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 28, 2003, 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 |_|

Indicate by check mark whether the registrant is an accelerated filter (as
defined in Rule 12b-2 of the Exchange Act.)

      YES |X|  NO |_|

Common Stock - Shares Outstanding as of April 25, 2003: 40,177,392


                                  Page 1 of 33
<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1: Financial Statements

                        Technitrol, Inc. and Subsidiaries

                           Consolidated Balance Sheets

                                  In thousands

<TABLE>
<CAPTION>
                                                           March 28,    December 27,
                          Assets                                2003            2002
                                                                ----            ----
                                                         (unaudited)
<S>                                                        <C>             <C>
Current assets:
     Cash and cash equivalents                             $ 131,207       $ 205,075
     Trade receivables, net                                   86,261          65,185
     Inventories                                              66,834          60,588
     Prepaid expenses and other current assets                21,972          13,878
                                                           ---------       ---------
           Total current assets                              306,272         344,726

Property, plant and equipment                                192,676         163,147
     Less accumulated depreciation                           103,792          98,286
                                                           ---------       ---------
           Net property, plant and equipment                  88,884          64,861
Deferred income taxes                                         11,281          11,743

Goodwill and other intangibles, net                          146,853         100,768
Other assets                                                  26,555          25,608
                                                           ---------       ---------
                                                           $ 579,846       $ 547,706
                                                           =========       =========

         Liabilities and Shareholders' Equity

Current liabilities:
     Current installments of long-term debt                $  11,126       $  10,667
     Accounts payable                                         41,754          28,791
     Accrued expenses                                         80,781          69,689
                                                           ---------       ---------
           Total current liabilities                         133,661         109,147

Long-term liabilities:
     Long-term debt, excluding current installments            5,921           5,681
     Other long-term liabilities                              11,783          10,501

Shareholders' equity:
     Common stock and additional paid-in capital             207,564         207,033
     Retained earnings                                       223,470         220,836
     Other                                                    (2,553)         (5,492)
                                                           ---------       ---------
           Total shareholders' equity                        428,481         422,377
                                                           ---------       ---------
                                                           $ 579,846       $ 547,706
                                                           =========       =========
</TABLE>

See accompanying Notes to Unaudited Consolidated Financial Statements.


                                  Page 2 of 33
<PAGE>

                        Technitrol, Inc. and Subsidiaries

                       Consolidated Statements of Earnings

                                 (Unaudited)
                      In thousands, except per share data

<TABLE>
<CAPTION>
                                                                                      Quarter Ended
                                                                              March 28,       March 29,
                                                                                   2003            2002
                                                                                   ----            ----
<S>                                                                           <C>             <C>
Net sales                                                                     $ 122,544       $  93,420
Costs and expenses:
     Cost of sales                                                               92,123          74,168
     Selling, general and administrative expenses                                23,734          23,479
     Restructuring and unusual and infrequent items                               3,893           2,658
                                                                              ---------       ---------

         Total costs and expenses applicable to sales                           119,750         100,305
                                                                              ---------       ---------
Operating profit (loss)                                                           2,794          (6,885)

Other (expense) income:
     Interest income (expense), net                                                (287)           (241)
     Equity method investment earnings                                              272              --
     Other                                                                          (40)           (416)
                                                                              ---------       ---------

         Total other income (expense)                                               (55)           (657)
                                                                              ---------       ---------

Earnings (loss) before taxes and cumulative effect of accounting change           2,739          (7,542)

Income taxes (benefit)                                                              105          (2,381)
                                                                              ---------       ---------
Net earnings (loss) before cumulative effect of accounting change                 2,634          (5,161)
Cumulative effect of accounting change, net of income taxes                          --         (15,738)
                                                                              ---------       ---------
Net earnings (loss)                                                           $   2,634       $ (20,899)
                                                                              =========       =========

Basic earnings (loss) per share before cumulative effect of accounting
    change                                                                    $    0.07       $   (0.15)
Cumulative effect of accounting change, net of income taxes                          --       $   (0.47)
                                                                              ---------       ---------
Basic earnings (loss) per share                                               $    0.07       $   (0.63)
                                                                              =========       =========

Diluted earnings (loss) per share before cumulative effect of accounting
    change                                                                    $    0.07       $   (0.15)
Cumulative effect of accounting change, net of income taxes                          --       $   (0.47)
                                                                              ---------       ---------
Diluted earnings (loss) per share                                             $    0.07       $   (0.63)
                                                                              =========       =========
</TABLE>

    See accompanying Notes to Unaudited Consolidated Financial Statements.


                                  Page 3 of 33
<PAGE>

                        Technitrol, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows

                                   (Unaudited)

                                  In thousands

<TABLE>
<CAPTION>
                                                                                     Quarter Ended
                                                                               March 28,       March 29,
                                                                                    2003            2002
                                                                                    ----            ----
<S>                                                                            <C>             <C>
Cash flows from operating activities:
Net earnings (loss)                                                            $   2,634       $ (20,899)
Adjustments to reconcile net earnings to net cash provided
   by operating activities:
     Depreciation and amortization                                                 5,628           5,329
     Tax benefit from employee stock compensation                                   (122)            406
     Amortization of stock incentive plan expense                                    466             204
     Restructuring and unusual and infrequent items, net of cash payments          3,100            (187)
     Cumulative effect of accounting change                                           --          15,738
     Changes in assets and liabilities, net of effect of acquisitions:
       Trade receivables                                                             460           1,463
       Inventories                                                                 3,658           4,858
       Prepaid expenses and other current assets                                  (3,757)          1,836
       Accounts payable and accrued expenses                                       1,947           3,183
     Other, net                                                                   (2,325)         (3,680)
                                                                               ---------       ---------
         Net cash provided by operating activities                                11,689           8,251
                                                                               ---------       ---------
Cash flows from investing activities:
     Acquisitions, net of cash acquired                                          (81,926)             --
     Capital expenditures                                                         (1,716)         (1,366)
     Proceeds from sale of property, plant and equipment                             324              13
                                                                               ---------       ---------
         Net cash used in investing activities                                   (83,318)         (1,353)
                                                                               ---------       ---------
Cash flows from financing activities:
     Dividends paid                                                                   --          (1,137)
     Principal payments of long-term debt, net                                      (137)        (38,629)
     Sale of stock through employee stock purchase plan                              481             760
                                                                               ---------       ---------
         Net cash provided by (used in) financing activities                         344         (39,006)
                                                                               ---------       ---------
Net effect of exchange rate changes on cash                                       (2,583)           (129)
                                                                               ---------       ---------
Net decrease in cash and cash equivalents                                        (73,868)        (32,237)
Cash and cash equivalents at beginning of year                                   205,075         142,267
                                                                               ---------       ---------
Cash and cash equivalents at March 28, 2003 and
  March 29, 2002                                                               $ 131,207       $ 110,030
                                                                               =========       =========
</TABLE>

     See accompanying Notes to Unaudited Consolidated Financial Statements.


                                  Page 4 of 33
<PAGE>

                        Technitrol, Inc. and Subsidiaries

            Consolidated Statement of Changes in Shareholders' Equity

                          Quarter Ended March 28, 2003

                                   (Unaudited)
                                  In thousands

<TABLE>
<CAPTION>
                                                                                               Other
                                                                                     -----------------------
                                                                                                    Accumu-
                                              Common stock and                                   lated 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 27, 2002               40,130      $ 207,033       $220,836      $(1,177)      $(4,315)
Stock options, awards and related
    compensation                               11            163             --          178
Tax benefit of stock compensation              --           (122)            --           --
Stock issued under employee stock
    purchase plan                              36            490             --           --
Currency translation adjustments               --             --             --           --         2,761       $2,761
Net earnings                                   --             --          2,634           --            --       $2,634
                                                                                                                 ------
Comprehensive income                                                                                             $5,395
                                           ------      ---------       --------      -------       -------       ------
Balance at March 28, 2003                  40,177      $ 207,564       $223,470      $  (999)      $(1,554)
                                           ======      =========       ========      =======       =======
</TABLE>

See accompanying Notes to Unaudited Consolidated Financial Statements.


                                  Page 5 of 33
<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, refer to Note 1 of Notes to Consolidated
Financial Statements included in Technitrol's Form 10-K filed for the year ended
December 27, 2002. We sometimes refer to Technitrol as "we" or "our".

      The results for the quarter ended March 28, 2003 and March 29, 2002, have
been prepared by our management without audit by our independent auditors. In
the opinion of management, the financial statements fairly present in all
material respects, the financial position and results of operations for the
periods presented. To the best of our knowledge and belief, 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 28, 2003 are not necessarily indicative of
annual results.

            New Accounting Pronouncements In January 2003, the Financial
Accounting Standards Board ("FASB") issued FASB Interpretation No. 46
Consolidation of Variable Interest Entities ("FIN 46"). FIN 46 clarifies the
application of Accounting Research Bulletin No. 51, Consolidated Financial
Statements, to certain entities in which equity investors do not have the
characteristics of a controlling financial interest, or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. We were required to adopt the
provisions of FIN 46 for variable interest entities created after January 31,
2003, whereas it is otherwise effective June 15, 2003 for variable interest
entities acquired before February 1, 2003. Adoption of this interpretation is
not expected to have a material effect on our revenue, operating results,
financial position, or liquidity.

      In December 2002, the FASB issued Statement No. 148, Accounting for
Stock-Based Compensation, Transition and Disclosure, an amendment to Statement
No. 123 ("SFAS 148"). SFAS 148 provides alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, SFAS 148 amends the disclosure requirements
of Statement No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), by
requiring prominent disclosures in both annual and interim financial statements,
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The provisions of SFAS 148 are
effective for fiscal years ending after December 15, 2002. We adopted the
provisions of SFAS 123, as amended by SFAS 148, as of the beginning of our
fiscal year in 2003. We used the prospective method of adoption, which
recognizes expense for all employee awards granted, modified or settled after
the beginning of the fiscal year in which the recognition provisions are first
applied. Adoption of this standard did not have a material effect on our
revenue, operating results, financial position or liquidity.

      In November 2002, the FASB issued FASB Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees and Indebtedness of Others ("FIN 45"). FIN 45 elaborates on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued.
FIN 45 also clarifies that a guarantor is required to recognize, at the
inception of a guarantee, a liability for the fair value of the obligation
undertaken in issuing the guarantee. We were required to adopt the provisions of
FIN 45 on a prospective basis to guarantees issued or modified after December
31, 2002. We have not issued any guarantees for performance of third parties
since December 31, 2002. Accordingly, adoption of this interpretation did not
have a material effect on our revenue, operating results, financial position or
liquidity.

      In June 2002, the FASB issued Statement No. 146 Accounting for Costs
Associated with Exit or Disposal Activities ("SFAS 146"). SFAS 146 superceded
the Emerging Issues Task Force Issue No. 94-3, Liability Recognition for Certain
Termination Benefits and Other Costs to Exit an Activity, ("EITF 94-3") The
principal difference between SFAS 146 and EITF 94-3 is that SFAS 146 requires
that a liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred. Under EITF 94-3, a liability for an
exit cost was recognized at the date of an entity's commitment to an exit plan.
As such, under SFAS 146, an entity's


                                  Page 6 of 33
<PAGE>

                        Technitrol, Inc. and Subsidiaries

         Notes to Unaudited Consolidated Financial Statements, continued

(1)   Accounting Policies, continued

commitment to a plan by itself, does not create a present obligation meeting the
definition of a liability. SFAS 146 also established fair value as the objective
for initial measurement of the liability. We were required to adopt the
provisions of SFAS 146 for all exit or disposal activities initiated after
December 15, 2002.

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

(2)   Acquisitions

      Eldor High Tech Wire Wound Components S.r.L.: In January 2003, we acquired
all of the capital stock of Eldor High Tech Wire Wound Components S.r.L.
(Eldor), headquartered in Orsenigo, Italy with production operations in Izmir
and Istanbul, Turkey. Eldor produces flyback transformers and switch mode
transformers for the European television market. The acquisition was accounted
for by the purchase method of accounting. The preliminary purchase price was
approximately $81.9 million net of cash acquired, plus related acquisition costs
and expenses. The fair value of net tangible assets acquired approximated $12.3
million. Based on the fair value of assets acquired, the preliminary allocation
of the unadjusted purchase price included $18.6 million for manufacturing
know-how, $6.1 million for customer relationships, $1.5 million for tradename
and $15.8 million allocated to goodwill. These fair value allocations are
subject to adjustment. All of the separately identifiable intangible assets will
be amortized, with estimated useful lives of 20 years for manufacturing
know-how, 8 years for customer relationships and 2 years for tradename. The
purchase price was funded with cash on hand. At closing, Eldor has no funded
debt. At the present time, we intend that the Eldor business will form the
nucleus of a new consumer division in the Pulse segment and will be treated as a
separate reporting unit for purposes of SFAS 142.

      Excelsus Technologies, Inc.: In August 2001, we 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 purchase price was approximately $83.3
million, net of $4.8 million of cash acquired. The fair value of net assets
acquired approximated $18.2 million. Based on the fair value of the assets
acquired, the allocation of the purchase price included $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. Included in the assets acquired was a $6.3 million tax receivable,
generated by the acceleration and settlement of Excelsus stock options at the
time of closing. We 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, we 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.

      During the quarter ended June 28, 2002, we recorded an impairment charge
of $32.1 million of the value assigned to the Excelsus trade names before any
tax benefit. The charge was included in the line "restructuring and unusual and
infrequent items" on the consolidated statement of earnings. This charge was
triggered by the combined effect of reorganizing Pulse into product-line based
organization and updated financial forecasts for DSL microfilters. In addition,
a purchase price allocation adjustment to record a deferred tax liability of
$16.0 million associated with the trade name was recorded and goodwill in an
equal amount was recognized. As required by FASB Statement No. 109, Accounting
for Income Taxes, approximately $12.8 million of the additional deferred tax
liability was recognized as a tax benefit in the consolidated statement of
earnings for the three months ended June 28, 2002, concurrent with the trade
name impairment.

      Full Rise Electronics Co. Ltd. (FRE): FRE is based in the Republic of
China (Taiwan) and manufactures connector products including single and
multiple-port jacks and supplies such products for us under a


                                  Page 7 of 33
<PAGE>

                        Technitrol, Inc. and Subsidiaries

         Notes to Unaudited Consolidated Financial Statements, continued

(2)   Acquisitions, continued

cooperation agreement. In April 2001, we made a minority investment in the
common stock of FRE, which was accounted for by the cost-basis method of
accounting. On July 27,2002, we made an additional investment in FRE of $6.7
million which increased the total investment to $20.9 million. As a result of
the increased ownership percentage to approximately 29%, we began to account for
the investment under the equity method. We also have an option to purchase
additional shares of common stock in FRE in the future. Also refer to Note 8
"Equity Method Investment".

(3)   Restructuring

      In the first quarter of 2003, we accrued $3.9 million for severance and
related payments comprising $1.6 million for the termination of approximately 30
manufacturing and support personnel at AMI Doduco's facility in Germany, $1.6
million to finalize the shutdown of a redundant facility in Spain acquired from
Engelhard-ECAL by a subsidiary of AMI Doduco and $0.6 million for severance and
related payments for 19 manufacturing and 4 support personnel at Pulse,
primarily in France and Mexico. The majority of these accruals is expected to be
utilized by the end of the second quarter of 2003.

      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. These accruals were primarily related
to Pulse. The vast majority of these accruals were utilized by the end of the
first quarter in 2002.

      Our restructuring charges are summarized on a year-to-date basis for 2003
as follows:

<TABLE>
<CAPTION>
                                                                AMI
      Restructuring provision (in millions):                   Doduco     Pulse       Total
      -----------------------                                  ------     -----       -----
<S>                                                             <C>        <C>        <C>
      Balance accrued at December 27, 2002                      $2.0       $2.2       $4.2

      Accrued during the three months ended March 28, 2003       3.3        0.6        3.9
      Severance and other cash payments                         (0.5)      (0.2)      (0.7)
      Non-cash asset disposals                                  (0.1)      (0.0)      (0.1)
                                                                ----       ----       ----

      Balance accrued at March 28, 2003                         $4.7       $2.6       $7.3
                                                                ====       ====       ====
</TABLE>

(4)   Inventories

      Inventories consisted of the following (in thousands):

                                                  March 28,      December 27,
                                                       2003              2002
                                                       ----              ----
                 Finished goods                     $22,627           $21,446
                 Work in process                     14,343            12,390
                 Raw materials and supplies          29,864            26,752
                                                    -------           -------
                                                    $66,834           $60,588
                                                    =======           =======

      The increase in inventory was primarily related to the Eldor acquisition.


                                  Page 8 of 33
<PAGE>

                        Technitrol, Inc. and Subsidiaries

         Notes to Unaudited Consolidated Financial Statements, continued

(5)   Derivatives and Other Financial Instruments

      We utilize 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 28, 2003, we had two foreign exchange forward contracts
outstanding to sell forward approximately 76.4 million euros in the aggregate,
in order to hedge intercompany loans. The terms of these contracts were
approximately 30 days. We had no other financial derivative instruments at March
28, 2003. 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 net earnings by the
weighted average number of common shares outstanding (excluding restricted
shares) during the period. We had restricted shares outstanding of approximately
163,000 and 319,000 as of March 28, 2003 and March 29, 2002, 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 136,000 for the three months ended
March 28, 2003. There were 340,000 stock options outstanding for the three
months ended March 29, 2002. 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):

<TABLE>
<CAPTION>
                                                                   Quarter Ended
                                                             March 28,       March 29,
                                                                  2003            2002
                                                                  ----            ----
<S>                                                         <C>             <C>
Net earnings (loss)                                         $    2,634      $  (20,899)
     Basic earnings (loss) per share:
         Shares                                                 39,991          33,361
         Per share amount, before change in accounting
            principle                                       $     0.07      $    (0.15)
     Change in accounting principle                                 --           (0.47)
                                                            ----------      ----------
     Per share amount                                       $     0.07      $     0.63)
                                                            ==========      ==========

     Diluted earnings (loss) per share:
         Shares                                                 40,134          33,680
         Per share amount, before change in accounting
            principle                                       $     0.07      $    (0.15)
         Change in accounting principle                             --           (0.47)
                                                            ----------      ----------
         Per share amount                                   $     0.07      $    (0.63)
                                                            ==========      ==========
</TABLE>


                                  Page 9 of 33
<PAGE>

                        Technitrol, Inc. and Subsidiaries

         Notes to Unaudited Consolidated Financial Statements, continued

(7)   Business Segment Information

      For the quarters ended March 28, 2003 and March 29, 2002 there were
immaterial amounts of intersegment revenues eliminated in consolidation. There
has been no material change in segment assets from December 27, 2002 to March
28, 2003, except for those related to the acquisition of Eldor by Pulse. In
addition, the basis for determining segment financial information has not
changed from 2002. Specific segment data are as follows:

<TABLE>
<CAPTION>
                                                                  Quarter Ended
                                                             March 28,      March 29,
Net sales:                                                        2003           2002
                                                                  ----           ----
<S>                                                          <C>             <C>
     Pulse                                                   $  67,880       $ 45,111
     AMI Doduco                                                 54,664         48,309
                                                             ---------       --------
         Total                                               $ 122,544       $ 93,420
                                                             =========       ========
Earnings (loss) before income taxes:
     Pulse                                                       5,556       $ (6,369)
     AMI Doduco                                                 (2,762)          (516)
                                                             ---------       --------
         Operating profit                                        2,794         (6,885)
     Other income expense, net                                     (55)          (657)
                                                             ---------       --------
     Earnings (loss) before income taxes and cumulative
       effect of accounting change                           $   2,739       $ (7,542)
                                                             =========       ========
</TABLE>

(8)   Equity Method Investment

      During the quarter ended September 27, 2002, our minority ownership in FRE
increased from approximately 19% to 29%. In accordance with generally accepted
accounting principles, we have adjusted presentations in all relevant prior
periods to reflect the impact of a change in accounting for our ownership in
this investment from the cost basis method to the equity method of accounting as
if the 19% investment was accounted for as an equity method investment since the
initial investment. All prior period amounts have been adjusted to reflect this
recognition of equity earnings as if it occurred at the time of the original
investment in April 2001. This investment is reflected in the Other assets
caption on the Consolidated Balance Sheets.

(9)   Accounting for Stock Based Compensation

      We adopted SFAS 123, as amended by SFAS 148, at the beginning of the 2003
fiscal year. We implemented SFAS 123 under the prospective method approach per
SFAS 148, whereby compensation expense is recorded for all awards subsequent to
adoption.

      As permitted by the provisions of SFAS 123, we applied Accounting
Principles Board Opinion 25, "Accounting for Stock Issued to Employees" and
related interpretations in accounting for our stock option and purchase plans
prior to adoption of SFAS in fiscal 2003. Accordingly, no compensation cost was
recognized for our stock option and employee purchase plans prior to fiscal
2003.


                                 Page 10 of 33
<PAGE>

                        Technitrol, Inc. and Subsidiaries

         Notes to Unaudited Consolidated Financial Statements, continued

(9)   Accounting for Stock Based Compensation, continued

      If compensation cost for our stock option plan and stock purchase plan had
been determined based on the fair value as required by SFAS 123 for all awards,
our pro forma net income (loss) and earnings (loss) per basic and diluted share
would have been as follows, (amounts are in thousands, except per share
amounts):

<TABLE>
<CAPTION>
                                                                         Quarter Ended
                                                                   March 28,       March 29,
                                                                        2003            2002
                                                                        ----            ----
<S>                                                               <C>              <C>
Net income (loss), as reported                                    $    2,634       $  (20,899)
Add: Stock-based compensation expense included
  in reported net income (loss), net of taxes                            466              204
Deduct: Total stock-based compensation expense determined
  under fair value based method for all awards, net of taxes            (466)            (368)
                                                                  ----------       ----------
Net income (loss) adjusted                                        $    2,634       $  (21,063)
Basic net income (loss) per share - as reported                   $     0.07       $    (0.63)
Basic net income (loss) per share - adjusted                      $     0.07       $    (0.63)
Diluted net income (loss) per share - as reported                 $     0.07       $    (0.63)
Diluted net income (loss) per share - adjusted                    $     0.07       $    (0.63)
</TABLE>

      At March 28, 2003, we had approximately 340,000 options outstanding,
representing less than 1% of our outstanding shares of common stock. The value
of restricted stock has always been and continues to be recorded as compensation
expense over the restricted period, and such expense is included in the results
of operations for the period ended March 28, 2003 and March 29, 2002,
respectively.


                                 Page 11 of 33
<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 and involve a number of risks and uncertainties.
Actual results may differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by us
described in "Risk Factors" section of this report on page 21 through 26.

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 our annual report on Form 10-K for
the period ended December 27, 2002 describes the significant accounting policies
and methods used in the preparation of the Consolidated Financial Statements.
Estimates are used for, but not limited to, the accounting for inventory
provisions, impairment of goodwill and other intangibles, restructuring expense
and acquisition related restructuring costs, income taxes, and contingency
accruals. Actual results could differ from these estimates. The following
critical accounting policies are impacted significantly by judgments,
assumptions and estimates used in the preparation of the Consolidated Financial
Statements.

      Inventory Provisions. Inventory purchases and commitments are based upon
future demand forecasts estimated by taking into account actual purchases of our
products over the recent past and customer forecasts. If there is a sudden and
significant decrease in demand for our products or there is a higher risk of
inventory obsolescence because of rapidly changing technology or customer
requirements, we may be required to write down our inventory and our gross
margin could be negatively affected. If we were to sell or use a significant
portion of inventory already written down, our gross margin could be positively
affected.

      Impairment of Goodwill and Other Intangibles. We will assess goodwill
impairment on an annual basis and between annual tests in certain circumstances.
In addition, 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.

      Restructuring Expense and Acquisition Related Restructuring Costs. Our
recent restructuring activities, which related to our existing and recently
acquired businesses, were designed to reduce both our fixed and variable costs,
particularly in response to the dramatically 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. Other
restructuring costs are expensed during the period in which we incur those
costs, and all of the requirements for accrual are met in accordance with the
applicable guidance. Restructuring costs are recorded based upon our best
estimates at the time of accrual, such as estimated residual asset values. Our
actual expenditures for the restructuring activities may differ from the
initially recorded costs. If this occurs, we would adjust our initial estimates
in future periods. In the case of acquisition-related restructuring costs,
depending on whether the assets impacted came from the acquired entity and the
timing of the restructuring charge, such adjustment 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 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, because, in accordance with the provisions of
Accounting Principles Board Opinion No. 23, Accounting for Income Taxes -
Special Areas ("APB 23") we intend to reinvest these earnings outside the U.S.
indefinitely. If we encounter a significant domestic need for liquidity that we
cannot fulfill through borrowings, equity offerings, or other internal or
external sources, we may experience unfavorable tax consequences as cash
invested outside the U.S. is transferred to the U.S. This adverse consequence
would occur if the transfer of cash into the U.S. were subject to income tax
without sufficient foreign tax credits available to offset the U.S. tax
liability.


                                 Page 12 of 33
<PAGE>

      Contingency Accruals. During the normal course of business, a variety of
issues may arise, which may result in litigation, environmental compliance and
other contingent obligations. In developing our contingency accruals we consider
both the likelihood of a loss or incurrence of a liability as well as our
ability to reasonably estimate the amount of exposure. We record contingency
accruals when a liability is probable and the amount can be reasonably
estimated. We periodically evaluate available information to assess whether
contingency accruals should be adjusted. We could be required to record
additional expenses in future periods if our initial estimates were too low, or
reverse part of the charges that we recorded initially if our estimates were too
high.

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 this time period,
the growth in our consolidated net sales has been due in large part to the
growth of Pulse. However, beginning in late 2000, the electronics markets served
by Pulse have experienced a severe global contraction. We believe that in 2002,
many of the markets Pulse serves began to stabilize in terms of unit sales.
However, because of excess capacity, relocation by customers from North America
and Europe to the Far East, and emergence of strong competitors in the Far East,
the pricing environment has been and remains deflationary for Pulse's products.
We believe that a broad-based market rebound in terms of pricing power will be
erratic and gradual probably lasting several years. In markets where unit demand
has begun to recover, downward pressure on selling prices has kept total revenue
from growing proportionately with unit growth.

      Demand slowed at AMI Doduco as we entered 2002, mirroring the prevailing
economic conditions in North America and Europe. However, during 2002 AMI Doduco
experienced increases in design and quoting activities for component
subassemblies in Europe. This included component subassemblies for automotive
applications such as multi-function switches, motor control sensors and ignition
security systems, and for non-automotive uses such as appliance and industrial
controls and medical equipment. AMI Doduco continued cost reduction actions
including work force adjustments and plant consolidations in line with demand
around the world

      In 2002, we recorded a goodwill impairment charge of $15.7 million, net of
income tax benefit, related to AMI Doduco as a cumulative effect of accounting
change. We also recorded a trade name impairment charge of $32.1 million, less a
$12.8 million income tax benefit, related to Pulse.

      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. Over the past 18
months, our gross margin has been positively impacted by the savings from our
various restructuring activities and ongoing cost and expense controls. Our
gross margin is also significantly affected by capacity utilization,
particularly at AMI Doduco. Pulse's markets are characterized by a relatively
short-term product life cycle compared to AMI Doduco. 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 relatively long-term and mature product
line, without significant turnover, compared to Pulse, with less variation in
the prices of product sold. Therefore, changes in prices have not historically
had a material impact on AMI Doduco revenue. Accordingly, a significant portion
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


                                 Page 13 of 33
<PAGE>

acquisition. Our acquisitions continually change the mix of our net sales. Pulse
made numerous acquisitions in recent years, which have increased our penetration
into our primary markets and expanded our presence in new markets. Recent
examples of these acquisitions include Excelsus, and the consumer electronics
business of Eldor Corporation. Excelsus was acquired in August 2001 for
approximately $83.3 million, net of cash acquired. Excelsus was based in
Carlsbad, California and was a leading producer of customer-premises digital
subscriber line filters and other broadband accessories. Pulse acquired Eldor's
consumer electronics business in January 2003 for approximately $84.5 million.
Eldor is headquartered in Orsenigo, Italy with production operations in Istanbul
and Izmir, Turkey. Eldor's consumer business is a leading supplier of flyback
transformers to the European television industry.

      Similarly, AMI Doduco has made a number of acquisitions over the years. 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. Generally, AMI Doduco's acquisitions have been
driven by our strategy of expanding our product and geographical market presence
for electrical contact products.

      Due to our integration of acquisitions and the interchangeable sources of
net sales between existing and acquired operations, historically, we have not
separately tracked the net sales of an acquisition after the date of the
transaction.

      Recent Cost Reduction Programs. During 1999 and 2000, the electronic
components industries served by Pulse were 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 many of our customers canceled orders and decreased
their level of business activity as a result of lower demand for their end
products. 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 2002. 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 non-residential construction spending, and reduced
capital spending. AMI Doduco has a higher fixed cost component of manufacturing
activity than Pulse, as it is more capital intensive. Therefore, AMI Doduco is
unable to reduce its capacity as quickly as Pulse in response to declining
market demand, although continuing actions are being taken to align AMI Doduco's
capacity with current market demand. In response to the decline in demand and
deflationary environment for our products, we implemented a series of cost
reduction initiatives and programs, summarized as follows:

      In the first quarter of 2003, we accrued $3.9 million for severance and
related payments comprised of $1.6 million for the termination of approximately
30 manufacturing and support personnel at AMI Doduco's facility in Germany, $1.6
million to finalize the shutdown of a redundant facility in Spain acquired by a
subsidiary of AMI Doduco from Engelhard-ECLAL and $0.6 million for severance and
related payments for 19 manufacturing and 4 support personnel at Pulse,
primarily in France and Mexico. The majority of these accruals is expected to be
utilized by the end of the second quarter of 2003.

      In 2002, we announced the closure of our production facility in the
Philippines. The production at this facility was transferred to other Pulse
facilities in Asia. We recorded charges of $3.8 million for this plant closing,
comprised of $1.4 million for severance and related payments and $2.4 million
for asset writedowns. The majority of this accrual was utilized by the end of
2002. We also adopted other restructuring plans during 2002. In this regard, we
recorded provisions of $6.0 million for personnel reductions. Approximately 800
personnel were terminated in 2002 and substantially all of the employee
severance and related payments in connection with these actions were completed
as of December 27, 2002. An additional provision of $7.0 million was recorded in
2002 related to asset writedowns. These assets were primarily Asian-based
production equipment that became idle in 2002.

      As a result of our continuing focus on both economic and operating profit,
we will continue to aggressively size both Pulse and AMI Doduco so that costs
are matched to revenue and unit demand and as we pursue additional growth
opportunities. The amounts of additional charges will depend on specific actions
taken. The actions taken over the past two years such as plant closures, asset
impairments and reduction in personnel worldwide have resulted in the
elimination of a variety of costs. The majority of these costs represent the
annual salaries and benefits of


                                 Page 14 of 33
<PAGE>

terminated employees, both those directly related to manufacturing and those
providing selling, general and administrative services. The eliminated costs
also include depreciation savings from disposed equipment and the relocation of
capacity to factories in lower cost countries, primarily the PRC. If incoming
orders increase substantially, additional hiring may be necessary to expand
capacity. However, we do not anticipate requiring additional capacity in the
foreseeable future.

      International Operations. An increasing percentage of our sales in recent
years has been outside of the United States. At December 27, 2002, we had
operations in 9 countries and we have significant net sales in currencies other
than the U.S. dollar. For the year ended December 27, 2002, 68.7% of our net
sales were outside of the U.S. For the year ended December 28, 2001, 64.9% of
our net sales were to customers outside of the U.S. 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 less than it is at AMI Doduco, although this
is expected to change as Eldor sells to its customers primarily in euros. As a
result of this and other factors, prior to the acquisition of Eldor, Pulse used
the U.S. dollar as its functional currency in Europe while AMI Doduco uses the
euro. For the acquired Eldor operations, Pulse uses the euro as its functional
currency. The use of different functional currencies creates different financial
effects. AMI Doduco's euro-denominated sales and earnings may result in higher
or lower dollar sales upon translation for our U.S. consolidated financial
statements. We may also experience a positive or negative translation adjustment
to equity because our investment in Eldor and AMI Doduco's European operations
may be worth more or less in U.S. dollars after translation for our U. S.
consolidated financial statements. At Pulse, we may incur foreign currency gains
or losses as euro-denominated transactions are remeasured to U.S. dollars for
financial reporting purposes. 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 our expenses and bank borrowings
in Europe, all of which are also denominated in euros. Despite Pulse's
significant presence in Asia, the vast majority of our revenues from customers
in Asia are denominated in U.S. dollars. As a consequence, Pulse has less
exposure to financial results in U.S. consolidation than AMI Doduco's sales and
profit fluctuations caused by currency fluctuations.

      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 28, 2003, we had two foreign currency forward contracts outstanding
to sell forward approximately 76.4 million of euros 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 some of its electrical contacts, contact materials and contact
subassemblies. Historically, we have leased or held these materials through
consignment arrangements with our suppliers. Leasing and consignment costs have
been typically 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 Turkey and 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 realize similar benefits in the future. Developing countries and, in
particular, the People's Republic of China, may change their tax policies at any
time.


                                 Page 15 of 33
<PAGE>

      We have not provided for U.S. federal income and foreign withholding taxes
on approximately $307.6 million of our non-U.S. subsidiaries' undistributed
earnings (as calculated for income tax purposes) as of December 27, 2002, as per
Accounting Principles Board Opinion No. 23, Accounting for Income Taxes -
Special Areas. 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. Unrecognized deferred taxes on these
undistributed earnings are estimated to be approximately $93.7 million. Where
excess cash has accumulated in our non-U.S. subsidiaries and it is advantageous
for tax reasons, subsidiary earnings may be remitted.


                                 Page 16 of 33
<PAGE>

Results of Operations

      Three months ended March 28, 2003 compared to the three months ended March
29, 2002

      Net Sales. Net sales for the three months ended March 28, 2003 increased
$29.1 million, or 31.2%, to $122.5 million from $93.4 million in the three
months ended March 29, 2002. Our sales increase from the comparable period last
year was attributable primarily to the increases from the Eldor acquisition,
offset by continuing effects of the global downturn in markets served by Pulse,
and to a lesser extent, AMI Doduco, that began late in 2000. Factors
contributing to the reduction in revenues included declining capital
expenditures by end-users, shortened lead times and consignment-type
arrangements making large inventory positions unnecessary and deflationary
pricing pressures, particularly in the electronics supply chain.

      Pulse's net sales increased $22.8 million, or 50.5%, to $67.9 million for
the three months ended March 28, 2003 from $45.1 million in the three months
ended March 29, 2002. Some increase was experienced in Pulse's networking,
consumer telecommunications and power conversion markets on a worldwide basis.
However, most of the increase is attributable to sales derived from our
acquisition of Eldor since the date of acquisition in January 2003.

      AMI Doduco's net sales increased $6.4 million, or 13.2%, to $54.7 million
for the three months ended March 28, 2003 from $48.3 million in the three months
ended March 29, 2002. Sales in the 2003 period reflect weak North American and
European markets more than offset by an increase in the average euro-to-U.S.
dollar exchange rate. Weak net sales resulted from lower manufacturing activity
primarily related to weak demand in the commercial and industrial machinery,
telecommunications and appliance end markets. On the other hand, demand for
automotive and high voltage components, particularly in Europe, remained strong.

      Cost of Sales. Our cost of sales increased $18.0 million, or 24.2%, to
$92.1 million for the three months ended March 28, 2003 from $74.2 million for
the three months ended March 29, 2002. Our consolidated gross margin for the
three months ended March 28, 2003 was 24.8% compared to 20.6% for the three
months ended March 29, 2002. Our consolidated gross margin in 2003 was
positively affected by:

      o     the gross margin on Eldor sales, which is higher than the average
            gross margin on AMI Doduco sales and sales of some of Pulse's legacy
            products,

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

      o     better capacity utilization at Pulse in 2003 than in 2002.

      Selling, General and Administrative Expenses. Total selling, general and
administrative expenses for the three months ended March 28, 2003 increased $0.2
million, or 1%, to $23.7 million, or 19.4% of net sales, from $23.5 million, or
25.1% net of sales for the three months ended March 29, 2002. Increased spending
as a result of the Eldor acquisition was more than offset by restructuring
actions that we took over the last year to reduce costs and tighten spending
controls.

      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 28, 2003 and
March 29, 2002 respectively, RD&E by segment was as follows (dollars in
thousands):

                                            2003               2002
                                            ----               ----

      Pulse                                $3,357             $3,837
      Percentage of segment sales             4.9%               8.5%

      AMI Doduco                            1,049             $  989
      Percentage of segment sales             1.9%               2.0%

      Although some consolidation of RD&E, particularly design action, has
occurred through restructuring activities at Pulse, we have minimized spending
cuts in the RD&E area as we believe that future sales in the


                                 Page 17 of 33
<PAGE>

electronic components markets will be driven by next-generation products. Design
and development activities with our OEM customers continued at an aggressive
pace during 2002 and into 2003. The change in RD&E as a percentage of sales at
Pulse relates to the effect of the acquisition of Eldor.

      Interest. Net interest expense was $0.3 million for the three months ended
March 28, 2003 compared to net interest expense of $0.2 million for the three
months ended March 29, 2002. Although the balance of invested cash increased in
2003 over the comparable period in 2002 by $21.2 million, a lower interest
income yield resulted in higher net interest expense. Recurring components of
interest expense (silver leasing fees, interest on bank debt and bank commitment
fees) approximated those of 2002.

      Our credit facility, which we entered into on June 20, 2001, has variable
interest rates. Accordingly, interest expense may increase if the rates
associated with, or the amounts borrowed under, our credit facilities move
higher during subsequent quarters. At March 28, 2003, we had no borrowings under
this facility. 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 for the three months ended
March 28, 2003 was 3.8% compared to 31.6%, before a change in accounting
principle, in the form of a benefit for the three months ended March 29, 2002.
The lower tax rate in 2003 resulted from a higher proportion of income being
attributable to low-tax jurisdictions, particularly China and Izmir, Turkey,
combined with significant expenses of AMI Doduco in high-tax jurisdictions.

Liquidity and Capital Resources

      Working capital as of March 28, 2003 was $172.6 million compared to $235.6
million as of December 27, 2002. This decrease was primarily due to the cash
purchase of the Eldor business in January 2003, which reduced invested cash as
of March 28, 2003. Cash and cash equivalents, which is included in working
capital, decreased from $205.1 million as of December 27, 2002 to $131.2 million
as of March 28, 2003.

      Net cash provided by operating activities was $11.7 million for the three
months ended March 28, 2003 and $8.3 million in the comparable period of 2002,
an increase of $3.4 million. This increase is primarily attributable to the
higher net earnings increase during the three months ended March 28, 2003,
partially offset by increased working capital requirements related to increased
unit volumes.

      Capital expenditures were $1.7 million during the three months ended March
28, 2003 and $1.4 million in the comparable period of 2002. We make capital
expenditures to expand production capacity and to improve our operating
efficiency. We plan to continue making such expenditures in the future as and
when necessary.

      We used $81.9 million cash for acquisitions in the three months ended
March 28, 2003 and none for the comparable period in 2002. The 2003 spending was
comprised of the acquisition of Eldor. We may acquire other businesses or
product lines to expand our breadth and scope of operations. We may also
exercise our option to expand our investment in FRE during 2003.

      We paid dividends of $1.1 million in the three months ended March 29,
2002. After paying a dividend on 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.

      As of March 28, 2003, we have no outstanding borrowings under our existing
three-year revolving credit agreement. We entered into this credit agreement on
June 20, 2001 providing for $225.0 million of credit capacity. Following the
conclusion of our follow-on equity offering in April 2002, we voluntarily
reduced the size of this credit facility to a maximum of $175.0 million in order
to reduce commitment fees and to size the facility to estimated future needs
given cash on hand, and again in March 2003 to a maximum of $125.0 million. We
also amended the minimum net worth threshold from $275.0 million to $259.3
million as a result of a cumulative effect of an accounting change, recorded in
the three months ended March 29, 2002. As of March 28, 2003 the amended facility
consists of:


                                 Page 18 of 33
<PAGE>

      o     an aggregate U.S. dollar-based revolving line of credit in the
            principal amount of up to $125.0 million, including individual
            sub-limits of:

            -     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 $75.0 million; and

            -     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.

The amounts outstanding under the credit facility in total may not exceed $125.0
million. Outstanding borrowings are limited to a maximum of three times our
earnings before interest, taxes, depreciation and amortization, (EBITDA) on a
rolling twelve-month basis as of the most recent quarter-end. We have no amounts
outstanding under the facility as of March 28, 2003.

      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.

      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. It is 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.

      We also have obligations outstanding under two unsecured term loan
agreements. The first is with Baden-Wurttembergische Bank for borrowing under
two loans, each in the amount of approximately 5.1 million euros, both due in
June 2003. The second is with Sparkasse Pforzheim, for the borrowing of
approximately 5.1 million euros, and is due in August 2009.

      We had three standby letters of credit outstanding at March 28, 2003 in
the aggregate amount of $0.8 million securing transactions entered into in the
ordinary course of business.

      We had commercial commitments outstanding at March 28, 2003 of
approximately $41.1.million due under precious metal consignment-type leases.

      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 operating cash requirements in the foreseeable
future. In addition, we may use internally generated funds or borrowings, or
additional equity offerings for acquisitions of suitable businesses or assets.

      With the exception of approximately $10.0 million of retained earnings as
of December 27, 2002 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. This favorable situation could change if
these countries


                                 Page 19 of 33
<PAGE>

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.

New Accounting Pronouncements

      In January 2003, the Financial Accounting Standards Board ("FASB") issued
FASB Interpretation No. 46 Consolidation of Variable Interest Entities ("FIN
46"). FIN 46 clarifies the application of Accounting Research Bulletin No. 51,
Consolidated Financial Statements, to certain entities in which equity investors
do not have a controlling financial interest or do not have sufficient equity at
risk for the entity to finance its activities without additional subordinated
financial support from other parties. We were required to adopt the provisions
of FIN 46 for variable interest entities created after January 31, 2003 whereas
it is otherwise effective June 15, 2003 for variable interest entities acquired
before February 1, 2003. Adoption of this interpretation is not expected to have
a material effect on our revenue, operating results, financial position, or
liquidity.

      In December 2002, the FASB issued Statement No. 148, Accounting for
Stock-Based Compensation, Transition and Disclosure, an amendment to Statement
No. 123 ("SFAS 148"). SFAS 148 provides alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, SFAS 148 amends the disclosure requirements
of Statement No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), by
requiring prominent disclosures in both annual and interim financial statements,
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The provisions of SFAS 148 are
effective for fiscal years ending after December 15, 2002. We adopted the
provisions of SFAS 123, as amended by SFAS 148, as of the beginning of our
fiscal year in 2003. We used the prospective method of adoption, which
recognizes expense for all employee awards granted, modified or settled after
the beginning of the fiscal year in which the recognition provisions are first
applied. Adoption of this standard did not have a material effect on our
revenue, operating results financial position or liquidity.

      In November 2002, the FASB issued FASB Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees and Indebtedness of Others ("FIN 45"). FIN 45 elaborates on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued.
FIN 45 also clarifies that a guarantor is required to recognize, at the
inception of a guarantee, a liability for the fair value of the obligation
undertaken in issuing the guarantee. We were required to adopt the provisions of
FIN 45 on a prospective basis to guarantees issued or modified after December
31, 2002. We have not issued any guarantees for performance of third parties
since December 31, 2002. Accordingly, adoption of this interpretation did not
have a material effect on our revenue, operating results, financial position or
liquidity.

      In June 2002, the FASB issued Statement No. 146 Accounting for Costs
Associated with Exit or Disposal Activities ("SFAS 146"). SFAS 146 superceded
the Emerging Issues Task Force Issue No. 94-3, Liability Recognition for Certain
Termination Benefits and Other Costs to Exit an Activity, ("EITF 94-3") The
principal difference between SFAS 146 and EITF 94-3 is that SFAS 146 requires
that a liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred. Under EITF 94-3, a liability for an
exit cost was recognized at the date of an entity's commitment to an exit plan.
As such, under SFAS 146, an entity's commitment to a plan by itself, does not
create a present obligation meeting the definition of a liability. SFAS 146 also
established fair value as the objective for initial measurement of the
liability. We were required to adopt the provisions of SFAS for all exit or
disposal activities initiated after December 15, 2002.


                                 Page 20 of 33
<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 recent 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 into 2002,
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 a
contraction will last nor the strength of any recovery. Accordingly, we may
continue to experience volatility in both our revenues and profits.

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

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

An inability to adequately respond to changes in technology 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


                                 Page 21 of 33
<PAGE>

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. In 2002, we recorded a
goodwill impairment charge of $15.7 million related to AMI Doduco and a trade
name impairment charge of $32.1 million related to Pulse. 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.

      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 historical practice has been to quickly integrate acquisitions into
the existing business of the acquiring segment and to report financial
performance on the segment level. As a result of this practice, we do not
separately track the 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.


                                 Page 22 of 33
<PAGE>

      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.

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 ten years, both organically and as a
result of acquisitions. However, in the past two years 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 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 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


                                 Page 23 of 33
<PAGE>

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 recent contraction. Although backlog should not be
relied on 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.

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.
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 France, Germany, Hungary, Italy, Mexico, the Peoples' Republic of
China, or PRC, Spain and Turkey. In addition, approximately 68.7% of our
revenues for the year ended December 27, 2002 were derived from sales to
customers outside the United States. Our future operations and earnings may be
adversely affected by the risks related to, or any other problems arising from,
operating in international markets.

      Risks inherent in doing business internationally may include:

      o     economic and political instability;


                                 Page 24 of 33
<PAGE>

      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 substantially all of its manufacturing operations
in the PRC. Our presence in the PRC has enabled Pulse to maintain lower
manufacturing costs and to flexibly adjust our work force to demand levels for
our products. Although the PRC has a large and growing economy, the potential
economic, political, legal and labor developments entail uncertainties and
risks. 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 early 2003, we acquired
the consumer business of Eldor Corporation. While this business is headquartered
in Italy, all of its manufacturing operations are in Turkey. These operations in
Turkey are subject to unique risks, including those associated with continuing
Middle East geo-political conflicts.

      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. 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 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 layoffs or termination of employees.

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

      A significant portion of our cash is held offshore by our international
subsidiaries and is predominantly denominated in U.S. dollars. If we encounter a
significant domestic need for liquidity that we cannot fulfill through
borrowings, equity offerings, or other internal or external sources, we may
experience unfavorable tax and earnings consequences 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 27,
2002 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.


                                 Page 25 of 33
<PAGE>

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

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

      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 GTI 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.

Public Health Epidemics such as Severe Acute Respiratory Syndrome May Disrupt
Operations in Affected Regions and Affect Operating Results.

      Pulse maintains extensive manufacturing operations in the PRC, as do many
of our customers and suppliers. A sustained interruption of our manufacturing
operation, or those of our customers or suppliers, as a result of complications
from severe acute respiratory syndrome, could have a material adverse effect on
our business and results of operations.

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 27, 2002.

Item 4: Controls and Procedures

      Within the 90 day period prior to the filing date of this report, we
carried out an evaluation, under the supervision and with the participation of
management, including the Principal Executive Officer and Principal Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures pursuant


                                 Page 26 of 33
<PAGE>

to Exchange Act Rule 13a-14. Based upon that evaluation, and subject to the
limitations of the immediately following paragraph, the Principal Executive
Officer and Principal Financial Officer concluded that our disclosure controls
and procedures are effective in alerting them, on a timely basis, to material
information required to be included in our periodic SEC filings.

      Our review of our internal controls was made within the context of the
relevant professional auditing standards defining "internal controls,"
"reportable conditions," and "material weaknesses." "Internal controls" are
processes designed to provide reasonable assurance that our transactions are
properly authorized, our assets are safeguarded against unauthorized or improper
use, and our transactions are properly recorded and reported, all to permit the
preparation of our condensed consolidated financial statements in conformity
with accounting principles generally accepted in the United States. "Significant
deficiencies" are referred to as "reportable conditions," or control issues that
could have a significant adverse effect on our ability to properly authorize
transactions, safeguard our assets, or record, process, summarize or report
financial data in the condensed consolidated financial statements. A "material
weakness" is a particularly serious reportable condition where the internal
control does not reduce to a relatively low level the risk that misstatements
caused by error or fraud may occur in amounts that would be material in relation
to the condensed consolidated financial statements and not be detected within a
timely period by employees in the normal course of performing their assigned
functions. As part of our internal controls procedures, we also address other,
less significant control matters that we identify, and we determine what
revision or improvement to make, if any, in accordance with our on-going
procedures. However, the design of any system of controls is based in part upon
certain assumptions about the likelihood of future events and there is no
certainty that any design will succeed in achieving its stated goal under all
potential future considerations, regardless of how remote. In addition, our
evaluation of the impact on our controls and procedures of our recent
acquisition of the Eldor consumer business is still in process.

      There have been no significant changes in our internal controls or in
other factors that could significantly affect internal controls subsequent to
the date we carried out this evaluation, nor were there any significant
deficiencies or material weaknesses in our internal controls. As a result, no
corrective actions were required or undertaken.


                                 Page 27 of 33
<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 29

            (b)   Reports On Form 8-K                                      None

                        We filed a current report on Form 8-K dated January 10,
                  2003. This report pertains to our acquisition of Eldor High
                  Tech Wire Wound Components S.r.L., pursuant to the Share
                  Purchase Agreement entered into on January 9, 2003.


                                 Page 28 of 33
<PAGE>

                                  Exhibit Index

2.1      Agreement and Plan of Merger, dated as of May 23, 2001, as amended as
         of July 6, 2001, by and among Pulse Engineering, Inc., Pulse
         Acquisition Corporation, Excelsus Technologies, Inc., and certain
         principal shareholders of Excelsus Technologies, Inc. that are
         signatories thereto (incorporated by reference to Exhibit 2 to our Form
         8-K dated August 21, 2001).

2.2      Share Purchase Agreement, dated as of January 9, 2003, by Pulse
         Electronics (Singapore) Pte. Ltd. and Forfin Holdings B.V. that are
         signatories thereto (incorporated by reference to Exhibit 2 to our Form
         8-K dated January 10, 2003).

3.1      Amended and Restated Articles of Incorporation (incorporated by
         reference to Exhibit 1 to our 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 our Form 10-Q for the
         quarter ended June 29, 2001).

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

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

4.2      Amendment No. 1 to the Rights Agreement, dated March 25, 1998, between
         Technitrol, Inc. and Registrar and Transfer Company, as Rights Agent
         (incorporated by reference to Exhibit 4 to our Registration Statement
         on Form 8-A/A dated April 10, 1998).

4.3      Amendment No. 2 to the Rights Agreement, dated June 15, 2000, between
         Technitrol, Inc. and Registrar and Transfer Company, as Rights Agent
         (incorporated by reference to Exhibit 5 to our Registration Statement
         on Form 8-A/A dated July 5, 2000).

10.1     Technitrol, Inc. 2001 Employee Stock Purchase Plan (incorporated by
         reference to Exhibit 4.1 to our Registration Statement on Form S-8
         dated June 28, 2001, File Number 333-64060).

10.2     Technitrol, Inc. Restricted Stock Plan II, as amended and restated as
         of January 1, 2001 (incorporated by reference to Exhibit C, to our
         Definitive Proxy on Schedule 14A dated March 28, 2001).

10.3     Technitrol, Inc. 2001 Stock Option Plan (incorporated by reference to
         Exhibit 4.1 to our Registration Statement on Form S-8 dated June 28,
         2001, File Number 333-64068).

10.4     Technitrol, Inc. Board of Directors Stock Plan (incorporated by
         reference to Exhibit 4.1 to our Registration Statement on Form S-8
         dated June 1, 1998, File Number 333-55751).

10.5     Revolving Credit Agreement, by and among Technitrol, Inc. and certain
         of its subsidiaries, Bank of America, N.A. as Agent and Lender, and
         certain other Lenders that are signatories thereto, dated as of June
         20, 2001 (incorporated by reference to Exhibit 10.(a) to the Company's
         Form 10-Q for the quarter ended June 29, 2001).

10.6     Lease Agreement, dated October 15, 1991, between Ridilla-Delmont and
         AMI Doduco, Inc. (formerly known as Advanced Metallurgy Incorporated),
         as amended September 21, 2001 (incorporated by reference to Exhibit
         10.6 to the Company's Amendment No. 1 to Registration Statement on Form
         S-3 dated February 28, 2002, File Number 333-81286).


                                 Page 29 of 33
<PAGE>

10.7     Incentive Compensation Plan of Technitrol, Inc. (incorporated by
         reference to Exhibit 10.7 to Amendment No. 1 to our Registration
         Statement on Form S-3 filed on February 28, 2002, File Number
         333-81286).

10.8     Technitrol, Inc. Supplemental Retirement Plan, Amended and Restated
         January 1, 2002 (incorporated by reference to Exhibit 10.8 to Amendment
         No. 1 to our Registration Statement on Form S-3 filed on February 28,
         2002, File Number 333-81286).

10.9     Agreement between Technitrol, Inc. and James M. Papada, III, dated July
         1, 1999, as amended April 23, 2001, relating to the Technitrol, Inc.
         Supplemental Retirement Plan (incorporated by reference to Exhibit 10.9
         to Amendment No. 1 to our Registration Statement on Form S-3 filed on
         February 28, 2002, File Number 333-81286).

10.10    Letter Agreement between Technitrol, Inc. and James M. Papada, III,
         dated April 16, 1999, as amended October 18, 2000 (incorporated by
         reference to Exhibit 10.10 to Amendment No. 1 to our Registration
         Statement on Form S-3 filed on February 28, 2002, File Number
         333-81286).

10.11    Form of Indemnity Agreement (incorporated by reference to Exhibit 10.11
         to our Form 10-K for the year ended December 28, 2001).

10.12    Amendment 1 to Revolving Credit Agreement, by and among Technitrol,
         Inc. and certain of its subsidiaries, Bank of America, N.A. as Agent
         and Lender, and certain other Lenders that are signatories thereto,
         dated as of May 15, 2002 (incorporated by reference to Exhibit 10.12 to
         our Form 10-K for the year ended December 27, 2002).

10.13    Amendment 2 to Revolving Credit Agreement, by and among Technitrol,
         Inc. and certain of its subsidiaries, Bank of America, N.A. as Agent
         and Lender, and certain other Lenders that are signatories thereto,
         dated as of December 20, 2002 (incorporated by reference to Exhibit
         10.13 to our Form 10-K for the year ended December 27, 2002).

10.14    Letter modification to Revolving Credit Agreement, by and among
         Technitrol, Inc. and certain of its subsidiaries, Bank of America, N.A.
         as Agent and Lender, and certain other Lenders that are signatories
         thereto, dated as of March 6, 2003

99.1     Certification of Principal Executive Officer

99.2     Certification of Principal Financial Officer


                                 Page 30 of 33
<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 1, 2003            /s/ Drew A. Moyer
------------------------      --------------------------------------------------
          (Date)              Drew A. Moyer
                              Vice President, Corporate Controller and Secretary
                              (duly authorized officer, principal financial and
                              accounting officer)


                                 Page 31 of 33
<PAGE>

                                  CERTIFICATION

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

1. I have reviewed this quarterly report on Form 10-Q of Technitrol;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under with such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of
Technitrol as of, and for the periods presented in this quarterly report.

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

      a)    designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

      b)    evaluated the effectiveness of the registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

      c)    presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
function):

      a)    all significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses in
            internal controls; and

      b)    any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: May 1, 2003                           /s/ James M. Papada, III
      -----------                           ---------------------------
                                            James M. Papada, III
                                            Chairman, President and CEO


                                 Page 32 of 33
<PAGE>

                                  CERTIFICATION

I, Drew A. Moyer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Technitrol;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under with such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of
Technitrol as of, and for the periods presented in this quarterly report.

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

      a)    designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

      b)    evaluated the effectiveness of the registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

      c)    presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
function):

      a)    all significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses in
            internal controls; and

      b)    any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

The registrant's other certifying officer and I have indicated in this quarterly
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: May 1, 2003             /s/ Drew A. Moyer
      -----------             -----------------
                              Drew A. Moyer
                              Vice President, Corporate Controller and Secretary


                                 Page 33 of 33