416
Unrealized holding gains on securities		—		—			—			—			444			444
Net income		—		—			61,657			—			—			61,657
Comprehensive income															$	93,517
Balance at December 28, 2007		40,901	$	222,593		$	289,048		$	—		$	49,438

See accompanying Notes to Consolidated Financial Statements.

41

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

(1) Summary of Significant Accounting Policies

Principles of Consolidation

          The consolidated financial statements include the accounts of Technitrol, Inc. and all of our subsidiaries. We sometimes refer to Technitrol, Inc. as “Technitrol”, “we” or “our”. All material intercompany accounts and transactions are eliminated in consolidation.

Cash and Cash Equivalents

          Cash and cash equivalents include funds invested in a variety of liquid short-term investments with an original maturity of three months or less.

Inventories

          Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method. We establish inventory provisions to write down excess and obsolete inventory to market value. Inventory that is written down to market in the ordinary course of business is not written back up after a write down. Inventory provisions are utilized when the actual inventory is physically disposed. Cash flows from the sale of inventory are recorded in operating cash flows. The provisions are determined by comparing quantities on-hand to historical usage and forecasted demand. Inventory reserves at December 28, 2007 and December 29, 2006 were $12.9 million and $11.3 million, respectively.

Property, Plant and Equipment

          Property, plant and equipment are stated at cost. Depreciation is based upon the estimated useful life of the assets on both the accelerated and the straight-line methods. Estimated useful lives of assets range from 5 to 30 years for buildings and improvements and from 3 to 10 years for machinery and equipment. Expenditures for maintenance and repairs are charged to operations as incurred, and major renewals and improvements are capitalized. Upon sale or retirement, the cost of the asset and related accumulated depreciation are removed from our balance sheet, and any resulting gains or losses are included in earnings.

Goodwill and Other Intangibles

          FASB Statement No.142, Goodwill and Other Intangibles Assets (“SFAS 142”), requires that goodwill and intangible assets with indefinite useful lives be tested for impairment at least annually. SFAS 142 also requires that other intangible assets with finite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with FASB Statement No. 144, Accounting for the Impairment or Disposal of Long Lived Assets (“SFAS 144”). We amortize other identifiable intangibles, except those with indefinite lives, on a straight-line basis over 4 to 10 years. See Note 2 and Note 5 for additional information regarding goodwill and other intangible assets.

Revenue Recognition

          Revenue is recognized upon shipment of product and passage of title without right of return, after all performance factors have been met. We are not subject to any significant customer acceptance provisions. All product returns are deducted from net sales and are accrued for based on historical experience and FASB Statement No. 48, Revenue Recognition When Right of Return Exist (“SFAS 48”). Warranties are limited to rework, replacement of products and other normal remedies. We record an allowance for doubtful receivables. Accounts receivable allowances at December 28, 2007 and December 29, 2006 were $2.4 million and $1.8 million, respectively.

Stock-based Compensation

          We currently sponsor a stock option plan and a restricted stock award plan. However, there have been no stock options granted since 2004. On December 31, 2005, we adopted FASB Statement No. 123(R), Share-Based Payment (“SFAS 123(R)”),which replaces SFAS 123 and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”). Under SFAS 123(R), compensation cost relating to stock-based payment transactions is recognized in the financial statements, and is based on the fair value of the equity or liability instruments issued. SFAS 123(R) applies to all of our outstanding unvested stock-based payment awards as of December 31, 2005 and all prior awards using the modified prospective transition method without restatement of prior periods. Prior to December 31, 2005, we had previously adopted SFAS 123, as amended by FASB Statement No. 148,

42

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(1) Summary of Significant Accounting Policies, continued

Accounting for Stock-Based Compensation – Transition and Disclosure – An amendment of FASB Statement No. 123 (“SFAS 148”),whereby compensation expense was recorded for all awards subsequent to adoption. Upon adoption of SFAS 123(R), the cumulative effect recorded in the year ended December 29, 2006 was a gain of $0.1 million, net of taxes.

          Prior to SFAS 123(R) adoption, if compensation cost for issuances under our stock option plan had been determined based on the fair value as required by SFAS 123(R) for all awards, our pro forma net loss and loss per basic and diluted share would have been as follows (in thousands, except per share amounts):

	2005
Net loss - as reported	$	(26,864	)
Add: Stock-based compensation expense included in reported net loss, net of taxes		2,151
Deduct: Total stock-based compensation expense determined under fair value based method for all awards, net of taxes		(2,494	)
Net loss - adjusted	$	(27,207	)
Basic and diluted loss - as reported	$	(0.67	)
Basic and diluted loss - adjusted	$	(0.68	)

Foreign Currency Translation

          Certain of our foreign subsidiaries use the U.S. dollar as a functional currency and others use a local currency. For subsidiaries using the U.S. dollar as the functional currency, non-U.S. dollar monetary assets and liabilities are remeasured at year-end exchange rates while non-monetary items are remeasured at historical rates. Income and expense accounts are remeasured at the average rates in effect during the year, except for depreciation that is remeasured at historical rates. Gains or losses from changes in exchange rates are recognized in earnings in the period of occurrence. For subsidiaries using a local currency as the functional currency, net assets are translated at year-end rates while income and expense accounts are translated at average exchange rates. Adjustments resulting from these translations are reflected as currency translation adjustments in shareholders’ equity.

Financial Instruments and Derivative Financial Instruments

          The carrying value of our cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and accrued expenses are a reasonable estimate of their fair value due to the short-term nature of these instruments. The carrying value of our long-term debt approximates our fair value after taking into consideration current rates offered to us under our credit facility, as our long-term borrowings under our credit facility are subject to variable interest rates. We do not hold or issue financial instruments or derivative financial instruments for trading purposes.

          We are exposed to market risk from changes in interest rates, foreign currency exchange rates and precious metal prices. To mitigate the risk from these changes, we periodically enter into hedging transactions which have been authorized pursuant to our policies and procedures. In accordance with FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”), gains and losses related to fair value hedges are recognized in income along with adjustments of carrying amounts of the hedged item. Therefore, all of our forward exchange contracts are marked-to-market, and unrealized gains and losses are included in current-period net income. Although we had no forward exchange contracts outstanding at December 28, 2007 or December 29, 2006, we utilized foreign currency forwards during the 2006 period. During January 2008, we entered into a forward contract to sell forward approximately $400 million in exchange for approximately 2,025 million Danish Kroner in connection with the anticipated Sonion A/S acquisition.

Precious Metal Consignment-type Leases

          We had custody of inventories under consignment-type leases from suppliers of $185.9 million at December 28, 2007 and $135.8 million at December 29, 2006. The increase is the result of higher silver prices and overall volume increases at December 28, 2007 than at December 29, 2006. As of December 28, 2007, we had three consignment-type leases in place for sourcing all precious metals and the related inventory and liability are not recorded on our balance sheet. The agreements are generally one-year in duration and can be extended with annual renewals and either party can

43

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(1) Summary of Significant Accounting Policies, continued

terminate the agreements with 30 days written notice. The primary covenant in each of the agreements is a prohibition against us creating security interests in the consigned metals. Included in interest expense for the year ended December 28, 2007 were consignment fees of $2.9 million. These consignment fees were $3.6 million and $1.1 million in the years ended December 29, 2006 and December 30, 2005, respectively.

Estimates

          Our preparation of financial statements is in conformity with what generally accepted accounting principles require and we make estimates and assumptions that 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 amounts could differ significantly from those estimates.

Adjustments

          In the fourth quarter of 2007, an error was discovered related to our 2005 restructuring charge for the Electronics consumer division. We determined that the adjustment was not material to any period presented. Since the amount is immaterial to all periods presented, we have determined to correct prior year financial statements within this Form 10-K. In this regard, compared to amounts in our previously issued consolidated statements of operations, severance and asset impairment expenses increased $1.4 million, net loss increased $1.4 million and diluted loss per share increased $0.04 for the year ended December 30, 2005. This adjustment also decreased total assets and retained earnings by $1.4 million as of December 30, 2005.

Reclassifications

          Certain amounts in the prior-year financial statements have been reclassified to conform with the current-year presentation. Also refer to Note 3 “Divestiture.”

(2) Acquisitions

           Larsen Group: In December 2006, we acquired certain assets which comprise the Larsen Group (“Larsen”). Headquartered in Vancouver, Washington, Larsen had production operations in the United States, Mexico, China and France. We have included the acquired assets in our consolidated balance sheet since the effective date of the acquisition. The results of Larsen’s operations are included in our consolidated net earnings beginning in 2007. Larsen manufactured non-cellular wireless and automotive antennas and its’ acquisition expanded our Electronics antenna division. The purchase price and fair value of the acquired assets were not material to our consolidated financial statements.

           ERA Group: On January 4, 2006, we acquired all of the stock of ERA Group, headquartered in Herrenberg, Germany with production operations in Germany, China and Tunisia. The results of ERA’s operations have been included in our consolidated financial statements since the effective date of the acquisition. ERA produced advanced-technology ignition coils, along with a variety of other coils and transformers used in automotive, heating/ventilation/air conditioning and appliance applications. It became the foundation of our Electronics automotive division. The purchase price was approximately $53.4 million, net of cash acquired of $1.3 million, and including acquisition costs of approximately $0.9 million. The purchase price was financed primarily with bank credit under our multi-currency credit facility. The fair value of the net tangible assets acquired approximated $12.0 million. In addition to the fair value of net tangible assets acquired, purchase price allocations included $2.2 million for intellectual property, $3.1 million for customer relationships and $37.4 million allocated to goodwill. Each of the identifiable intangibles with finite lives are being amortized, using lives of five years for intellectual property and customer relationships.

           LK Products Oy: On September 8, 2005, we acquired all of the stock of LK Products Oy (“LK”), headquartered in Kempele, Finland with production operations in Finland, China and Hungary as well as offices in South Korea and San Diego. The results of LK’s operations have been included in our consolidated financial statements since that date. LK produced antennas and integrated modules for mobile communications and information devices and is the foundation of Electronics’ antenna division. The purchase price was approximately $111.1 million, net of cash acquired of $0.4 million, and including acquisition costs of approximately $2.3 million and consideration resulting from the earn-out provision noted below. The initial purchase price was funded with cash on hand. The fair value of the net tangible assets acquired approximated $19.2 million. In addition to the fair value of assets acquired, purchase price allocations included $19.4

44

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(2) Acquisitions, continued

million for customer relationships, $0.4 million for trademarks, $1.4 million for technology and $71.1 million allocated to goodwill. Each of the identifiable intangibles with finite lives is being amortized, using lives of five years for technology and ten years for customer relationships. The purchase agreement also included an earn-out provision which resulted in us paying approximately $19.8 million, or 15.5 million euros, net of a receivable from the seller, in 2006. LK is treated as a separate reporting unit for purposes of SFAS 142.

           Full Rise Electronic Co., Ltd.: Full Rise Electronic Co., Ltd. (“FRE”) is headquartered in Taiwan and conducts production operations in China. FRE manufactures connector products including single and multiple-port jacks, and supplies products to us. We began making investments in FRE in April 2001. As of December 28, 2007, our investment in FRE was approximately $31.5 million and our record ownership was approximately 71%. We also have beneficial ownership of an additional 4% of the common shares outstanding of FRE pursuant to an agreement which gives us voting authority, rights to any dividends paid, as well as the authority to prevent any transfer of these shares. Our net earnings therefore reflect FRE’s net earnings, after deducting the minority shareholders’ interest. Purchases of common stock in FRE were allocated, on a pro rata basis, to goodwill, identifiable intangible assets, and property, plant, and equipment according to the estimated fair value of such assets as of the date we began consolidating FRE’s results with our own.

(3) Divestiture

          In 2005, we received approximately $6.7 million for the sale of Electrical’s bimetal and metal cladding operations. We realized a gain of approximately $1.4 million from the sale of approximately $5.1 million of inventory and $0.2 million of machinery and equipment. During 2005, we accrued $1.3 million for severance and related payments resulting from the announcement to terminate manufacturing and support personnel and incurred other expenses related to the shutdown of operations. The majority of this accrual was paid by December 29, 2006. Additionally, we realized a $1.1 million pension curtailment gain during the 2005 period as a result of the reduced estimated future service period of the severed personnel. In December of 2006, the remaining fixed assets were sold for approximately $2.0 million, which resulted in a pretax gain of $0.6 million over the previously carried $1.4 million net book value. There were no sales or net earnings during the year ended 2007, but the results of the bimetal and metal cladding operations are reflected as discontinued operations on the Consolidated Statements of Operations for 2005 and 2006.

          Summary results of operations for the bimetal and metal cladding operations were as follows (in thousands):

	2007		2006		2005
Net sales	$	—	$	—	$	9,020
Earnings (loss) before income taxes		—		359		(726	)

(4) Financial Statement Details

          The following provides details for certain financial statement captions at December 28, 2007 and December 29, 2006 (in thousands):

	2007		2006
Inventories:
Finished goods	$	48,940	$	37,415
Work in progress		27,748		23,843
Raw materials and supplies		45,427		45,139
	$	122,115	$	106,397
Property, plant and equipment, at cost:
Land	$	6,278	$	6,418
Buildings and improvements		35,385		38,675
Machinery and equipment		219,508		203,116
	$	261,171	$	248,209
Accrued expenses:
Income taxes payable	$	15,874	$	31,607
Accrued compensation		24,994		21,943
Other accrued expenses		51,228		42,818
	$	92,096	$	96,368

45

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(4) Financial Statement Details, continued

          Upon adoption of FASB Interpretation No. 48, Accounting for Income Taxes (“FIN 48”), we reclassified approximately $17.6 million of unrecognized tax benefits from current to long-term liabilities. At December 28, 2007, approximately $19.8 million of unrecognized tax benefits are classified as other long-term liabilities.

(5) Goodwill and Other Intangible Assets

          FASB Statement No. 142, Goodwill and Other Intangible Assets (“SFAS 142”), requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually in accordance with the provisions of SFAS 142. SFAS 142 also requires that other intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS 144”).

          The changes in the carrying amounts of goodwill for the years ended December 28, 2007 and December 29, 2006 were as follows (in thousands):

Balance at December 30, 2005	$	141,481
Goodwill acquired during the year		68,610
Purchase price allocation and other adjustments		997
Currency translation adjustment		8,040
Balance at December 29, 2006	$	219,128
Goodwill acquired during the year		—
Purchase price allocation and other adjustments		(9,056	)
Currency translation adjustment		14,584
Balance at December 28, 2007	$	224,656

          The majority of our goodwill and other intangibles relate to our Electronics segment.

          During 2007, we completed the purchase price allocation for Larsen, which resulted in a $5.3 million reclassification from goodwill to identifiable intangibles and an increase to goodwill of approximately $0.2 million to finalize the fair values of other acquired assets. Additionally, in the fourth quarter of 2007, we adjusted deferred taxes that relate to pre-acquisition net operating losses of LK by $4.0 million with an offsetting reduction in goodwill.

          Other intangible assets at December 28, 2007 and December 29, 2006 were as follows (in thousands):

	2007			2006
Intangible assets subject to amortization (definite lives):
Technology	$	11,655		$	11,207
Customer relationships		32,162			26,102
Tradename / trademark		427			383
Other		2,402			2,402
Total	$	46,646		$	40,094
Accumulated amortization:
Technology	$	(8,516	)	$	(7,113	)
Customer relationships		(8,798	)		(4,391	)
Tradename / trademark		(427	)		(383	)
Other		(769	)		(531	)
Total	$	(18,510	)	$	(12,418	)
Net tangible assets subject to amortization	$	28,136		$	27,676

46

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(5) Goodwill and Other Intangible Assets, continued

	2007		2006
Intangible assets not subject to amortization (indefinite lives):
Tradename	$	6,658	$	4,658
Other intangibles, net	$	34,794	$	32,334

          Amortization expense was approximately $5,296,000, $4,802,000 and $2,053,000 for the years ended December 28, 2007, December 29, 2006 and December 30, 2005, respectively.

          Estimated annual amortization expense for each of the next five years is as follows (in thousands):

Year Ending
2008	$	5,128
2009	$	4,550
2010	$	4,191
2011	$	2,625
2012	$	2,518

(6) Investments

          As of December 28, 2007 and December 29, 2006, we held approximately $8.2 million and $7.5 million, respectively, of securities designated as available for sale according to FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities (“SFAS 115”). In the periods ended December 28, 2007 and December 29, 2006, we recognized approximately $0.4 million and $0.2 million, respectively, of unrealized holding gains as a component of accumulated other comprehensive income as a result of holding these securities. We do not intend to liquidate the majority of these securities in a short period of time, and therefore, we have included these investments as a component of other assets on our 2007 and 2006 Consolidated Balance Sheets. These securities are held in an irrevocable grantor trust (“Rabbi Trust”) and will be used to fund future benefit payments to participants in one of our defined benefit plans. The Rabbi Trust was established in 2006 and is subject to the claims of our general creditors in the event of our insolvency.

(7) Debt

          At December 28, 2007, we had no short-term debt, and long-term debt was as follows (in thousands):

Long-term Debt	2007
Bank Loans
Variable-rate, (5.19%) unsecured debt in Germany (denominated in euros) due 2010	$	2,943
Fixed-rate, (5.65%) unsecured debt in Germany (denominated in euros) due 2009		7,524
Total long-term debt	$	10,467
At December 29, 2006, short-term and long-term debt was as follows (in thousands):
Short-term Debt	2006
Bank Loans
Fixed-rate, (5.58%) unsecured debt in China (denominated in Renminbi) due 2007	$	1,645
Fixed-rate, (7.20%) unsecured debt in China (denominated in Renminbi) due 2007		126
Total short-term debt	$	1,771

47

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(7) Debt, continued

Long-term Debt	2006
Bank Loans
Variable-rate, (5.95%) unsecured debt in Singapore (denominated in US Dollars) due 2010	$	11,000
Variable-rate, (4.26%) unsecured debt in Germany (denominated in euros) due 2010		25,081
Variable-rate, (5.95%) unsecured debt in Hong Kong (denominated in US Dollars) due 2010		8,500
Variable-rate, (5.95%) unsecured debt in the United States (denominated in US Dollars) due		6,000
Fixed-rate, (5.65%) unsecured debt in Germany (denominated in euros) due 2009		6,750
Mortgage Notes
8.20% - 10.32% mortgage notes, due in monthly installments until 2007		60
Total long-term debt		57,391
Less current installments		(60	)
Long-term debt excluding current installments	$	57,331

          We entered into a credit agreement on October 14, 2005 providing for $200.0 million of credit capacity. The facility consists of an aggregate U.S. dollar-equivalent revolving line of credit in the principal amount of up to $200.0 million, and provides for borrowings in multiple currencies including but not limited to U.S. dollars, euros, and Japanese yen, including individual sub-limits of:

– a U.S. dollar-based swing-line loan not to exceed $20.0 million;

– a multicurrency facility providing for the issuance of letters of credit in an aggregate amount not to exceed the U.S. dollar equivalent of $25.0 million; and

– a Singapore sub-facility not to exceed the U.S. dollar equivalent of $50.0 million.

          The credit agreement permits us to request one or more increases in the total commitment not to exceed $100.0 million, provided the minimum increase is $25.0 million, subject to bank approval. The total amount outstanding under the credit facility may not exceed $200.0 million, provided we do not request an increase in total commitment.

          Outstanding borrowings are subject to two financial covenants, both of which are computed on a rolling twelve-month basis as of the most recent quarter-end. The first is maximum debt outstanding amounting to three and one-half times our earnings before interest, taxes, depreciation and amortization (EBITDA), as defined by the credit agreement. The second is maximum debt service expenses amounting to two and one-half times our cash interest expense, as defined by the credit agreement. The credit agreement also contains covenants specifying capital expenditure limitations and other customary and normal provisions. We are in compliance with these covenants as of December 28, 2007.

          We pay a commitment fee on the unborrowed portion of the commitment, which ranges from 0.15% to 0.25% of the total commitment, depending on our debt-to-EBITDA ratio, as defined above. The interest rate for each currency’s borrowing will be a combination of the base rate for that currency plus a credit margin spread. The base rate is different for each currency. The credit margin spread is the same for each currency and is 0.60% to 1.25%, depending on our debt-to-EBITDA ratio, as defined in the credit agreement. Each of our domestic subsidiaries with net worth equal to or greater than $10 million has guaranteed all obligations incurred under the credit facility.

          We had six standby letters of credit outstanding at December 28, 2007 in the aggregate amount of $1.7 million securing transactions entered into in the ordinary course of business.

          As of December 28, 2007, we had $2.9 million of outstanding borrowings under this five-year revolving credit agreement, primarily to fund acquisitions. Our total credit available, including standby letters of credit, as of December 28, 2007 was approximately $195.4 million.

          We also have an obligation outstanding due in August 2009 under an unsecured term loan agreement in Germany for the borrowing of approximately 5.1 million euros as of December 28, 2007.

48

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(7) Debt, continued

          Principal payments of long-term debt due within the next five years are as follows (in thousands):

2008	$	—
2009		7,524
2010		2,943
2011		—
2012		—
Thereafter		—
	$	10,467

          We had commercial commitments outstanding at December 28, 2007 of approximately $185.9 million due under precious metal consignment-type leases. This represents an increase of $50.1 million from the $135.8 million outstanding as of December 29, 2006 and is primarily attributable to higher average silver prices and an increased quantity of leased precious metal during 2007.

(8) Income Taxes

          Earnings (loss) from continuing operations before income taxes, minority interest and cumulative effect of accounting changes were as follows (in thousands):

	2007			2006			2005
Domestic	$	(5,003	)	$	(4,324	)	$	(5,722	)
Non-U.S.		74,423			74,410			(11,606	)
Total	$	69,420		$	70,086		$	(17,328	)
Income tax expense was as follows (in thousands):
	2007			2006			2005
Current:
Federal	$	2,653		$	4,339		$	(2,188	)
State and local		(204	)		290			248
Non-U.S.		12,745			9,988			352
		15,194			14,617			(1,588	)
Deferred:
Federal		(451	)		(2,937	)		4,414
State and local		(185	)		(584	)		785
Non-U.S.		(7,051	)		584			2,550
		(7,687	)		(2,937	)		7,749
Net tax expense	$	7,507		$	11,680		$	6,161

          A reconciliation of the statutory federal income tax rate with the effective income tax rate was as follows:

	2007			2006			2005
Statutory federal income tax rate		35	%		35	%		35	%
Increase (decrease) resulting from:
State and local income taxes, net of federal tax effect		—			—			(1	)
Non-deductible expenses and other		3			3			23
Section 965 dividend		—			—			(41	)
Non-U.S. income subject to U.S. income tax		3			2			(8	)
Lower foreign tax rates		(29	)		(22	)		(40	)
Research and development and other tax credits		(1	)		(1	)		(1	)
Effective tax rate		11	%		17	%		(33	%)

          We adopted the provisions of FIN 48 on December 30, 2006 and, at the date of adoption, we had approximately $22.8 million of unrecognized income tax benefits. Upon adoption of FIN 48, we did not recognize an adjustment to our liabilities for unrecognized tax benefits, but we reclassified approximately $17.6 of unrecognized tax benefits from current to long-term liabilities. At December 28, 2007, we have approximately $23.6 million of unrecognized income tax benefits,

49

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(8) Income Taxes, continued

$19.8 million of which are classified as other long-term liabilities. If all the tax benefits were recognized, than approximately $1.1 million would be reversed through an adjustment to goodwill and approximately $22.5 million would impact the effective tax rate.

          A reconciliation of the total gross unrecognized tax benefits was as follows (in thousands):

Balance at December 30, 2006	$	22,789
Tax positions related to current year:
Additions		3,576
Tax positions related to prior years:
Additions		6
Reductions		(198	)
Total		(192	)
Lapses in statutes of limitation		(2,597	)
Balance at December 28, 2007	$	23,576

         Our continuing practice is to recognize interest and/or penalties related to income tax matters as income tax expense. As of December 28, 2007, we have $1.2 million accrued for interest and/or penalties related to uncertain income tax positions.

         We are subject to U.S. federal income tax as well as income tax in multiple state and non-U.S. jurisdictions. With respect to federal and state income tax, tax returns for all years after 2003 are subject to future examination by the respective tax authorities. With respect to material non-U.S. jurisdictions in which we operate, we have open tax years ranging from 3 to 10 years.

         We do not expect the amount of unrecognized tax benefits to significantly change within the next 12 months. However, such balances may change quarter-over-quarter during 2008.

         Several of our foreign subsidiaries continue to operate under separate tax holiday arrangements as granted by certain foreign jurisdictions. The nature and extent of such arrangements vary, and the benefits of such arrangements may phase out in the future according to the specific terms and schedules as set forth by the particular tax authorities having jurisdiction over the arrangements. For example, the tax holidays applicable to most of our PRC earnings will expire in 2010. In 2007, 2006 and 2005, taxes on foreign earnings were favorably impacted by tax holidays and other incentives in certain foreign jurisdictions of $10.0 million, $11.4 million and $0.9 million, respectively.

         Deferred tax assets and liabilities included the following (in thousands):

	2007			2006
Assets:
Inventories	$	167		$	(16	)
Plant and equipment		9,085			3,804
Vacation pay and other compensation		536			479
Pension expense		3,426			2,654
Stock awards		612			450
Accrued liabilities		1,063			1,043
Net operating losses – state and foreign		13,699			24,104
Tax credits		18,974			21,573
Other		4,881			1,642
Total deferred tax assets		52,443			55,733
Valuation allowance		(11,394	)		(23,076	)
Net deferred tax assets	$	41,049		$	32,657

50

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(8) Income Taxes, continued

			2007			2006
Liabilities:
	Foreign earnings not permanently invested		$	18,723		$	18,957
	Acquired intangibles			8,101			8,816
		Total deferred tax liabilities		26,824			27,773
		Net deferred taxes	$	14,225		$	4,884
		Short-term deferred tax assets	$	5,485		$	3,290
		Short-term deferred tax liabilities		(1,485	)		(1,218	)
		Long-term deferred tax assets		22,753			16,135
		Long-term deferred tax liabilities		(12,528	)		(13,323	)
		Net deferred tax assets	$	14,225		$	4,884

         The valuation allowance on the deferred tax asset decreased $11.7 million primarily due to a reduction in goodwill related to pre-acquisition net operating losses of LK of approximately $4.0 million, a reduction to gross deferred tax assets of approximately $3.8 million and approximately $3.9 million of tax benefit resulting from consumption and realization of net operating losses and our expectation that the tax benefit of certain remaining losses is likely to be realized. Based on our history of taxable income and our projection of future earnings, we believe that it is more likely than not that sufficient taxable income will be generated in the foreseeable future to realize the net deferred tax assets. Unless utilized, net operating losses will expire in fiscal years 2008 through 2026. Foreign tax credit carryforwards will start to expire in 2010. Research and development credit carryforwards will start to expire in 2019.

         In October 2004, the American Jobs Creation Act of 2004 (“AJCA”) was signed into law. The AJCA contained a series of provisions, several of which are pertinent to us. The AJCA created a temporary incentive for U.S. multi-national corporations to repatriate accumulated income abroad by providing an 85% dividends received deduction for certain dividends from controlled foreign corporations. Based on this legislation and 2005 guidance by the Department of Treasury, we repatriated $52 million of foreign earnings in the year ended December 30, 2005. A charge of $7.3 million related to the repatriation is included in income taxes (from continuing operations) in the accompanying Consolidated Statements of Operations in the year ended December 30, 2005. After this repatriation we continue to have undistributed earnings of our foreign subsidiaries, with the exception of approximately $40 million, considered to be indefinitely reinvested, and in accordance with APB Opinion No. 23, Accounting for Income Taxes - Special Areas (“APB 23”), no provision for U.S. federal or state income taxes had been provided on these undistributed earnings.

         We have not provided for U.S. federal and state income and foreign withholding taxes on approximately $485 million of non-U.S. subsidiaries’ undistributed earnings (as calculated for income tax purposes) as of December 28, 2007, including pre-acquisition earnings of foreign entities acquired in stock purchases. Unrecognized deferred taxes on these undistributed earnings were estimated to be approximately $134 million.

(9) Employee Benefit Plans

         We maintain defined benefit pension plans for certain of our U.S. employees. Certain of our non-U.S. subsidiaries have varying types of retirement plans providing benefits for substantially all of their employees. Benefits are based on years of service and average final compensation. In 2006 and 2005, we began to combine the retirement plans of ERA and LK, respectively, with our own plans. For U.S. plans we fund at least the minimum amount required by the Employee Retirement Income Security Act of 1974, as amended. We do not provide any post-retirement benefits outside of the U.S. except as may be required by certain jurisdictions. Depending on the investment performance of plan assets and other factors, the funding amount in any given year may be zero.

         Pension expense was as follows (in thousands):

	2007		2006		2005
Principal defined benefit plans	$	1,023	$	1,305	$	30
Other employee benefit plans		979		703		1,191
	$	2,002	$	2,008	$	1,221

         During 2005, a curtailment gain of $1.1 million was recognized as a result of the reduced estimated future service period of the severed personnel of the discontinued operations.

51

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(9) Employee Benefit Plans, continued

         The net expense for the principal defined benefit pension plans included the following components (in thousands):

	2007			2006			2005
Service cost	$	1,191		$	1,310		$	1,585
Interest cost		2,422			2,244			2,161
Expected return on plan assets		(2,640	)		(2,442	)		(2,354	)
Amortization of transition obligation		9			10			13
Amortization of prior service cost		241			270			271
Recognized actuarial gain		(200	)		(87	)		(1,646	)
Net periodic pension cost	$	1,023		$	1,305		$	30

         The financial status of the principal defined benefit plans at December 28, 2007 and December 29, 2006 was as follows (in thousands):

		2007			2006
Change in benefit obligation:
Projected benefit obligation at beginning of year		$	42,298		$	41,601
	Service cost		1,191			1,310
	Interest cost		2,422			2,244
	Plan amendments		(27	)		(134	)
	Actuarial (gain) loss		790			(2,101	)
	Plans not previously aggregated		—			785
	Benefits paid		(1,626	)		(1,407	)
Projected benefit obligation at end of year		$	45,048		$	42,298
Change in plan assets:
Fair value of plan assets at beginning of year		$	34,008		$	31,424
Actual return on plan assets			2,016			3,752
Employer contributions			255			232
Plans not previously aggregated			—			7
Benefits paid			(1,626	)		(1,407	)
Fair value of plan assets at end of year		$	34,653		$	34,008
Accumulated benefit obligation		$	39,015		$	36,509

         In connection with our 2006 adoption of FASB Statement No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans (“SFAS 158”), the unrecognized components of net periodic pension cost have been included in accumulated other comprehensive income for 2007 and 2006.

52

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(9) Employee Benefit Plans, continued

         The effects of applying SFAS 158 to the 2006 statement of financial position, was as follows (in thousands):

	Before Application of SFAS 158			Adjustments			After Application of SFAS 158
Other assets		$	10,538		$	(797)		$	9,741
Deferred income taxes			16,738			(603)			16,135
Total assets		$	770,880		$	(1,400)		$	769,480
Other long-term liabilities		$	16,690		$	(2,376)		$	14,314
Total liabilities		$	283,136		$	(2,376)		$	280,760
Minority interest		$	9,691		$	—		$	9,691
Accumulated other comprehensive income		$	17,450		$	976		$	18,426
Total shareholders’ equity		$	478,053		$	976		$	479,029

         The accumulated other comprehensive income for the principal defined benefit plans included the following components (in thousands):

	2007			2006
Actuarial gain	$	1,476		$	2,474
Amortization of prior service costs		(1,314	)		(1,451	)
Amortization of transition obligations		(34	)		(47	)
Accumulated other comprehensive income	$	128		$	976

         The pension cost expected to be amortized from accumulated other comprehensive income in 2008 for the principal defined benefit pension plans is expected to be approximately $0.3 million.

         The aggregate benefit obligation, accumulated benefit obligation and fair value of plan assets for plans with benefit obligations in excess of plan assets, as of the measurement date of each statement of financial position presented, is as follows (in thousands):

	2007		2006
Benefit obligation	$	10,969	$	9,729
Accumulated benefit obligation	$	9,101	$	8,080
Plan assets	$	18	$	22

         Our securities held in the Rabbi Trust are excluded from plan assets. However, the Rabbi Trust securities will be used to fund future benefit payments to participants of one of our defined benefit plans. As of December 28, 2007 and December 29, 2006 we held approximately $8.2 million and $7.5 million, respectively, of securities in the Rabbi Trust. See Note 6 to the consolidated financial statements for further details regarding the Rabbi Trust.

         The principal defined benefit plans’ weighted-average asset allocations at December 28, 2007 and December 29, 2006 were as follows:

	2007			2006
Asset Category
Equity securities		68	%		71	%
Debt securities		31	%		28	%
Other		1	%		1	%
Total		100	%		100	%

         Our asset allocation policy for our primary benefit plans is for a target investment of 65% to 75% equity securities and 25% to 35% fixed income securities. The goal of our asset investment policy is to achieve a return in excess of the rate of inflation with acceptable levels of volatility. We utilize professionally managed mutual funds to invest our assets.

53

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(9) Employee Benefit Plans, continued

Our pension assets are invested in a variety of small and large capitalization domestic and international mutual stock funds and a bond fund.

          To develop the expected long-term rate of return on assets assumption, we considered historical returns and future expectations for returns for each asset class, weighted by the target asset allocations. This resulted in the selection of the 8.0% long-term rate of return on assets assumption.

Assumptions used to develop data were as follows:
		2007			2006
	Discount rate		5.80	%		5.75	%
	Annual compensation increases		4.25	%		4.25	%
	Expected long-term rates of return on plan assets		8.00	%		8.00	%
Our measurement date is the last day of the year.

          We expect to contribute approximately $0.3 million to the principal defined benefit plans in 2008. Additionally, we expect to make benefit payments in 2008 of approximately $1.7 million from our principal defined benefit plans. The following table shows expected benefit payments for the next five fiscal years and the aggregate five years thereafter from the principal defined benefit plans (in millions):

Year Ending
2008	$	1.7
2009		1.9
2010		2.1
2011		2.4
2012		2.6
Thereafter		14.1
	$	24.8

          We maintain two defined contribution 401(k) plans covering substantially all U.S. employees. Under our 401(k) plans, we contributed a matching amount equal to $1.00 for each $1.00 of the participant’s contribution, not in excess of a maximum of 4% or 6% of the participant’s annual wages, depending on the plan. The total contribution expense under the 401(k) plans for employees of continuing operations was approximately, $1.3 million, $1.3 million and $1.0 million in 2007, 2006 and 2005, respectively.

(10)  Asset Retirement Obligations

          We adopted FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (“FIN 47”) as of December 30, 2005. FIN 47 clarifies the term “conditional asset retirement obligation” as used in SFAS No. 143, Accounting for Asset Retirement Obligations (“SFAS 143”), which refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event. SFAS 143 requires that the fair value of a legal liability for an asset retirement obligation be recorded in the period in which it is incurred if a reasonable estimate of fair value can be made. Upon recognition of a liability, the asset retirement cost is recorded as an increase in the carrying value of the related long-lived asset and then depreciated over the life of the asset. Our asset retirement obligations arise primarily from legal requirements to decontaminate buildings, machinery and equipment at the time we dispose of or replace them. We also have leased facilities where we have asset retirement obligations from contractual commitments to remove leasehold improvements and return the property to a specified condition when the lease terminates. As a result of our evaluation of our asset retirement obligations, we recorded a $1.0 million non-current liability for asset retirement obligations and a $0.3 million increase in the carrying value of the related assets, net of $0.3 million of accumulated depreciation in the year ended December 30, 2005. The cumulative effect recorded in 2005 upon the adoption of this interpretation was $0.6 million, net of taxes of $0.3 million.

54

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(10)  Asset Retirement Obligations, continued

          The following table presents our liability for asset retirement obligations as if this interpretation had been adopted on December 30, 2005 (in thousands):

Balance at December 30, 2005	$	960
Accretion Expense		77
Payments/Settlements		—
Currency translation adjustment		99
Balance at December 29, 2006	$	1,136
Accretion Expense		85
Payments/Settlements		(69	)
Currency translation adjustment		120
Balance at December 28, 2007	$	1,272

(11)  Commitments and Contingencies

          We conduct a portion of our operations on leased premises and also lease certain equipment under operating leases. Total rental expense amounts for the years ended December 28, 2007, December 29, 2006 and December 30, 2005 were $9.8 million, $9.2 million and $7.6 million, respectively.

          The aggregate minimum rental commitments under non-cancelable leases in effect at December 28, 2007 were as follows (in thousands):

Year Ending
2008	$	9,726
2009		6,856
2010		2,740
2011		1,778
2012		522
Thereafter		810
	$	22,432

          The aggregate minimum rental commitments schedule does not include $185.9 million due under precious metal consignment-type leases. We expect to make payments under such leases as the precious metal is purchased in 2008 upon sale of the precious metal to customers.

          We had six standby letters of credit outstanding at December 28, 2007 in the aggregate amount of $1.7 million securing transactions entered into in the ordinary course of business.

          We had no other off-balance-sheet financing arrangements in addition to our operating leases, precious metal leases and letters of credit.

          Our manufacturing operations are subject to a variety of local, state, federal, and international environmental laws and regulations governing air emissions, wastewater discharges, the storage, use, handling, disposal and remediation of hazardous substances and wastes and employee health and safety. It is our policy to meet or exceed the environmental standards set by these laws. However, in the normal course of business, environmental issues may arise. We may incur increased costs associated with environmental compliance and cleanup projects necessitated by the identification of new environmental issues or new environmental laws and regulations.

          We accrue costs associated with environmental and legal matters when they become probable and reasonably estimable. Accruals are established based on the estimated undiscounted cash flows to settle the obligations and are not reduced by any potential recoveries from insurance or other indemnification claims. We believe that any ultimate liability with respect to these actions in excess of amounts provided will not materially affect our operations or consolidated financial position, liquidity or operating results.

55

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(11)  Commitments and Contingencies, continued

          We are also subject to various lawsuits, claims and proceedings which arise in the ordinary course of our business. These actions include routine tax audits and assessments occurring throughout numerous jurisdictions on a worldwide basis. We do not believe that the outcome of any of these actions will have a material adverse effect on our financial results.

(12)  Shareholders’ Equity

          All retained earnings are free from legal or contractual restrictions as of December 28, 2007, with the exception of approximately $25.1 million of retained earnings, primarily in the PRC that are restricted in accordance with Section 58 of the PRC Foreign Investment Enterprises Law. Included in the $25.1 million is $4.9 million of retained earnings of FRE, a majority-owned subsidiary. The restriction applies to 10% of our net earnings in the PRC, limited to 50% of the total capital invested in the PRC.

          See Note 13 for information regarding our stock-based compensation plans.

          We have a Shareholder Rights Plan. The Rights are currently not exercisable, and automatically trade with our common shares. However, after a person or group has acquired 15% or more of our common shares, the Rights will become exercisable, and separate certificates representing the Rights will be distributed. In the event that any person or group acquires 15% of our common shares, each holder of two Rights (other than the Rights of the acquiring person) will have the right to receive, for $300, that number of common shares having a market value equal to two times the exercise price of the Rights. Alternatively, in the event that, at any time following the date in which a person or group acquires ownership of 15% or more of our common shares, and we are acquired in a merger or other business combination transaction, or 50% or more of our consolidated assets are sold, each holder of two Rights (other than the Rights of such acquiring person or group) will thereafter have the right to receive, upon exercise, that number of shares of common stock of the acquiring entity having a then market value equal to two times the exercise price of the Rights. The Rights may be redeemed by us at a price of $0.005 per Right at any time prior to becoming exercisable. Rights that are not redeemed or exercised expire on September 9, 2008.

(13)  Stock-Based Compensation

          We have an incentive compensation plan for our employees. One component of this plan is restricted stock, which grants the recipient the right of ownership of our common stock, generally conditional on continued employment for a specified period. Another component is stock options. On December 31, 2005, we adopted SFAS 123(R), which replaced SFAS 123 and superseded APB 25. Under SFAS 123(R), compensation cost relating to stock-based payment transactions is recognized in the financial statements, and is based on the fair value of the equity or liability instruments issued. SFAS 123(R) applies to all of our outstanding unvested stock-based payment awards as of December 31, 2005 and all prior awards using the modified prospective transition method without restatement of prior periods. As we had previously adopted SFAS 123, as amended by SFAS 148, at the beginning of the 2003 fiscal year, whereby compensation expense was recorded for all awards subsequent to adoption, our adoption did not significantly impact our financial position or our results of operations. Upon adoption of SFAS 123(R), the cumulative effect recorded in the year ended December 29, 2006 was a gain of $0.1 million, net of taxes.

          The following table presents the stock-based compensation expense included in the Consolidated Statements of Operations (in thousands):

	2007			2006			2005
Restricted stock		$	3,281		$	2,540		$	2,555
Stock options			449			553			652
Total stock-based compensation included in selling, general and administrative expenses			3,730			3,093			3,207
Income tax benefit			(1,262)			(1,026)			(1,056)
Total after-tax stock-based compensation expense		$	2,468		$	2,067		$	2,151

56

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(13) Stock-Based Compensation, continued

Restricted Stock: The value of restricted stock issued is based on the market price of the stock at the award date. Shares are held by us until the continued employment requirement has been attained. The market value of the shares at the date of grant is charged to expense on a straight-line basis over the vesting period, which is generally three years. Cash awards, which are intended to assist recipients with their resulting personal tax liability, are based on the market value of the shares and are accrued over the vesting period. If the recipient makes an election under Section 83(b) of the Internal Revenue Code, the expense related to the cash award is fixed based on the value of the awarded stock on the grant date. If the recipient does not make the election under Section 83(b), the expense related to the cash award is variable based on the current market value of the shares and generally is limited to 65% of the value as of the date of grant.

         A summary of the restricted stock activity for 2007 and 2006 is as follows (in thousands, except per share data):

	2007					2006
	Shares			Weighted Average Stock Grant Price (Per Share)		Shares			Weighted Average Stock Grant Price (Per Share)
Opening nonvested restricted stock		205			$ 20.48		209			$ 18.79
Granted		99			$ 26.33		86			$ 23.48
Vested		(78	)		$ 20.96		(82	)		$ 19.59
Forfeited/cancelled		(7	)		$ 23.41		(8	)		$ 18.00
Ending nonvested restricted stock		219			$ 22.85		205			$ 20.48

         As of December 28, 2007, there was approximately $2.4 million of total unrecognized compensation cost related to restricted stock grants. This unrecognized compensation is expected to be recognized over a weighted-average period of approximately 1.9 years.

Stock Options: Stock options are granted at no cost to the employee and cannot be granted at a price lower than the fair market value at date of grant. These options expire seven years from the date of grant and vest equally over four years. There were no options issued during the years ended December 28, 2007, December 29, 2006 and December 30, 2005. We value our stock options according to the fair value method using the Black-Scholes option-pricing model.

         A summary of the stock options activity for 2007 and 2006 is as follows (in thousands, except per share data):

	2007									2006
	Shares			Weighted Average Option Grant Price (Per Share)				Aggregate Intrinsic Value		Shares			Weighted Average Option Grant Price (Per Share)			Aggregate Intrinsic Value
Opening stock options outstanding		295				$	18.99				475			$	19.31
Granted		—			$		—				—			$	—
Exercised		(51	)		$		19.13				(113	)		$	19.95
Forfeited/cancelled		(57	)		$		18.97				(67	)		$	19.65
Ending stock options outstanding		187			$		18.96		$  1,887		295			$	18.99		$  2,257
Ending stock options exercisable		176			$		19.12		$  1,742		238			$	19.41		$  1,724

          The exercise prices of the options outstanding as of December 28, 2007 range from $16.55 per share to $26.20 per share. As of December 28, 2007, there was approximately $0.1 million of total unrecognized compensation cost related to option grants. This unrecognized compensation is expected to be recognized over a weighted-average period of approximately one year.

57

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(13) Stock-Based Compensation, continued

          During the twelve months ended December 28, 2007 and December 29, 2006, cash received from stock options exercised was $1.0 million and $2.4 million, respectively. The total intrinsic value of stock options exercised during the twelve months ended December 28, 2007 and December 29, 2006 was $0.4 million and $0.9 million, respectively. SFAS 123(R) requires that tax benefits from deductions in excess of the compensation cost of stock options exercised be classified as a cash inflow from financing, which has caused current year net cash provided by operating activities to be lower and net cash used in financing activities to be higher by less than $0.1 million. Prior to adopting SFAS 123(R), we presented these benefits in the operating section of the Consolidated Statements of Cash Flows.

          No amounts of stock-based compensation cost have been capitalized into inventory or other assets in any period presented in the Consolidated Financial Statements.

(14) Earnings (loss) Per Share

          Basic earnings (loss) per share were calculated by dividing earnings (loss) by the weighted average number of common shares outstanding during the year (excluding restricted shares which are considered to be contingently issuable). For calculating diluted earnings per share, common share equivalents are added to the weighted average number of common shares outstanding. Common share equivalents are computed based on the number of outstanding options to purchase common stock and unvested restricted shares as calculated using the treasury stock method. However, in years when we have a net loss, or the exercise price of stock options, by grant, are greater than the actual stock price as of the end of the year, those common stock equivalents will be excluded from the calculation of diluted earnings per share. There were approximately 189,000 and 200,000 common share equivalents for the years ended December 28, 2007 and December 29, 2006, respectively. As we had a net loss for the year ended December 30, 2005, we did not include any common share equivalents in the calculation of earnings per share. There were approximately 187,000, 295,000 and 475,000 stock options outstanding as of December 28, 2007, December 29, 2006 and December 30, 2005, respectively. We had unvested restricted shares outstanding of approximately 219,000, 205,000 and 209,000 as of December 28, 2007, December 29, 2006 and December 30, 2005, respectively.

Earnings per share calculations were as follows (in thousands, except per share amounts):

	2007		2006		2005
Earnings (loss) from continuing operations before cumulative effect of accounting changes	$	61,657	$	56,895	$	(25,828	)
Cumulative effect of accounting changes, net of income taxes		—		75		(564	)
Net earnings (loss) from discontinued operations		—		233		(472	)
Net earnings (loss)	$	61,657	$	57,203	$	(26,864	)
Basic earnings (loss) per share:
Shares		40,605		40,394		40,297
Continuing operations	$	1.52	$	1.41	$	(0.65	)
Cumulative effect of accounting changes		—		0.00		(0.01	)
Discontinued operations		—		0.01		(0.01	)
Per share amount	$	1.52	$	1.42	$	(0.67	)
Diluted earnings (loss) per share:
Shares		40,794		40,594		40,297
Continuing operations	$	1.51	$	1.40	$	(0.65	)
Cumulative effect of accounting changes		—		0.00		(0.01	)
Discontinued operations		—		0.01		(0.01	)
Per share amount	$	1.51	$	1.41	$	(0.67	)

58

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(15) Research, Development and Engineering Expenses

          Research, development and engineering expenses (“RD&E”) are included in selling, general and administrative expenses and were $40.4 million, $39.6 million and $25.5 million in 2007, 2006 and 2005, respectively. RD&E includes costs associated with new product development, product and process improvement, engineering follow-through during early stages of production, design of tools and dies and the adaptation of existing technology to specific situations and customer requirements. The research and development component of RD&E, which generally includes only those costs associated with new technology, new products or significant changes to current products or processes, was $35.2 million, $33.8 million and $20.9 million in 2007, 2006 and 2005, respectively.

(16) Severance and Asset Impairment Expense

          As a result of our continuing focus on both economic and operating profit, we will continue to aggressively size both Electronics and Electrical so that costs are optimally matched to current and anticipated future revenue and unit demand, and as we pursue additional growth opportunities. The amounts of additional charges will depend on specific actions taken. The actions taken over the past three years such as plant closures, plant relocations, asset impairments and reduction in personnel worldwide have resulted in the elimination of a variety of costs. The majority of these costs represent the annual salaries and benefits of terminated employees, both those directly related to manufacturing and those providing selling, general and administrative services. The eliminated costs also include depreciation savings from disposed equipment. We implemented numerous restructuring initiatives during 2007, 2006 and 2005 in order to reduce our cost structure and capacity.

          In the year ended December 28, 2007, we accrued $18.0 million for cost reduction actions primarily at Electronics. These include severance and related payments of $12.5 million related to the termination of manufacturing and support personnel and $5.5 million to write down the value of certain fixed assets to their disposal value. The majority of these accruals will be paid by December 26, 2008.

          Our restructuring charges are summarized for 2007 as follows (in millions):

	Electrical				Electronics				Total
Balance accrued at December 29, 2006		$	0.5			$	3.8		$	4.3
Accrued during the twelve months ended December 28, 2007			0.4				17.6			18.0
Severance and other cash payments			(0.7	)			(6.0	)		(6.7	)
Non-cash charges and currency translation adjustments			(0.1	)			(4.6	)		(4.7	)
Balance accrued at December 28, 2007		$	0.1			$	10.8		$	10.9

          In the year ended December 29, 2006, we accrued $8.8 million for a number of actions to further streamline operations at Electronics and Electrical. These include severance and related payments to manufacturing and support personnel of $6.8 million and $2.0 million to write down the value of certain fixed assets to their disposal values. The majority of these accruals were paid by December 28, 2007.

          Our restructuring charges are summarized for 2006 as follows (in millions):

	Electrical				Electronics				Total
Balance accrued at December 30, 2005		$	1.6			$	1.6		$	3.2
Accrued during the twelve months ended December 29, 2006			1.6				7.2			8.8
Severance and other cash payments			(2.2	)			(5.7	)		(7.9	)
Non-cash charges and currency translation adjustments			(0.5	)			0.7			0.2
Balance accrued at December 29, 2006		$	0.5			$	3.8		$	4.3

59

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(16) Severance and Asset Impairment Expense, continued

          In the year ended December 30, 2005, we accrued $7.0 million for a number of actions to streamline operations at Electronics and Electrical. These include $4.4 million related to the termination of manufacturing and support personnel and $2.6 million to write down the value of certain fixed assets to their disposal values. The majority of these accruals were paid by December 29, 2006. Additionally, we recorded a $47.4 million impairment charge of Electronics consumer division assets consisting of $27.0 million of goodwill, $11.5 million of identifiable intangibles, and $8.9 million of property, plant, and equipment. These impairments resulted from updated cash flow projections which reflect the shift of production by Electronics to China-based locations, decreasing average selling prices for television transformers resulting from competition with Asian companies selling in U.S. dollars, and the recent weakness in the European television market for flyback transformers.

          Our restructuring charges are summarized for 2005 as follows (in millions):

	Electrical				Electronics				Total
Balance accrued at December 31, 2004		$	1.8			$	1.2		$	3.0
Accrued during the twelve months ended December 30, 2005			3.4				49.6			53.0
Severance and other cash payments			(2.8	)			(3.0	)		(5.8	)
Non-cash charges and currency translation adjustments			(0.8	)			(46.2	)		(47.0	)
Balance accrued at December 30, 2005		$	1.6			$	1.6		$	3.2

(17) Supplementary Information

          The following amounts were charged directly to costs and expenses (in thousands):

	2007		2006		2005
Depreciation	$	28,055	$	29,081	$	20,105
Amortization of intangible assets	$	5,296	$	4,802	$	2,053
Advertising	$	663	$	666	$	265
Repairs and maintenance	$	23,894	$	19,589	$	15,554
Bad debt expense	$	1,704	$	913	$	334
Cash payments made:
Income taxes	$	9,269	$	4,462	$	5,435
Interest	$	5,456	$	6,586	$	2,041

          Accumulated other comprehensive income as disclosed in the Consolidated Statements of Changes in Shareholders’ Equity consists principally of foreign currency translation items. In addition, our defined benefit plans impact accumulated other comprehensive income. Refer to Note 9 to the consolidated financial statements for details of our defined benefit plans.

(18) Quarterly Financial Data (Unaudited)

          Quarterly results of continuing operations (unaudited) for 2007 and 2006 are summarized as follows (in thousands, except per share data):

	Quarter Ended
	Mar. 30		June 29		Sept. 28		Dec. 28
2007:
Net sales	$	254,432	$	258,512	$	257,093	$	256,518
Gross profit		54,742		57,280		60,385		60,578
Earnings from continuing operations before income taxes and minority interest		7,090		22,266		21,309		18,755
Net earnings		4,711		20,942		19,185		16,819
Basic earnings per share	$	0.12	$	0.52	$	0.47	$	0.41
Diluted earnings per share	$	0.12	$	0.51	$	0.47	$	0.41

60

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(18) Quarterly Financial Data (Unaudited), continued

	Quarter Ended
	Mar. 31		June 30		Sept. 29		Dec. 29
2006:
Net sales	$	221,093	$	239,238	$	257,683	$	236,082
Gross profit		51,193		56,408		61,625		49,869
Earnings from continuing operations before income taxes, minority interest and cumulative effect of account change		15,048		20,124		16,994		17,919
Net earnings		11,964		15,222		15,245		14,772
Basic earnings per share	$	0.30	$	0.38	$	0.38	$	0.36
Diluted earnings per share	$	0.30	$	0.38	$	0.38	$	0.36

(19) Segment and Geographical Information

          We operate our business in two segments: the Electronic Components Segment, which operates under the name Electronics, and the Electrical Contact Products Segment, which operates under the name Electrical. Electronics and Electrical are known in their primary markets as Pulse and AMI Doduco, respectively. Each segment is managed by a President who reports to our Chief Executive Officer.

          Electronics designs and manufactures a wide variety of highly-customized electronic components and modules. Passive magnetics-based components manage and regulate electronic signals and power for use in a variety of devices by filtering out radio frequency interference and adjusting and ensuring proper current and voltage. The passive magnetics-based products are often referred to as chokes, inductors, filters and transformers. Wireless antennas and antenna modules capture communications signals in handsets and a variety of other mobile and portable devices. Automotive coils power certain functions related to a vehicle’s safety, navigation, communication, engine control, stability and similar electronic systems. Electronics sells its products to multinational original equipment manufacturers, original design manufacturers, contract manufacturers and distributors. Through a majority-owned subsidiary, Electronics also supplies a variety of electronic connectors, modules, wireless antennas and other accessories.

          Electrical is a global manufacturer of a full range of electrical contact products, from contact materials to completed contact subassemblies. Contact products complete or interrupt electrical circuits in virtually every electrical device. Electrical provides its customers with a broad array of highly engineered products and tools designed to meet unique customer needs.

Amounts are in thousands and exclude discontinued operations:

	2007			2006			2005
Net sales
Electronics	$	671,569		$	627,505		$	361,552
Electrical		354,986			326,591			254,826
Total	$	1,026,555		$	954,096		$	616,378
Operating profit (loss) before income taxes
Electronics	$	50,881		$	54,037		$	(21,618	)
Electrical		22,514			17,253			3,228
Total operating profit (loss)		73,395			71,290			(18,390	)
Items not included in segment profit (1)		(3,975	)		(1,204	)		(338	)
Earnings (loss) from continuing operations before income taxes, minority interest and cumulative effect of accounting changes	$	69,420		$	70,086		$	(18,728	)

(1) Includes interest income, interest expense and other non-operating items disclosed in our Consolidated Statements of Operations. We exclude these items when measuring segment operating profit.

61

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(19) Segment and Geographical Information, continued

	2007		2006		2005
Assets at end of year
Electronics	$	519,478	$	520,410	$	386,994
Electrical		146,111		129,819		101,854
Segment assets		665,589		650,229		488,848
Assets not included in Segment assets (1)		155,764		119,251		196,054
Total	$	821,353	$	769,480	$	684,902
Capital expenditures (2)
Electronics	$	13,155	$	44,586	$	29,686
Electrical		8,427		4,588		4,365
Total	$	21,582	$	49,174	$	34,051
Depreciation and amortization
Electronics	$	27,345	$	28,332	$	16,440
Electrical		6,006		5,551		5,718
Total	$	33,351	$	33,883	$	22,158

(1)	Cash and cash equivalents are the primary corporate assets. We exclude cash and cash equivalents, deferred tax assets, and intercompany receivables when measuring segment assets.
(2)	During the past three years, we have acquired several companies. We have included acquired property, plant and equipment in these capital expenditure amounts.

          We have no significant intercompany revenue between our segments. We do not use income taxes when measuring segment results; however, we allocate income taxes to our segments to determine certain performance measures. These performance measures include economic profit. The following pro forma disclosure of segment income tax expense is based on simplified assumptions and includes allocations of corporate tax items. These allocations are based on the proportionate share of total tax expense for each segment, obtained by multiplying our respective segment’s operating profit by the relevant estimated effective tax rates for the year. The allocated tax expense (benefit) amounts, including the tax effect of discontinued operations and the cumulative effect of accounting change, for Electronics were, in thousands, $5,234, $7,975, and $6,107 in 2007, 2006 and 2005, respectively. For Electrical, they were, in thousands, $2,273, $3,871 and $(517) in 2007, 2006 and 2005, respectively.

          We sell our products to customers throughout the world. The following table summarizes our sales to customers in the United States, China and Germany, where sales are significant. Other countries in which our sales are not significant are grouped into regions. We attribute customer sales to the country addressed in the sales invoice. The product is usually shipped to the same country. Amounts are in thousands:

	2007		2006		2005
Sales to customers in:
China	$	303,019	$	204,828	$	86,444
Europe, other than Germany		280,049		285,509		209,174
Germany		178,507		168,494		87,328
United States		121,821		124,659		100,207
Asia, other than China		84,475		110,492		95,279
Other		58,684		60,114		37,946
Total	$	1,026,555	$	954,096	$	616,378

62

Technitrol, Inc. and Subsidiaries
Notes to Consolidated Financial Statements, continued

(19)  Segment and Geographical Information, continued

          The following table includes net property, plant and equipment located in China, Germany, the United States and Turkey where assets are significant. Other countries in which such assets are not significant are grouped into regions. Property, plant and equipment represent all of the relevant assets that have long useful lives. Amounts are in thousands:

	2007		2006		2005
Net property, plant and equipment located in:
China	$	42,423	$	44,564	$	32,652
Germany		27,779		27,113		15,726
United States		9,252		8,085		6,155
Africa		9,108		12,957		—
Europe, other than Germany		5,984		12,659		17,487
Asia, other than China		71		103		4,710
Other		3,150		1,865		16,168
Total	$	97,767	$	107,346	$	92,898

(20) Subsequent Event

          On January 8, 2008, we announced the agreement to acquire the capital stock of Sonion A/S for approximately $385 million in cash, excluding transaction costs. Sonion A/S, a world-leading producer of microacoustic transducers and micromechanical components used in hearing instruments, acoustic devices, medical devices and mobile communication devices, is headquartered in Roskilde, Denmark with manufacturing facilities in Denmark, Poland, China and Vietnam. Additionally, in January 2008 we entered into an agreement with JP Morgan Chase Bank, N.A. and J.P. Morgan Securities Inc. to arrange and syndicate a $200 million senior term loan facility and a $300 million senior revolving credit facility, which will be used to partly fund the Sonion A/S acquisition and other corporate purposes. We expect to execute both the acquisition of Sonion A/S and the related credit agreement at the end of February 2008.

63

Technitrol, Inc. and Subsidiaries
Financial Statement Schedule II

Valuation and Qualifying Accounts
In thousands

	Additions (Deductions)
Description	Opening Balance		Charged to costs and expenses			Write-offs and payments				Ending Balance
Year ended December 28, 2007:
Provisions for obsolete and slow-moving inventory	$	11,255		$	9,122		$	(7,428	)	$	12,949
Allowances for doubtful accounts	$	1,833		$	1,704		$	(1,152	)	$	2,385
Year ended December 29, 2006:
Provisions for obsolete and slow-moving inventory	$	11,499		$	8,051		$	(8,295	)	$	11,255
Allowances for doubtful accounts	$	1,663		$	913		$	(743	)	$	1,833
Year ended December 30, 2005:
Provisions for obsolete and slow-moving inventory	$	11,097		$	5,334		$	(4,932	)	$	11,499
Allowances for doubtful accounts	$	1,715		$	334		$	(386	)	$	1,663

64

Exhibit Index

2.1	Share Purchase Agreement dated January 8, 2008 between Technitrol, Inc., NC III Limited, Nordic Capital III Limited, P-M 2000 A/S, Intermediate Capital Investments Limited and Erhvervsinvest Nord A/S. (Incorporated by reference to Exhibit 2.1 to our Form 8-K dated January 8, 2008).
3.1	Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to our Form 8-K dated December 27, 2007).
3.3	By-laws (incorporated by reference to Exhibit 3.3 to our Form 8-K dated December 27, 2007).
4.1	Rights Agreement, dated as of August 30, 1996, between Technitrol, Inc. and Registrar and Transfer Company, as Rights Agent (incorporated by reference to Exhibit 3 to our Registration Statement on Form 8-A dated October 24, 1996).
4.2	Amendment No. 1 to the Rights Agreement, dated March 25, 1998, between Technitrol, Inc. and Registrar and Transfer Company, as Rights Agent (incorporated by reference to Exhibit 4 to our Registration Statement on Form 8-A/A dated April 10, 1998).
4.3	Amendment No. 2 to the Rights Agreement, dated June 15, 2000, between Technitrol, Inc. and Registrar and Transfer Company, as Rights Agent (incorporated by reference to Exhibit 5 to our Registration Statement on Form 8-A/A dated July 5, 2000).
10.1	Technitrol, Inc. 2001 Employee Stock Purchase Plan (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-8 dated June 28, 2001, File Number 333-64060).
10.1(1)	Form of Stock Option Agreement (incorporated by reference to Exhibit 10.1(1) to our Form 10-Q for the nine months ended October 1, 2004).
10.2	Technitrol, Inc. Restricted Stock Plan II, as amended and restated as of April 30, 2003 (incorporated by reference to Exhibit 10.2 to our Form 10-Q for the six months ended June 29, 2007).
10.3	Technitrol, Inc. 2001 Stock Option Plan (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-8 dated June 28, 2001, File Number 333-64068).
10.4	Technitrol, Inc. Board of Directors Stock Plan, as amended (incorporated by reference to Exhibit 10 to our Form 8-K dated May 18, 2005).
10.5	Credit Agreement, by and among Technitrol, Inc. and certain of its subsidiaries, Bank of America N.A. as Administrative Agent and Lender, and certain other Lenders that are signatories thereto, dated as of October 14, 2005 (incorporated by reference to Exhibit 10.1 to our Form 8-K dated October 20, 2005).
10.6	Lease Agreement, dated October 15, 1991, between Ridilla-Delmont and AMI Doduco, Inc. (formerly known as Advanced Metallurgy Incorporated), as amended September 21, 2001 (incorporated by reference to Exhibit 10.6 to the Company’s Amendment No. 1 to Registration Statement on Form S-3 dated February 28, 2002, File Number 333-81286).
10.7	Incentive Compensation Plan of Technitrol, Inc. (incorporated by reference to Exhibit 10.7 to Amendment No. 1 our Registration Statement on Form S-3 filed on February 28, 2002, File Number 333-81286).
10.8	Technitrol, Inc. Supplemental Retirement Plan, amended and restated January 1, 2002 (incorporated by reference to Exhibit 10.8 to Amendment No. 1 to our Registration Statement on Form S-3 filed on February 28, 2002, File Number 333-81286).
10.8(1)	Technitrol, Inc. Grantor Trust Agreement dated July 5, 2006 between Technitrol, Inc. and Wachovia Bank, National Association (incorporated by reference to Exhibit 10.8(1) to our Form 8-K dated July 11, 2006).
10.9	Agreement between Technitrol, Inc. and James M. Papada, III, dated July 1, 1999, as amended April 23, 2001, relating to the Technitrol, Inc. Supplemental Retirement Plan (incorporated by reference to Exhibit 10.9 to Amendment No. 1 to our Registration Statement on Form S-3 filed on February 28, 2002, File Number 333-81286).
10.10	Letter Agreement between Technitrol, Inc. and James M. Papada, III, dated April 16, 1999, as amended October 18, 2000 (incorporated by reference to Exhibit 10.10 to Amendment No. 1 to our Registration Statement on Form S-3 filed on February 28, 2002, File Number 333-81286).
10.10(1)	Letter Agreement between Technitrol, Inc. and James M. Papada, III dated April 25, 2007 (incorporated by reference to Exhibit 10.10(1) to our Form 8-K dated May 1, 2007).

65

Exhibit Index, continued

10.10(2)	Modification to Letter Agreement agreed to on February 15, 2008 (incorporated by reference to Exhibit 10.10(2) to our Form 8-K dated February 22, 2008).
10.11	Form of Indemnity Agreement (incorporated by reference to Exhibit 10.11 to our Form 10-K for the year ended December 28, 2001).
10.12	Technitrol Inc. Supplemental Savings Plan (incorporated by reference to Exhibit 10.15 to our Form 10-Q for the nine months ended September 26, 2003).
10.13	Technitrol, Inc. 401(K) Retirement Savings Plan, as amended (incorporated by reference to post-effective Amendment No. 1, to our Registration Statement on Form S-8 filed on October 31, 2003, File Number 033-35334).
10.13(1)	Amendment No. 1 to Technitrol, Inc. 401(k) Retirement Savings Plan, dated December 31, 2006 (incorporated by reference to Exhibit 10.13(1) to our Form 10-K for the year ended December 29, 2006).
10.14	Pulse Engineering, Inc. 401(K) Plan as amended (incorporated by reference to post-effective Amendment No. 1, to our Registration Statement on Form S-8 filed on October 31, 2003, File Number 033-94073).
10.14(1)	Amendment No. 1 to Pulse Engineering, Inc. 401(k) Plan, dated December 31, 2006 (incorporated by reference to Exhibit 10.14(1) to our Form 10-K for the year ended December 29, 2006).
10.15	Amended and Restated Short-Term Incentive Plan (incorporated by reference to Exhibit 10.15 to our Form 10-K for the year ended December 31, 2005).
10.17	Amended and Restated Consignment Agreement dated November 19, 2007 between Technitrol, Inc. and Sovereign Precious Metals, LLC.
10.18	Amended and Restated Fee Consignment and/or Purchase of Silver Agreement dated August 4, 2006 among The Bank of Nova Scotia, AMI Doduco, Inc., AMI Doduco Espana, S.L. and AMI Doduco GmbH.
10.18(1)	Letter Amendment dated November 7, 2007 among The Bank of Nova Scotia, AMI Doduco, Inc., AMI Doduco Espana, S.L. and AMI Doduco GmbH.
10.18(2)	Consignment and/or Purchase of Silver Agreement dated November 9, 2007 among The Bank of Nova Scotia and AMI Doduco, Inc.
10.18(3)	Guarantee dated September 8, 2006 executed by Technitrol, Inc. in favor of the The Bank of Nova Scotia.
10.19	Consignment Agreement dated September 24, 2005 between Mitsui & Co. Precious Metals Inc., and AMI Doduco, Inc. (incorporated by reference to Exhibit 10.19 to our Form 8-K dated March 28, 2006).
10.21	Corporate Guaranty dated November 1, 2004 by Technitrol, Inc. in favor of Mitsui & Co. Precious Metals, Inc. (incorporated by reference to Exhibit 10.21 to our Form 10-Q for the nine months ended October 1, 2004).
10.22	Amended and Restated Fee Consignment and/or Purchase of Silver Agreement dated February 12, 2008 among HSBC Bank USA, National Association, AMI Doduco, Inc. and Technitrol, Inc. (incorporated by reference to Exhibit 10.22 to our Form 8-K dated February 22, 2008).
10.23	Share Purchase Agreement dated August 8, 2005 among Pulse Electronics (Singapore) Pte. Ltd., as Purchaser, and Filtronic Plc and Filtronic Comtek Oy, as Sellers (incorporated by reference to Exhibit 10.1 to our Form 8-K dated August 11, 2005).
10.24	Sale and Transfer Agreement dated November 28, 2005 among era GmbH & Co. KG, Pulse GmbH, CST Electronics Co., Ltd., and certain other parties named therein (incorporated by reference to Exhibit 10.1 to our Form 8-K dated December 2, 2005).
10.25	CEO Annual and Long-Term Equity Incentive Process (incorporated by reference to Exhibit 10.25 to our Form 10-Q for the six months ended June 30, 2006).

66

Exhibit Index, continued

10.26	Letter Agreement between Technitrol, Inc. and Michael J. McGrath dated March 7, 2007 (incorporated by reference to Exhibit 10.2 to our Form 10-Q for the six months ended June 29, 2007).
10.27	Commitment Letter dated January 8, 2008 between Technitrol, Inc., JPMorgan Chase Bank, N.A. and J.P. Morgan Securities Inc. (incorporated by reference to Exhibit 10.27 to our Form 8-K dated January 8, 2008).
10.28	Fee Letter dated January 8, 2008 between Technitrol, Inc., JPMorgan Chase Bank, N.A. and J.P. Morgan Securities Inc. (incorporated by reference to Exhibit 10.28 to our Form 8-K dated January 8, 2008).
10.29	Engagement Letter dated January 8, 2008 between Technitrol, Inc. and J.P. Morgan Securities Inc. (incorporated by reference to Exhibit 10.29 to our Form 8-K dated January 8, 2008).
10.30	Schedule of Board of Director and Committee Fees (incorporated by reference to Exhibit 10.30 to our Form 10-Q for the three months ended March 30, 2007).
21	Subsidiaries of the Registrant
23	Consent of Independent Registered Public Accounting Firm
31.1	Certification of Principal Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

67

Signatures

          Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TECHNITROL, INC.

By	/s/James M. Papada, III
	James M. Papada, III
	Chairman and Chief Executive Officer
Date	February 25, 2008

          Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By	/s/Alan E. Barton	By	/s/James M. Papada, III
	Alan E. Barton		James M. Papada, III
	Director		Chairman and Chief Executive Officer
			(Principal Executive Officer)
Date	February 25, 2008
		Date	February 25, 2008
By	/s/John E. Burrows, Jr.
		By	/s/Drew A. Moyer
	John E. Burrows, Jr.
	Director		Drew A. Moyer
			Senior Vice President
Date	February 25, 2008		and Chief Financial Officer
			(Principal Financial Officer)
By	/s/David H. Hofmann
		Date	February 25, 2008
	David H. Hofmann
	Director	By	/s/Edward J. Prajzner
Date	February 25, 2008		Edward J. Prajzner
			Vice President, Corporate Controller and
By	/s/Edward M. Mazze		Chief Accounting Officer
			(Principal Accounting Officer)
	Edward M. Mazze
	Director	Date	February 25, 2008
Date	February 25, 2008
By	/s/C. Mark Melliar-Smith
	C. Mark Melliar-Smith
	Director
Date	February 25, 2008

68

EX-10.17

Exhibit 10.17

AMENDED AND RESTATED CONSIGNMENT AGREEMENT

          This AMENDED AND RESTATED CONSIGNMENT AGREEMENT made as of the 19^th day of November, 2007 by and between SOVEREIGN PRECIOUS METALS, LLC, a Rhode Island limited liability company (“Consignor”) with offices at One Financial Plaza, Providence, Rhode Island 02903; TECHNITROL, INC., a Pennsylvania corporation with offices at 1210 Northbrook Drive, Suite 470, Trevose, Pennsylvania 19053 (“Customer”).

          This Amended and Restated Consignment Agreement amends and restates that certain Consignment Agreement, dated July 11, 2006 and amended and restated as of October 23, 2007, by and among the Consignor, AMI Doduco, Inc. and the Customer.

           1.          Commodities Consigned; Insurance and Risk of Loss; Title. (a) Commodities consigned hereunder will consist of: (i) gold bullion, minimum degree of fineness of 99.99% Unallocated Loco London, or mutually agreed upon fineness, form and location, in bars of approximately 400 fine troy ounces each (“Gold”); (ii) silver bullion, minimum degree of fineness of 99.99% in bars of approximately 5,000 fine troy ounces each (“Silver”); (iii) palladium bullion, minimum degree of fineness of 99.95% Unallocated Loco Zurich, or mutually agreed upon fineness, form and location, in bars of approximately 32.15 fine troy ounces each (“Palladium”); and (iv) platinum bullion, minimum degree of fineness of 99.95% Unallocated Loco Zurich, or mutually agreed upon fineness, form and location, in bars of approximately 32.15 fine troy ounces each (“Platinum”). EXCEPT AS PROVIDED ABOVE, AND EXCEPT FOR A WARRANTY THAT CONSIGNOR SHALL HAVE TITLE TO THE COMMODITIES AT THE TIME THAT CUSTOMER SHALL PURCHASE SUCH COMMODITIES FROM CONSIGNOR AND WITHDRAW SUCH COMMODITIES FROM CONSIGNMENT AS HEREINAFTER PROVIDED, CONSIGNOR MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER MATTER, AND CONSIGNOR DISCLAIMS ALL SUCH WARRANTIES. Commodities shall be consigned in amounts as requested by Customer from time to time. At no time shall the value of consigned commodities exceed the lesser of: (i) $50,000,000 less the total amounts of the Borrower’s foreign exchange obligations to Sovereign Bank; (ii) 12,000 fine troy ounces of Gold, 3,350,000 fine troy ounces of Silver, 2,000 fine troy ounces of Palladium, and 1,000 fine troy ounces of Platinum; (iii) such other limit as the parties may agree upon; or (iv) such limit as Consignor may approve in its sole discretion (“Consignment Limit”).

          (b)          Each delivery of commodities shall be at Customer’s expense and, if Customer shall select the carrier for any such delivery, Customer shall bear the risk of any loss by such carrier. Following the delivery of commodities to Customer, or to such other location as may be agreed upon from time to time by the parties hereto, Customer shall insure the commodities to their full value against all risks of loss and shall, as between Consignor and Customer, accept all risk of loss until their purchase or return to Consignor.

          (c)          Title to consigned commodities shall remain in Consignor until commodities are purchased and withdrawn from consignment. Commodities are deemed to be on consignment until paid for in full, whereupon title to such commodities shall pass to Customer.

          (d)          Customer shall deliver to Consignor a letter certifying the names of persons (each an “Authorized Representative”) authorized to transact consignment and other transactions hereunder. Any person identifying himself or herself as an Authorized Representative may effect transactions hereunder. Consignor shall have no obligation to ascertain whether the person is in fact an Authorized Representative or is in fact authorized to effect the transaction. Consignor may verify any request for a transaction. Customer authorizes Consignor to record all requests Consignor may receive from Customer or any person purporting to act on behalf of Customer.

          (e)          Consignor is obligated to engage only in transactions involving commodities in units, fineness and quantities it customarily maintains in its inventory, but Consignor may from time to time agree to other types of transactions. Commodities in the possession or control of Customer or a third party for the account of Customer shall constitute consigned commodities hereunder notwithstanding such commodities: (i) are in alloyed form or contained in raw materials, work in process or finished goods; (ii) are delivered to or credited to the account of Customer by a third party in exchange for or in consideration of commodities delivered by Consignor to such third party; or (iii) are sold by Customer to Consignor and then consigned back to Customer.

          2.          Valuation. For purposes of this Agreement: (a) the value of Gold, Palladium and Platinum bullion shall be determined on the basis of the London Bullion Market Association or the London Platinum and Palladium Market second fixing price for such commodity on the valuation date or, if no price is available for such date, then on the basis of said second fixing price on the next previous day for which it is available; and (b) the value of Silver bullion shall be determined on the basis of the London Bullion Market Association’s silver fixing price for such commodity on the valuation date or, if no price is available for such date, then on the basis of said published price for the previous day for which such price was available. Should the London Bullion Market Association or London Platinum and Palladium Market discontinue or alter its practice of quoting a price for gold, silver, palladium or platinum as applicable on any day for which such a price is necessary for the purposes hereof, Consignor shall announce a substituted index commonly used in the trade to become the method of valuation hereunder.

          3.          Payments by Customer.

          (a)         During such time as consigned commodities are consigned to Customer hereunder and until the same are withdrawn from consignment and paid for in full by Customer as hereinafter provided, Customer will pay to Consignor a fee computed daily on the value of such consigned commodities at such rate or rates as Consignor shall specify in writing to Customer, and as such rates may change from time to time upon notice to Customer, such fee to be accrued on a daily basis and paid to Consignor not later than the tenth (10^th) day of each month. A consignment fee calculated in accordance with this subparagraph shall be known as a “Floating Consignment Fee”.

          (b)          During such time as consigned commodities are consigned to Customer hereunder and until the same are withdrawn from consignment and paid for in full by Customer as hereinafter provided and provided that no Event of Default (as hereinafter defined) has occurred and is then continuing, instead of paying the Floating Consignment Fee set forth above, Customer may elect to pay to Consignor a Fixed Consignment Fee with respect to consigned commodities in accordance with the following:

          (i)         Such Fixed Consignment Fee shall be calculated for a certain specific quantity of consigned commodities consigned to Customer for a certain specific Consignment Period at a rate announced by Consignor from time to time upon the request of Customer. The quantity and type of consigned commodities, and the Consignment Period shall be selected by Customer and consented to by Consignor. Once the specific quantity and type of consigned commodities and the specific Consignment Period have been selected and the consignment fee determined, such selections shall be irrevocable and binding on Customer and shall obligate Customer to accept the consignment requested from Consignor in the amount and for the Consignment Period specified.

          (ii)         The Fixed Consignment Fee shall be accrued on a daily basis and paid to Consignor not later than the tenth (10^th) day of each month.

          (c)          At such time as Customer shall request the consignment and delivery of consigned commodities under this Agreement, it shall become obligated to pay to Consignor a market premium per troy ounce as announced by Consignor at the time of such consignment (“Market Premium”). Such payment is to be made within ten (10) days after Customer’s receipt of Consignor’s monthly invoice by bank wire to a bank of Consignor’s choice. At such time as Customer shall purchase and withdraw consigned commodities from consignment under this Agreement, it shall become obligated to pay to Consignor: (i) a purchase price computed in accordance with Paragraph 2 hereof if such purchase is effected by Customer prior to 2:30 p.m., Greenwich Mean Time, on any Business Day; or (ii) such other purchase price as shall be mutually agreed upon by Consignor and Customer (“Purchase Price Payment”). The purchase of all consigned commodities bearing a Fixed Consignment Fee shall take place on the last day of the Consignment Period relating thereto. All Purchase Price Payments are to be made within two (2) Business Days after such purchase by bank wire to a bank of Consignor’s choice, provided, however, title to such consigned commodities shall not pass until the making of such Purchase Price Payment. Consigned commodities shall be deemed to have been purchased and withdrawn from consignment at such time as Customer shall notify Consignor that it elects to purchase such consigned commodities from Consignor.

          (d)          Customer hereby agrees to pay upon demand: (i) interest on any Purchase Price Payment not paid when due hereunder at a rate per annum equal to the floating Prime Rate (as hereinafter defined) of Sovereign Bank (“Bank”), plus five percent (5%), from the date of delinquency until payment in full; and

(ii) interest on any Consignment Fees, Market Premium or any other amount due hereunder not paid when due hereunder at a rate per annum equal to the floating Prime Rate of Bank, plus five percent (5%), from the date of delinquency until payment in full. For the purposes hereof, the term “Prime Rate” shall mean the variable per annum rate of interest so designated from time to time by Bank as its prime rate. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer. All payments made under this Agreement shall be made by Customer to Consignor at the address of Consignor set forth above or at such other place as Consignor may from time to time specify, in writing in lawful currency of the United States of America in immediately available funds, without counterclaim or setoff and free and clear of, and without any deduction or withholding for, any taxes or other payments. If any payment hereunder becomes due on a day that is not a Business Day, the due date of such payment shall be extended to the next succeeding Business Day, and such extension of time shall be included in computing interest and fees in connection with such payment. All payments shall be applied first to the payment of all fees and other amounts due Consignor (including Market Premiums but excluding the purchase price of commodities hereunder and Consignment Fees), then to accrued Consignment Fees, and the balance on account of the outstanding purchase price of commodities hereunder; provided, however, that after the occurrence of an Event of Default, payments will be applied to the obligations of Customer to Consignor as Consignor determines in its sole discretion.

          (e)          Customer may elect from time to time to convert any outstanding Floating Consignment Fee consignment to a Fixed Consignment Fee consignment and to convert any outstanding Fixed Consignment Fee consignment to a Floating Consignment Fee consignment, provided, however, that: (i) with respect to any such conversion of a Fixed Consignment Fee consignment into a Floating Consignment Fee consignment, such conversion shall only be made on the last day of the Consignment Period with respect thereto; provided, however, in the event of any governmental action pursuant to Paragraph 3 (k) hereof, Customer may make a conversion prior to the last day of any such Consignment Period; (ii) with respect to any such conversion of a Floating Consignment Fee consignment to a Fixed Consignment Fee consignment, Customer shall give Consignor at least two (2) Eurodollar Business Days’ prior notice by telephone or by electronic mail of the day on which such election is effective; and (iii) no consignment may be converted into a Fixed Consignment Fee consignment when Consignor has declared the existence of an Event of Default hereunder. Customer shall give to Consignor telephonic notice (confirmed in writing by Customer) of its decision to convert an outstanding consignment. All or any part of outstanding consignments under this Agreement may be converted as provided herein. Each such request shall be irrevocable by Customer.

          (f)          Any Fixed Consignment Fee consignments may be continued as such upon the expiration of a Consignment Period with respect thereto by giving to Consignor telephonic notice (confirmed in writing by Customer) of Customer’s decision to continue an outstanding consignment as such; provided, however, that no Fixed Consignment Fee consignment may be continued as such when Consignor has declared the existence of an Event of Default hereunder, but shall be automatically converted to a Floating Consignment Fee consignment on the last day of the first Consignment Period relating thereto ending during the continuance of such Event of Default.

          (g)          In the event that Customer does not notify Consignor of its election hereunder with respect to any consignment, such consignment shall be automatically converted to a Floating Consignment Fee consignment at the end of the applicable Consignment Period.

          (h)          In the event, prior to the commencement of any Consignment Period relating to any Fixed Consignment Fee consignment, Consignor shall determine in good faith that adequate and reasonable methods do not exist for ascertaining the Fixed Consignment Fee that would otherwise determine the rate of interest to be applicable to any Fixed Consignment Fee consignment during any Consignment Period, Consignor shall forthwith give notice of such determination (which shall be conclusive and binding on Customer) to Customer. In such event: (a) any request for a Fixed Consignment Fee consignment shall be automatically withdrawn and shall be deemed a request for a Floating Consignment Fee consignment; (b) each Fixed Consignment Fee consignment will automatically, on the last day of the then current Consignment Period thereof, become a Floating Consignment Fee consignment; and (c) the obligations of Consignor to make Fixed Consignment Fee consignments shall be suspended until Consignor determines that the circumstances giving rise to such suspension no longer exist, whereupon Consignor shall so notify Customer.

          (i)          Notwithstanding any other provisions herein, if any present or future law, regulation, treaty or

directive or in the interpretation or application thereof shall make it unlawful for Consignor to make or maintain Fixed Consignment Fee consignments, Consignor shall forthwith give notice of such circumstances to Customer and thereupon: (a) the agreement of Consignor to make Fixed Consignment Fee consignments shall forthwith be suspended; and (b) the Fixed Consignment Fee consignments then outstanding shall be converted automatically to Floating Consignment Fee consignments on the last day of each Consignment Period applicable to such Fixed Consignment Fee consignments or within such earlier period as may be required by law.

           (j)          Customer shall indemnify Consignor and hold Consignor harmless from and against any loss, cost or expense that Consignor may sustain or incur as a consequence of: (a) default by Customer in payment of any Fixed Consignment Fee consignments as and when due and payable (including, without limitation, as a result of prepayment or late payment of the purchase price for the consigned commodities or the acceleration of the consignment facility indebtedness pursuant to the terms of this Agreement), which expenses shall include any such loss or expense arising from interest or fees payable by Consignor to a consignor or lender of commodities or funds obtained by Consignor in order to make or maintain its Fixed Consignment Fee consignments; (b) default by Customer in taking a consignment or conversion after Customer has given (or is deemed to have given) its request therefore; and (c) the purchase of consigned commodities bearing a Fixed Consignment Fee or the making of any conversion of any such consignment to a Floating Consignment Fee consignment on a day that is not the last day of the applicable Consignment Period with respect thereto, including interest or fees payable by Consignor to a consignor or lender of commodities or funds obtained by Consignor in order to make or maintain any such consignments.

           (k)          If any present or future applicable law, which expression, as used herein, includes statutes, rules and regulations thereunder and interpretations thereof by any competent court or by any governmental or other regulatory body or official charged with the administration or the interpretation thereof and requests, directives, instructions and notices at any time or from time to time hereafter made upon or otherwise issued to Consignor by any central bank or other fiscal, monetary or other authority (whether or not having the force of law), shall:

           (i)          If Company’s action(s) cause subject Consignor to be subject to any tax (except for taxes on income or profits), levy, impost, duty, charge, fee, deduction or withholding of any nature with respect to this Consignment Agreement or this consignment facility, or

           (ii)         materially change the basis of taxation (except for changes in taxes on income or profits) of payments to Consignor of the principal of or the interest on this consignment facility or any other amounts payable to Consignor under this Consignment Agreement, or

           (iii)        impose on Consignor any other conditions or requirements with respect to this Consignment Agreement, this consignment facility or any class of loans or commitments of which this consignment facility forms a part;

and the result of any of the foregoing is, following the date hereof:

           (i)         to increase the cost to Consignor of making, funding, issuing, renewing, extending or maintaining this consignment facility, or

           (ii)         to reduce the amount of principal, interest or other amount payable to Consignor hereunder on account of this consignment facility, or

           (iii)        to require Consignor to make any payment or to forego any interest or other sum payable hereunder, the amount of which payment or foregone interest or other sum is calculated by reference to the gross amount of any sum receivable or deemed received by Consignor for Customer hereunder;

then, and in each such case, Customer will, upon demand by Consignor, at any time and from time to time and as often as the occasion therefore may arise, pay to Consignor such additional amounts as will be sufficient to compensate Consignor for such additional cost, reduction, payment or foregone interest or other sum.

           (l)          Upon the occurrence of any of the events set forth in Paragraph 3(i), Paragraph 3(j) or Paragraph 3(k) hereof, Consignor shall provide to Customer a certificate setting forth any additional

amounts payable pursuant thereto, together with a brief explanation of such amounts.

           4.          Maintenance of Consignment Limit. If the value of commodities on consignment at any time exceeds the Consignment Limit, Customer will promptly either (a) purchase and withdraw from consignment (and make payment to Consignor as provided in Paragraph 3), a quantity of consigned commodities which has an aggregate value sufficient to result in the value of the remaining consigned commodities to be less than the Consignment Limit, or (b) deliver to Consignor sufficient of such consigned commodities to achieve the same result. Any such delivery shall be at Customer’s expense and risk.

           5.          True Consignment. This Agreement shall provide for a true consignment and all transactions hereunder shall constitute true consignments of commodities.

           6.          Warranties. Customer warrants and represents to Consignor (which warranties and representations shall survive the execution of this Agreement and the delivery of consigned commodities to Customer) that:

           (a)       Customer (i) is duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania; and (ii) has the corporate power and authority to execute, deliver and perform this Agreement and to carry on business as now conducted. The execution, delivery and performance by Customer of the terms of this Agreement have been authorized by all requisite corporate action and will not violate the charter or bylaws of Customer or any document to which it is a party or by which it is bound. This Agreement constitutes the legal, valid and binding obligation of Customer enforceable in accordance with its terms.

           (b)       No Event of Default, as defined herein, and no event which, with the passage of time or the giving of notice, would become an Event of Default, has occurred and is continuing. No statement made by or on behalf of Customer herein or in any writing furnished to Consignor contains an untrue statement of material fact or omits any material fact necessary to make such statement not misleading.

           7.         Affirmative and Negative Covenants. Customer covenants, from the date hereof until payment and performance of all obligations of Customer hereunder, Customer shall:

           (a)       Do all things necessary to keep in full force and effect its corporate existence; and not dissolve or liquidate and not change its corporate name unless it has provided Consignor with thirty (30) days prior written notice thereof.

           (b)       Not create, incur, assume or suffer to exist any mortgage, security interest, pledge, lien or other encumbrance on any of the consigned commodities or on any products or inventory which contains consigned commodities.

          (c)        Should the Customer fail to file annual financial statements within ninety (90) days of the Customer’s fiscal year end, and/or fail to file quarterly financial statements within thirty (30) day of the Customer’s financial quarter ends with the Securities and Exchange Commission, then the Customer shall be required to Furnish to Consignor: (i) within ninety (90) days after the end of each of Customer’s fiscal years, a copy of Customer’s annual report, the financial statements contained therein prepared by an independent certified public accountant acceptable to Consignor, inclusive of consolidating financial statements; (ii) within thirty (30) days after the Customer’s financial quarter end(s) the financial statements contained therein prepared by an independent certified public accountant acceptable to Consignor, inclusive of consolidating financial statements; (iii) annual consolidating financial statements within ninety (90) days after the end of each of Customer’s fiscal years, and (iv) such additional information regarding the location and use of consigned commodities by Customer as Consignor may reasonably request.

           8.          Conditions to Consignor’s Obligation to Consign. The obligation of Consignor to deliver and/or consign commodities hereunder is subject to the following conditions precedent: (a) the representations and warranties in Paragraph 6 shall be true and correct on and as of the date hereof and the date each consignment is requested and is to occur; and (b) no Event of Default, nor any event which upon notice or lapse of time or both would constitute an Event of Default, shall have occurred and be continuing.

           9.           Default. In case of the occurrence of any one or more of the following events (each an “Event of Default”):

          (a)          default in the payment or performance of any of Customer’s material obligations or agreements hereunder which, in the case of a performance default is not cured within thirty (30) days after written notice of such default from Consignor; or

          (b)          any representation or warranty made herein or in any document furnished in connection with this Agreement shall prove to be false or misleading in any material respect; or

          (c)          Customer shall make an assignment for the benefit of creditors; file or suffer the filing of any voluntary or involuntary petition under any chapter of the Bankruptcy Code; apply for or permit the appointment of a receiver, trustee or custodian of any of its property or business; become insolvent or suffer the entry of an order for relief under Title 11, United States Code; or make an admission of its inability to pay its debts as they become due; or

          (d)          the occurrence of any material loss, theft or destruction of or damage to any of the consigned commodities; or the occurrence of any attachment on any of the consigned commodities; or

          (e)          the occurrence of any Event of Default as defined in that certain Credit Agreement dated as of October 14, 2005 (the “Credit Agreement”) by and among Customer, certain subsidiaries of Customer, Bank of America, N.A. and the Lenders (as defined in the Credit Agreement), as the same may be amended and/or amended and restated from time to time, that causes any or all of the Obligations (as defined in the Credit Agreement) to be immediately due and payable;

then in any such event (i) the obligations of Consignor hereunder shall, at Consignor’s option, terminate, (ii) Customer shall promptly return to Consignor all commodities theretofore consigned to but not purchased and paid for by Customer, and (iii) all Customer’s obligations to Consignor shall become and be immediately due and payable without presentment, demand or notice, all of which are hereby expressly waived, notwithstanding any credit or time allowed to Customer or any agreement to the contrary. Customer shall, at Consignor’s request, immediately assemble all consigned commodities, and Consignor may go upon Customer’s premises during normal business hours to take immediate possession thereof. Customer shall pay all reasonable legal expenses and attorneys’ fees incurred by Consignor in enforcing Consignor’s rights, powers and remedies under this Agreement. No failure or delay on Consignor’s part to exercise or to enforce any of its rights hereunder or to require strict compliance with the terms hereof and no course of conduct on Consignor’s part shall constitute a waiver or relinquishment of any rights hereunder. Consignor’s recourse shall be limited to outstanding obligations, consignment fees, any previously agreed upon outstanding invoices, and any reasonable legal expenses incurred.

          10.          Termination; Return of Commodities. Consignor or Customer may terminate this Agreement upon thirty (30) days prior written notice. Upon the giving of such notice or at any time thereafter, Consignor may, at its option, suspend or terminate its obligation to consign or deliver commodities hereunder. Upon termination of this Agreement, Customer shall, within forty-eight (48) hours following the request of Consignor, deliver to Consignor, at Customer’s expense and risk, any commodities consigned but not purchased and paid for in full.

          11.          Expenses. Customer shall pay on demand all reasonable expenses of Consignor in connection with the preparation, default, collection, waiver or amendment of terms, or in connection with Consignor’s exercise, preservation or enforcement of any of its rights, remedies or options under this Agreement, including, without limitation, reasonable fees of outside legal counsel; and the amount of all such expenses shall, until paid, bear interest at the rate set forth in Section 3 hereof and be an obligation secured by any collateral. Consignor shall provide prior notice to Customer as to any legal fees and related expenses that will be charged to Customer for the preparation and/or negotiation of any amendments to this Agreement or any other agreements relating to this Agreement.

          12.          Additional Definitions.

          “Business Day” means each and every day other than Saturdays, Sundays and days on which

Consignor is closed by virtue of a national holiday or a holiday in the State of Rhode Island.

          “Consignment Period” means, with respect to the consignment of commodities based upon a Fixed Consignment Fee, the period beginning on the Drawdown Date and ending on the day which numerically corresponds to such date one, two or three months (or such other period, if agreed to by the Consignor) thereafter (or, if such month has no numerically corresponding day, on the last Eurodollar Business Day of such month), as the Customer may select in its notice provided pursuant to Section 3 hereof; provided, however, that:

                 (a) Consignment Periods commencing on the same date for consignments of consigned commodities comprising part of the same consignment shall be of the same duration, and

                (b) if such Consignment Period would otherwise end on a day which is not a Eurodollar Business Day, such Consignment Period shall end on the next following Eurodollar Business Day; provided, however, that if such next following Eurodollar Business Day is the first Eurodollar Business Day of a calendar month, such Consignment Period shall end on the next preceding Eurodollar Business Day.

          “Drawdown Date” means the date on which any consignment under this consignment facility is made or is to be made and the date on which any consignment under this consignment facility is converted or continued in accordance with Section 3 hereof.

          “Eurodollar Business Day” means any day on which commercial banks are open for international business (including dealings in dollar deposits) in London.

          “Fixed Consignment Fee” means a consignment fee calculated in accordance with the provisions of Paragraph 3(b) hereof.

          “Floating Consignment Fee” means a consignment fee calculated in accordance with the provisions of Paragraph 3(a) hereof.

           13.          Miscellaneous. (a) The rights of Customer under this Agreement may not be assigned without the prior written consent of Consignor. All covenants and agreements of Customer contained herein shall bind Customer, its successors and assigns, and shall inure to the benefit of Consignor, its successors and assigns.

           (b)          Customer agrees to indemnify and hold harmless Consignor from and against any third-party claims, actions and suits resulting from: (i) any actual or proposed use by Customer of the commodities consigned, delivered or sold to Customer by Consignor; or (ii) Customer’s violation of any environmental law or release or threatened release of any hazardous materials (including, but not limited to claims with respect to wrongful death, personal injury or damage to property); in each case including, without limitation, Consignor’s reasonable fees and disbursements of counsel incurred in connection with any such litigation or other proceeding; provided, however, that Consignor shall not be entitled to indemnification if: (i) a court of competent jurisdiction finally determines (all appeals having been exhausted or waived) that Consignor acted in bad faith or with willful misconduct; (ii) if Consignor has not provided Customer with prompt notice of a claim, action or suit; or (iii) if Consignor has settled any claim or compromised any of Customer’s rights without the consent of Customer. The provisions of this subsection shall survive payment or satisfaction of payment of all amounts owing by Customer with respect to the obligations hereunder and the termination of the obligations of Consignor hereunder.

          (c)          This Agreement shall be governed by and construed under Rhode Island law. If any provision of this Agreement is held to be invalid, illegal or unenforceable, the validity of all other terms shall not be affected thereby. Customer submits to the jurisdiction of the courts of Rhode Island and of any federal court located in such state, as well as to the jurisdiction of all courts from which an appeal may be taken from such courts, for the purpose of any suit, action or proceeding arising out of the breach by Customer of any of its obligations under this Agreement, and expressly waives any and all objections it may have as to venue in any of such courts and agrees that service of process may be made on Customer by mailing a copy of the summons to the address of Customer on the books and records of Consignor. CUSTOMER WAIVES TRIAL BY JURY IN CONNECTION WITH ANY SUIT OR ACTION ARISING OUT OF OR CONCERNING ITS OBLIGATIONS IN CONNECTION WITH THIS AGREEMENT.

          (d)          All communications hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, by overnight courier, by confirmed telecopier or by hand to the address of Consignor or Customer provided above, as applicable, or to such other address as the parties may provide to each other. Notices shall be deemed effective three (3) days after deposit in the mail, if sent by certified mail; the next business day, if sent by overnight courier; upon confirmation, if sent by confirmed telecopier; and upon delivery, if sent by hand.

          (e)          This Agreement and any amendments hereto may be executed in multiple counterparts, each of which shall deemed to be an original, but all of which together shall constitute one and the same instrument. Facsimile signatures will be considered original signatures.

          IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above written.

TECHNITROL, INC.

By: /s/ Drew A. Moyer

Name: Drew A. Moyer

Title: Sr. Vice President & CFO

SOVEREIGN PRECIOUS METALS, LLC

By: /s/ Michael Smith

Name: Michael Smith

Title: Senior Vice President

EX-10.18

Exhibit 10.18

August 4, 2006

AMI Doduco, Inc.

Murray Corporate Park

1003 Corporate Drive

Export, PA 15362

and

AMI Doduco Espana, S.L.

Manises, Nr. 1

28224 Pozuelo de Alarcon (Madrid)

and

AMI Doduco GmbH

Im Altgefall 12

75181 Pforzheim

Dear Sirs:

Re:        Amended and Re-stated Fee Consignment and/or Purchase of Silver Agreement

              Reference is made to existing silver consignment arrangements between AMI Doduco, Inc. (“AMI”) and The Bank of Nova Scotia (“Scotiabank”), as provided for in a Fee Consignment and/or Purchase of Silver Agreement dated April 6, 2006, as amended from time to time (the “Agreement”).

              Further to discussions between the parties, it was agreed that certain terms of the Agreement are to be revised and that AMI Doduco Espana, S.L. (“AMI Espana”) and AMI Doduco GmbH (“AMI GmbH”) would also be permitted to utilize this facility and would each be a consignee under the Agreement and, as a consequence, the provisions of the Agreement are hereby amended and re-stated in full.

              Accordingly, Scotiabank is pleased to confirm that, subject to your acceptance, it is prepared to deliver on an uncommitted basis, from time to time, silver upon consignment (the “Consignment(s)”) to AMI, AMI Espana and AMI GmbH (each a “Consignee”, AMI Espana and AMI GmbH, jointly, the “European Consignees”, and

collectively the “Consignees” and together with Scotiabank, “the Parties”) subject to availability and to the terms and conditions outlined herein and further subject to Scotiabank’s absolute discretion not to deliver silver if it so decides.

Definitions.      For the purposes of this Agreement:

“Dollar Value” with respect to silver shall mean, on the day of determination, the value in U.S. dollars of one troy ounce of silver determined by, as the case may be, the Handy & Harman (“H&H”) Noon price (with respect to AMI) and the London Fixing Price (with respect to the European Consignees) with respect to silver on such day times the number of ounces of silver, in respect of which the Dollar Value is being determined. In the event that there is no H&H Noon price and/or London Fix Price, as the case may be, for silver on a particular day, the last established H&H Noon price and/or London Fixing Price for silver shall apply.

1.        Availability. Silver delivered and held on consignment hereunder from time to time by the Consignees shall not at any time have an aggregate Dollar Value which exceeds the lesser of (i) the Dollar Value of 5,000,000 troy ounces of silver and (ii) $85,000,000 U.S. (such $85,000,000 U.S. amount being the “Maximum Dollar Limit”).

2.        Restoration of Maximum Dollar Limit. If at any time the Dollar Value of silver held on consignment hereunder by the Consignees should exceed the Maximum Dollar Limit, then Scotiabank may at its option, by telex or telecopied notice to the Consignees, require that by the end of the Business Day immediately following the day upon which such telex or telecopied notice is given, the Consignees either:

(i)        re-deliver to Scotiabank a portion of the silver held on consignment hereunder sufficient to reduce the Dollar Value of the silver continued to be held on consignment hereunder to an amount no greater than the Maximum Dollar Limit; or

(ii)       purchase from Scotiabank, at the applicable H&H Noon price and/or London Fixing Price, as the case may be, plus applicable premium (as provided in paragraph 14), a quantity of the silver held on consignment hereunder sufficient to reduce the Dollar Value of the silver held on consignment hereunder to an amount no greater than the Maximum Dollar Limit.

With respect to item (ii) above, if the relevant parties are unable to agree to the purchase price, then the Maximum Dollar Limit shall be restored pursuant to the provisions of item (i) above.

3.        Quality. Silver delivered to the Consignees and returned to Scotiabank shall be in London Good Delivery bar form and of a minimum fineness of .9999, unless otherwise mutually agreed to in advance of delivery.

4.        Orders. Requests for delivery of silver will be made by an authorized representative of the relevant Consignee to an authorized officer of Scotiabank by

telephone, telex or telecopied transmission. Each request will indicate the quantity and quality of the silver to be delivered, the date on which the delivery is requested to be made and the required term of the Consignment, which term may be for up to twelve (12) months or any other lesser term which is mutually acceptable to Scotiabank and the relevant Consignee. Unless otherwise requested by the relevant Consignee, any silver delivered shall be of the quality set forth in paragraph 3. All telephone requests shall be confirmed in writing to Scotiabank within five (5) days of such request.

5.	Deliveries by Scotiabank.
	(a)       If Scotiabank has agreed to make a requested delivery of silver, it will arrange for the delivery of the silver to a location acceptable to Scotiabank and the relevant Consignee and on the date agreed upon for delivery. Scotiabank will bear the cost of such delivery and bear all risk of loss or damage to the silver until it has been delivered to the agreed upon location at which time such risk shall pass to the relevant Consignee. Such delivery shall be accompanied by a delivery statement provided by Scotiabank setting out the quantity and quality of silver delivered.
	(b)       If on receipt of the silver it is determined by the relevant Consignee that the silver delivered by Scotiabank to it is of a different quantity and/or quality than is set out in the delivery statement, such Consignee shall forthwith give notice of such discrepancy to Scotiabank. In that event, Scotiabank shall be entitled to conduct such tests and make such examination of the silver as it considers necessary or desirable. If such tests or examinations determine that the silver delivered by Scotiabank to such Consignee is of a different quantity and/or quality than was set out in the said delivery statement, then Scotiabank or the applicable Consignee, as the case may be, shall make the appropriate adjustments.
	(c)       Absent manifest error, unless Scotiabank receives from the relevant Consignee the above described notice of discrepancy within fifteen (15) days of receipt of the silver, then the silver delivered will be deemed to be as set out in the delivery statement that accompanied the delivery.
	Business Day. For the purposes of this Agreement, “Business Day” shall mean any day, other than a Saturday, a Sunday or a day that banks are lawfully closed for business in Toronto, Canada or New York, New York, or in the case of any location to which silver is to be delivered or received, a day that transactions cannot be carried out at such location.
6.	Consignment Fee.
	(a)       Each Consignee will pay monthly and on the last day of a Consignment term, in arrears, to Scotiabank as a consignment fee in respect of the applicable Consignment an amount which shall accrue from day to day for the actual number of days elapsed and shall be calculated daily on the daily Dollar Value of the silver making up the applicable Consignment at such rate as may be agreed upon by the applicable Consignee and Scotiabank at the time of each Consignment

	request or request for renewal, which rate shall remain in effect for the term of the applicable Consignment. In the event that a Consignment is made with no fixed Consignment term applicable thereto, then the rate applicable to such Consignment shall be as agreed upon by Scotiabank and the applicable Consignee and subject to change upon two (2) Business Days’ notice to the applicable Consignee. In the event that a Consignee and Scotiabank should fail at any time to agree upon the rate to apply to a Consignment or the renewal of a Consignment term, then such Consignee shall immediately deliver the subject silver for which there is no agreement to Scotiabank, as provided for in paragraph 24 hereof.
	Notwithstanding the foregoing or any other provisions in this Agreement, any renewal of a Consignment term requested by a Consignee shall be at Scotiabank’s option and subject to Scotiabank’s absolute discretion not to renew a Consignment term if it so decides. Any Consignment the term of which is not renewed shall be immediately re-delivered to Scotiabank in accordance with the terms of this Agreement.
	(b)       All rates in this Agreement shall be calculated on the basis of a 360-day year and for the actual number of days elapsed.
7.	Title.
	(a)       Title to the silver delivered by Scotiabank and held by a Consignee on consignment for Scotiabank will remain with Scotiabank and will not pass to the applicable Consignee until such time as the silver is purchased by such Consignee as provided for in paragraphs 10, 11 and 7(b) hereof. In the event that only a portion of a Consignment is purchased, then title as pertains to that portion only will transfer to the relevant Consignee.
	(b)       Title to the silver purchased by a Consignee as provided for in paragraphs 10 and 11 hereof will pass to such Consignee upon receipt by Scotiabank of all funds due to it from that Consignee in payment for the silver purchased.

8.       Commingling. The Consignees and Scotiabank agree that the Consignees shall be permitted, in the ordinary course of their business as now being conducted, to commingle the silver held on consignment for Scotiabank with any other silver or silver containing alloys being held by the Consignees on consignment (provided such other silver is not subject to a segregation requirement), safekeeping, or trust, or with silver or silver containing alloys owned by the Consignees.

9.       Safekeeping. Until such time as the silver received from Scotiabank has been returned to Scotiabank, or purchased by the Consignees, as hereinafter provided, the Consignees will afford the silver no less safekeeping protection than they afford silver held for their own account. Each Consignee will arrange insurance coverage, reasonably acceptable to Scotiabank, on the silver held by it on consignment for Scotiabank in such amounts and covering such risks as is usually carried by companies engaged in a similar business and each Consignee shall, upon request, deliver to Scotiabank a copy of all

policies for such insurance.

10.    Purchase Request. If a Consignee wishes to purchase part or all of the silver held hereunder on consignment for Scotiabank, an authorized representative of such Consignee will make a request to an authorized officer of Scotiabank by telephone, telex or telecopied transmission stating the quantity and quality of silver to be purchased and the proposed value date of the purchase. Scotiabank will send the relevant Consignee written confirmation of all telephone requests and such Consignee shall send Scotiabank written acknowledgement of such confirmation within five (5) days of receipt.

11.    Purchase. Provided that no Event of Default exists, and subject to the provisions of paragraph 31 hereof, Scotiabank, by its authorized officer, shall provide an authorized representative of the applicable Consignee at least two (2) Business Days (or such lesser period as Scotiabank may accommodate) prior to the proposed value date with a quotation (based on the H&H Noon price and/or the London Fixing Price, as the case may be, with respect to silver plus the applicable premium) of the value date price of the silver to be purchased. If the authorized representative of the applicable Consignee agrees to such quotation, such quantity of silver will thereupon be conclusively deemed to have been contracted for purchase, with payment of the purchase price to be made on the agreed upon value date.

12.    Security. As continuing collateral security for the present and future indebtedness and liability of AMI, AMI Espana and AMI GmbH to Scotiabank hereunder, Technitrol, Inc. (the “Guarantor”) shall deliver in favour of Scotiabank in the form attached hereto as Exhibit A, its guarantee (the “Guarantee”) of the present and future indebtedness and liability incurred by such Consignees to Scotiabank hereunder.

13.	Invoices.
	(a)       In the case of a Consignment, Scotiabank will furnish the applicable Consignee, as at the 22nd day of each month and as at the last day of a Consignment term, with a statement of the quantity and quality of silver held on consignment for Scotiabank by such Consignee and a calculation of the consignment fee in accordance with paragraph 6 hereof payable by such Consignee, together with an invoice for such charges.
	(b)       In the case of purchases, Scotiabank will furnish the relevant Consignee promptly after each purchase is agreed to with a statement setting forth the quantity and quality of the silver sold, and a calculation of the purchase price payable by such Consignee, together with an invoice for such purchase price.
	(c)       Failure by Scotiabank to issue a statement and/or an invoice or failure to issue such statement and/or invoice in a timely manner, does not negate the Consignees’ obligation to pay amounts due under this Agreement.
	(d)       If there is a discrepancy between the statement provided by Scotiabank and the agreed to terms of the purchase by the relevant Consignee, as such

Consignee understands them to be, such Consignee shall forthwith notify Scotiabank of such discrepancy. Absent manifest error, if such notification is not received by Scotiabank within fifteen (15) days of receipt of the statement by the relevant Consignee then such statement shall be deemed to be correct.

14.    Payments. Payment of the consignment fee will be made by the applicable Consignee within ten (10) Business Days following the 22nd day of each month and on the last day of a Consignment term. Payment of the purchase price of the silver will be made on the value date and shall be determined by the H&H Noon price and/or the London Fixing Price, as the case may be, with respect to silver on such day plus a premium of $0.015 per ounce times the number of ounces of silver which is the subject of the relevant purchase transaction (in the event that there is no H&H Noon price and/or London Fixing Price, as the case may be, for silver on a particular day, the last established H&H Noon price and/or London Fixing Price, as the case may be, for silver shall apply). In either case, payment will be made in U.S. dollars in same day funds by any method mutually agreed upon from time to time. If an amount payable hereunder is not paid when due, the applicable Consignee will pay interest on the unpaid amount, based on a 360 day year, calculated and payable upon demand for the actual number of days elapsed and compounded monthly until paid in full, at Scotiabank’s U.S. dollar base rate as quoted in New York from time to time for U.S. dollar commercial loans made by Scotiabank in the United States of America and being a variable rate of interest adjusted automatically upon change by Scotiabank plus 1% per annum.

15.    Reports. In the event that the Guarantor’s financial statements are no longer publicly available, the Guarantor will begin sending to Scotiabank quarterly and annual audited financial statements within ninety (90) days of the end of each fiscal quarter and any other information as Scotiabank may reasonably request from time to time.

16.    Period of Agreement. This Agreement may be terminated, for any reason, and upon no less than thirty (30) days’ written notice of such termination (the “Termination Notice”) being given by the Consignees (acting together) to Scotiabank or by such Termination Notice being given by Scotiabank to the Consignees. Such termination to be effective, except as hereinafter provided, as of the date specified in such Termination Notice (such date being the “Termination Date”). Notwithstanding the above, in the event that any term of a Consignment should extend beyond the Termination Date, termination with respect to that Consignment only shall be effective on the maturity date applicable to such Consignment. For all other Consignments, termination shall be effective on the Termination Date. On the relevant effective date for termination, each Consignee shall, if it has not already done so, re-deliver to Scotiabank all silver which is held for Scotiabank by it under the relevant terminated Consignments by either physically delivering the silver to Scotiabank, or by purchasing the silver from Scotiabank as provided for in paragraphs 10 and 11 hereof and shall pay to Scotiabank all applicable amounts due and accruing to it hereunder. If an Event of Default should occur prior to the Termination Date specified in any Termination Notice or prior to any other applicable date of termination for a Consignment, Scotiabank’s right to terminate this Agreement and make demand hereunder shall take effect immediately.

17.    Events of Default. Upon the occurrence of any one of the following events of default (an “Event of Default”):

(a)       failure by a Consignee to deliver any amount of silver or pay any purchase price, consignment fees, interest or other amounts in respect of any silver held on consignment hereunder or purchased from Scotiabank, within five (5) Business Days of the date on which it is due hereunder; provided that such five (5) Business Day grace period shall have no application where a Termination Notice pursuant to paragraph 16 above has been given and the applicable Consignee has failed to re-deliver silver or pay amounts due and accruing as required by such paragraph;

(b)       failure by the Consignees to restore the Maximum Dollar Limit as required by paragraph 2;

(c)       a Consignee makes any representation or warranty hereunder which is incorrect in any material respect; or breaches any covenant hereunder or fails to perform or observe, in any material respect, any other term or provision contained in this Agreement and any such breach of covenant or failure to perform or observe shall remain unremedied for fifteen (15) days after written notice thereof has been given by Scotiabank to the applicable Consignee in the manner provided for in paragraph 23 hereof;

(d)       a materially adverse change occurs in the financial condition of a Consignee or the Guarantor which gives reasonable grounds to conclude that such Consignee or the Guarantor will be unable to perform or observe, in the normal course, its obligations under this Agreement or the Guarantee, as applicable;

(e)       any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or any other proceedings for the relief of debtors and/or creditors are instituted by or against a Consignee or the Guarantor, and, in the case of any such proceeding instituted against a Consignee or the Guarantor (but not instituted by such party), either such proceeding shall remain undismissed, or unstayed for a period of 30 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against it or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property) shall occur;

(f)       an order is made or an effective resolution passed for the winding-up or liquidation of a Consignee or the Guarantor; or any steps are taken to enforce any encumbrance on the whole or any material part of the undertaking, property or assets of a Consignee or the Guarantor;

(g)       the occurrence of any Event of Default as defined in that certain Credit Agreement dated as of October 14, 2005 (the “Credit Agreement”) by and among

the Guarantor, AMI and certain other subsidiaries of the Guarantor, Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer, Bank of America, N.A. Singapore Branch as Singapore Administrative Agent, and the Lenders (all as defined in the Credit Agreement), as the same may be amended and/or amended and restated from time to time, that causes the Administrative Agent to declare any or all of the Obligations (as defined in the Credit Agreement) to be immediately due and payable. Such Credit Agreement Events of Default (together with related definitions and ancillary provisions) shall, for as long as this Agreement has not been terminated and is in full force and effect, be a part of and are hereby incorporated into this Agreement by reference, mutatis mutandis, as if such Events of Default were set forth in this Agreement in full, without regard to any termination of such Credit Agreement. Insofar as any provisions of the Credit Agreement’s Events of Default conflict with or are inconsistent with any provisions of the Events of Default of this Agreement, then the provisions of this Agreement shall govern to the extent of the conflict or inconsistency, provided that the non-inclusion of a provision in either document shall not constitute a conflict or inconsistency for the purposes of this provision;

(h)       the Guarantor denies, to any extent, its obligations under the Guarantee or claims the Guarantee to be invalid or withdrawn in whole or in part; or the Guarantee is determined to be invalid in whole or in part by a court or other judicial entity, or is invalidated in whole or in part by any Act, regulation or governmental action; or the Guarantor breaches any of its covenants as contained in its Guarantee, or makes any representation or warranty as contained in its Guarantee which is incorrect in any material respect;

Scotiabank may terminate this Agreement and, upon making a demand in writing upon each Consignee, will become entitled to have the Consignees deliver to Scotiabank forthwith all silver held by the Consignees on consignment for Scotiabank hereunder and shall be entitled to receive payment forthwith from the Consignees of all amounts due and accruing to Scotiabank hereunder. Delivery of such silver shall be made by either physically delivering the silver to Scotiabank or by paying to Scotiabank the applicable H&H Noon price and/or London Fixing Price, as the case may be, plus the applicable premium of the silver then held by the Consignees as of the date and time of termination and by so paying such amount, the Consignees shall be deemed to have purchased the silver which they were required to re-deliver to Scotiabank. If the Consignees fail to immediately deliver to Scotiabank all such silver held on consignment hereunder or fail to immediately pay to Scotiabank all other amounts due to it hereunder, Scotiabank may proceed to take such steps as it deems fit, including realizing upon any security it holds in that respect.

18.    Corporate Authority. At the time of acceptance of this Agreement, each Consignee will furnish Scotiabank with a certificate of the Secretary of each Consignee and the Guarantor setting out the names and specimen signatures of those officers authorized to sign this Agreement on behalf of the applicable Consignee and the Guarantee on behalf of the Guarantor.

19.    Authorized Representatives. Each Consignee will, from time to time, notify Scotiabank in writing of the names of two or more persons who are to be its authorized representatives for the purposes hereof. Scotiabank will, from time to time, notify the Consignees in writing of the names of two or more persons who are to be its authorized officers for the purposes hereof. Each Consignee and Scotiabank shall provide to each other specimen signatures of such persons.

20.    Representations of the Consignees. Each Consignee hereby represents and warrants to Scotiabank that it has full power and authority to purchase silver from Scotiabank and to receive and hold silver for Scotiabank on the terms and conditions contained herein; that it has obtained all necessary governmental approvals, if any, to receive and hold and purchase silver; and, that this Agreement has been duly authorized by all necessary corporate action and that the execution, delivery and performance of this Agreement by the relevant Consignee will not result in the breach of its charter, articles of incorporation, by-laws, corporate resolutions or other of its constitutional documents.

21.    Representations of Scotiabank. Scotiabank hereby represents and warrants to the Consignees that it shall have title free and clear of any encumbrance to all silver to be delivered to the Consignees under this Agreement, and that it has full power and authority to deliver and sell silver to the Consignees on the terms and conditions contained herein.

22.    Covenants of the Consignees.

(a)       Records: Each Consignee shall maintain at its principal place of business records reasonably satisfactory to Scotiabank with respect to the silver delivered by Scotiabank hereunder, and shall permit an authorized officer of Scotiabank, or a representative not necessarily in Scotiabank’s employ, to examine such records at any reasonable time during normal business hours, with reasonable prior notice.

(b)       Taxes: Each Consignee shall pay all taxes, customs duties, assessments and charges lawfully levied, assessed or imposed in respect of the silver held by it for Scotiabank hereunder or upon the sale of such silver by Scotiabank to it, except any tax in respect of the income of Scotiabank.

All payments by a Consignee shall be made without set-off or counterclaim and free and clear of any taxes (including any value added tax), levies, duties, charges, fees or deductions for withholdings whatsoever.

If, as a result of any requirement, it should be necessary for a Consignee to deduct or withhold any amount from any payment hereunder, then such Consignee shall make an additional payment so that the amount received by Scotiabank after such deduction or withholding equals the amount that would have been received by Scotiabank if there had been no such deduction or withholding requirement.

Evidence satisfactory to Scotiabank of the payment of any tax, etc. referred to in

this paragraph will, upon the request of Scotiabank made from time to time, be provided by the applicable Consignee to Scotiabank.

(c)       Observe Laws: Each Consignee shall duly observe and conform to all valid requirements of any governmental authority relative to the holding of silver by such Consignee for Scotiabank hereunder.

(d)       Negative Covenants: Each Consignee covenants and agrees that, until the satisfaction in full of all of the Consignees’ obligations to Scotiabank hereunder, it will not, directly or indirectly, (i) create, incur, assume or suffer to exist any pledge, lien, security interest or other encumbrance of any nature whatsoever, on any of the silver held on consignment hereunder other than any security interest granted to Scotiabank; (ii) sell, lease, transfer or otherwise dispose of all or any portion of the silver held on consignment hereunder, except in the ordinary course of its business; (iii) dissolve or liquidate; or (iv) guarantee or otherwise in any way become or be responsible for obligations of any other person. Notwithstanding the previous sentence, the Consignees may from time to time guarantee the obligations of (1) the Guarantor or other entities controlled by the Guarantor, or (2) third parties, in the ordinary course of business which in the aggregate do not exceed $20,000,000 U.S. at any one time; provided, that, the issuance of any such guarantees shall not, individually or in the aggregate, have a material adverse effect on the business or prospects of any Consignee on an individual basis or the Consignees collectively.

23.    Notices. Any notice in writing may be given by being delivered by hand or by being sent by authenticated telex or telecopied transmission in the case of the Consignees to:

AMI Doduco, Inc.

Murray Corporate Park

1003 Corporate Drive

Export, PA 15362

Attention: Vice President of Purchasing

Fax No.: (724) 733-2880

AMI Doduco Espana, S.L.

Manises, Nr. 1

28224 Pozuelo de Alarcon (Madrid)

Attention: Manage of Precious Metals

Fax No.: + 34-91-799-4655

AMI Doduco GmbH

Im Altgefall 12

75181 Pforzheim

Attention: Manager of Precious Metals

Fax No.: + 49-7231-602398

and, with respect to each of the Consignees, a copy to:

Technitrol, Inc.

1210 Northbrook Drive, Suite 470

Trevose, PA 19053

Attention: Chief Financial Officer

Fax No.: (215) 355-7397

and in the case of Scotiabank to:

The Bank of Nova Scotia

ScotiaMocatta

One Liberty Plaza, 24^th Floor

New York, N.Y. 10006

U.S.A.

Attention: Managing Director

Fax No.: (212) 225-6248

or to such other address, telex or telecopier number as may hereafter be notified in writing by the applicable Consignee or Scotiabank, respectively and any such notice, if given by hand, authenticated telex or telecopied transmission will be deemed to have been given when delivered or sent.

If an authorized representative of a Consignee makes an oral request or gives an oral notice hereunder to Scotiabank, whether to an agent or an employee of Scotiabank then, until notice in writing by such Consignee, Scotiabank shall be entitled to rely on its dealings with such Consignee upon those oral instructions whether by telephone or otherwise. In so relying, neither Scotiabank nor any agent or employee shall incur any liability to such Consignee in acting upon such oral instructions contemplated hereby and which Scotiabank believes in good faith to have been given by a person authorized by such Consignee to effect any applicable transaction. In the event there is a discrepancy between the oral instructions and any written confirmation in respect thereof, or in the absence of receiving confirmation, the oral instructions will be deemed to be the controlling instructions.

24.    Deliveries by a Consignee. All deliveries of silver to be made hereunder by a Consignee to Scotiabank will be free of all liens, charges, security interests and encumbrances and made in accordance with the directions of Scotiabank or, in the absence of such directions, in a commercially acceptable manner to Scotiabank at its address set out in paragraph 23 hereunder. The applicable Consignee shall bear the cost of such delivery and shall bear the risk of loss of or damage to such silver until delivery is made by it to Scotiabank at which time such risk shall pass to Scotiabank.

25.    Indemnity Provisions. If the introduction of or any change in or in the interpretation of, or any change in its application to a Consignee of, any law or any regulation or guideline issued by any central bank or other governmental authority (whether or not having the force of law), including, without limitation, any reserve or special deposit requirement or any tax (other than tax on Scotiabank’s general income), or any capital requirement, has due to Scotiabank’s compliance the effect, directly or indirectly, of (i) increasing the cost to Scotiabank of performing its obligations hereunder; (ii) reducing any amount received or receivable by Scotiabank hereunder or its effective return hereunder or on its capital; or (iii) causing Scotiabank to make any payment or to forgo any return based on any amount received or receivable by Scotiabank hereunder, then upon demand from time to time the applicable Consignee shall pay such amount as shall compensate Scotiabank for any such cost, reduction, payment or forgone return. Each Consignee agrees that Scotiabank shall have no liability to the Consignees for any reason in respect of this facility other than on account of Scotiabank’s gross negligence or willful misconduct.

26.    Assignment. The Consignees may not assign or transfer any of their rights or obligations hereunder without the prior written consent of Scotiabank, which consent shall not be unreasonably withheld. Scotiabank may at any time assign or transfer all or any of its rights and/or obligations hereunder, provided such assignment or transfer is to its successors in title or to a wholly-owned subsidiary or a branch or office of Scotiabank and each such assignee being entitled to rely on the paragraph headed Indemnity Provisions as set out above.

27.    Laws. This Agreement will be interpreted and governed in all respect by the laws of the State of New York.

28.    Amendments. This Agreement constitutes the entire Agreement between the Consignees and Scotiabank in respect of the subject matter hereof and may only be amended by a document signed by the Consignees and Scotiabank.

29.    Judgment Currency. All payments made under this Agreement or resulting from any judgment relating to this Agreement shall be made in U.S. Dollars.

30.    Force Majeure. If Scotiabank is prevented from or hindered in making delivery of silver or the making of delivery is delayed by reason of force majeure (which shall be deemed for this purpose to include war, civil commotion, act of terrorism, hijacking, strike, walkout, industrial dispute, fire, explosion, storm, tempest, flood, act or omission

of any governmental, licensing or other similar body or of a person or body for the time being exercising the power and authority of such body (whether in Canada, the United States of America or elsewhere) or any further cause not within the direct control of Scotiabank) Scotiabank shall be under no liability whatsoever in respect thereof and the time for delivery by Scotiabank shall be extended for a period equal to that during which delivery is so prevented, hindered or delayed; however, notwithstanding the foregoing, Scotiabank may, if it so chooses, by notice in writing given to the applicable Consignee, advise that it will not make the delivery affected by the force majeure.

Scotiabank shall not be liable for any loss arising on or in connection with any lack of delivery of silver to a Consignee hereunder as a result of moratorium, currency restrictions or changes thereof.

31.    Determination. Scotiabank shall have the right to determine at any time, and in its discretion reasonably exercised, as to whether any event, circumstance, or thing envisaged in this Agreement is or would be “material” or “adverse”, as such terms are used herein.

32.    No Obligation to Deliver or Renew a Consignment. Execution of this Agreement shall not obligate Scotiabank to deliver silver or to renew a Consignment term pursuant to any request that it may receive from a Consignee; nor does it obligate the Consignees to request the delivery of silver. A Consignee shall have no automatic right to obtain the delivery of silver hereunder or to renew a Consignment term despite making the appropriate request and notwithstanding the occurrence or non-occurrence of an Event of Default hereunder. Scotiabank shall have complete discretion to refuse any delivery or renewal request at any time until actual delivery or actual renewal of the Consignment without giving any reason for any such refusal and Scotiabank shall incur no liability in respect of any such refusal.

33.    Other Agreements. This Agreement supersedes and shall replace the Silver Lease Agreement between AMI and Scotiabank dated April 9, 1996, as amended, which agreement shall terminate and cease to be of effect, with silver held thereunder constituting silver held on consignment under this Agreement.

If the foregoing terms and conditions are satisfactory, please so indicate by executing on the enclosed copy of this letter the form of acceptance and returning it to us on or before August 31, 2006, failing which this offer will expire.

Yours truly,

THE BANK OF NOVA SCOTIA

By:  Zoran Miljkovic

Authorized Officer

By:  /s/ Authorized Officer

Authorized Officer

ACCEPTED:

Dated: August 24, 2006.

AMI DODUCO, INC.

By:  Drew A. Moyer

Name: Drew A. Moyer

Title: Corporate Secretary

By:  James M. Papada, III

Name: James M. Papada, III

Title: President

AMI DODUCO ESPANA, S.L.

By:  Drew A. Moyer

Name: Drew A. Moyer

Title: Director

By:  Marc H. Turpin

Name:  /s/ Marc H. Turpin

Title: Director

AMI DODUCO GmbH

By:  /s/ Drew A. Moyer

Name: Drew A. Moyer

Title: Director

By:  Marc H. Turpin

Name: Marc H. Turpin

Title: Director

EX-10.18(1)

Exhibit 10.18-1

November 7, 2007

AMI Doduco, Inc.

Murray Corporate Park

1003 Corporate Drive

Export, PA 15362

AMI Doduco Espana, S.L.

Manises, Nr. 1

28224 Pozuelo de Alarcon (Madrid)

SPAIN

AMI Doduco GmbH

Im Altgefall 12

75181 Pforzheim

GERMANY

Technitrol, Inc.

1210 Northbrook Drive, Suite 470

Trevose, PA 19053

Re: Precious Metals Consignment Facilities

Ladies and Gentlemen:

Reference is made: (a) to that certain Amended and Restated Fee Consignment and/or Purchase of Silver Agreement dated as of August 4, 2006 (as the same may have been amended, the “Scotiabank Consignment Agreement”), by and among AMI Doduco, Inc. (“AMI”), AMI Doduco Espana, S.L. (“AMI Spain”), and AMI Doduco GmbH (“AMI Germany” and, collectively with AMI and AMI Spain, “Consignees”) and The Bank of Nova Scotia (“Scotiabank”); and (b) to that certain Amended and Restated Consignment Agreement dated as of July 29, 2005 (as the same may have been amended, the “BofA Consignment Agreement”), by and among Technitrol, Inc. (“Technitrol”), AMI and Bank of America, N.A. (“BofA”), as successor by merger and by assignment to Fleet Precious Metals Inc., formerly a Rhode Island corporation doing business as Bank of America Precious Metals.

November 7, 2007
Page 2

The obligations of Consignees under the Scotiabank Consignment Agreement are secured by that certain Guarantee (the “Guarantee”) dated September 8, 2006 executed by Technitrol in favor of Scotiabank.

Pursuant to a certain Asset Sale Agreement dated as of October 10, 2006 by and between BofA and Scotiabank, Scotiabank acquired and assumed all of the rights and obligations of BofA under the BofA Consignment Agreement.

Capitalized terms not otherwise defined herein shall have the meanings set forth in the Scotiabank Consignment Agreement.

Each of Scotiabank and Consignees hereby agrees, as of the date hereof, as follows:

          1.        The Scotiabank Consignment Agreement shall supersede and shall replace the BofA Consignment Agreement, which BofA Consignment Agreement shall terminate and shall cease to be of further force and effect. All commodities consigned to Technitrol and AMI pursuant to the BofA Consignment Agreement shall hereafter be deemed commodities consigned to AMI pursuant to the Scotiabank Consignment Agreement and guaranteed by Technitrol pursuant to the Guarantee, and all consignment fees, purchase price payments, market premiums and all other obligations of Technitrol and AMI to Scotiabank under the BofA Consignment Agreement (collectively, “Consignment Obligations”) shall hereafter constitute joint and several Consignment Obligations of Consignees payable to Scotiabank under the Scotiabank Consignment Agreement and guaranteed by Technitrol pursuant to the Guarantee.

          2.        Paragraph 1 of the Scotiabank Consignment Agreement is hereby amended in its entirety to read as follows:

1. Availability. Silver delivered and held on consignment hereunder from time to time by the Consignees shall not at any time have an aggregate Dollar Value that exceeds the lesser of:

(i) the Dollar Value of 9,000,000 troy ounces of silver; and (ii) One Hundred Fifty-Three Million U.S. Dollars ($153,000,000 U.S.) (such $153,000,000 U.S. being the “Maximum Dollar Limit”).

November 7, 2007
Page 3

          3.      The Scotiabank Consignment Agreement is amended hereby to add a new Paragraph 34 and a new Paragraph 35 to read as follows:

34.          Expenses. The Consignees shall pay within ten (10) days of written demand therefor all reasonable expenses of Scotiabank incurred in connection with Scotiabank’s exercise, preservation or enforcement of any of Scotiabank’s rights or remedies under this Agreement, including, without limitation, reasonable fees of outside legal counsel, but excluding expenses incurred that are attributable to the negligence or willful misconduct of Scotiabank, and the amount of all such expenses shall, until paid, bear interest at the rate set forth in Paragraph 14 hereof and be an obligation secured by any collateral.

35.          Joint and Several Obligations of Consignees; Suretyship Waivers and Consents; Maximum Enforceability.

(a)          Each covenant, agreement, representation and warranty of the Consignees contained herein and all of the obligations of Consignees to Scotiabank hereunder (collectively, the “Obligations”) constitute the joint and several undertaking of each Consignee.

(b)          Each Consignee acknowledges that the Obligations of such Consignee undertaken herein might be construed to consist, at least in part, of the guaranty of Obligations of the other Consignees and, in full recognition of that fact, each Consignee consents and agrees that Scotiabank may, at any time and from time to time, without notice or demand, whether before or after any actual or purported termination, repudiation or revocation of this Agreement by any Consignee, and without affecting the enforceability or continuing effectiveness hereof as to such Consignee: (i) with the written consent of the other Consignees, supplement, restate, modify, amend, increase, decrease, extend, renew or otherwise change the time for payment or the terms of this Agreement or any part thereof, including any increase or decrease of the rate(s) of interest thereon; (ii) supplement, restate, modify, amend, increase, decrease or waive, or enter into or give any agreement, approval or consent with respect to, this Agreement or any part thereof, or any agreement, instrument or other document executed in connection

November 7, 2007
Page 4

with this Agreement (collectively, together with this Agreement, the “Facility Documents”), or any condition, covenant, default, remedy, right, representation or term thereof or thereunder; (iii) accept partial payments; (iv) release, reconvey, terminate, waive, abandon, fail to perfect, subordinate, exchange, substitute, transfer or enforce any security or guarantees, and apply any security and direct the order or manner of sale thereof as Scotiabank, in its sole and absolute discretion, may determine; (v) release any entity or natural person (collectively (“Person”) from any personal liability with respect to this Agreement or any part thereof; (vi) settle, release on terms satisfactory to Scotiabank or by operation of applicable law or otherwise liquidate or enforce any security or guaranty in any manner, consent to the transfer of any security and bid and purchase at any sale; or (vii) consent to the merger, change or any other restructuring or termination of the existence of any Consignee or any other Person, and correspondingly restructure the Obligations evidenced hereby, and any such merger, change, restructuring or termination shall not affect the liability of any Consignee or the continuing effectiveness hereof, or the enforceability hereof with respect to all or any part of the Obligations evidenced hereby.

(c)           Scotiabank may enforce this Agreement independently as to each Consignee and independently of any other remedy or security that Scotiabank may have or hold at any time in connection with the Obligations evidenced hereby, and it shall not be necessary for Scotiabank to marshal assets in favor of any Consignee or any other Person or to proceed upon or against or exhaust any security or remedy before proceeding to enforce this Agreement. Each Consignee expressly waives any right to require Scotiabank to marshal assets in favor of any Consignee or any other Person or to proceed against any other Consignee or any Collateral provided by any Person, and agrees that Scotiabank may proceed against Consignees or any Collateral in such order as it shall determine in its sole and absolute discretion.

(d)           Scotiabank’s rights hereunder shall be reinstated and revived, and the enforceability of this Agreement shall continue, with respect to any amount at any time paid on account of the Consignees’ Obligations to Scotiabank which thereafter shall be

November 7, 2007
Page 5

required to be restored or returned by Scotiabank, all as though such amount had not been paid.

(e)           To the maximum extent permitted by applicable law, and to the extent that the Obligations of a Consignee are deemed to be a guaranty of the Obligations of another Consignee, each Consignee expressly waives any and all suretyship defenses now or hereafter arising or asserted by reason of: (i) any disability or other defense of the other Consignees with respect to the Obligations evidenced hereby, (ii) the unenforceability or invalidity of any security or guaranty for the Obligations evidenced hereby or the lack of perfection or continuing perfection or failure of priority of any security for the Obligations evidenced hereby, (iii) the cessation for any cause whatsoever of the liability of the other Consignees (other than by reason of the full payment and performance of all Obligations), (iv) any failure of Scotiabank to comply with applicable law in connection with the sale or other disposition of any Collateral or other security for any Obligation, (v) any act or omission of Scotiabank or others that directly or indirectly results in or aids the discharge or release of any Consignee or the Obligations evidenced hereby or any security or guaranty therefor by operation of law or otherwise, (vi) the avoidance of any security interest, lien or other interest in favor of Scotiabank for any reason, or (vii) any action taken by Scotiabank that is authorized by this Paragraph or any other provision hereof or of any Facility Document. Until such time, if any, as all of the Obligations have been paid and performed in full and no portion of any agreement remains in effect, no Consignee shall have any right of subrogation, contribution, reimbursement or indemnity from any other Consignee, and each Consignee (only in its capacity as a guarantor or surety) expressly waives any right to enforce any remedy that Scotiabank now has or hereafter may have against any other Person and waives the benefit of, or any right to participate in, any Collateral now or hereafter held by Scotiabank.

(f)          Notwithstanding any provision contained in this Agreement or any of the other Facility Documents to the contrary, it is the intention and agreement of each Consignee and Scotiabank that the obligations of each Consignee under this Agreement and each of the other Facility Documents to which it is a party shall be valid

November 7, 2007
Page 6

and enforceable against such Consignee to the maximum extent permitted by applicable law. Accordingly, if any provision of this Agreement or any of the other Facility Documents creating any obligation of a Consignee in favor of Scotiabank shall be declared to be invalid or unenforceable in any respect or to any extent, it is the stated intention and agreement of the Consignees and Scotiabank that any balance of the obligation created by such provision and all other obligations of such Consignee to Scotiabank created by other provisions of this Agreement and of the other Facility Documents shall remain valid and enforceable. Likewise, if any sums which Scotiabank may be otherwise entitled to collect from a Consignee under this Agreement or under any of the other Facility Documents shall be declared to be in excess of those permitted under any law (including any federal, national, provincial or state fraudulent conveyance or like statute or rule of law) applicable to such Consignee’s obligations under this Agreement or under any of the other Facility Documents, it is the stated intention and agreement of such Consignee and Scotiabank that all sums not in excess of those permitted under such applicable law shall remain fully collectible by Scotiabank from such Consignee, and such excess sums shall nevertheless survive as a subordinate obligation of such Consignee, junior in right to the claims of general unsecured creditors. This provision shall control every other provision of the Facility Documents.

          4.         Except as amended hereby, the Scotiabank Consignment Agreement, the Guarantee and all agreements, instruments and documents executed in connection therewith (collectively, the “Scotiabank Documents”), shall remain in full force and effect and are in all respects hereby ratified and affirmed.

         5.         Each of the Consignees hereby affirms each representation, warranty and covenant made by it and set forth in the Scotiabank Documents as if fully set forth herein in full. Each of the Consignees acknowledges and confirms that there are no defenses, claims or setoffs available that would operate to limit its obligations under the Scotiabank Documents.

November 7, 2007
Page 7

Please indicate your assent to the terms of this letter agreement by your signature below.

	Sincerely,
	THE BANK OF NOVA SCOTIA
		/s/ Jacob Szafranski
		Jacob Szafranski
	By:	Manager
For- Timothy P. Dinneny
		Managing Director
	By:	/s/ Zoran Miljkovic
		Zoran Miljkovic
		Director

ACCEPTED AND AGREED AS
OF THE DATE SET FORTH ABOVE:

AMI DODUCO, INC.

By:	/s/ Drew A. Moyer
Name:	Drew A. Moyer
Title: President
AMI DODUCO ESPANA, S.L.
By:	/s/ Drew A. Moyer
Name:	Drew A. Moyer
Title: President
AMI DODUCO GMBH
By:	/s/ Drew A. Moyer
Name:	Drew A. Moyer
Title: Director

November 7, 2007
Page 8

GUARANTOR ACKNOWLEDGEMENT

          Technitrol, Inc. (“Technitrol”) hereby affirms each representation, warranty and covenant made by it and set forth in the Guarantee as if fully set forth herein in full. Technitrol acknowledges and confirms that there are no defenses, claims or setoffs available to it that would operate to limit its obligations under the Guarantee. Technitrol acknowledges and agrees that its obligations to Scotiabank pursuant to the Guarantee shall remain in full force and effect and shall include, without limitation, all Consignment Obligations (as defined in Section 1 hereof) of AMI and/or Technitrol incurred pursuant to the former BofA Consignment Agreement.

TECHNITROL, INC.
By:	/s/ Drew A. Moyer
Name: Drew A. Moyer
Title: Sr. VP & CFO

EX-10.18(2)

Exhibit 10.18-2

 November 9, 2007

AMI Doduco, Inc.
Murray Corporate Park
1003 Corporate Drive
Export, PA 15362

Re:                         Consignment and/or Purchase of Silver Agreement

Ladies and Gentlemen:

                    We are pleased to confirm that, subject to your acceptance of this facility, THE BANK OF NOVA SCOTIA (“Scotiabank”) will be prepared to deliver, from time to time, on an uncommitted basis, silver upon consignment (the “Consignment(s)”) to AMI DODUCO, INC. (the “Consignee”) subject to availability and to the terms and conditions outlined herein and further subject to Scotiabank’s absolute discretion not to deliver silver if it so decides.

Definitions. For the purposes of this Agreement:

“Dollar Value” with respect to silver shall mean, on the day of determination, the value in U.S. dollars of one troy ounce of silver determined by the Handy & Harman (“H&H”) noon price with respect to silver, on such day times the number of ounces of silver in respect of which the Dollar Value is being determined. In the event that there is no H&H noon price for silver on a particular day, the last established H&H noon price for silver shall apply.

1.         Availability. Silver delivered and held on consignment hereunder from time to time by the Consignee shall not at any time have a Dollar Value which exceeds the lesser of (i) the Dollar Value of 600,000 troy ounces of silver and (ii) $10,200,000 U.S. (such $10,200,000 U.S. amount being the “Maximum Dollar Limit”).

2.         Restoration of Maximum Dollar Limit. If at any time the Dollar Value of silver held on consignment hereunder by the Consignee should exceed the Maximum Dollar Limit, then Scotiabank may at its option, by telex or telecopy notice to the Consignee, require that by the end of the Business Day immediately following the day upon which such notice is given, the Consignee either:

            (i)          re-deliver to Scotiabank a portion of the silver held on consignment hereunder sufficient to reduce the Dollar Value of the silver continued to be held on consignment hereunder to an amount no greater than the Maximum Dollar Limit; or

            (ii)          purchase from Scotiabank, at the H&H noon price on the date of purchase plus a premium of $0.015 per ounce (the “Applicable Premium”), a quantity of the silver sufficient to reduce the Dollar Value of the silver continued to be held on consignment hereunder to an amount no greater than the Maximum Dollar Limit.

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3.         Quality. Silver delivered to the Consignee and returned to Scotiabank shall be in London Good Delivery bar form and of a minimum fineness of .9999, unless otherwise mutually agreed to in advance of delivery.

EXCEPT FOR THE FINENESS OF THE CONSIGNED SILVER AND THE QUANTITY THEREOF WITH RESPECT TO EACH CONSIGNMENT, SCOTIABANK MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE SILVER CONSIGNED OR TO BE CONSIGNED OR SOLD HEREUNDER, WHETHER AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER MATTER, AND SCOTIABANK HEREBY DISCLAIMS ALL SUCH WARRANTIES.

4.         Orders. Requests for delivery of silver will be made by an authorized representative of the Consignee to an authorized officer of Scotiabank by telephone, telex or telecopied transmission. Each request will indicate the quantity and quality of the silver to be delivered and the date on which the delivery is to be made. Unless otherwise requested by Consignee, any silver delivered shall be of the quality set forth in paragraph 3. All telephone requests shall be confirmed in writing to Scotiabank within five (5) days of such request.

5.         Deliveries by Scotiabank.

            (a)          If Scotiabank has agreed to make a requested delivery of silver, it will arrange for the delivery of the silver to a location acceptable to both parties and on the date agreed upon for delivery. Scotiabank will assume all risk of loss or damage to the silver until it has been delivered to the agreed upon location, at which time such risk shall pass to the Consignee. Such delivery shall be accompanied by a delivery statement provided by Scotiabank setting out the quantity and quality of silver delivered.

            (b)          If on receipt of the silver it is determined by the Consignee that the silver delivered by Scotiabank to the Consignee is of a different quantity and/or quality than is set out in the delivery statement, the Consignee shall forthwith give notice of such discrepancy to Scotiabank. In that event, Scotiabank shall be entitled to conduct such tests and make such examination of the silver as it considers necessary or desirable. If such tests or examinations determine that the silver delivered by Scotiabank to the Consignee is of a different quantity and/or quality than was set out in the said delivery statement, then Scotiabank or the Consignee, as the case may be, shall make the appropriate adjustments.

            (c)          Absent manifest error, unless Scotiabank receives from the Consignee the above described notice of discrepancy within fifteen (15) Business Days of receipt of the silver, then the silver delivered will be deemed to be as set out in the delivery statement that accompanied the delivery; provided, however, that in no event shall such requirement to provide notice of discrepancy extend beyond thirty (30) Business Days.

Business Day. For the purposes of this Agreement, “Business Day” shall mean any day, other than a Saturday, a Sunday or a day that banks are lawfully closed for business in Toronto, Canada or New York, New York, or in the case of any location to which silver is to be delivered or received, a day that transactions cannot be carried out at such location.

6.         Title.

            (a)          Title to the silver delivered by Scotiabank and held by the Consignee on consignment for Scotiabank will remain with Scotiabank and will not pass to the Consignee until such time as the silver is purchased by the Consignee as provided for in paragraphs 9, 10 and 6(b) hereof. In the event that only a

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portion of the Consignment is purchased, then title as pertains to that portion only will transfer to the Consignee.

            (b)          Title to the silver purchased by the Consignee as provided for in paragraphs 9 and 10 hereof will pass to the Consignee upon receipt by Scotiabank of all funds due to it from the Consignee in payment for the silver purchased.

7.         Segregation. The Consignee shall not be permitted at any time to commingle the silver held on consignment for Scotiabank with any other silver held by the Consignee on consignment, safekeeping, or trust, or with silver owned by the Consignee. Upon receipt of Scotiabank’s silver, the Consignee shall segregate and continue to segregate such silver in a manner such that the silver may be readily identifiable as being the property of Scotiabank and to that end, the Consignee shall prominently display, on such segregated silver, such signs, flags or plaques (which conform to all legal requirements, if any) which clearly state that such segregated silver is the property of Scotiabank and as may be necessary to preserve and identify Scotiabank’s ownership of such segregated silver.

8.         Safekeeping. Until such time as the silver received from Scotiabank has been returned to Scotiabank, or purchased by the Consignee, as hereinafter provided, the Consignee will afford the silver no less safekeeping protection than it affords silver held for its own account. The Consignee will provide insurance coverage, reasonably acceptable to Scotiabank and with Scotiabank designated thereon as loss payee, on the silver held on consignment for Scotiabank by the Consignee in such amounts and covering such risks as is usually carried by companies in a similar business and the Consignee shall upon request deliver to Scotiabank a copy of all policies for such insurance.

9.         Purchase Request. If the Consignee wishes to purchase part or all of the silver held on consignment for Scotiabank, an authorized representative of the Consignee will make a request to an authorized officer of Scotiabank stating the quantity and quality of silver to be purchased and the proposed value date of the purchase. Scotiabank will send Consignee written confirmation of all telephone requests and Consignee shall send Scotiabank written acknowledgment of such confirmation within five (5) days of receipt.

10.       Purchase. Provided that no Event of Default exists, and subject to the provisions of paragraph 31 hereof, Scotiabank, by its authorized officer, shall provide an authorized representative of the Consignee at least two (2) Business Days (or such lesser period as Scotiabank may accommodate) prior to the proposed value date with a quotation (based on the H&H noon price with respect to silver on the day such quotation is given plus a premium of $0.015 per ounce) of the value date price of the silver to be purchased. If the authorized representative of the Consignee agrees to such quotation, such quantity of silver will thereupon be conclusively deemed to have been contracted for purchase, with payment of the purchase price to be made on the agreed upon value date.

11.       Security. The obligations of Consignee under this Agreement are secured by that certain Guarantee dated September 8, 2006 executed by Technitrol, Inc. in favor of Scotiabank as the same may be amended and/or amended and restated from time to time.

12.       Invoices.

            (a)          Scotiabank will furnish the Consignee promptly after each purchase is agreed to with a statement setting forth the quantity and quality of the silver sold, and a calculation of the purchase price payable by the Consignee, together with an invoice for such purchase price.

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            (b)          Failure by Scotiabank to issue a statement and/or an invoice or failure to issue such statement and/or invoice in a timely manner, does not negate the Consignee’s obligation to pay amounts due under this Agreement.

            (c)          If there is a discrepancy between the statement provided by Scotiabank and the agreed to terms of the purchase by the Consignee, as the Consignee understands them to be, the Consignee shall forthwith notify Scotiabank of such discrepancy. Absent manifest error, if such notification is not received by Scotiabank within fifteen (15) days of receipt of the statement by the Consignee then such statement shall be deemed to be correct; provided, however, that in no event shall such requirement to provide notice of discrepancy extend beyond thirty (30) days

13.       Payments. Payment of the purchase price of the silver will be made on the value date and will be made in U.S. dollars in same day funds by any method mutually agreed upon from time to time. If an amount payable hereunder is not paid when due, the Consignee will pay interest on the unpaid amount, based on a 360 day year, calculated and payable upon demand for the actual number of days elapsed and compounded monthly until paid in full, at Scotiabank’s U.S. dollar base rate as quoted in New York from time to time for U.S. dollar commercial loans made by Scotiabank in the United States of America and being a variable rate of interest adjusted automatically upon change by Scotiabank plus 1% per annum.

14.       Reports. In the event that Technitrol, Inc.’s financial statements are no longer publicly available, the Consignee will begin sending to Scotiabank its quarterly and annual audited financial statements within ninety (90) days of the end of each fiscal quarter and its fiscal year-end, as the case may be, and any other information as Scotiabank may reasonably request from time to time.

15.        Period of Agreement. A party may, for any reason, and upon no less than thirty (30) days’ written notice to the other party (the “Termination Notice”) terminate this Agreement. Such termination to be effective as of the date specified in such Termination Notice (such date being the “Termination Date”). On the Termination Date, the Consignee shall re-deliver to Scotiabank all silver held on consignment for Scotiabank by either physically delivering the silver to Scotiabank, or by purchasing the silver from Scotiabank as provided for in paragraphs 9 and 10 hereof and shall pay all other amounts due to Scotiabank hereunder. If an Event of Default should occur prior to the Termination Date specified in any Termination Notice, Scotiabank’s right to terminate this Agreement and make demand hereunder shall take effect immediately.

16.        Events of Default. Upon the occurrence of any one of the following events of default (an “Event of Default”):

            (a)          failure by the Consignee to deliver any amount of silver or pay any purchase price, interest or other amounts in respect of any silver held on consignment hereunder or purchased from Scotiabank, within five (5) Business Days of the date on which it is due hereunder; provided that such five (5) Business Day grace period shall have no application where a Termination Notice pursuant to paragraph 15 above has been given and the Consignee has failed to re-deliver silver or pay amounts due and accruing as required by such paragraph;

            (b)          failure by the Consignee to restore the Maximum Dollar Limit as required by paragraph 2;

            (c)          the Consignee makes any representation or warranty hereunder which is incorrect in any material respect; or breaches any covenant hereunder or fails to perform or observe, in any material respect, any other term or provision contained in this Agreement and any such breach or failure shall

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remain unremedied for fifteen (15) days after written notice thereof has been given by Scotiabank to the Consignee in the manner provided for in paragraph 22 hereof;

            (d)          a material adverse change occurs in the financial condition of the Consignee or Technitrol, Inc. which gives reasonable grounds to conclude, in the sole opinion of Scotiabank, that the Consignee will be unable to perform or observe, in the normal course, its obligations under this Agreement. For the purposes of this Agreement, material adverse change shall mean the occurrence of any event or condition that results in the diminution by at least ten (10) percent in the shareholders’ equity (as determined in accordance with generally accepted accounting principles applicable in the United States) of the Consignee or Technitrol, Inc.;

            (e)          any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or any other proceedings for the relief of debtors and/or creditors are instituted by or against the Consignee or Technitrol, Inc. and, in the case of any such proceeding instituted against the Consignee or Technitrol, Inc. (but not instituted by such party), either such proceeding shall remain undismissed, or unstayed for a period of 30 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against it or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property) shall occur;

            (f)          an order is made or an effective resolution passed for the winding-up or liquidation of the Consignee or Technitrol, Inc., or any steps are taken to enforce any encumbrance on the whole or any material part of the undertaking, property or assets of the Consignee or Technitrol, Inc.;

            (g)          the Consignee or Technitrol, Inc. admits its inability to pay its debts generally; or the Consignee or Technitrol, Inc. fails to pay any of its indebtedness in an aggregate amount of not less than $25,000,000 U.S. when due and such failure continues after any applicable grace period specified in an agreement or instrument relating to such indebtedness;

            (h)          the Consignee or Technitrol, Inc. permits any default under any agreement or instrument relating to its indebtedness, or any other event, to occur and continue after any applicable grace period specified in such agreement or instrument and the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of indebtedness in an aggregate amount of not less than $25,000,000 U.S.;

Scotiabank may terminate this Agreement and, upon making a demand in writing upon the Consignee, will become entitled to have the Consignee deliver to Scotiabank forthwith all silver held by the Consignee on consignment for Scotiabankand shall be entitled to receive payment forthwith from the Consignee of all other amounts due to it hereunder. Delivery of such silver shall be made by either physically delivering the silver to Scotiabank or by paying to Scotiabank the applicable H&H noon price plus the Applicable Premium of the silver then held by the Consignee as of the date and time of termination, and by so paying such amount, the Consignee shall be deemed to have purchased the silver which it was required to re-deliver to Scotiabank. If the Consignee fails to immediately deliver to Scotiabank all such silver held on consignment hereunder, or fails to immediately pay to Scotiabank all other amounts due to it hereunder, Scotiabank may proceed to take such steps as it deems fit, including realizing upon any security it holds in that respect.

17.        Corporate Authority. At the time of acceptance of this Agreement, the Consignee will furnish Scotiabank with a certificate of the Secretary of the Consignee setting out the names and specimen signatures of those officers authorized to sign this Agreement on behalf of the Consignee.

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18.       Authorized Representatives. The Consignee will, from time to time, notify Scotiabank in writing of the names of two or more persons who are to be its authorized representatives for the purposes hereof. Scotiabank will, from time to time, notify the Consignee in writing of the names of two or more persons who are to be its authorized officers for the purposes hereof. The Consignee and Scotiabank shall provide to each other specimen signatures of such persons.

19.       Representations of the Consignee. The Consignee hereby represents and warrants to Scotiabank that it has full power and authority to purchase silver from Scotiabank and to receive and hold silver for Scotiabank on the terms and conditions contained herein; that it has obtained all necessary governmental approvals, if any, to receive and hold and purchase silver; and, that this Agreement has been duly authorized by all necessary corporate action and that the execution, delivery and performance of this Agreement by the Consignee will not result in the breach of its charter, articles of incorporation, by-laws, corporate resolution or other of its constitutional documents.

20.       Representations of Scotiabank. Scotiabank hereby represents and warrants to the Consignee that Scotiabank shall have title free and clear of any encumbrance to all silver to be delivered to the Consignee under this Agreement, and that it has full power and authority to deliver and sell silver to the Consignee on the terms and conditions contained herein.

21.       Covenants of the Consignee.

            (a)          Records: The Consignee shall maintain at its principal place of business records reasonably satisfactory to Scotiabank with respect to the silver delivered by Scotiabank hereunder, and shall permit an authorized officer of Scotiabank, or a representative not necessarily in Scotiabank’s employ, to examine such records at any reasonable time during normal business hours, and without prior notice.

            (b)          Taxes: The Consignee shall pay all taxes, customs duties, assessments and charges lawfully levied, assessed or imposed in respect of the silver held by the Consignee for Scotiabank hereunder or upon the sale of such silver by Scotiabank to the Consignee, except any tax in respect of the income of Scotiabank.

All payments by the Consignee shall be made without set-off or counterclaim and free and clear of any taxes (including value added tax), levies, duties, charges, fees or deductions for withholdings whatsoever.

If, as a result of any requirement, it should be necessary for the Consignee to deduct or withhold any amount from any payment hereunder, then the Consignee shall make an additional payment so that the amount received by Scotiabank after such deduction or withholding equals the amount that would have been received by Scotiabank if there had been no such deduction or withholding requirement.

Evidence satisfactory to Scotiabank of the payment of any tax, etc. referred to in this paragraph will, upon the request of Scotiabank made from time to time, be provided by the Consignee to Scotiabank.

            (c)          Observe Laws: The Consignee shall duly observe and conform to all valid requirements of any governmental authority relative to the holding of silver by the Consignee for Scotiabank hereunder.

            (d)          Negative Covenants: The Consignee covenants and agrees that, until the satisfaction in full of all of the Consignee’s obligations to Scotiabank hereunder, the Consignee will not, directly or

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indirectly, (i) create, incur, assume or suffer to exist any pledge, lien, security interest or other encumbrance of any nature whatsoever, on any of the silver held on consignment hereunder other than any security interest granted to Scotiabank; (ii) sell, lease, transfer or otherwise dispose of all or any portion of the silver held on consignment hereunder, except in the ordinary course of its business; (iii) dissolve or liquidate; or (iv) guarantee or otherwise in any way become or be responsible for obligations of any other person. Notwithstanding the previous sentence, the Consignee may from time to time guarantee the obligations of (1) other entities controlled by Technitrol, Inc., or (2) third parties, in the ordinary course of business which in the aggregate do not exceed $20,000,000 U.S. at any one time; provided, that, the issuance of any such guarantees shall not, individually or in the aggregate, have a material adverse effect on the business or prospects of the Consignee.

22.        Notices. Any notice in writing may be given by being delivered by hand or by being sent by authenticated telex or telecopied transmission in the case of the Consignee to:

AMI Doduco, Inc.
Murray Corporate Park
1003 Corporate Drive
Export, PA 15362
Attention:	Vice-President of Purchasing
Fax No.:	(724) 733-2880
With a copy to:
Technitrol, Inc.
1210 Northbrook Drive, Suite 470
Trevose, PA 19053
Attention:	Chief Financial Officer
Fax No.:	(215) 355-7397
and in the case of Scotiabank to:
The Bank of Nova Scotia
ScotiaMocatta
One Liberty Plaza, 25th Floor
New York, New York 10006
U.S.A.
Attention:	Managing Director
Fax No.:	(212) 912-8415

or to such other address, telex or telecopier number as may hereafter be notified in writing by the Consignee or Scotiabank, respectively and any such notice, if given by hand, authenticated telex or telecopied transmission will be deemed to have been given when delivered or sent.

            If an authorized representative of the Consignee makes an oral request or gives an oral notice hereunder to Scotiabank, whether to an agent or an employee of Scotiabank then Scotiabank shall be entitled to rely on its dealings with the Consignee upon those oral instructions whether by telephone or otherwise. In so relying, neither Scotiabank nor any agent or employee shall incur any liability to the Consignee in acting upon such oral instructions, contemplated hereby and which Scotiabank believes in

- 8 -

good faith to have been given by a person authorized by the Consignee to effect any applicable transaction. In the event there is a discrepancy between the oral instructions and any written confirmation in respect thereof, or in the absence of receiving confirmation, the oral instructions will be deemed to be the controlling instructions.

23.       Deliveries by Consignee. All deliveries of silver to be made hereunder by the Consignee to Scotiabank will be free of all liens, charges, security interests and encumbrances and made in accordance with the directions of Scotiabank or, in the absence of such directions, in a commercially acceptable manner to Scotiabank at its address set out in paragraph 22 hereunder. The Consignee shall bear the cost of such delivery and shall bear the risk of loss of or damage to such silver until delivery is made by it to Scotiabank at which time such risk shall pass to Scotiabank.

24.       Assignment. The Consignee may not assign or transfer any of its rights or obligations hereunder without the prior written consent of Scotiabank, which consent shall not be unreasonably withheld. Scotiabank may at any time assign or transfer all or any of its rights and/or obligations hereunder, provided such assignment or transfer is to its successors in title or to a wholly-owned subsidiary or a branch of Scotiabank.

25.       Laws and Waiver of Jury Trial. This Agreement will be interpreted and governed in all respects by the laws of the State of New York, and each party hereby irrevocably and unconditionally waives any and all rights to trial by jury with respect to any legal proceeding arising out of or relating to this Agreement.

26.       Amendments. This Agreement may only be amended by a document signed by the Consignee and Scotiabank.

27.       Judgment Currency. All payments made under this Agreement, or resulting from any judgment relating to this Agreement, shall be made in U.S. Dollars.

28.       On Site Audit. The Consignee shall permit an authorized officer of Scotiabank or a representative who may not necessarily be in Scotiabank’s employ, to attend, at any reasonable time during normal business hours and upon five (5) Business Days’ prior notice, at any of the facilities of the Consignee upon which Scotiabank’s silver is held on consignment, in order to carry out an audit of such silver and verify that such silver continues to be held at such site(s) and in the same form as when delivered to the Consignee; provided, however, that Scotiabank shall indemnify and hold harmless the Consignee for any acts or omissions of any such officer or representative.

29.       Force Majeure. If Scotiabank is prevented from or hindered in making delivery of the silver or the making of delivery is delayed by reason of force majeure (which shall be deemed for this purpose to include war, civil commotion, act of terrorism, hijacking, strike, walkout, industrial dispute, fire, explosion, storm, tempest, flood, act or omission of any governmental, licensing or other similar body or of a person or body for the time being exercising the power and authority of such body (whether in Canada, the United States of America or elsewhere) or any further cause not within the direct control of Scotiabank) Scotiabank shall be under no liability whatsoever in respect thereof and the time for delivery by Scotiabank shall be extended for a period equal to that during which delivery is so prevented, hindered or delayed; however, notwithstanding the foregoing, Scotiabank may, if it chooses, by notice in writing given to the Consignee, advise that it will not make the delivery affected by the force majeure.

            Scotiabank shall not be liable for any loss arising on or in connection with any lack of delivery of silver to the Consignee hereunder as a result of moratorium, currency restrictions or changes thereof.

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30.       Determination. Scotiabank shall have the right to determine at any time, and in its discretion reasonably exercised, as to whether any event, circumstance, or thing envisaged in this Agreement is or would be “material” or “adverse”, as such terms are used herein.

31.       No Obligation to Deliver or Sell. Execution of this Agreement shall not obligate Scotiabank to deliver or sell silver pursuant to any request that it may receive from the Consignee; nor does it obligate the Consignee to request delivery or purchase of silver from Scotiabank. The Consignee shall have no automatic right to obtain the delivery of silver or purchase silver hereunder despite making a delivery or purchase request, as the case may be, and notwithstanding the occurrence or non-occurrence of an Event of Default hereunder. Scotiabank shall have complete discretion to refuse any delivery or purchase request at any time until actual delivery or purchase is made of the silver requested without giving any reason for such refusal and Scotiabank shall incur no liability in respect of any such refusal.

32.       Other Agreements. This Agreement supersedes and shall replace the Letter Agreement between the parties dated July 18, 1997, as it may have been amended, which agreement shall terminate and cease to be of effect, with silver held thereunder constituting silver held on consignment under this Agreement.

            If the foregoing terms and conditions are satisfactory, please so indicate by executing on the enclosed copy of this letter the form of acceptance and returning it to us on or before November 9, 2007, failing which this offer will expire.

			Yours truly,
ACCEPTED:			THE BANK OF NOVA SCOTIA
Dated: November 26, 2007.
			By: /s/ Authorized Officer
AMI DODUCO, INC.			Authorized Officer
By: /s/ Drew A. Moyer
	Name:	Drew A. Moyer	By: /s/ Zoran Miljkovic
	Title:	President
			Authorized Officer
By: /s/ Edward Prajzner
	Name:	Edward Prajzner
	Title:	Vice President

ACKNOWLEDGED AND AGREED INCLUDING, WITHOUT LIMITATION, AS TO PARAGRAPH 11 HEREOF.

TECHNITROL, INC.

By:  /s/ Drew A. Moyer

Name: Drew A. Moyer

Title: Sr. VP & CFO

EX-10.18(3)

Exhibit 10.18-3

The Bank of Nova Scotia
One Liberty Plaza
New York, NY 10006

Attn: Managing Director
Phone: (212) 225-6200
Fax: (212) 225-6248

GUARANTEE

FOR VALUABLE CONSIDERATION, the undersigned hereby absolutely and unconditionally guarantees to The Bank of Nova Scotia and its affiliates (the “Bank”) the punctual payment and performance, when due, whether by acceleration or otherwise, of each and every obligation to the Bank, of each and everyone of AMI Doduco, Inc., AMI Doduco Espana, S.L. and AMI Doduco GmbH (individually a “Customer” and collectively the “Customers”) arising under transactions with the Bank or otherwise (“Obligations”); agrees that it shall pay its obligations hereunder without deduction or set off; agrees that its obligations hereunder shall not be released by any amendment to or waiver of any rights under any agreement between a Customer or the Customers and the Bank or otherwise or any release of any security granted for any Obligations, or by any bankruptcy or similar proceeding in respect of the undersigned, a Customer, the Bank or any party to any security document or by the invalidity, illegality or unenforceability of any Obligations; agrees that the Bank may enforce its rights hereunder without first exhausting any other rights and remedies it may have and shall be entitled to payment from the undersigned for all expenses including legal expenses, incurred by the Bank in enforcing its rights hereunder; agrees that the liability of the undersigned to the Bank shall be joint and several with any other guarantors of the Obligations; agrees that this Guarantee shall continue to be effective or shall be reinstated if at any time payment of any sum hereby guaranteed is rendered void or ordered to be returned by the Bank upon the bankruptcy of a Customer or otherwise, all as though such payment had not been made; agrees that this Guarantee and any controversies and actions arising therefrom shall be governed by New York law (without regard to the conflicts of law provisions thereof); agrees that the Bank is hereby granted as security a lien in and to and right of set off against all cash and other property of the undersigned held by the Bank; and agrees that the Bank may, without the consent of or notice to the undersigned, and without impairing the obligations of the undersigned hereunder, realize upon security of each and every Customer or the undersigned in any manner, and apply amounts obtained thereby to the payment of any Obligations. The undersigned may terminate this Guarantee effective thirty days after the Bank receives written notice of the termination at the address or facsimile number set forth above. The obligations of the undersigned hereunder shall continue, irrespective of such termination, in respect of Obligations which arise before the effective date of the termination.

This Guarantee shall supersede and replace the undersigned’s guarantee dated July 6, 2000 in favour of the Bank (the “Prior Guarantee”) and the undersigned acknowledges that any Obligation arising prior to the date of this Guarantee and which was guaranteed under the Prior Guarantee shall continue to be guaranteed by the undersigned under this Guarantee.

Name & Address of Guarantor		By:	/s/ Drew A. Moyer
Technitrol, Inc.			Authorized Signatory of Guarantor
1210 Northbrook Dr. – Suite. 470
Trevose, PA 19053		Name:		Drew A. Moyer
		Title:		Sr. VP & CFO
Date:	9/8/06

EX-21

Exhibit 21

Subsidiaries of the Registrant

Technitrol, Inc., which has no parent, has the following subsidiaries:

Name	Incorporation	Percent Owned
AMI Doduco Components B.V.	Netherlands	100%
AMI Doduco España, S. L.	Spain	100%
AMI Doduco GmbH	Germany	100%
AMI Doduco Holding GmbH	Germany	100%
AMI Doduco, Inc.	Pennsylvania	100%
AMI Doduco Investors (DE), LLC	Delaware	100%
AMI Doduco LLC	Delaware	100%
AMI Doduco (Mexico), S. de R. L. de C. V.	Mexico	100%
AMI Doduco Nederland B.V.	Netherlands	100%
AMI Doduco (PR), LLC	Delaware	100%
AMI Doduco Singapore Holding Pte. Ltd.	Singapore	100%
AMI Doduco (Tianjin) Electrical Contacts Manufacturing Co., Ltd.	People’s Republic of China	100%
Boothbay Pte. Ltd.	Singapore	100%
CST Electronics Co., Ltd.	Hong Kong	100%
Dongguan Pulse Electronics Co., Ltd.	People’s Republic of China	100%
Electro Componentes Mexicana S. A. de C. V.	Mexico	100%
Electro Corporacion Mexicana S. A. de C. V.	Mexico	100%
Eraplast S.A.R.L.	West Samoa	100%
Full Rich (Ning Bo) Electronic co., Ltd.	People’s Republic of China	100%
Full Rise Electronic Co., Ltd. (Fuliwang)	People’s Republic of China	71%
Full Rise Electronic Co., Ltd. (Hong Kong)	Hong Kong	71%
Full Rise Electronic Co., Ltd. (Taiwan)	Taiwan	71%
Maxtop (Ning Bo) Telecom Electronic Co., Ltd.	People’s Republic of China	71%
MCS Holdings, Inc.	Delaware	100%
Mianyang Pulse Electronics Co., Ltd.	People’s Republic of China	100%
Pulse Canada Ltd.	Canada	100%
Pulse Components GmbH	Germany	100%
Pulse Components Ltd.	Hong Kong	100%
Pulse Electronics (Europe) Ltd.	United Kingdom	100%
Pulse Electronics Ltd.	Hong Kong	100%
Pulse Electronics (Shenzhen) Co., Ltd.	People’s Republic of China	100%
Pulse Electronics (Singapore) Pte. Ltd.	Singapore	100%
Pulse Elektronik Sanay Ticaret L.S.	Turkey	100%
Pulse Engineering, Inc.	Delaware	100%
Pulse Finland Oy	Finland	100%
Pulse GmbH & Co. KG	Germany	100%
Pulse Italy S.r.L.	Italy	100%
Pulse LK	United Kingdom	100%
Pulse Netherland BV	Netherlands	100%
Pulse PowerTrain GmbH & Co. KG	Germany	100%
Pulse S.A.R.L.	France	100%
Pulse (Suzhou) Wireless Products Co., Ltd.	People’s Republic of China	100%
Smart Jumbo Industries Limited	Hong Kong	100%
Technitrol Delaware, Inc.	Delaware	100%
Technitrol Singapore Holdings Pte. Ltd.	Singapore	100%
TNL Singapore Components Holdings Pte. Ltd.	Singapore	100%
Tunera S.A.R.L.	Tunisia	100%

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

The Board of Directors
Technitrol, Inc.:

We consent to the incorporation by reference in the registration statement (Nos. 033-35334, 033-63203, 333-55751, 333-94073, 333-64068, 333-64060, and 333-130013) on Form S-8 of Technitrol, Inc. of our reports dated February 25, 2008, with respect to the consolidated balance sheets of Technitrol, Inc. and subsidiaries as of December 28, 2007 and December 29, 2006, and the related consolidated statements of operations, cash flows, and changes in shareholders’ equity for each of the years in the three-year period ended December 28, 2007, and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of December 28, 2007, which reports appear in the December 28, 2007 annual report on Form 10-K of Technitrol, Inc. Our report refers to the Company’s adoption of Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109, Statement of Financial Accounting Standard No. 123(R), Share-Based Payment, Statement of Financial Accounting Standard No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, and Financial Accounting Standards Board Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations.

/s/ KPMG LLP

Philadelphia, Pennsylvania
February 25, 2008

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
pursuant to Rule 13a-14(a)/15d-14(a)

I, James M. Papada, III, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Technitrol, Inc. (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
		a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
		b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
		c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
		a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
		b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2008	/s/James M. Papada, III
	James M. Papada, III
	Chairman and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
pursuant to Rule 13a-14(a)/15d-14(a)

I, Drew A. Moyer, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Technitrol, Inc. (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
		a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
		b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
		c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
		a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
		b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2008	/s/Drew A. Moyer
	Drew A. Moyer
	Senior Vice President and Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code

I, James M. Papada, III, Chief Executive Officer of Technitrol, Inc., certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	the Annual Report on Form 10-K for the fiscal year ended December 28, 2007 (the “Periodic Report”), which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2)	information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Technitrol, Inc.

Dated: February 25, 2008
	/s/James M. Papada, III
	James M. Papada, III

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Technitrol, Inc., and will be retained by Technitrol, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code

I, Drew A. Moyer, Chief Financial Officer of Technitrol, Inc., certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	the Annual Report on Form 10-K for the fiscal year ended December 28, 2007 (the “Periodic Report”), which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2)	information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Technitrol, Inc.

Dated: February 25, 2008
	/s/Drew A. Moyer
	Drew A. Moyer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Technitrol, Inc., and will be retained by Technitrol, Inc., and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.