8-K/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 5, 2006

K-TRON INTERNATIONAL, INC.

(Exact Name of Registrant Specified in Charter)

New Jersey	0-9576	22-1759452
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
Routes 55 & 553 P.O. Box 888 Pitman, New Jersey		08071-0888
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (856)589-0500

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE:

     This Amendment No. 1 amends and restates in its entirety Item 9.01 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 5, 2006 in order to file the financial statements and pro forma financial information required by Item 9.01 of Form 8-K with respect to the Registrant’s acquisition of Premier Pneumatics, Inc., a Kansas corporation (“Premier”).

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

     The audited consolidated financial statements of Premier and its subsidiary for the years ended December 31, 2005 and December 31, 2004 are attached hereto as Exhibit 99.1. The unaudited interim consolidated balance sheet of Premier and its subsidiary as of September 30, 2006 and the unaudited interim consolidated statements of income and cash flows of Premier and its subsidiary for the nine month periods ended September 30, 2006 and September 30, 2005 are attached hereto as Exhibit 99.2.

(b) Pro Forma Financial Information

     The unaudited pro forma condensed consolidated statements of income of K-Tron International, Inc. and Premier for the fiscal year ended December 31, 2005 and the nine month period ended September 30, 2006 and the unaudited pro forma condensed consolidated balance sheet of K-Tron International, Inc. and Premier as of September 30, 2006 are attached hereto as Exhibit 99.3.

(d) Exhibits

Exhibit No.	Description
23.1	Consent of KPMG LLP.
99.1	The audited consolidated financial statements of Premier Pneumatics, Inc. and its subsidiary for the years ended December 31, 2005 and December 31, 2004.
99.2	The unaudited interim consolidated balance sheet of Premier Pneumatics, Inc. and its subsidiary as of September 30, 2006 and the unaudited interim consolidated statements of income and cash flows of Premier Pneumatics, Inc. and its subsidiary for the nine month periods ended September 30, 2006 and September 30, 2005.
99.3	The unaudited pro forma condensed consolidated statements of income of K-Tron International, Inc. and Premier Pneumatics, Inc. for the fiscal year ended December 31, 2005 and the nine month period ended September 30, 2006 and the unaudited pro forma condensed consolidated balance sheet of K-Tron International, Inc. and Premier Pneumatics, Inc. as of September 30, 2006.

- 2 -

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

K-TRON INTERNATIONAL, INC.
By:	/s/ Edward B. Cloues, II
	Edward B. Cloues, II
	Chairman of the Board and Chief Executive Officer

Dated: December 15, 2006

EXHIBIT INDEX

Exhibit No.	Description
23.1	Consent of KPMG LLP.
99.1	The audited consolidated financial statements of Premier Pneumatics, Inc. and its subsidiary for the years ended December 31, 2005 and December 31, 2004.
99.2	The unaudited interim consolidated balance sheet of Premier Pneumatics, Inc. and its subsidiary as of September 30, 2006 and the unaudited interim consolidated statements of income and cash flows of Premier Pneumatics, Inc. and its subsidiary for the nine month periods ended September 30, 2006 and September 30, 2005.
99.3	The unaudited pro forma condensed consolidated statements of income of K-Tron International, Inc. and Premier Pneumatics, Inc. for the fiscal year ended December 31, 2005 and the nine month period ended September 30, 2006 and the unaudited pro forma condensed consolidated balance sheet of K-Tron International, Inc. and Premier Pneumatics, Inc. as of September 30, 2006.

EX-23.1

KPMG LLP
Suite 1000
1000 Walnut Street
Kansas City, MO 64106-2162

Consent of Independent Auditor

The Board of Directors
K-Tron International, Inc.:

We consent to the incorporation by reference in the registration statement (No. 333-136299) on Form S-8 of K-Tron International, Inc. of our report dated March 31, 2006, with respect to the consolidated balance sheets of Premier Pneumatics, Inc. and subsidiary as of December 31, 2005 and 2004, and the related consolidated statements of earnings, stockholder’s equity, and cash flows for the years then ended, which report appears in the Form 8-K/A (Amendment No. 1) of K-Tron International, Inc. dated October 5, 2006.

Kansas City, Missouri
December 15, 2006

KPMG LLP, a U.S. limited liability partnership, is the U.S.
member firm of KPMG International, a Swiss cooperative.

EX-99.1

PREMIER PNEUMATICS, INC. AND SUBSIDIARY

Consolidated Financial Statements

December 31, 2005 and 2004

(With Independent Auditors’ Report Thereon)

Independent Auditors’ Report

The Board of Directors
Premier Pneumatics, Inc.:

We have audited the accompanying consolidated balance sheets of Premier Pneumatics, Inc. and subsidiary (the Company) as of December 31, 2005 and 2004, and the related consolidated statements of earnings, stockholder’s equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Premier Pneumatics, Inc. and subsidiary as of December 31, 2005 and 2004, and the results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

Kansas City, Missouri
March 31, 2006

PREMIER PNEUMATICS, INC. AND SUBSIDIARY

Consolidated Balance Sheets

December 31, 2005 and 2004

Assets		2005	2004
Current assets:
Cash and cash equivalents	$	2,187,767	2,000,815
Receivables, less allowance for bad debts of $128,916 in 2005 and $139,059 in 2004		2,622,940	1,633,592
Inventories		1,012,134	626,620
Prepaid expenses		36,791	101,566
Note receivable from stockholder		791,496	—
Total current assets		6,651,128	4,362,593
Property, plant, and equipment, at cost:
Land and buildings		1,535,712	1,528,830
Machinery, tools, and equipment		5,229,287	5,137,344
Airplane		2,399,062	2,340,975
Total property, plant, and equipment		9,164,061	9,007,149
Less accumulated depreciation		5,845,995	5,415,838
Net property, plant, and equipment		3,318,066	3,591,311
Note receivable from stockholder		—	1,041,479
Total assets	$	9,969,194	8,995,383
Liabilities and Stockholder’s Equity
Current liabilities:
Current portion of note payable	$	147,250	147,250
Accounts payable		766,928	491,571
Commissions payable		484,820	270,864
Advance billings and customer deposits		822,912	687,699
Accrued compensation, benefits, and related expenses		855,059	203,747
Accrued taxes and other expenses		453,979	331,776
Total current liabilities		3,530,948	2,132,907
Note payable		1,828,354	1,975,604
Total liabilities		5,359,302	4,108,511
Stockholder’s equity:
Class A common stock, $1 par value. Authorized 500,000 shares; issued and outstanding 300,000 shares at December 31, 2005 and 2004		300,000	300,000
Additional paid-in capital		159,250	159,250
Retained earnings		4,150,642	4,427,622
Total stockholder’s equity		4,609,892	4,886,872
Total liabilities and stockholder’s equity	$	9,969,194	8,995,383

See accompanying notes to consolidated financial statements.

2

PREMIER PNEUMATICS, INC. AND SUBSIDIARY

Consolidated Statements of Earnings

Years ended December 31, 2005 and 2004

	2005			2004
Net sales	$	18,893,264			14,217,106
Cost of sales		12,363,888			8,925,730
Gross profit		6,529,376			5,291,376
Selling, general, and administrative expenses		5,034,428			4,168,376
Operating income		1,494,948			1,123,000
Interest expense, net		(11,835	)		(24,211	)
Other income, net		39,907			17,493
Net earnings	$	1,523,020			1,116,282

See accompanying notes to consolidated financial statements.

3

PREMIER PNEUMATICS, INC. AND SUBSIDIARY

Consolidated Statements of Stockholder’s Equity

Years ended December 31, 2005 and 2004

	Class A		Additional					Total
	common		paid-in		Retained			stockholder’s
	stock		capital		earnings			equity
Balance at December 31 , 2003	$	300,000		159,250		4,512,305			4,971,555
Net earnings		—		—		1,116,282			1,116,282
Distributions to stockholders		—		—		(1,200,965	)		(1,200,965	)
Balance at December 31, 2004		300,000		159,250		4,427,622			4,886,872
Net earnings		—		—		1,523,020			1,523,020
Distributions to stockholders		—		—		(1,800,000	)		(1,800,000	)
Balance at December 31 , 2005	$	300,000		159,250		4,150,642			4,609,892

See accompanying notes to consolidated financial statements.

4

PREMIER PNEUMATICS, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

Years ended December 31, 2005 and 2004

	2005			2004
Cash flows from operating activities:
Net earnings	$	1,523,020			1,116,282
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation		430,157			433,915
Gain on sale of property, plant, and equipment		—			(600	)
Decrease (increase) in receivables		(989,348	)		173,161
Decrease (increase) in inventories		(385,514	)		165,786
Decrease (increase) in prepaid expenses		64,775			(55,899	)
Increase in accounts payable		275,357			45,026
Increase (decrease) in commissions payable		213,956			(160,085	)
Increase in advance billings and customer deposits		135,213			175,458
Increase (decrease) in other accrued liabilities		773,515			(26,784	)
Total adjustments		518,111			749,978
Cash provided by operating activities		2,041,131			1,866,260
Cash flows from investing activities:
Additions to property, plant, and equipment, net		(156,912	)		(2,456,862	)
Proceeds from sale of property, plant, and equipment		—			600
Collection of note receivable from stockholder		249,983			335,355
Cash provided by (used in) investing activities		93,071			(2,120,907	)
Cash flows from financing activities:
Distribution to stockholder		(1,800,000	)		(1,200,965	)
Repayment of borrowings		(147,250	)		(85,896	)
Borrowings		—			2,208,750
Cash provided by (used in) financing activities		(1,947,250	)		921,889
Increase in cash and cash equivalents		186,952			667,242
Cash and cash equivalents at beginning of year		2,000,815			1,333,573
Cash and cash equivalents at end of year	$	2,187,767			2,000,815
Supplemental cash disclosure:
Interest expense paid during the year	$	103,814			58,833

See accompanying notes to consolidated financial statements.

5

PREMIER PNEUMATICS, INC.  AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(1) Summary of Significant Accounting Policies

(a)	Description of Business and Basis of Presentation
	Premier Pneumatics, Inc. and subsidiary (the Company) manufacture pneumatic conveying components and design complete materials handling systems. The Company’s customers range in size from individually owned firms to many Fortune 500 companies. These companies are involved in industries such as plastics, food, chemicals, and mineral processing. For the years ended December 31, 2005 and 2004, sales to companies in the plastics industry have represented over 50% of total sales. Sales are generally concentrated in the United States of America, although the Company does have export sales throughout the world.
	The consolidated financial statements include the financial statements of Premier Pneumatics, Inc. and its wholly owned subsidiary, Mariposa Group, LLC. All intercompany transactions have been eliminated.
(b)	Allowance for Doubtful Accounts
	The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience and specific identification. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
(c)	Inventories
	Inventories are valued on the last-in, first-out (LIFO) method. Had the first-in, first-out (FIFO) method been used, net earnings would have been $20,000 higher and $312,000 lower than reported in the accompanying consolidated financial statements for the years ended December 31, 2005 and 2004, respectively.
	The components of inventories at December 31, 2005 and 2004 are as follows:

	2005		2004
Raw materials	$	1,139,418		1,003,164
Work-in-process		750,381		155,831
Finished goods		337,335		662,625
Inventories at FIFO		2,227,134		1,821,620
Less LIFO reserve		1,215,000		1,195,000
Inventories at FIFO	$	1,012,134		626,620

During 2004, inventory quantities were reduced. This reduction resulted in the liquidation of LIFO inventory layers carried at lower costs than prevailed in prior years. This reduction resulted in decreasing the charge to cost of goods sold in 2004, and thus reducing cost of goods sold by

(Continued)

6

PREMIER PNEUMATICS, INC.  AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

	approximately $447,000 below the amount that would have resulted from liquidating inventory recorded at December 31, 2004 prices.
(d)	Property, Plant, and Equipment
	Depreciation of plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from 5 to 25 years on buildings and improvements, range from 3 to 15 years on machinery, tools, and equipment, and is 15 years on the airplane. Expenditures for maintenance and repairs are charged to expense as incurred.
	Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from the accounts. Gains and losses on dispositions are reflected in current operations, except that no gain or loss on disposition is recognized with respect to assets exchanged for similar assets.
(e)	Research and Development Costs
	Costs incurred in the creation and start-up of new products or changes of existing products are charged to expense as incurred. The Company charged approximately $45,000 and $121,000 of research and development costs to operations during the years ended December 31, 2005 and 2004, respectively.
(f)	Income Taxes
	The Company has adopted Subchapter S corporate status. Therefore, the Company has no income tax liability, as the taxable income of the Company is included in the taxable income of its stockholder.
(g)	Revenue Recognition
	Revenue is recognized at the time the product is shipped. Advance billings and customer deposits represent amounts paid to the Company from customers in advance of the shipment of the product.
(h)	Product Warranty
	The Company provides for the estimated cost of product warranties at the time of sale based upon historical experience, or, in some cases, when specific warranty problems are encountered. Should actual product failure rates or repair costs differ from the Company’s current estimates, revisions to the estimated warranty liability would be required. The Company’s warranty accrual at December 31, 2005 and 2004 totaled $154,500 and $103,500, respectively.
(i)	Statements of Cash Flows
	For purposes of the consolidated statements of cash flows, the Company considers interest-bearing deposits with an original maturity of three months or less to be cash equivalents.
(j)	Use of Estimates
	The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date

(Continued)

7

PREMIER PNEUMATICS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(2)	Notes Payable to Bank
	The Company has a short-term unsecured revolving credit arrangement that renews annually with a commercial bank allowing borrowings of up to $1,000,000 at the prime rate. There were no borrowings outstanding under the agreement during the years ended December 31, 2005 and 2004.
	In 2004, the Company created a wholly owned subsidiary, which entered into a five-year loan agreement on May 4, 2004 with a financial institution in the amount of $2,208,750, with interest at a rate of LIBOR plus 1.75% (6.01% at December 31, 2005). The loan is due in monthly installments of $12,271 through maturity in May 2009, upon which the remaining outstanding principal is due. The proceeds of the loan were used for the purchase of an aircraft for use in the Company’s selling efforts. The loan is secured with the aircraft.
	The aggregate maturities of the note payable subsequent to December 31, 2005 are as follows:

Year ended December 31:
2006	$	147,250
2007		147,250
2008		147,250
2009		1,533,854
Total	$	1,975,604

	The agreement provides that the Company must meet certain covenants with respect to tangible net worth and debt. As of December 31, 2005, the Company was in compliance with these covenant requirements.
(3)	Profit Sharing Plan
	The Company has a noncontributory employee profit sharing plan covering all employees. The annual contribution is determined at the discretion of the board of directors. Plan proceeds are distributed to participants upon death, retirement, or termination of employment under available plan options. Contributions by the Company were $310,000 and $156,000 for the years ended December 31, 2005 and 2004, respectively.

8

PREMIER PNEUMATICS, INC.  AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

	Effective January 1, 2005, the Company adopted a phantom stock plan (the Plan) whereby the Company will grant members of senior management (the participants) units in the Plan. In addition, the Plan allows for the participants to contribute a portion of the participants’ annual incentive bonus to the Plan in exchange for additional units. Units granted under the Plan will vest immediately with an exercise price equal to the book value of the Company as of the previous fiscal year-end. Units issued under the Plan will be settled in cash at net book value upon termination of the participants caused by death, retirement, or other unforeseeable events and at fair value upon a change of control. The maximum number of units authorized to be issued is 33,000 units. To date, the Company has granted 29,815 units issued and outstanding to the participants under the provisions of the Plan. At December 31, 2005, the liability related to the Company’s obligation for the Plan totaled approximately $458,000 and is included in accrued payroll, taxes, and other expenses in the accompanying consolidated balance sheets.
	In December 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004), Share-Based Payment, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. This Statement is a revision to Statement No. 123 and supersedes Accounting Principle Board Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance. This Statement will require measurement of the cost of employee services received in exchange for stock compensation based on the grant-date fair value of the employee stock options. Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The adoption of this statement will not have a significant effect on the Company’s consolidated financial statements.
(4)	Related Party Transaction
	During 2003, the Company loaned $1,376,834 to a stockholder of the Company. During 2005 and 2004, $249,983 and $335,355 was repaid to the Company, respectively. As of December 31, 2005, $791,496 was outstanding on the note. All outstanding principal and interest is due on November 30, 2006. The note bears interest at an annual rate of 1.50%.

9

EX-99.2

PREMIER PNEUMATICS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2006
(UNAUDITED)

(IN THOUSANDS)

CURRENT ASSETS
CASH & CASH EQUIVALENTS	$	2,436
ACCOUNTS RECEIVABLE, NET		2,354
INVENTORIES, NET		1,287
NOTE RECEIVABLE FROM STOCKHOLDER		519
PREPAID EXPENSES		53
TOTAL CURRENT ASSETS		6,649
PROPERTY, PLANT AND EQUIPMENT, NET		3,144
TOTAL ASSETS	$	9,793
LIABILITIES AND STOCKHOLDER’S EQUITY
ACCOUNTS PAYABLE	$	848
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES		3,776
TOTAL CURRENT LIABILITIES		4,624
STOCKHOLDER’S EQUITY
COMMON STOCK		300
ADDITIONAL PAID IN CAPITAL		159
RETAINED EARNINGS		4,710
TOTAL STOCKHOLDER’S EQUITY		5,169
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	9,793

SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.

PREMIER PNEUMATICS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(UNAUDITED)

(IN THOUSANDS)

	2006			2005
REVENUES	$	16,380		$	12,789
COST OF REVENUES		10,465			8,400
GROSS PROFIT		5,915			4,389
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		4,185			3,180
OPERATING INCOME		1,730			1,209
INTEREST (INCOME) EXPENSE, NET		(49	)		8
NET INCOME	$	1,779		$	1,201

SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.

PREMIER PNEUMATICS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(UNAUDITED)

(IN THOUSANDS)

	2006			2005
OPERATING ACTIVITIES:
NET INCOME	$	1,779		$	1,201
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY (USED IN ) OPERATING ACTIVITIES:
DEPRECATION AND AMORTIZATION		319			323
CHANGES IN ASSETS AND LIABILITIES:
ACCOUNTS RECEIVABLE, NET		269			(5	)
INVENTORIES, NET		(275	)		(726	)
PREPAID EXPENSES		(16	)		(9	)
ACCOUNTS PAYABLE		81			291
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES		1,160			1,330
NET CASH PROVIDED BY OPERATING ACTIVITIES		3,317			2,405
INVESTING ACTIVITIES:
CAPITAL EXPENDITURES		(145	)		(132	)
COLLECTION OF NOTE RECEIVABLE FROM STOCKHOLDER		272			250
NET CASH PROVIDED BY INVESTING ACTIVITIES		127			118
FINANCING ACTIVITIES:
PRINCIPAL PAYMENTS ON LONG-TERM DEBT		(1,976	)		(110	)
DISTRIBUTIONS TO STOCKHOLDER		(1,220	)		(700	)
NET CASH USED IN FINANCING ACTIVITIES		(3,196	)		(810	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		248			1,713
CASH AND CASH EQUIVALENTS
BEGINNING OF PERIOD		2,188			2,001
END OF PERIOD	$	2,436		$	3,714

SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.

PREMIER PNEUMATICS, INC. AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements

September 30, 2006
(Unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

NATURE OF BUSINESS

Premier Pneumatics, Inc. and subsidiary (“Premier”) manufacture pneumatic conveying components and design complete materials handling systems. Premier’s customers range in size from individually owned firms to many Fortune 500 companies. These companies are involved in industries such as plastics, food, chemicals and mineral processing. Sales are generally concentrated in the United States of America, although the Company does have export sales throughout the world.

BASIS OF PRESENTATION

The unaudited consolidated financial statements include the financial statements of Premier Pneumatics, Inc. and its wholly-owned subsidiary, Mariposa Group, LLC. All intercompany transactions have been eliminated.

INTERIM FINANCIAL INFORMATION

The unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and, in management’s opinion, include all adjustments necessary for a fair presentation of results for the periods presented.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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 results could differ from those estimates.

ACQUISITION OF PREMIER PNEUMATICS, INC. BY K-TRON INTERNATIONAL, INC.

On October 5, 2006, K-Tron International, Inc. (“K-Tron”), through its indirect, wholly-owned subsidiary Premier Pneumatics, Inc., a Delaware corporation (“Acquisition Co.”), acquired all of the outstanding capital stock (the “Premier Stock”) of Premier Pneumatics, Inc., a Kansas corporation (“Premier”), from the shareholder (“Shareholder”) of Premier. The acquisition of

the Premier Stock was made pursuant to a Stock Purchase Agreement (the “Premier Stock Purchase Agreement”) by and among Acquisition Co. and the Shareholder.

The purchase price paid to the Shareholder on October 5, 2006 for the acquisition of the Premier Stock was $27.565 million. The Shareholder expects to pay K-Tron an estimated post-closing adjustment of $111 thousand based on Premier’s net working capital on the closing date.

EX-99.3

K-Tron International, Inc. and Subsidiaries
Notes to Pro Forma Condensed Consolidated Financial Statements
(Unaudited)

On October 5, 2006, K-Tron International, Inc. (“K-Tron”), through its indirect, wholly- owned subsidiary Premier Pneumatics, Inc., a Delaware corporation (“Acquisition Co.”), acquired all of the outstanding capital stock (the “Premier Stock”) of Premier Pneumatics, Inc., a Kansas corporation (“Premier”), from the shareholder (“Shareholder”) of Premier. The acquisition of the Premier Stock was made pursuant to a Stock Purchase Agreement (the “Premier Stock Purchase Agreement”) by and among Acquisition Co. and the Shareholder.

Prior to the October 5, 2006 acquisition of Premier, Premier’s wholly-owned subsidiary, Mariposa Group, LLC (“Mariposa”), was transferred to the Shareholder.

The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2006 gives effect to the acquisition of Premier by K-Tron as of such date. The unaudited pro forma condensed consolidated statements of income for the fiscal year ended December 31, 2005 and the nine months ended September 30, 2006 give effect to the acquisition of Premier by K-Tron as if it had occurred on January 2, 2005 and January 1, 2006. The pro forma information is based on the historical consolidated financial statements of Premier and K-Tron, and the assumptions and adjustments in the accompanying notes to the unaudited pro forma condensed consolidated financial statements give effect to the acquisition as of the beginning of each respective period and under the purchase method of accounting.

The unaudited pro forma condensed consolidated financial statements are presented for informational purposes only and should not be construed to be indicative of the actual financial position or results of operations of the combined companies on the dates indicated or of those results that may be obtained in the future. The unaudited pro forma condensed consolidated financial statements reflect Premier’s balance sheet as of September 30, 2006 and its consolidated statements of income for the year ended December 31, 2005 and nine months ended September 30, 2006.

The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto of K-Tron as filed with the Securities and Exchange Commission on Form 10-K for the fiscal year ended December 31, 2005 and the audited consolidated financial statements and notes thereto of Premier filed herein.

K-TRON INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FISCAL YEAR ENDED DECEMBER 31, 2005
(UNAUDITED)

(IN THOUSANDS EXCEPT EARNINGS PER SHARE)

	AS REPORTED				PRO FORMA				PRO FORMA
	K-TRON		PREMIER		ADJUSTMENTS				CONSOLIDATED
REVENUES	$	118,940	$	18,933	$	1,964		(9)	$	139,837
COST OF REVENUES		68,944		12,364		67		(9)		81,375
GROSS PROFIT		49,996		6,569		1,897				58,462
OPERATING EXPENSES
SELLING, GENERAL AND ADMINISTRATIVE		34,330		5,034		1,897		(9)		40,717
						(90	)	(1)
						222		(5)
						(676	)	(10)
RESEARCH AND DEVELOPMENT		2,449		0						2,449
		36,779		5,034		1,353				43,166
OPERATING INCOME		13,217		1,535		544				15,296
INTEREST EXPENSE, NET		1,016		12		1,772		(6)		2,696
						(104	)	(1)
INCOME BEFORE INCOME TAXES		12,201		1,523		(1,124	)			12,600
INCOME TAX PROVISION		4,919				609		(7)		5,078
						(450	)	(8)
NET INCOME	$	7,282	$	1,523	$	(1,284	)		$	7,521
BASIC EARNINGS PER SHARE	$	2.85							$	2.94
DILUTED EARNINGS PER SHARE	$	2.68							$	2.77
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (BASIC)		2,555								2,555
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (DILUTED)		2,719								2,719

SEE NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

K-TRON INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2006
(UNAUDITED)

(IN THOUSANDS EXCEPT EARNINGS PER SHARE)

	AS REPORTED					PRO FORMA				PRO FORMA
	K-TRON		PREMIER			ADJUSTMENTS				CONSOLIDATED
REVENUES	$	103,761	$	16,380		$	1,800		(9)	$	121,941
COST OF REVENUES
GROSS PROFIT		60,426		10,465			209		(9)		71,100
		43,335		5,915			1,591				50,841
OPERATING EXPENSES
SELLING, GENERAL AND ADMINISTRATIVE		28,218		4,185			1,591		(9)		33,504
							(71	)	(1)
							173		(5)
							(592	)	(10)
RESEARCH AND DEVELOPMENT
		1,741		0							1,741
OPERATING INCOME		29,959		4,185			1,101				35,245
		13,376		1,730			490				15,596
INTEREST EXPENSE, NET		519		(49	)		1,329		(6)		1,759
							(40	)	(1)
INCOME BEFORE INCOME TAXES		12,857		1,779			(799	)			13,837
INCOME TAX PROVISION		4,446					712		(7)		4,838
							(320)		(8)
NET INCOME	$	8,411	$	1,779		$	(1,191	)		$	8,999
BASIC EARNINGS PER SHARE	$	3.24								$	3.47
DILUTED EARNINGS PER SHARE	$	3.01								$	3.22
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (BASIC)		2,595									2,595
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (DILUTED)		2,793									2,793

SEE NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

K-TRON INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2006
(UNAUDITED)

(IN THOUSANDS)

	AS REPORTED				PRO FORMA			PRO FORMA
	K-TRON		PREMIER		ADJUSTMENTS			CONSOLIDATED
ASSETS
CASH & CASH EQUIVALENTS	$	12,876	$	2,436	$	27,565	(3)	$	12,416
						(27,565	)(3)
						111	(3)
						(600	)(4)
						(2,407	)(2)
RESTRICTED CASH		701							701
ACCOUNTS RECEIVABLE, NET		21,637		2,873					24,510
INVENTORIES, NET		22,915		1,287		1,110	(4)		25,312
OTHER CURRENT ASSETS		5,020		53					5,073
TOTAL CURRENT ASSETS		63,149		6,649		(1,786	)		68,012
PROPERTY, PLANT AND EQUIPMENT, NET		26,082		3,144		2,327	(4)		29,537
						(2,016	)(1)
PATENTS, NET		1,479		0					1,479
GOODWILL		3,779		0		18,635	(4)		22,414
OTHER IDENTIFIABLE INTANGIBLES, NET		13,116		0		4,800	(4)		17,916
NOTES RECEIVABLE AND OTHER ASSETS		2,371		0					2,371
TOTAL ASSETS	$	109,976	$	9,793	$	21,960		$	141,729
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT PORTION OF LONG-TERM DEBT	$	392	$	0	$			$	392
ACCOUNTS PAYABLE		8,816		848					9,664
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES		23,341		3,776		(436	)(2)		26,681
TOTAL CURRENT LIABILITIES		32,549		4,624		(436	)		36,737
LONG-TERM DEBT		14,214		0		27,565	(3)		41,779
DEFERRED INCOME TAXES		3,418							3,418
SHAREHOLDERS’ EQUITY		59,795		5,169		(1,971	)(2)		59,795
						(2,016	)(1)
						(27,565	)(3)
						111	(3)
						26,272	(4)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	109,976	$	9,793	$	21,960		$	141,729

SEE NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

K-Tron International, Inc. and Subsidiaries
Notes to Pro Forma Condensed Consolidated Financial Statements
(Unaudited)

1.	To record, prior to the October 5, 2006 acquisition, the transfer of Premier’s wholly-owned subsidiary, Mariposa, to the Shareholder and to eliminate Mariposa’s operating results.
2.	To record distributions made to the Shareholder subsequent to September 30, 2006 and prior to the October 5, 2006 acquisition.
3.	To recognize the financing associated with the acquisition of the Premier Stock by K-Tron.
	The purchase price paid on October 5, 2006 for the acquisition of the Premier Stock was $27.565 million. K-Tron expects to receive from the Shareholder an estimated post-closing adjustment of $111 thousand based on Premier’s net working capital on the closing date. K-Tron incurred approximately $600 thousand in acquisition costs. K-Tron will reimburse the Shareholder for income taxes related to making an Internal Revenue Code (“IRC”) section 338(h)(10) election. The amount of the income tax reimbursement has not yet been calculated.
	The $27.565 million paid at closing was borrowed under a new $50 million unsecured revolving credit facility that K-Tron entered into on September 29, 2006. The entire purchase price of $27.565 million was paid in cash, including a $2.0 million escrow. K-Tron borrowed the funds using LIBOR rate loans that bear interest at LIBOR for the relevant period plus a percentage ranging from 0.875% to 1.625%, depending on K-Tron’s consolidated debt-to-EBITDA ratio. K-Tron entered into two $5 million interest rate swaps with durations of three and four years. The balance of the loan, $17.565 million, was borrowed at one to six month LIBOR rates with the average effective interest rate on the $27.565 million borrowing equal to approximately 6.4% per annum as of the end of October 2006.
4.	The excess ($26.872 million) of the purchase price over the carrying value of the net identifiable assets acquired ($1.182 million) has been allocated as follows:

	(In Thousands)
Fair Value Adjustments for:
Inventory	$	1,110
Property, Plant and Equipment		2,327
Goodwill		18,635
Trade Names		2,600
Customer Relationships		2,200
Excess of Purchase Price Over Carrying Value	$	26,872

5. To record depreciation and amortization on the fair value adjustments.

Property Plant and Equipment	3 to 17 years
Trade Names	Indefinite life
Customer Relationships	10 years

6.	To record the interest expense on the funds borrowed based upon the interest rates disclosed in Note 3 above.
7.	To record income taxes for 2006 and 2005 since Premier elected S Corporation status for Federal and State purposes and, as such, did not incur any tax liability.
8.	To adjust for the pro forma adjustments to the extent the adjustments would create allowable deductions, at the appropriate U.S. Federal and State statutory rates.
9.	To reclassify commissions, profit sharing and other income to conform to the classification used by K-Tron.
10.	To eliminate nonrecurring Shareholder expenses primarily related to compensation and aircraft expenses.
11.	Deferred taxes related to the fair value adjustments have not been provided for in the Condensed Consolidated Pro Forma Balance Sheet since an IRC section 338(h)(10) election is expected to be made.