Exhibit Index
                                                                   is on page 35

                                  UNITED STATES
                        SECURITIES & EXCHANGE COMMISSION

                             Washington, D.C. 20549

                             ----------------------

                                    FORM 10-Q

X     Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 For the quarterly period ended March 29, 2002, or

_     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 its Charter)

          PENNSYLVANIA                                          23-1292472
(State or other jurisdiction of                               (IRS Employer
incorporation or organization)                            Identification Number)

    1210 Northbrook Drive, Suite 385
        Trevose, Pennsylvania                                     19053
(Address of principal executive offices)                        (Zip Code)

Registrant's telephone number, including area code:            215-355-2900


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 | |

Common Stock - Shares Outstanding as of April 22, 2002:         40,059,895


                                  Page 1 of 36

<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1:  Financial Statements

                        Technitrol, Inc. and Subsidiaries

                           Consolidated Balance Sheets

                                  In thousands


<TABLE>
<CAPTION>
                                                                           March 29,   December 28,
                                Assets                                        2002         2001
                                                                           ---------    ---------
                                                                          (unaudited)
<S>                                                                        <C>          <C>
Current assets:
     Cash and cash equivalents                                             $ 110,030    $ 142,267
     Trade receivables, net                                                   61,626       63,294
     Inventories                                                              57,400       62,404
     Prepaid expenses and other current assets                                16,795       18,785
                                                                           ---------    ---------
           Total current assets                                              245,851      286,750

Property, plant and equipment                                                169,505      170,665
     Less accumulated depreciation                                            91,254       87,613
                                                                           ---------    ---------
           Net property, plant and equipment                                  78,251       83,052
Deferred income taxes                                                          9,965        9,499

Excess of cost over net assets acquired and other intangibles, net           118,214      128,512
Other assets                                                                  17,209       17,207
                                                                           ---------    ---------
                                                                           $ 469,490    $ 525,020
                                                                           =========    =========

                 Liabilities and Shareholders' Equity

Current liabilities:
     Current installments of long-term debt                                $     122    $     122
     Accounts payable                                                         27,110       24,780
     Accrued expenses                                                         73,460       72,591
                                                                           ---------    ---------
           Total current liabilities                                         100,692       97,493

Long-term liabilities:
     Long-term debt, excluding current installments                           50,191       89,007
     Other long-term liabilities                                               8,755        9,289

Shareholders' equity:
     Common stock and additional paid-in capital                              71,177       70,184
     Retained earnings                                                       243,156      264,055
     Other                                                                    (4,481)      (5,008)
                                                                           ---------    ---------
           Total shareholders' equity                                        309,852      329,231
                                                                           ---------    ---------
                                                                           $ 469,490    $ 525,020
                                                                           =========    =========
</TABLE>

See accompanying Notes to Unaudited Consolidated Financial Statements.


                                  Page 2 of 36
<PAGE>

                        Technitrol, Inc. and Subsidiaries

                       Consolidated Statements of Earnings

                                   (Unaudited)
                       In thousands, except per share data

<TABLE>
<CAPTION>
                                                                                                   Quarter Ended
                                                                                                March 30,    March 30,
                                                                                                    2002         2001
                                                                                               ---------    ---------
<S>                                                                                            <C>          <C>
Net sales                                                                                      $  93,420    $ 157,244
Costs and expenses:
     Cost of sales                                                                                74,168      106,867
     Selling, general and administrative expenses                                                 23,479       27,413
     Restructuring and unusual and infrequent items                                                2,658        1,250
                                                                                               ---------    ---------

         Total costs and expenses applicable to sales                                            100,305      135,530
                                                                                               ---------    ---------
Operating profit (loss)                                                                           (6,885)      21,714

Other (expense) income:
     Interest income (expense), net                                                                 (241)       1,211
     Other                                                                                          (416)         (64)
                                                                                               ---------    ---------

         Total other income (expense)                                                               (657)       1,147
                                                                                               ---------    ---------


Earnings (loss) before taxes and cumulative effect of accounting change                           (7,542)      22,861

Income taxes (benefit)                                                                            (2,381)       4,867
                                                                                               ---------    ---------

Net earnings (loss) before cumulative effect of accounting change                                 (5,161)      17,994


Cumulative effect of accounting change, net of income taxes                                      (15,738)          --
                                                                                               ---------    ---------
Net earnings (loss)                                                                            $ (20,899)   $  17,994
                                                                                               =========    =========

Basic earnings (loss) per share before cumulative effect of accounting
    change                                                                                     $   (0.15)   $    0.55

Cumulative effect of accounting change, net of income taxes                                    $   (0.47)   $      --
                                                                                               ---------    ---------
Basic earnings (loss) per share                                                                $   (0.63)   $    0.55

Diluted earnings (loss) per share before cumulative effect of accounting
    change                                                                                     $   (0.15)   $    0.54

Cumulative effect of accounting change, net of income taxes                                    $   (0.47)   $      --
                                                                                               ---------    ---------
Diluted earnings (loss) per share                                                              $   (0.63)   $    0.54

Cash dividends declared per share                                                              $      --    $  0.3375
</TABLE>


See accompanying Notes to Unaudited Consolidated Financial Statements.


                                  Page 3 of 36
<PAGE>

                        Technitrol, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows

                                   (Unaudited)
                                  In thousands

<TABLE>
<CAPTION>
                                                                                 Quarter Ended
                                                                             March 29,    March 30,
                                                                               2002         2001
                                                                            ---------    ---------
<S>                                                                         <C>          <C>
Cash flows from operating activities:
Net earnings (loss)                                                         $ (20,899)   $  17,994
Adjustments to reconcile net earnings to net cash provided
   by operating activities:
     Depreciation and amortization                                              5,329        6,062
     Tax benefit from employee stock compensation                                 406          236
     Amortization of stock incentive plan expense                                 204          772
     Restructuring and unusual and infrequent items, net of cash payments        (187)        (929)
     Cumulative effect of accounting change                                    15,738           --
     Changes in assets and liabilities, net of effect of acquisitions:
       Trade receivables                                                        1,463       11,892
       Inventories                                                              4,858        2,161
       Prepaid expenses and other current assets                                1,836        2,205
       Accounts payable and accrued expenses                                    3,183      (21,781)
     Other, net                                                                (3,680)        (272)
                                                                            ---------    ---------
         Net cash provided by operating activities                              8,251       18,340
                                                                            ---------    ---------
Cash flows from investing activities:
     Acquisitions, net of cash acquired                                            --      (12,911)
     Capital expenditures                                                      (1,366)      (6,003)
     Proceeds from sale of property, plant and equipment                           13           55
                                                                            ---------    ---------
         Net cash used in investing activities                                 (1,353)     (18,859)
                                                                            ---------    ---------
Cash flows from financing activities:
     Dividends paid                                                            (1,137)      (1,122)
     Proceeds of short-term borrowings, net of repayments                          --        9,343
     Principal payments of long-term debt                                     (38,629)        (245)
     Payoff of debt assumed in acquisition                                         --       (3,920)
     Sale of stock through employee stock purchase plan                           760        6,435
     Exercise of stock options                                                     --           17
                                                                            ---------    ---------
         Net cash provided by (used in) financing activities                  (39,006)      10,508
                                                                            ---------    ---------
Net effect of exchange rate changes on cash                                      (129)        (146)
                                                                            ---------    ---------
Net (decrease) increase in cash and cash equivalents                          (32,237)       9,843
Cash and cash equivalents at beginning of year                                142,267      162,631
                                                                            ---------    ---------
Cash and cash equivalents at March 29, 2002 and
  March 30, 2001                                                            $ 110,030    $ 172,474
                                                                            =========    =========
</TABLE>

See accompanying Notes to Unaudited Consolidated Financial Statements.


                                  Page 4 of 36
<PAGE>

                        Technitrol, Inc. and Subsidiaries

            Consolidated Statement of Changes in Shareholders' Equity

                          Quarter Ended March 29, 2002

                                   (Unaudited)
                                  In thousands

<TABLE>
<CAPTION>
                                                                                              Other
                                                                                    -----------------------
                                                                                                   Accumu-
                                                                                                    lated
                                                Common stock and                                    other
                                                 paid-in capital                      Deferred     compre-      Compre-
                                               -------------------       Retained     compen-      hensive      hensive
                                              Shares        Amount       earnings     sation       income       income
                                              ------       -------       --------     -------      -------      -------
<S>                                           <C>          <C>           <C>          <C>          <C>          <C>
Balance at December 28, 2001                  33,683       $70,184       $264,055     $(2,430)     $(2,578)
Stock options, awards and related
    compensation                                  (7)         (173)            --         517

Tax benefit of stock compensation                 --           406             --          --
Stock issued under employee stock
    purchase plan                                 36           760             --          --

Currency translation adjustments                  --            --             --          --           10      $     10
Net loss                                          --            --        (20,899)         --           --       (20,899)
                                                                                                                --------
Comprehensive loss                                                                                              $(20,889)
                                              ------       -------       --------     -------       -------     --------
Balance at March 29, 2002                     33,712       $71,177       $243,156     $(1,913)      $(2,568)
                                              ======       =======       ========     =======       =======
</TABLE>

See accompanying Notes to Unaudited Consolidated Financial Statements.


                                  Page 5 of 36
<PAGE>

                        Technitrol, Inc. and Subsidiaries

              Notes to Unaudited Consolidated Financial Statements

(1)   Accounting Policies

      For a complete description of the accounting policies of Technitrol, Inc.
and its consolidated subsidiaries ("the Company"), refer to Note 1 of Notes to
Consolidated Financial Statements included in the Company's Form 10-K filed for
the year ended December 28, 2001.

      The results for the quarter ended March 29, 2002 and March 30, 2001, have
been prepared by Technitrol's management without audit by its independent
auditors. In the opinion of management, the financial statements fairly present
in all material respects, the financial position and results of Technitrol's
operations for the periods presented. To the best knowledge and belief of
Technitrol, all adjustments have been made to properly reflect income and
expenses attributable to the periods presented. All such adjustments are of a
normal recurring nature. Operating results for the quarter ended March 29, 2002
are not necessarily indicative of annual results.

      Certain amounts in the prior year financial statements have been
reclassified to conform with the current year presentation.

(2)   Acquisitions

      Excelsus Technologies, Inc.: In August 2001, the Company acquired all of
the capital stock of Excelsus Technologies, Inc. ("Excelsus") based in Carlsbad,
California. Excelsus produced customer-premises digital subscriber line filters
and other broadband accessories. The acquisition was accounted for by the
purchase method of accounting. The preliminary purchase price was approximately
$85.9 million, net of $4.8 million of cash acquired and a preliminary purchase
price adjustment of $2.6 million. The fair value of net assets acquired
approximated $18.2 million. Based on the fair value of the assets acquired, the
preliminary allocation of the unadjusted purchase price includes $40.0 million
for trade names, $27.0 million for goodwill and $8.0 million for technology. The
technology intangible is subject to amortization and is estimated to have a
5-year life. A significant portion of the purchase price is being maintained in
an escrow account. Included in the assets acquired is a $6.3 million tax
receivable, generated by the acceleration and settlement of Excelsus stock
options at the time of closing. The Company filed income tax returns for the
period ending on the closing date, and received the full amount of the tax
receivable during the fourth quarter of 2001. In order to fund the purchase
price, the Company used approximately $19.0 million of cash on-hand and borrowed
approximately $74.0 million under its existing credit facility with a syndicate
of commercial banks. Excelsus was integrated into Pulse. Prior to the
acquisition, Excelsus recorded revenues of approximately $40.0 million in 2000.

                                                                     (continued)


                                  Page 6 of 36
<PAGE>

                        Technitrol, Inc. and Subsidiaries

         Notes to Unaudited Consolidated Financial Statements, continued

(2)   Acquisitions, continued

      Full Rise Electronics Co. Ltd.: In April 2001, the Company made a minority
investment in the common stock of Full Rise Electronics Co. Ltd. ("FRE") which
is accounted for by the cost-basis method of accounting. FRE is based in the
Republic of China (Taiwan) and manufactures connector products including single
and multiple-port jacks. The Company has an option to purchase additional shares
of common stock in FRE in the future.

      Grupo ECM: In March 2001, the Company acquired Electro Componentes
Mexicana, S.A. de C.V. and affiliates based in Mexico City. These operations are
referred to as Grupo ECM. Grupo ECM manufactured and marketed inductive
components primarily for automotive applications. This business was integrated
into Pulse. The purchase price was not material to the Company's consolidated
financial position.

      Engelhard-CLAL: In January 2001, the Company acquired the electrical
contacts business of Engelhard-CLAL. These operations are based in France with
additional operations in Spain and the United Kingdom. Engelhard-CLAL
manufactured electrical contacts, wire and strip contact materials and related
products primarily for the European electrical equipment market. This business
was integrated into AMI Doduco. The purchase price was not material to the
Company's consolidated financial position.

(3)   Restructuring

      In the first quarter of 2002, we accrued $1.8 million for severance and
related payments, related to the termination of approximately 400 manufacturing
personnel and approximately 75 support personnel. An additional accrual of $0.8
million was provided for asset disposals. The vast majority of these accruals
were utilized by the end of the first quarter in 2002.

      Approximately $1.3 million of restructuring charges were recorded in the
quarter ended March 30, 2001 to provide for severance and related payments.

      We implemented numerous restructuring initiatives during 2001 in order to
reduce Pulse's cost structure and capacity, although the speed and depth of the
contraction in Pulse's markets made it impossible to reduce costs at the same
rate at which revenues contracted throughout 2001.

                                                                     (continued)


                                  Page 7 of 36
<PAGE>

                        Technitrol, Inc. and Subsidiaries

         Notes to Unaudited Consolidated Financial Statements, continued

(3)   Restructuring, continued

      Our restructuring charges are summarized on a year-to-date basis for 2002
as follows:

<TABLE>
<CAPTION>
                                                                      AMI
      Restructuring provision (in millions):                         Doduco         Pulse           Total
      -----------------------                                        ------         -----           -----
<S>                                                                  <C>          <C>              <C>
      Balance accrued at December 28, 2001                           $ 0.6        $ 2.4            $ 3.0
      Accrued during the three months ended March 29, 2002             0.5          2.1              2.6
      Severance and other cash payments                               (0.1)        (2.0)            (2.1)
      Non-cash asset disposals                                        (0.0)        (0.9)            (0.9)
                                                                     -----        -----            -----
      Balance accrued at March 29, 2002                              $ 1.0        $ 1.6            $ 2.6
                                                                     =====        =====            =====
</TABLE>

(4)   Inventories

      Inventories consisted of the following (in thousands):

                                               March 29,   December 28,
                                                  2002         2001
                                                -------      -------
            Finished goods                      $21,949      $22,159
            Work in process                      11,354       11,723
            Raw materials and supplies           24,097       28,522
                                                -------      -------
                                                $57,400      $62,404
                                                =======      =======


                                  Page 8 of 36
<PAGE>

                        Technitrol, Inc. and Subsidiaries

         Notes to Unaudited Consolidated Financial Statements, continued

(5)   Derivatives and Other Financial Instruments

      The Company utilizes derivative financial instruments, primarily forward
exchange contracts and currency options, to manage foreign currency risks. While
these hedging instruments are subject to fluctuations in value, such
fluctuations are generally offset by the value of the underlying exposures being
hedged.

      At March 29, 2002, the Company had five foreign exchange forward contracts
outstanding to sell forward approximately 46.1 million of euro in the aggregate,
in order to hedge intercompany loans. The terms of the contracts were generally
30 days The Company had no other financial derivative instruments. In addition,
management believes that there is no material risk of loss from changes in
market rates or prices which are inherent in other financial instruments.

(6)   Earnings Per Share

      Basic earnings per share are calculated by dividing earnings by the
weighted average number of common shares outstanding (excluding restricted
shares) during the period. The Company had restricted shares outstanding of
approximately 319,000 and 334,000 as of March 29, 2002 and March 30, 2001,
respectively. For calculating diluted earnings per share, common share
equivalents and restricted stock outstanding are added to the weighted average
number of common shares outstanding. Common share equivalents result from
outstanding options to purchase common stock as calculated using the treasury
stock method. Such common share equivalent amounts were approximately 26,800 for
the three months ended March 29, 2002. There were no common stock options
outstanding for the three months ended March 30, 2001. As the three month period
ended March 29, 2002 resulted in a net loss, common share equivalents are
anti-dilutive, and therefore excluded from the earnings per share calculation.
Earnings per share calculations are as follows (in thousands, except per share
amounts):

                                                                     (continued)


                                  Page 9 of 36
<PAGE>

                        Technitrol, Inc. and Subsidiaries

         Notes to Unaudited Consolidated Financial Statements, continued

(6)   Earnings Per Share, continued

<TABLE>
<CAPTION>
                                                                   Quarter Ended
                                                             March 29,        March 30,
                                                                2002             2001
                                                            ----------       ----------
<S>                                                         <C>              <C>
Net earnings                                                $  (20,899)      $   17,994
     Basic earnings per share:
         Shares                                                 33,361           32,916
         Per share amount, before change in accounting
            principle                                       $    (0.15)      $      .55
     Change in accounting principle                              (0.47)              --
                                                            ----------       ----------
     Per share amount                                            (0.63)            0.55
                                                            ==========       ==========

     Diluted earnings per share:
         Shares                                                 33,680           33,250
         Per share amount, before change in accounting
            principle                                       $    (0.15)      $      .54
         Change in accounting principle                          (0.47)              --
                                                            ----------       ----------
         Per share amount                                        (0.63)            0.54
                                                            ==========       ==========
</TABLE>

(7)   Business Segment Information

      For the quarters ended March 29, 2002 and March 30, 2001 there were
immaterial amounts of intersegment revenues eliminated in consolidation. There
has been no material change in segment assets from December 28, 2001 to March
29, 2002. In addition, the basis for determining segment financial information
has not changed from 2001. Specific segment data are as follows:

<TABLE>
<CAPTION>
                                                                         Quarter Ended
                                                                    March 29,      March 30,
                                                                      2002            2001
                                                                    --------       ---------
<S>                                                                 <C>            <C>
Net sales:
     Pulse                                                          $ 45,111       $  91,320
     AMI Doduco                                                       48,309          65,924
                                                                    --------       ---------
         Total                                                      $ 93,420       $ 157,244
                                                                    ========       =========

Earnings before income taxes:
     Pulse                                                          $ (4,239)      $  18,456
     Pulse restructuring and unusual and infrequent items             (2,130)         (1,250)
     AMI Doduco                                                           12           4,508
     AMI Doduco restructuring and unusual and infrequent items          (528)             --
                                                                    --------       ---------
         Operating profit                                             (6,885)         21,714
     Other income, net                                                  (657)          1,147
                                                                    --------       ---------
     Earnings before income taxes and cumulative effect of
       accounting change                                            $ (7,542)      $  22,861
                                                                    ========       =========

</TABLE>


                                 Page 10 of 36
<PAGE>

                        Technitrol, Inc. and Subsidiaries

         Notes to Unaudited Consolidated Financial Statements, continued

(8)   Adoption of SFAS 142

      In July 2001, the FASB issued Statement No. 141, Business Combinations,
("SFAS 141") and Statement No. 142, Goodwill and Other Intangible Assets ("SFAS
142"). SFAS 141 requires that the purchase method of accounting be used for all
business combinations completed after June 30, 2001. SFAS 141 also specifies
that intangible assets acquired in a purchase method business combination must
meet certain criteria to be recognized and reported apart from goodwill. SFAS
142 requires that goodwill and intangible assets with indefinite useful lives no
longer be amortized, but instead they are tested for impairment at least
annually in accordance with the provisions of SFAS 142. SFAS 142 will also
require 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 SFAS 144.

      We adopted the provisions of SFAS 141 in fiscal 2001, and SFAS 142
effective January 1, 2002. Furthermore, any goodwill and any intangible assets
determined to have an indefinite useful life acquired in a purchase business
combination completed after June 30, 2001 are not amortized, but will continue
to be evaluated for permanent impairment. Goodwill and intangible assets
acquired in business combinations completed before July 1, 2001 were amortized
until December 28, 2001. Since our acquisition of Excelsus was completed on
August 7, 2001, the provisions of SFAS 141 were applied. Therefore, goodwill and
certain intangibles with indefinite lives resulting from the Excelsus
transaction have not been subject to amortization.

      In connection with the transitional goodwill impairment evaluation, SFAS
142 required us to perform an assessment of whether goodwill is impaired as of
the date of adoption. We had approximately $80.3 million of unamortized goodwill
and $48.2 million of other intangible assets as of December 28, 2001, which was
subject to the transition provisions of SFAS 141 and SFAS 142. To accomplish
this, we determined the carrying value of each reporting unit by assigning the
assets and liabilities, including the existing goodwill and intangible assets,
to those reporting units as of the date of adoption. As AMI Doduco's reporting
unit's carrying amount exceeded its fair value, an indication existed that the
reporting unit's goodwill may be impaired and we performed the second step of
the transitional impairment test. In the second step, we compared the implied
fair value of the AMI Doduco's goodwill, determined by allocating the reporting
unit's fair value to all of its assets and liabilities in a manner similar to a
purchase price allocation in accordance with SFAS 141, to its carrying amount.
As a result of the transitional impairment test, we recorded an impairment loss
of $15.7 million in the first quarter of 2002. This loss was recognized as a
cumulative effect of an accounting principle change during the three months
ended March 29, 2002.

                                                                     (continued)


                                 Page 11 of 36
<PAGE>

                        Technitrol, Inc. and Subsidiaries

         Notes to Unaudited Consolidated Financial Statements, continued

(8)   Adoption of SFAS 142, continued

      Goodwill was not amortized for the three months ended March 29, 2002,
whereas amortization expense was $1.1 million for the three months ended March
30, 2001. Amortization expense was approximately $5.4 million and $3.8 million
for the years ended December 28, 2001 and December 29, 2000, respectively.

      The following table presents the impact of SFAS 142 on net income and net
income per share had the standard been in effect for the three months ended
March 30, 2001 (in thousands, except per share amounts):

                                                     Quarter Ended
                                                 March 29,      March 30,
                                                    2002          2001
                                                 --------       --------
Net income - as reported                         $(20,899)      $ 17,994
Adjustments:
     Amortization of goodwill                          --          1,091
     Cumulative effect of accounting change        15,763             --
     Income tax effect                                (25)           (24)
                                                 --------       --------

           Net adjustments                         15,738          1,067

Net income - adjusted                            $ (5,161)      $ 19,061
                                                 ========       ========

Basic net income per share - as reported         $  (0.63)      $   0.55
Basic net income per share - adjusted            $  (0.15)      $   0.58
Diluted net income per share - as reported       $  (0.63)      $   0.54
Diluted net income per share - adjusted          $  (0.15)      $   0.57

(9)   Subsequent Event

      The Company completed a follow-on offering of 6,348,000 shares of its
common stock on April 11, 2002. The proceeds of the offering, net of expenses,
were approximately $135.0 million. The Company expects to use the net proceeds
from the sale of shares for voluntary repayment of outstanding debt, potential
strategic acquisitions and general corporate purposes.


                                 Page 12 of 36
<PAGE>

Item 2: 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. Actual results could 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 25
through 33.

Critical Accounting Policies

      The preparation of financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States
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 in the Annual Report on Form 10-K for
the fiscal year ended December 28, 2001 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 the
allowance for doubtful accounts and sales returns, inventory allowances,
goodwill impairments, restructuring expense and acquisition related
restructuring costs, and income taxes. 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.

      Accounts Receivable and Sales Returns and Allowances. The allowance for
doubtful accounts is based on our assessment of the collectibility of specific
customer accounts and the aging of the accounts receivable. If there is a
deterioration of a major customer's creditworthiness or actual defaults are
higher than our historical experience, our estimates of the recoverability of
amounts due could be adversely affected. Also, an accrual for sales returns is
established based on historical trends in product returns. If the actual future
returns do not reflect the historical data, our net sales could be affected.

      Inventory Allowances. Inventory purchases and commitments are based upon
future demand 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 and customer requirements, we may be required to
increase our inventory allowances and our gross margin could be adversely
affected.

      Goodwill Impairment. We will assess goodwill impairment on an annual basis
and between annual tests in certain circumstances. In response to changes in
industry and market conditions, we may strategically realign our resources and
consider restructuring, disposing of, or otherwise exiting businesses, which
could result in an impairment of goodwill.


                                 Page 13 of 36
<PAGE>

      Restructuring Expense and Acquisition Related Restructuring Costs. Our
recent restructuring activities, related to our existing and recently acquired
businesses, were designed to reduce both our fixed and variable costs,
particularly in response to the reduced demand for our products in the
electronics components industry. These costs included the closing of facilities
and the termination of employees. Acquisition-related costs are included in the
allocation of the cost of the acquired business and added to goodwill. Other
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.

      These restructuring costs are recorded based upon estimates. Our actual
expenditures for the restructuring activities may differ from the initially
recorded costs. If this occurs, we would adjust our estimates in future periods.
In the case of acquisition-related restructuring costs, this would generally
require a change in value of the goodwill appearing on our balance sheet, which
may not affect our earnings. In the case of other restructuring costs, we could
be required either to record additional expenses in future periods if our
initial estimates were too low, or to reverse part of the charges that we
recorded initially if our initial estimates were too high.

      Income Taxes. We have not provided for U.S. federal income and foreign
withholding taxes on non-U.S. subsidiaries' undistributed earnings as calculated
for income tax purposes, as per Accounting Principles Board Opinion No. 23,
Accounting for Income Taxes - Special Areas. If we encounter a significant
domestic need for liquidity that we cannot fulfill through borrowings or other
internal or external sources, we may experience unfavorable tax consequences as
this cash is transferred to the U.S. This adverse consequence would occur if the
transfer of cash into the U.S. is taxed and no offsetting foreign tax credit is
available to offset the U.S. tax liability, resulting in lower net earnings.

Overview

      We are a global producer of precision-engineered passive magnetics-based
electronic components 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 distinct segments:

      o     the electronic components segment, which operates under the name
            Pulse, and

      o     the electrical contact products segment, which operates under the
            name AMI Doduco.

      General. We experienced consistent growth in net sales from fiscal 1991
through fiscal 2000. We define net sales as gross sales less returns and
allowances. We sometimes refer to net sales as revenue. During the past several
years, the growth in our consolidated net sales has been due in large part to
the growth of Pulse. However, since late 2000, the electronics markets served by
Pulse have experienced a severe global contraction. While there remains
substantial uncertainty with respect to future demand for


                                 Page 14 of 36
<PAGE>

our products, particularly at Pulse, we believe that the markets we serve have
begun to stabilize in 2002 and that a market rebound will be gradual.

      Based on recent increases in the level of order activity, we believe that
demand for Pulse's products will gradually improve, and we believe this
improvement began in the first quarter of 2002. While Pulse's revenues in the
first part of the quarter were weak, there have been indications of firming
market conditions, other than in the telecommunications sector, notable in the
increase in our incoming orders, beginning in mid-February of 2002. This is
consistent with reports from our customers and peers.

      Throughout the year ended December 28, 2001 demand has slowed at AMI
Doduco, mirroring the prevailing economic conditions in North America and
Europe. These anemic market conditions continued into 2002, however, AMI Doduco
has seen increases in design and quoting activities for component subassemblies
in Europe, for automotive applications such as tire pressure monitoring systems,
multi-function switches, motor control sensors and ignition security systems,
and non-automotive uses such as appliance and industrial controls and medical
equipment. Although some of our customers and the popular press generally report
modest optimism for the second half of the year, AMI Doduco is continuing its
cost reduction actions. For example, in addition to workforce adjustments in
line with market demand around the world, AMI Doduco is also continuing the
North American plant consolidation begun in 2001, as well as the consolidation
of all European contact pre-material production into our Pforzheim, Germany
facility and other product and plant consolidation actions in Europe.

      Historically, the gross margin at Pulse has been significantly higher than
at AMI Doduco. As a result, the mix of net sales generated by Pulse and AMI
Doduco during a period affects our consolidated gross margin. For example, our
gross margin for the quarter ended March 29, 2002 was 20.6% compared to 32.0%
for the quarter ended March 30, 2001. For the quarter ended March 29, 2002,
Pulse generated approximately 48.3% of our consolidated net sales compared to
approximately 58.1% for the quarter ended March 30, 2001. Our gross margin is
also significantly affected by capacity utilization at both Pulse and AMI
Doduco. Pulse has a relatively short-term product life cycle. As a result,
significant product turnover occurs each year. Therefore, Pulse's changes in
average selling prices do not necessarily provide a meaningful and quantifiable
measure of Pulse's operations. AMI Doduco has a fairly long-term and mature
product line, without significant turnover. There is minimal variation over time
in the prices of products sold, therefore, pricing has not been a material
influence on AMI Doduco revenue. Accordingly, substantially all of the sales
growth and contraction at AMI Doduco is attributable to changes in unit volume.

      Acquisitions. Historically, acquisitions have been an important part of
our growth strategy. In many cases, our move into new and high-growth extensions
of our existing product lines or markets has been facilitated by an acquisition.
Our acquisitions continually change the mix of our net sales. Pulse made
numerous acquisitions in recent years which have increased its penetration into
its primary markets and expanded its presence in new markets. Recent examples of
these acquisitions include Excelsus, Grupo ECM and EWC. Excelsus was acquired in
August 2001 for approximately $85.9 million, net of cash acquired. Excelsus is
based in Carlsbad, California and is a leading North American producer of
customer-premises digital subscriber line filters and other broadband


                                 Page 15 of 36
<PAGE>

accessories. Pulse acquired Electro Componentes Mexicana, which we refer to as
Grupo ECM, in March 2001. Grupo ECM is a manufacturer of inductive components
primarily for automotive applications. In October 2000, Pulse acquired various
assets of EWC, a manufacturer of magnetic components primarily for the defense
and aerospace industries.

      Similarly, AMI Doduco has made a number of recent acquisitions. In January
2001, AMI Doduco acquired the electrical contact and materials business of
Engelhard-CLAL, a manufacturer of electrical contacts, wire and strip contact
materials and related products. In addition, in fiscal 2000, AMI Doduco acquired
a tool and die fabrication facility in Estonia, and in fiscal 1999 it acquired
MEC Betras Italia, a producer of electrical contact rivets and stamped
electrical contact parts, located near Milan, Italy. These acquisitions were
driven by our strategy of expanding our product and geographical market presence
for electrical contact products. Due to our quick integration of acquisitions
and the interchangeable sources of net sales between existing and acquired
operations, we can not separately track the net sales of an acquisition after
the date of the transaction.

      Recent Cost Reduction Programs. During 1999 and 2000, the electronic
components industry served by Pulse was characterized by unprecedented growth.
Beginning in late 2000 and continuing all during 2001, however, the opposite
trend was experienced as these industries experienced a severe worldwide
contraction and virtually all of our customers canceled orders and decreased
their level of business activity as a result of lower demand for their end
products. While the electrical contact industry served by AMI Doduco is
generally less dependent on volatile technology markets, it too was negatively
impacted by general economic trends as reflected in slower overall construction
spending, reduced capital spending and industrial controls. Our manufacturing
business model at Pulse has a very high variable cost component due to the
labor-intensity of many processes. This allows us to quickly change our capacity
based on market demand. Just as we expanded capacity during 1999 and 2000, we
reduced capacity during 2001 and in the first quarter of 2002.

      In the first quarter of 2002, we accrued $1.8 million for severance and
related payments, related to the termination of approximately 400 manufacturing
personnel and approximately 75 support personnel. An additional accrual of $0.8
million was provided for asset disposals. The majority of these accruals were
utilized by the end of the first quarter of 2002.

      Approximately $1.3 million of restructuring charges were recorded in the
quarter ended March 30, 2001 to provide for severance and related payments.

      We implemented numerous restructuring initiatives during 2001 in order to
reduce Pulse's cost structure and capacity, although the speed and depth of the
contraction in Pulse's markets made it impossible to reduce costs at the same
rate at which revenues contracted throughout 2001.

      As a result of our historical focus on both economic and operating profit,
we will continue to aggressively size both Pulse and AMI Doduco so that costs
are minimized, while we plan for the recovery in demand and pursue additional
growth opportunities. We expect to undertake additional cost reduction actions
during the second quarter of 2002, the extent of which will be determined by the
timing and degree of a recovery in our

                                 Page 16 of 36
<PAGE>

markets and the economy in general. We anticipate that Pulse's restructuring
efforts will continue into, and be substantially completed by the end of, the
second quarter of 2002 and will consist largely of additional capacity
consolidation and reductions in operating expenses, including further employment
reductions. AMI Doduco also plans to undertake further consolidation activities
into the second quarter of 2002 consisting mainly of employment reductions.
While we do not currently anticipate significant cost reduction actions past the
second quarter of 2002, they may occur if there is not a recovery in our markets
and in the economy in general or if broader opportunities to reduce cost and
increase economic profit present themselves. If additional actions are
undertaken, the amounts will depend on specific actions taken to reduce
manufacturing capacity and improve efficiency.

      Our restructuring charges are summarized for 2002 as follows:

<TABLE>
<CAPTION>
                                                                 AMI
      Restructuring provision (in millions):                    Doduco     Pulse      Total
                                                                ----       ----       ----
<S>                                                             <C>        <C>        <C>
      Balance accrued at December 28, 2001                      $0.6       $2.4       $3.0
      Accrued during the three months ended March 29, 2002       0.5        2.1        2.6
      Severance and other cash payments                         (0.1)      (2.0)      (2.1)
      Non-cash asset disposals                                  (0.0)      (0.9)      (0.9)
                                                                ----       ----       ----
      Balance accrued at March 29, 2002                         $1.0       $1.6       $2.6
                                                                ====       ====       ====
</TABLE>

      International Operations. An increasing percentage of our sales in recent
years has been outside of the United States. As of March 29, 2002, we have
operations in 12 countries and we have significant net sales in currencies other
than the U.S. dollar. As a result, changing exchange rates often impact our
financial results and the analysis of our period-over-period results. This is
particularly true of movements in the exchange rate between the U.S. dollar and
the euro. AMI Doduco's European sales are denominated primarily in euros. A
portion of Pulse's European sales are also denominated in euros. However, the
proportion at Pulse is much less than it is at AMI Doduco. As a result of this
and other factors, Pulse uses the U.S. dollar as its functional currency in
Europe while AMI Doduco uses the euro. The use of different functional
currencies creates different financial effects. The euro was 5.0% weaker, on
average, relative to the U.S. dollar during the three months ended March 29,
2002 than in the comparable prior-year period. As a result, AMI Doduco's
euro-denominated sales resulted in lower dollar sales upon translation for our
U.S. consolidated financial statements. As the euro was only 1.4% weaker than
the U.S. dollar at March 29, 2002 versus December 28, 2001, we experienced an
immaterial translation adjustment to equity in the three months ended March 29,
2002 because our investment in AMI Doduco's European operations was worth
essentially the same in U.S. dollars. If an increasing percentage of our sales
are denominated in non-U.S. currencies, it could increase our exposure to
currency fluctuations. The impact of exchange rate differences on AMI Doduco's
European sales will be partially offset by the impact on its expenses and bank
borrowings in Europe, most of which are also denominated in euros. Despite
Pulse's significant presence in Asia, the vast majority of its revenues from
customers in Asia are denominated in U.S. dollars. As a result, Pulse has less
exposure than AMI Doduco to sales fluctuations caused by currency fluctuations.


                                 Page 17 of 36
<PAGE>

      In order to reduce our exposure resulting from 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.
As of March 29, 2002, we had five foreign currency forward contracts outstanding
to sell forward approximately 46.1 million of euro in the aggregate, in order to
hedge intercompany loans. 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.

      Precious Metals. AMI Doduco uses silver, as well as other precious metals,
in manufacturing many of its electrical contacts, contact materials and contact
subassemblies. Historically, as is the case with other manufacturers who use
precious metals in their products, we have leased or held these materials
through consignment arrangements with our suppliers. Leasing and consignment
costs have been substantially below the costs to borrow funds to purchase the
metals and these arrangements eliminate the fluctuations in the market price of
owned precious metal. AMI Doduco's terms of sale generally allow us to charge
customers for the market value of silver on the day after we deliver the silver
bearing product to the customer. 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 caused by increases in interest rates or increases 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 Germany and the income
earned in low-tax jurisdictions, particularly in Asia. This mix of income can
vary significantly from one period to another. We have benefited over recent
years from favorable offshore tax treatments. However, we may not be able to
take advantage of similar benefits in the future. Developing countries and, in
particular, the People's Republic of China, may change their tax policies at any
time. We have not provided for U.S. federal income and foreign withholding taxes
on approximately $294.0 million of our non-U.S. subsidiaries' undistributed
earnings (as calculated for income tax purposes) as of December 28, 2001. Such
earnings include pre-acquisition earnings of foreign entities acquired through
stock purchases, and are intended to be reinvested outside of the U.S.
indefinitely. It is not practical to estimate the amount of unrecognized
deferred taxes on these undistributed earnings. Where excess cash has
accumulated in our non-U.S. subsidiaries and it is advantageous for tax reasons,
subsidiary earnings may be remitted.


                                 Page 18 of 36
<PAGE>

Results of Operations

      Three months ended March 29, 2002 compared to the three months ended March
30, 2001

      Net Sales. Net sales for the three months ended March 29, 2002 decreased
$63.8 million, or 40.6%, to $93.4 million from $157.2 million in the three
months ended March 30, 2001. Our sales decline from the comparable period last
year was attributable primarily to the continuing global downturn in markets
served by Pulse, and to a lesser extent, AMI Doduco that began late in 2000.
Factors contributing to the downturn included declining capital expenditures by
end-users and excess inventory levels throughout the supply chain.

      Pulse's net sales decreased $46.2 million, or 50.6%, to $45.1 million for
the three months ended March 29, 2002 from $91.3 million in the three months
ended March 30, 2001. This decline was experienced in Pulse's networking,
telecommunications and power conversion markets on a worldwide basis,
particularly in North America and Europe. The majority of Pulse sales during the
quarter ended March 30, 2001 were for products ordered in 2000, before the
dramatic slowdown began. Net sales in 2002 include sales derived from our
acquisitions of Grupo ECM and Excelsus since the date of their acquisition in
March and August 2001, respectively.

      AMI Doduco's net sales decreased $17.6 million, or 26.7%, to $48.3 million
for the three months ended March 29, 2002 from $65.9 million in the three months
ended March 30, 2001. Sales in the 2002 period reflect weak North American and
European markets and a decline in the average euro-to-U.S. dollar exchange rate.
Lower net sales resulted from lower manufacturing activity primarily related to
customers in the commercial and industrial machinery, telecommunications and
appliance industries.

      Cost of Sales. Our cost of sales decreased $32.7 million, or 30.6%, to
$74.2 million for the three months ended March 29, 2002 from $106.9 million for
the three months ended March 30, 2001. This decrease was due to a decrease in
net sales. Our consolidated gross margin for the three months ended March 29,
2002 was 20.6% compared to 32.0% for the three months ended March 30, 2001. Our
consolidated gross margin in 2002 was negatively affected by:

      o     a mix of net sales weighted more heavily by AMI Doduco on a relative
            basis as Pulse's gross profit as a percentage of sales is typically
            higher than that of AMI Doduco, and

      o     manufacturing inefficiencies at both Pulse and AMI Doduco due to
            under-utilization of capacity as a result of the market downturn.

      These factors more than offset the positive impact of our restructuring
initiatives.

      Selling, General and Administrative Expenses. Total selling, general and
administrative expenses for the three months ended March 29, 2002 decreased $3.9
million, or 14.4%, to $23.5 million, or 25.1% of net sales, from $27.4 million,
or 17.4% net of sales for the three months ended March 30, 2001. The decrease in
selling, general and administrative expenses in 2002 was due to aggressive
action that we took to reduce


                                 Page 19 of 36
<PAGE>

costs and tighten spending controls. For example, selling expenses, which are
largely variable with net sales, decreased $1.1 million, or 14.4%, to $6.3
million, from $7.4 million in the three months ended March 29, 2002 versus the
comparable period of 2001. Administrative expenses decreased by $1.5 million, or
14.4%, to $9.0 million from $10.5 million in the three months ended March 29,
2002 from the comparable period of 2001 due largely to reduced headcount, tight
spending controls, and lower incentive awards and lower expenses related to our
restricted stock plan in 2002. The underlying expense for incentive awards is
primarily variable and dependent upon our overall financial performance
regarding incentive plan targets, primarily the achievement of economic profit
and net operating profit objectives. These targets, which were set in December
of 2001, were not achieved for the first quarter of 2002, and therefore no cash
incentives were paid to executives. These incentive awards were $0.6 million in
the three months ended March 30, 2001. Expenses associated with stock-based
compensation plans including the restricted stock plan were also significantly
lower in the three months ended March 29, 2002 versus the comparable period in
2001, due to a lower average share price of our common stock in 2002 compared to
2001. These expenses were less than $0.1 million in the three months ended March
29, 2002 and $0.6 million in the three months ended March 30, 2001.

      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 three months ended March 29, 2002 and
March 30, 2001 respectively, RD&E by segment was as follows (dollars in
thousands):

                                                    2002           2001
                                                  --------       --------
      Pulse                                       $  3,837       $  4,331
      Percentage of segment sales                      8.5%           4.7%

      AMI Doduco                                  $    989       $  1,178
      Percentage of segment sales                      2.0%           1.8%

      Although 2001 and the first quarter of 2002 have been characterized by
cost reduction activities and much lower sales levels, particularly at Pulse, we
largely avoided spending cuts in the RD&E area as we believe that the recovery
in the electronic components markets will be driven by next-generation products.
Design and development activities with our OEM customers continued at an
aggressive pace during 2001 and into 2002.

      Interest. Net interest expense was $0.2 million for the three months ended
March 29, 2002 compared to net interest income of $1.2 million for the three
months ended March 30, 2001. This decrease in net interest income is due
primarily to a lower invested cash balance, which decreased from March 30, 2001
to March 29, 2002 by $62.4 million, from $172.4 million to $110.0 million. The
decrease in cash is attributable primarily to payments to retirement of
outstanding debt, which decreased from December 28, 2001 to March 29, 2002 by
$38.6 million.

      Our primary credit facility, which was entered into on June 20, 2001, has
variable interest rates. Accordingly, interest expense may increase if the rates
associated with, or


                                 Page 20 of 36
<PAGE>

the amounts borrowed under, our credit facilities move higher during subsequent
quarters. 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 such instruments to date.

      Income Taxes. The effective income tax rate, before change in accounting
principle, in the form of a benefit for the three months ended March 29, 2002
was 31.6% compared to 21.3% for the three months ended March 30, 2001. The
higher tax rate, in the form of a benefit in 2002 resulted from a higher
proportion of losses being attributable to high-tax jurisdictions.

Liquidity and Capital Resources

      Working capital as of March 29, 2002 was $145.2 million compared to $189.3
million as of December 28, 2001. This decrease was primarily due to lower
invested cash as of March 29, 2002 as $38.6 million of outstanding long-term
debt was retired during the three months ended March 29, 2002. Cash and cash
equivalents, which is included in working capital, decreased from $142.3 million
as of December 28, 2001 to $110.0 million as of March 29, 2002.

      Net cash provided by operating activities was $8.3 million for the three
months ended March 29, 2002 and $18.3 million in the comparable period of 2001,
a decrease of $10.0 million. During the three months ended March 29, 2002, net
earnings declined as a result of the continued slowdown in the markets served by
Pulse. However, the lower earnings have been partially offset by decreased
working capital requirements and aggressive cash management actions that we took
in response to the slowdown. Inventory declined by $4.9 million during the three
months ended March 29, 2002 due to the significant reduction in Pulse's net
sales during the period and corresponding actions to limit purchases and
production activity.

      Capital expenditures were $1.4 million during the three months ended March
29, 2002 and $6.0 million in the comparable period of 2001. The level of capital
expenditures decreased due to tight spending controls, lower Pulse capacity
needs resulting from lower sales, and our efforts to maximize cash flow during
this period of slow market activity. We significantly reduced our capital
spending in 2001 as compared to fiscal 2000 and expect that our spending in 2002
may be less than in 2001. We make capital expenditures to expand production
capacity and to improve our operating efficiency. We plan to continue making
such expenditures in the future.

      There was no cash used for acquisitions in the three months ended March
29, 2002 and $12.9 million for the comparable period in 2001. The 2001 spending
included the acquisitions of Engelhard-ECAL and Grupo ECM. We may acquire other
businesses or product lines to expand our breadth and scope of operations. We
may exercise our option to expand our investment in FRE during 2002.

      We paid dividends of $1.1 million in the three months ended March 29, 2002
and $1.1 million in the comparable period of 2001. We received proceeds of $0.8
million during the three months ended and $6.4 million in the comparable period
of 2001 from the sale of stock through our employee stock purchase plan. After
paying a dividend on


                                 Page 21 of 36
<PAGE>

January 25, 2002 to shareholders of record on January 4, 2002, we no longer
intend to pay cash dividends on our common stock. We currently intend to retain
future earnings to finance the growth of our business.

      On June 20, 2001 we entered into a new three-year revolving credit
agreement providing for $225.0 million of credit capacity. This credit facility
consisted of:

      o     a U.S. dollar-based revolving line of credit in the principal amount
            of up to $225.0 million;

      o     a British pounds sterling-based or euro-based revolving line of
            credit in the principal amount of up to the U.S. dollar equivalent
            of $100.0 million; and

      o     a multicurrency facility providing for the issuance of letters of
            credit in an aggregate amount not to exceed the U.S. dollar
            equivalent of $10.0 million.

      Following the conclusion of our follow-on equity offering, we voluntarily
reduced the size of this credit facility. The amounts outstanding under the
amended credit facility in total may not exceed $175.0 million. At March 29,
2002 we had approximately $138.5 million of unused line credit available under
the amended credit agreement, although outstanding borrowings are limited to a
maximum multiple of three times our ratio of debt to earnings before interest,
taxes, depreciation and amortization, ("EBITDA") on a rolling twelve-month
basis.

      We pay a facility fee irrespective of whether there are outstanding
borrowings or not, which ranges from 0.275% to 0.450% of the total commitment,
depending on our EBITDA. 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: LIBOR or prime rate for U.S.
dollars, Euro-LIBOR for euros, and a rate approximating sterling LIBOR for
British pounds. The credit margin spread is the same for each currency and is
0.850% to 1.425% depending on our debt to EBITDA ratio. Each of our domestic
subsidiaries with net worth equal to or greater than $5 million has agreed to
guarantee all obligations incurred under the credit facility. The credit
facility also contains covenants requiring maintenance of minimum net worth,
maximum debt to EBITDA ratio, minimum interest expense coverage, capital
expenditure limitations, and other customary and normal provisions. We are in
compliance with all such covenants.

      Our German indirect subsidiary, AMI Doduco GmbH, has obligations
outstanding under two term loan agreements. The first is with
Baden-Wurttembergische Bank for the borrowing of two loans, each in the amount
of approximately 5.1 million euro, both due in June 2003. The second is with
Sparkasse Pforzheim, for the borrowing of approximately 5.1 million euro, and is
due in August 2009. We and several of our subsidiaries have guaranteed the
obligations arising under these term loan agreements.

      We believe that the combination of cash on hand, cash generated by
operations and, if necessary, additional borrowings under our credit agreement
will be sufficient to satisfy our short and long-term operating cash
requirements. In addition, we may use internally generated funds or borrowings,
or additional equity offerings for acquisitions of suitable businesses or
assets. On April 11, 2002 we completed a follow-on equity offering. The proceeds
of the offering, net of expenses, were approximately $135.0 million.
Approximately $36.5 million was used to retire outstanding debt. The remainder


                                 Page 22 of 36
<PAGE>

of approximately $98.5 million is expected to be used for potential strategic
acquisitions and general corporate purposes.

      With the exception of approximately $10.0 million of retained earnings as
of December 28, 2001 in the PRC that are restricted in accordance with Section
58 of the PRC Foreign Investment Enterprises Law, substantially all retained
earnings are free from legal or contractual restrictions. The amount restricted
in accordance with the PRC Foreign Investment Enterprise Law is for employee
welfare programs and 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. 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 some
foreign governments require for international cash transfers may delay our
internal cash movements from time to time. The retained earnings in other
countries represent a material portion of our assets. We expect to reinvest
these earnings outside of the United States because we anticipate that a
significant portion of our opportunities for growth in the coming years will be
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 rates significantly lower than the U.S. statutory rate.
Additionally, we have not accrued U.S. income taxes on foreign earnings
indefinitely invested abroad. We have also been granted special tax incentives
in other countries such as the PRC and the Philippines. This favorable situation
could change if these countries were to increase rates or revoke the special tax
incentives, or if we were to discontinue manufacturing operations in these
countries. This could have a material unfavorable impact on our net income and
cash position.

      We commenced an intercompany lending program during the year ended
December 28, 2001, whereby excess U.S. dollar denominated cash is being used to
retire euro denominated debt. The benefit derived from this program is lower net
interest expense, as the U.S. dollar interest income rates have been decreasing,
while the euro interest expense rates have declined less rapidly.

New Accounting Pronouncements

      In October 2001, the Financial Accounting Standards Board ("FASB") issued
Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, ("SFAS 144") which addresses financial accounting and reporting for the
impairment or disposal of long-lived assets. While SFAS 144 supersedes FASB
Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, ("SFAS 121") it retains many of the
fundamental provisions of SFAS 121. SFAS 144 also supersedes the accounting and
reporting provisions of APB Opinion No. 30, Reporting the Results of
Operations--Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions, ("APB
30"). SFAS 144 does however, retain the requirement in APB 30 to report
separately discontinued operations, and extends this reporting requirement to a
component of an entity that either has been disposed of by sale, abandonment, or
in a distribution to owners; or is classified as held for sale. Goodwill is
excluded from the scope of SFAS 144. We were required to adopt the provisions of
SFAS 144 during the


                                 Page 23 of 36
<PAGE>

three months ended March 29, 2002. Adoption of this standard did not have a
material effect on our net sales, operating results or liquidity.

      In August 2001, the FASB issued Statement No. 143, Accounting for Asset
Retirement Obligations ("SFAS 143") which addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. SFAS 143 applies to legal
obligations associated with the retirement of tangible long-lived assets that
result from the acquisition, construction, development and (or) normal use of
the assets. SFAS 143 requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred if a
reasonable estimate of fair value can be made. The fair value of the liability
is added to the carrying amount of the associated asset and this additional
carrying amount is depreciated over the life of the asset. The liability is
accreted at the end of each period through charges to operating expense. If the
obligation is settled for other than the carrying amount of the liability, a
gain or loss on settlement will be recognized. We are required to adopt the
provisions of SFAS 143 during the three months ending March 28, 2003. Adoption
of this standard is not expected to have a material effect on our net sales,
operating results or liquidity.


                                 Page 24 of 36
<PAGE>

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.

Risk Factors

Cyclical changes in the markets we serve, including the current contraction,
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 equipment markets. These markets are highly cyclical. The demand for
our components reflects the demand for products in the electronic and electrical
equipment markets generally. Beginning in late 2000 and continuing to the
present, these markets, particularly the electronics market, have experienced a
severe worldwide contraction. This contraction has resulted in a decrease in
demand for our products, as our customers have:

      o     canceled many existing orders;

      o     introduced fewer new products; and

      o     worked to decrease their inventory levels.

      The decrease in demand for our products has had a significant adverse
effect on our operating results and profitability. We cannot predict how long
this contraction will last nor the strength of any recovery. Accordingly, we may
continue to experience weakness 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, the recent economic contraction has significantly
increased the pressure on our


                                 Page 25 of 36
<PAGE>

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 may decrease our
sales.

      Pulse operates in an industry characterized by rapid change caused by the
frequent emergence of new technologies. 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. Our inability to react to changes in
technology quickly and efficiently may decrease our sales and profitability.

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 Pulse's 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, as was the case during 2001. 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.

      In recent years we have completed several acquisitions. 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, goodwill and other intangibles could
become impaired, resulting in our recognition of a loss. While our acquisitions
have not generally resulted in goodwill impairment in the past, upon the
adoption of SFAS 142, we recorded a goodwill impairment charge in the first
quarter of 2002 of approximately $15.7 million related to AMI Doduco. The degree
of success of any of our acquisitions depends on our ability to:

      o     successfully integrate or consolidate acquired operations into our
            existing businesses;

      o     identify and take advantage of cost reduction opportunities; and

      o     further penetrate the markets for the product capabilities acquired.


                                 Page 26 of 36
<PAGE>

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

      o     cause a disruption in our ongoing business;

      o     distract our managers;

      o     unduly burden our other resources; and

      o     result in an inability to maintain our historical standards,
            procedures and controls.

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 practice has been to quickly integrate acquisitions into the existing
business of the acquiring segment and to only report financial performance on
the segment level. As a result of this practice, we do not separately track the
stand-alone 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 quickly 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 additional acquisition opportunities may slow our
future growth.

      We intend 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
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 customers with the ability to terminate the arrangement with little or no
prior notice. Our contracts 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:

      o     do not submit additional purchase orders;

      o     do not enter into new agreements with us; or

      o     elect to terminate their relationship with us.


                                 Page 27 of 36
<PAGE>

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 rapidly over the last few years, both organically and as a
result of acquisitions. However, in the past twelve months we have significantly
reduced our workforce and facilities in response to a dramatic decrease 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 business may suffer.

Uncertainty in demand for our products may result in increased costs of
production and an inability to service our customers.

      We currently have very little visibility into our customers' 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:

      o     production delays;

      o     increased costs of production;

      o     an inability to make timely deliveries; and

      o     a decrease in profits.

A decrease in availability or increase in cost 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:

      o     precious metals such as silver;

      o     base metals such as copper and brass; and

      o     ferrite cores.

      Some of these materials are produced by a limited number of suppliers.
From time to time, 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, 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.

      Some of our raw materials, such as precious 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


                                 Page 28 of 36
<PAGE>

typically purchase the precious metal from our supplier at the current market
price on the day after delivery to our customer and pass this cost on to our
customer. In addition, leasing and consignment costs have historically been
substantially below the costs to borrow funds to purchase the precious metals.
We currently have four consignment or leasing agreements related to precious
metals, all of which generally have one year terms with varying maturity dates,
but can be terminated by either party with 30 days' prior notice. Our results of
operations and liquidity will be negatively impacted if:

      o     we are unable to enter into new leasing or consignment arrangements
            with similarly favorable terms after our existing agreements
            terminate, or

      o     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.

      Fees charged by the consignor are driven by interest rates and the market
price of the consigned material. The market price of the consigned material is
determined by the supply of and the demand for the material. Consignment fees
will increase if interest rates or the price of the consigned material increase.

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

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

      o     product quality and reliability;

      o     global design and manufacturing capabilities;

      o     breadth of product line;

      o     customer service; and

      o     price.

      Our inability to successfully compete on any or all of the above factors
may result in reduced sales.

Our backlog is not an accurate measure of future revenues and is subject to
customer cancellation.

      While our backlog consists of firm accepted orders with an express release
date generally scheduled within six months of the order, many of the orders that
comprise our backlog may be canceled by customers without penalty. It is widely
known that customers in the electronics industry have on occasion double and
triple ordered components from multiple sources to ensure timely delivery when
quoted lead time is particularly long. In addition, customers often cancel
orders when business is weak and inventories are excessive, a process that we
have experienced in the current contraction. Although you should not rely on our
backlog as an indicator of our future revenues, our results of operations could
be adversely impacted if customers cancel a material portion of orders in our
backlog.


                                 Page 29 of 36
<PAGE>

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 that, in turn, could decrease our operating results and cash flow. For
example, there has been a material devaluation of the euro against the U.S.
dollar in the last several years which has negatively impacted our reported
profits. 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 some of our products in foreign locations,
including Estonia, France, Germany, Hungary, Italy, Mexico, the Philippines, the
Peoples' Republic of China, or PRC, and Spain. Our future operations and
earnings may be adversely affected by the risks related to, or any other
problems arising from, operating in international markets.

      Risks inherent in doing business internationally may include:

      o     economic and political instability;

      o     expropriation and nationalization;

      o     trade restrictions;

      o     capital and exchange control programs;

      o     transportation delays;

      o     foreign currency fluctuations; and

      o     unexpected changes in the laws and policies of the United States or
            of the countries in which we manufacture and sell our products.

      In particular, Pulse has a significant portion of its manufacturing
operations in the PRC. Our presence in the PRC has enabled Pulse to maintain
lower manufacturing costs and to flexibly adjust its work force to demand levels
for its products. Although the PRC has a large and growing economy, its
potential economic, political, legal and labor developments entail uncertainties
and risks. 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 conduct our
operations within the PRC, our business will suffer.

      In addition, we have benefited over recent years from favorable tax
treatment as a result of our international operations. We operate in foreign
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 other countries such as the PRC and the Philippines. This
favorable situation could change if these countries were to increase rates or
revoke 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 favorable tax incentives. Accordingly, in the
event of


                                 Page 30 of 36
<PAGE>

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, equipment write offs or write downs
and moving expenses. In addition, as we implement transfers of our operations we
may experience disruptions, including strikes or other types of labor unrest
resulting from lay offs 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 U.S. dollars. If we encounter a
significant domestic need for liquidity that we cannot fulfill through
borrowings or other internal or external sources, we may experience unfavorable
tax and earnings consequences as 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. With the exception of
approximately $10.0 million of retained earnings as of December 28, 2001 in 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. The PRC Foreign Investment Enterprise 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. We have not experienced any
significant liquidity restrictions in any country in which we operate and none
are presently foreseen. However, foreign exchange ceilings imposed by local
governments and the sometimes lengthy approval processes which some foreign
governments require for international cash transfers may delay our internal cash
movements from time to time.

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, 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
business could be adversely affected.

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

      Our manufacturing operations are subject to a variety of environmental
laws and regulations governing:


                                 Page 31 of 36
<PAGE>

      o     air emissions;

      o     wastewater discharges;

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

      o     employee health and safety.

      If violations of environmental laws should occur, we could be held liable
for damages, penalties, fines and remedial actions. Our operations and results
could be adversely affected by any material obligations arising from existing
laws, as well as any required material modifications arising from 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. In addition, it is possible that we may be held liable for
contamination discovered at our present or former facilities.

      We are aware of contamination at two locations. In Sinsheim, Germany,
there is a shallow groundwater and soil contamination that is naturally
decreasing over time. The German environmental authorities have not required
corrective action to date. In addition, property in Leesburg, Indiana, which was
acquired with our acquisition of GTI in 1998, is the subject of a 1994
Corrective Action Order to GRI by the Indiana Department of Environmental
Management. The order requires us to investigate and take corrective actions.
Monitoring data is being collected to confirm and implement the corrective
measures. We anticipate making additional environmental expenditures in future
years to continue our environmental studies, analysis and remediation
activities. Based on current knowledge, we do not believe that any future
expenses or liabilities associated with environmental remediation will have a
material impact on our operations or our consolidated financial position,
liquidity or operating results, however, we may be subject to additional costs
and liabilities if the scope of the contamination or the cost of remediation
exceeds our current expectations.

Pennsylvania law and our organizational documents contain provisions that could
discourage or prevent a potential takeover of our company that might otherwise
result in shareholders receiving a premium over the market price for their
shares.

      Provisions of Pennsylvania law, our Rights Agreement and our articles of
incorporation and bylaws could complicate the acquisition of us by means of a
tender offer, a proxy contest, or otherwise, and the removal of incumbent
officers and directors.

      These provisions include:

      o     Subsection 25F of the Pennsylvania Business Corporation Law, which
            prohibits various change of control transactions with a
            20%-or-greater shareholder, such as a party that has completed a
            successful tender offer, until five years after that party became a
            20%-or-greater shareholder,

      o     our Rights Agreement, known as a poison pill, which gives the board
            and shareholders the ability to severely dilute the ownership of any
            person acquiring 15% or more of our common stock, thereby making the
            acquisition impractical,

      o     our articles of incorporation, which require an affirmative vote of
            75% of our outstanding shares of stock to approve various change of
            control transactions with a holder of more than 5% of our stock, and


                                 Page 32 of 36
<PAGE>

      o     our classified board, which prevents a wholesale change in the
            board's composition.

      These provisions may have the effect of delaying, deterring or preventing
a future takeover or change in control of us unless such takeover or change in
control is approved by our board of directors.

Item 3: Quantitative and Qualitative Disclosures about Market Risk

      There were no material changes in market risk exposures that affect the
quantitative and qualitative disclosures presented in our Form 10-K for the year
ended December 28, 2001.


                                 Page 33 of 36
<PAGE>

                           PART II. OTHER INFORMATION

Item 1    Legal Proceedings                                                None

Item 2    Changes in Securities and Use of Proceeds                        None

Item 3    Defaults Upon Senior Securities                                  None

Item 4    Submission of Matters to a Vote of Security Holders              None

Item 5    Other Information                                                None

Item 6    Exhibits and Reports on Form 8-K

          (a) Exhibits

                   The Exhibit Index is on page 35

          (b) Reports On Form 8-K

                        We filed a current report on Form 8-K dated
               March 12, 2002. This report pertained to our financial
               outlook for the first quarter of 2002.


                                 Page 34 of 36
<PAGE>

                                  Exhibit Index

Document


3.1   Amended and Restated Articles of Incorporation of the Company
      (incorporated by reference to Exhibit 1 to the Company's Registration
      Statement on Form 8-A/A dated April 10, 1998).

3.2   Amendment to Amended and Restated Articles of Incorporation (incorporated
      by reference to Exhibit 3(i)(a) to the Company's Form 10-Q for the quarter
      ended June 29, 2001).

3.3   By-laws (incorporated by reference to Exhibit 3.3 to the Company's Form
      10-K for the year ended December 28, 2001).

4.1   Rights Agreement, dated as of August 30, 1996, between the Company and
      Registrar and Transfer Company, as Rights Agent (incorporated by reference
      to Exhibit 3 to the Company's Registration Statement on Form 8-A dated
      October 24, 1996).

4.2   Amendment No. 1 to the Rights Agreement, dated March 25, 1998, between the
      Company and Registrar and Transfer Company, as Rights Agent (incorporated
      by reference to Exhibit 4 to the Company's 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 the
      Company and Registrar and Transfer Company, as Rights Agent (incorporated
      by reference to Exhibit 5 to the Company's Registration Statement on Form
      8-A/A dated July 5, 2000).


                                 Page 35 of 36
<PAGE>

                                   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 thereunto duly authorized.


                                             Technitrol, Inc.
                                       ----------------------------
                                                (Registrant)


     May 10, 2002                      /s/ Drew A. Moyer
-------------------------              ----------------------------
        (Date)                             Drew A. Moyer
                                           Corporate Controller and Secretary
                                              (duly authorized officer and
                                              principal accounting officer)


                                 Page 36 of 36