<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

(Mark One)
[X]   Annual report pursuant to section 13 or 15(d) of the Securities Exchange
      Act of 1934 [NO FEE REQUIRED] for the fiscal year ended January 1, 2000 or

[ ]   Transition report pursuant to section 13 or 15(d) of the Securities
      Exchange Act of 1934 [NO FEE REQUIRED] for the transition period from
      ________ to ________

                          COMMISSION FILE NUMBER 0-9576

                           K-TRON INTERNATIONAL, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

          New Jersey
(State or other jurisdiction of                          22-1759452
incorporation or organization)              (I.R.S. Employer Identification No.)

            Routes 55 and 553
              P.O. Box 888
           Pitman, New Jersey                            08071-0888
(Address of principal executive offices)                 (Zip Code)


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

           Securities registered pursuant to Section 12(b) of the Act:

Title of each class           Name of each exchange on which registered
       None                                      None


           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.01 per share
                                (Title of class)

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 such filing
requirements for the past 90 days. Yes X  No__
<PAGE>   2
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in the definitive proxy statement incorporated
by reference in Part III of this annual report on Form 10-K or any amendment to
this annual report on Form 10-K. /X/

As of March 24, 2000, the aggregate market value of the Common Stock held by
non-affiliates of the Registrant was $34,979,438. Such aggregate market value
was computed by reference to the closing sale price of the Common Stock as
reported on the Nasdaq National Market on such date. For purposes of making this
calculation only, the Registrant has defined affiliates as including all
directors and executive officers, but excluding any institutional shareholders
owning more than ten percent of the Registrant's Common Stock.

As of March 24, 2000, there were 2,420,155 shares of the Registrant's Common
Stock outstanding.


                      DOCUMENTS INCORPORATED BY REFERENCE:

As stated in Part III of this annual report on Form 10-K, portions of the
following document are incorporated herein by reference:

         Definitive proxy statement to be filed within 120 days after the end of
         the fiscal year covered by this annual report on Form 10-K.

Unless the context indicates otherwise, the terms "K-Tron" and "Company" refer
to K-Tron International, Inc. and, where appropriate, one or more of its
subsidiaries.


                                       -2-
<PAGE>   3
                                     PART I

ITEM 1.           BUSINESS.

GENERAL

         K-Tron International, Inc. was incorporated in New Jersey in 1964. The
Company's operations are conducted primarily through subsidiaries, and its
principal business is the design, production, marketing and servicing of
gravimetric and volumetric feeders and related equipment for the processing of
bulk solids in a wide variety of manufacturing processes. K-Tron feeders control
by mass or weight (gravimetric feeding) or by volume (volumetric feeding) the
rate at which ingredients are fed into the manufacturing processes of numerous
products. The major industries served are plastics, food, chemical, detergent,
pharmaceutical and cement, but the Company's feeders are also used in many other
industries.

         In addition to feeding equipment, K-Tron designs, produces, markets and
services pneumatic conveying systems and related equipment for the food,
plastics and pharmaceutical industries, which may be used either in conjunction
with certain K-Tron feeders or on a stand-alone basis, as well as electronic
assemblies.

         K-Tron has manufacturing facilities in the United States, Switzerland
and Canada, and its equipment is sold throughout the world. The Company provides
service and spare parts for its feeding and pneumatic conveying equipment on a
worldwide basis, and it offers customer and employee training through its K-Tron
Institute in the United States and similar programs in Switzerland and
elsewhere.

         See Note 12 of Notes to consolidated financial statements, included in
Item 8 of this annual report on Form 10-K, for certain financial information
about foreign and domestic operations.

BRAND NAMES

         The Company markets its feeding and pneumatic conveying equipment under
three brand names: K-Tron Soder (feeders for other than heavy industries),
Hasler (feeders for heavy industries) and Hurricane (pneumatic conveying
equipment). The Company markets these brands on both an equipment and total
systems basis.

FEEDING EQUIPMENT

         The Company's feeders control the flow of materials into a
manufacturing process by mass or weight (gravimetric feeding) or by volume
(volumetric feeding). Feeding equipment manufactured by the Company is used in
many different industries.


                                       -3-
<PAGE>   4
         Weigh Belt Feeders. Weigh belt feeders move dry bulk material along a
belt, continuously weighing the material and adjusting the belt speed in order
to control precisely the flow rate of the material being fed into the
manufacturing process. The feeder regulates the flow rate according to the set
points in its electronic controller. A typical application would incorporate
several feeders, each supplying an ingredient of the final product, and
electronic controllers that determine the feed rate of each ingredient and are
capable of instantly altering individual feed rates to maintain the desired
proportion of each ingredient.

         Weigh belt feeders may also be used as batchers, to feed bulk material
into bags and other containers, or as meters, to measure accurately the amount
of material flowing into or out of a container.

         Loss-in-Weight Feeders. The loss-in-weight principle involves weighing
the entire feeding system, both equipment and material, which may be either dry
or liquid. The feeding mechanism controls the rate at which material is
discharged into the manufacturing process based upon a change in the total
weight of the system as material flows from the feeder. Electronic controllers
determine the feed rate and are capable of instantly altering feed rates to
maintain an accurate flow of materials. In dry material applications,
loss-in-weight feeders usually utilize an auger (single or twin screw) or
vibratory feeding mechanism, and the outflow is adjusted continuously to
maintain the desired feed rate. In liquid applications, the flow rate is
maintained by a pump or valve. Loss-in-weight feeders are especially suitable
for applications requiring a very high degree of accuracy, as in adding minor
ingredients to food processes or colorants to plastics, or applications
requiring a closed system, as in feeding dusty materials. Loss-in-weight feeders
virtually never need recalibration and may also be used as batchers.

         Volumetric Feeders. Volumetric feeders utilize single or twin screw
feeding mechanisms or other systems to regulate flow by volume instead of
weight, thereby offering an economical method of feeding bulk solids where
demands for accuracy are less stringent. They also can be used to make batches
by feeding sequentially into a hopper which is weighed and using the weight
signal to start and stop each feeder.

         K-Tron Soder Brand. The K-Tron Soder brand of products offers feeding
equipment and systems to control precisely the flow of ingredients in the
manufacture of numerous products in industries other than heavy industries.
K-Tron Soder feeders, including loss-in-weight feeders, weigh belt feeders,
volumetric feeders, flow meters and related controls, are assembled at Company
facilities in the United States and Switzerland in a complete range of feeding
equipment types and sizes for these industries. The plastics, food, chemical,
detergent and pharmaceutical industries are among those served by K-Tron Soder
feeders.

         Hasler Brand. The Hasler brand of products includes weigh belt feeders,
belt scales, flow meters, electronic ears, loss-in-weight feeders and related
controls. Hasler feeders, like K-Tron Soder feeders, control the flow of
ingredients into a process, but Hasler feeders serve heavy industry applications
which generally require high rates of material flow in rugged environments.

                                       -4-
<PAGE>   5



Hasler feeders are used in cement mills, mines and quarries and in the
fertilizer, aluminum, coal, glass and steel industries. They are primarily
assembled at Company facilities in Switzerland and also at Company facilities in
the United States.

PNEUMATIC CONVEYING EQUIPMENT

         In 1997, K-Tron acquired Hurricane Pneumatic Conveying Inc., a Canadian
company that manufactures pneumatic conveying systems and related equipment
primarily for the food, plastics and pharmaceutical industries. Hurricane's
brand of products, which include both self-contained and central systems for
powder and pellet applications, may be used in conjunction with certain K-Tron
Soder feeders or on a stand-alone basis. Hurricane products are assembled at
Company facilities in Canada.

K-TRON ELECTRONICS

         K-Tron Electronics designs, produces and tests electronic assemblies
for outside customers as well as for use by the Company in its products and also
produces controller hardware for the Company. Its facilities, which are located
in the United States, provide automated surface mount as well as through-hole
assembly capabilities and testing equipment.

CUSTOMERS

         The Company sells its equipment throughout the world to a wide variety
of customers in its addressed markets, ranging from large, global companies to
regional and local businesses. No single customer accounted for more than 10% of
the Company's total revenues in fiscal 1999.

MANUFACTURING AND SUPPLIERS

         The Company's primary manufacturing activities consist of the assembly,
calibration and testing of equipment, the machining and fabrication of certain
components and the producing of electronic assemblies and controllers. The
Company also manufactures the weight sensors which are used in most of its
gravimetric feeders. The Company assembles a number of components used in its
products that are manufactured by others to its specifications. These components
include sheet metal parts, screws, castings, integrated circuits, printed
circuit boards and enclosures.

         The Company produces a number of basic feeder models. Feeder units are
completed to specific customer orders, and customization is generally limited to
combining existing mechanical and electronic modules to meet a customer's
application requirements.

         Although certain components of the Company's products are currently
purchased from sole sources, the Company believes that comparable components can
be obtained readily from alternative suppliers or can be manufactured by the
Company internally, at prices competitive

                                       -5-
<PAGE>   6



with those of its current sources. The Company has never had a significant
production delay which was primarily attributable to an outside supplier.

PATENTS

         The Company's technology is protected by numerous patents in the United
States and in other major countries which offer patent protection. Certain of
the Company's patents have expired and others will expire at various future
dates. The loss of such patent protection is not expected to have a significant
adverse effect on the Company's operations.

RESEARCH AND DEVELOPMENT

         The Company invests in research and development ("R&D") to maintain a
technological leadership position in the feeding equipment industry. R&D focuses
on new products as well as on improvements to existing products. Current efforts
are aimed at developing new products, including new controls and a new belt
feeder, shortening the time spent in the development of such products, recycling
existing product designs into lower cost products and analyzing the
price/performance relationship for both new and existing products.

         A centralized R&D approach facilitates the development of common or
compatible products for the Company's three brands. The Company utilizes common
weighing and control technologies for both of its feeder brands.

         The Company's research and development expenses were $3,353,000,
$2,980,000 and $2,768,000 in fiscal 1999, 1998 and 1997, respectively.

COMPETITION

         The Company is a leading worldwide producer of feeders and related
equipment for the handling of bulk solids in manufacturing processes. The
Company believes it has reached this position primarily because of its use of
electronic and digital control technology, its use of digital weighing
technology, its development of mechanical design improvements to its products
and its knowledge of material handling. The Company also relies on other
technological advantages and on its reputation and experience in serving the
needs of its large customer base to maintain a competitive advantage.

         The Company entered the pneumatic conveying equipment market late in
1997 with its acquisition of the Hurricane brand. This is a very large market,
and the Company's strategy is to target specific niches within the overall
market and to sell its pneumatic conveying equipment in connection with certain
K-Tron Soder feeders as well as on a stand-alone basis.

         K-Tron Electronics was established to design and manufacture electronic
assemblies and controller hardware for use by the Company and also to sell such
assemblies to third parties,

                                       -6-
<PAGE>   7



generally focusing on small production runs for customers in New Jersey, eastern
Pennsylvania and Delaware. The market for electronic assemblies is very large,
and K-Tron Electronics is one of many suppliers to this market in the region
identified.

         Strong competition exists in every major market that the Company
serves. Competitors range in size from large corporations (or subsidiaries or
divisions thereof) with a broad line of products to regional organizations which
may specialize in a limited range of products.

BACKLOG

         At the end of fiscal 1999, the Company's backlog of unfilled orders was
approximately $17,835,000, compared to a backlog of approximately $22,354,000 at
the end of fiscal 1998, a decrease of 20.2%. Using the end of fiscal 1999
exchange rates, the backlog of orders at the end of fiscal 1998 was
approximately $20,585,000, representing a decrease in the 1999 backlog of
approximately 13.4%. The backlog of orders at the end of fiscal 1999, excluding
the effect of foreign currency exchange translations, was lower than the 1998
year-end backlog primarily due to the shipment of a large order in the fourth
quarter of 1999 that was included in the 1998 year-end backlog.

         The bulk of the Company's backlog represents orders that will be ready
for delivery in less than 120 days. Thus, except for shipments to be made later
in the year in accordance with customer requests, it is expected that most of
the backlog as of the end of fiscal 1999 will be shipped prior to April 30,
2000.

EMPLOYEES

         At the end of fiscal 1999, the Company had 475 employees, of which 292
were located in Europe, 163 in the United States, 13 in Singapore, 4 in Canada
and 3 in China.

         None of the Company's employees are represented by labor unions. The
Company considers relations with its employees to be good.

ITEM 2.           PROPERTIES.

         In North America, the Company owns a 92,000 square foot building on 17
acres in Pitman, New Jersey where it has manufacturing facilities,
administrative offices, its corporate headquarters, research and development
offices and a tech center for product demonstrations and training. A portion
(approximately 10,000 square feet) of the Company's Pitman facility is leased to
a sheet metal business which is a major supplier to the Company. The Company
also has leased facilities in Blackwood, New Jersey where it produces electronic
assemblies and controller hardware, and in Brantford, Ontario where it assembles
pneumatic conveying equipment.


                                       -7-
<PAGE>   8
         In Niederlenz, Switzerland, the Company owns a 60,000 square foot
building where it has manufacturing facilities and a tech center for product
demonstrations, and an adjacent five floor, 40,000 square foot office building
which houses administrative offices, training facilities and research and
development offices. In 1999, one floor of the office building was leased to
third parties. The Company also occupies an adjacent leased facility where it
manufactures weight sensors.

         In Colombier, Switzerland, the Company leases a 51,000 square foot
building where it has manufacturing facilities, administrative offices, training
facilities and research and development offices. The lease will not be renewed
upon expiration in October 2000. During fiscal 2000, the sales, sales support
and service activities conducted from that building will be moved to a 4,000
square foot leased facility in Neuchatel, Switzerland, near Colombier, while
engineering, assembly and administration will be relocated to the Company's
facility in Niederlenz, Switzerland. In Niederlenz, the manufacturing area will
be expanded by 6,000 square feet and approximately half of the office building
third-party leased space will be used for administration.

         Certain sales and service activities are conducted at Company-owned
facilities in England (30% leased to a third party) and Germany and from leased
office space in Germany, France, Singapore and China.

         The Company believes that its present facilities will be sufficient to
meet its needs for the foreseeable future.

ITEM 3.           LEGAL PROCEEDINGS.

         There are no material pending legal proceedings, other than ordinary
routine litigation incidental to the business, to which the Company or any of
its subsidiaries is a party or of which any of their property is the subject.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         This item is not applicable because there were no matters submitted to
a vote of security holders during the fourth quarter of 1999.



                                       -8-
<PAGE>   9



EXECUTIVE OFFICERS OF THE REGISTRANT

         The current executive officers of the Company are as follows:

<TABLE>
<CAPTION>
                  Name                               Age                        Position
                  ----                               ---                        --------
<S>                                                  <C>               <C>
         Edward B. Cloues, II                        52                Chairman of the Board of
                                                                       Directors and Chief Executive
                                                                       Officer

         Kevin C. Bowen                              48                President and Chief Executive
                                                                       Officer of K-Tron America, Inc.

         Lukas Guenthardt                            41                Senior Vice President -
                                                                       Strategic Planning, Product
                                                                       Development and Marketing

         Ronald R. Remick                            53                Senior Vice President,
                                                                       Chief Financial Officer and
                                                                       Treasurer

         Beat Steger                                 43                Managing Director of K-Tron
                                                                       (Schweiz) AG ("K-Tron
                                                                       Switzerland")
</TABLE>

         Edward B. Cloues, II has been a director since July 1985 and was most
recently reelected at the 1997 annual meeting of shareholders. He became
Chairman of the Board of Directors and Chief Executive Officer of the Company on
January 5, 1998. From May 1985 until May 1998, Mr. Cloues served as Secretary of
the Company. Prior to joining the Company, Mr. Cloues was a senior partner in
the law firm of Morgan, Lewis & Bockius LLP, which is the Company's general
counsel. He is also a director and non-executive Chairman of the Board of AMREP
Corporation and a director of AmeriQuest Technologies, Inc.

         Kevin C. Bowen has been President and Chief Executive Officer of K-Tron
America, Inc. since March 1995. From March 1994 to March 1995, Mr. Bowen was
President of K-Tron North America, the North American sales division of K-Tron
America. Mr. Bowen served as President of K-Tron America from May 1990 to March
1994 and has been with the Company in various other capacities since 1979.

         Lukas Guenthardt has been Senior Vice President - Strategic Planning,
Product Development and Marketing of the Company since June 1, 1998. Mr.
Guenthardt was Managing Director of K-Tron Switzerland from July 1995 to June 1,
1998, Managing Director of the Soder Division of K-Tron Switzerland from March
1994 to July 1995, and Director of International


                                       -9-
<PAGE>   10
Research and Development of the Company from July 1992, when he joined K-Tron,
until March 1994.

         Ronald R. Remick has been Senior Vice President, Chief Financial
Officer and Treasurer of the Company since May 10, 1999. Prior to joining the
Company, Mr. Remick was Vice President of Planning and Treasury of ARCO Chemical
Company from 1995 to 1998 and Vice President of Planning and Control of ARCO
Chemical Company from 1993 to 1995.

         Beat Steger has been Managing Director of K-Tron Switzerland since June
1998. From 1995 to June 1998, Mr. Steger was Director of Operations for K-Tron
Switzerland, and he has been with K-Tron Switzerland in various other capacities
since 1988.

         The executive officers are elected or appointed by the Board of
Directors of the Company or its appropriate subsidiary to serve until the
appointment or election and qualification of their successors or their earlier
death, resignation or removal.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         The Company's Common Stock trades on the Nasdaq National Market under
the symbol "KTII." The following table sets forth the high and low sales prices
for each quarter in fiscal 1998 and 1999 as quoted on the Nasdaq National
Market.

<TABLE>
<CAPTION>
Fiscal Year 1998                               High                      Low
<S>                                           <C>                      <C>
First Quarter . . . . . . . . . . . . . . .  $ 17.938                  $ 15.50
Second Quarter. . . . . . . . . . . . . . .  $ 21.25                   $ 17.00
Third Quarter . . . . . . . . . . . . . . .  $ 19.813                  $ 17.50
Fourth Quarter  . . . . . . . . . . . . . .  $ 19.75                   $ 16.875

Fiscal Year 1999

First Quarter   . . . . . . . . . . . . . .  $ 18.625                  $ 17.4375
Second Quarter  . . . . . . . . . . . . . .  $ 18.625                  $ 16.75
Third Quarter   . . . . . . . . . . . . . .  $ 18.125                  $ 14.00
Fourth Quarter  . . . . . . . . . . . . . .  $ 16.50                   $ 12.625
</TABLE>

         On March 24, 2000, the closing price of a share of K-Tron Common Stock
as reported by the Nasdaq National Market was $15.625.

         There were 321 record holders of the Company's Common Stock on March
24, 2000.


                                      -10-
<PAGE>   11
DIVIDEND POLICY

         The Company has never paid a cash dividend on its Common Stock, and it
currently intends to retain all future earnings for use in its business. The
declaration and payment of dividends in the future will be determined by the
Board of Directors in light of conditions then existing, including the Company's
earnings, financial condition, capital requirements and other factors. In
addition, one of the Company's credit facilities contains certain restrictions
on the transfer of funds that may restrict the Company's ability to declare
dividends.

ITEM 6.           SELECTED FINANCIAL DATA.

         The selected consolidated financial data presented below for, and as of
the end of, each of the Company's last five fiscal years have been derived from
and are qualified by reference to the Company's consolidated financial
statements. The consolidated financial statements of the Company for the fiscal
years ended January 1, 2000, January 2, 1999, January 3, 1998, December 28, 1996
and December 30, 1995 have been audited by Arthur Andersen LLP, independent
public accountants.

         This information should be read in conjunction with the Company's
consolidated financial statements and the related notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing elsewhere herein.

         The Company has not paid any cash dividends on its shares of Common
Stock during the periods presented.

                                      -11-
<PAGE>   12

<TABLE>
<CAPTION>
                                                                                       FISCAL YEAR ENDED
                                                    -------------------------------------------------------------------------------
                                                      JAN. 1       JAN. 2        JAN. 3        DEC. 28     PRO FORMA     DEC. 30
                                                      2000         1999          1998          1996         1995(1)      1995
--------------------------------------------------- ------------- -------------- ---------- ------------ ------------  ------------
FINANCIAL SUMMARY($000):
<S>                                                 <C>          <C>           <C>           <C>          <C>           <C>
  Revenues                                            $87,887      $89,142       $87,152       $89,871      $89,640       $110,394
  Income before loss on disposition of
    businesses and taxes                                8,644        8,718         7,309         5,841        2,717            834

  Income (loss) on disposition of businesses (2)           --           --            --            --           --       (11,278)

  Net income (loss)                                     6,759        6,593         5,444         4,026        1,408        (9,294)
  Total assets                                         54,770       56,617        54,249        55,330                      69,296
  Working capital                                      14,057       11,446         9,423        15,362                      23,114
  Additions to property, plant and equipment            2,605        2,713         3,000         2,081                         370
  Depreciation and amortization                         3,362        3,158         2,977         3,334                       4,844
PER SHARE ($):
  Basic net earnings (loss)                             $2.28        $2.10         $1.72         $1.29        $ .45        $(3.00)
  Diluted net earnings (loss)                            2.23         2.03          1.69          1.28          .45         (3.00)
  Book value                                             8.61         7.34          5.87          4.21                        3.03
CAPITALIZATION ($000):
  Shareholders' equity                                $25,210      $22,274       $18,892       $13,194                      $9,421
  Long-term debt                                        7,252        9,638        10,619        20,807                      35,004
  Short-term debt (3)                                   4,627        1,534         3,148           861                       2,133
  Total debt                                           11,879       11,172        13,767        21,668                      37,137
RATIOS:
  Return on average shareholders' equity (%)             28.4         32.0          33.9          35.6         10.1            N/A
  Return on revenues (%)                                  7.7          7.4           6.2           4.5          1.6            N/A
  Long-term debt to shareholders' equity (%)             28.8         43.3          56.2         157.7                       371.6
  Current assets to current liabilities                   1.6          1.5           1.4           1.8                         2.1
  Average inventory turnover                              4.7          4.7           4.1           3.2                         2.9
  Average accounts receivable turnover                    4.4          5.2           5.5           4.8                         4.3
OTHER DATA:
  Shares outstanding (000) (4)                          2,927        3,033         3,218         3,137                       3,113
  Shareholders of record (5)                              287          304           342           350                         383
  Number of employees                                     475          496           491           461                         466
</TABLE>

(1)      Reflects pro forma adjustments for loss on disposition of businesses
         described in (2) below and the discontinuance of the Company's other
         Colortronic brand business, all as more fully explained in Note 3 of
         the Company's fiscal year 1997 consolidated financial statements, as if
         such dispositions and discontinuances had been consummated as of the
         beginning of the 1995 fiscal year.

(2)      1995 - loss on disposition of businesses of $10,529 from sale of
         Colortronic GmbH and rights to several related patents and patent
         applications and $749 loss on the sale of Hasler France and Brazilian
         businesses.

(3)      Including current portion of long-term debt.

(4)      Net of treasury stock of 1,063 shares for fiscal years 1995 and 1996,
         1,053 for fiscal year 1997, 1,295 for fiscal year 1998 and 1,447 for
         fiscal year 1999.

(5)      Does not include shareholders whose shares are held in street name.


                                      -12-
<PAGE>   13
ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS.

         The following provides information which management believes is
relevant to an assessment and understanding of the Company's consolidated
results of operations and financial condition. The discussion should be read in
conjunction with the Company's consolidated financial statements and
accompanying notes. All references to 1999, 1998 and 1997 mean the fiscal years
ended January 1, 2000, January 2, 1999 and January 3, 1998, respectively.

         In the fourth quarter of 1999, the Company announced that it would
integrate its Soder and Hasler operations worldwide to form a unified business
serving the bulk material handling markets. The Company took a fourth quarter
1999 charge of $710,000 for this restructuring, of which $450,000 remained in
accrued liabilities at the end of 1999. Implementation of the integration plan
started in the fourth quarter of 1999 and will be completed with the closing of
the Company's Hasler manufacturing facility in Colombier, Switzerland before its
lease expires on October 31, 2000. On or about March 31, 2000, the sales, sales
support and service activities conducted from Colombier will be moved to nearby
leased office space in Neuchatel, Switzerland, while engineering, assembly and
administration will be moved to the Company's existing facility in Niederlenz,
Switzerland on or before June 30, 2000.

         On March 23, 2000, the Company completed a tender offer begun on
February 16, 2000 and repurchased 508,000 shares of its Common Stock at $18.00
per share for a total of $9,144,000. The purchase represented approximately
17.3% of the shares then outstanding. The purchase was financed by using
$1,194,000 of available cash, all of a $7,000,000 loan facility obtained from a
U.S. bank on February 4, 2000 and $950,000 from an existing $5,000,000 line of
credit with that same bank. The $7,000,000 loan is payable in equal monthly
installments plus accrued interest over a period of four years commencing May 1,
2000.

RESULTS OF OPERATIONS

         In 1999, 1998 and 1997, the Company reported net income of $6,759,000,
$6,593,000 and $5,444,000, respectively.

         K-Tron is an international company which derived approximately 59%, 58%
and 59% of its 1999, 1998 and 1997 revenues, respectively, from products
manufactured in, and services performed from, its facilities located outside the
United States, primarily in Europe. As such, the financial position and
performance of the Company is sensitive to changes in foreign currency exchange
rates ("foreign exchange rates"), which can affect both the translation of
financial statement items into U.S. dollars and the impact of transactions where
the revenues and related expenses may initially be accounted for in different
currencies, such

                                      -13-
<PAGE>   14
as sales made from the Company's Swiss manufacturing facilities
in currencies other than the Swiss franc.

         The following table sets forth the Company's results of operations
expressed as a percentage of total revenues for the periods indicated.

<TABLE>
<CAPTION>
                                                       Fiscal Year
                                      -------------------------------------------
                                         1999             1998             1997
                                      ---------        ---------        ---------
<S>                                   <C>              <C>              <C>
Total revenues                            100.0%           100.0%           100.0%
Cost of revenues                           55.7             54.9             55.2
                                      ---------        ---------        ---------
Gross profit                               44.3             45.1             44.8
Selling, general and
 administrative                            30.1             31.2             31.9
Research and development                    3.8              3.3              3.2
                                      ---------        ---------        ---------
Operating income                           10.4             10.6              9.7
Interest                                    0.6              0.8              1.3
                                      ---------        ---------        ---------
Income before income taxes                  9.8%             9.8%             8.4%
                                      =========        =========        =========
Year-end backlog  (at year-end
1999 foreign exchange rates, in
thousands)                            $  17,835        $  20,585        $  17,340
                                      =========        =========        =========
</TABLE>

         As noted above, more than half of the Company's revenues are normally
derived from activities in foreign jurisdictions. Consequently, the Company's
results can be significantly affected by changes in foreign exchange rates,
particularly in U.S. dollar exchange rates with respect to the Swiss franc,
German mark and euro and, to a lesser degree, the British pound sterling, French
franc and other currencies. When the U.S. dollar strengthens against these
currencies, the U.S. dollar value of non-U.S. dollar-based sales decreases. When
the U.S. dollar weakens against these currencies, the U.S. dollar value of
non-U.S. dollar-based sales increases. Correspondingly, the U.S. dollar value of
non-U.S. dollar-based costs increases when the U.S. dollar weakens and decreases
when the U.S. dollar strengthens. Overall, the Company typically receives a
majority of its revenues in currencies other than the U.S. dollar and, as such,
benefits from a weaker dollar and is adversely affected by a stronger dollar
relative to major currencies worldwide, especially those identified above.
Accordingly, changes in foreign exchange rates, and in particular a
strengthening of the U.S. dollar, may adversely affect the Company's total
revenues, gross profit and operating income as expressed in U.S. dollars.


                                      -14-
<PAGE>   15
         In addition, revenues and income of the Company with respect to
particular transactions may be affected by changes in foreign exchange rates
where sales are made in currencies other than the functional currency of the
facility manufacturing the product subject to the sale, including in particular
the U.S. dollar/Swiss franc (for inter-company transactions) and the euro/Swiss
franc and German mark/Swiss franc (for sales from the Company's Swiss
manufacturing facilities which are made in euros or German marks) exchange
rates. For 1999, 1998 and 1997, the changes in these and the U.S. dollar/euro
and U.S. dollar/German mark exchange rates were as follows:

<TABLE>
<CAPTION>
                                                                            Fiscal Year
                                                       ------------------------------------------------
                                                       1999                    1998                1997
                                                       ----                    ----                ----
<S>                                                  <C>          <C>       <C>          <C>       <C>
Average U.S. dollar equivalent of
 one Swiss franc                                       0.664                   0.692                0.689
% change vs. prior year                                           -4.0%                  NIL

Average U.S. dollar equivalent of
 one euro                                              1.064                   N/A                  N/A

Average U.S. dollar equivalent of
 one German mark                                       0.544                   0.570                0.577
% change vs. prior year                                           -4.6%                  -1.2%

Average Swiss franc equivalent
 of one German mark                                    0.819                   0.824                0.837
% change vs. prior year                                           -0.6%                  -1.6%

Average Swiss franc equivalent of
 one euro                                              1.602                   N/A                  N/A
</TABLE>

            Total revenues decreased by $1,255,000 or 1.4% in 1999 compared to
1998. Western European revenues increased and North American revenues decreased
in 1999 compared to 1998. If the average foreign exchange translation rates for
1999 were applied to 1998, revenues would have increased by 1.0% in 1999.

         Total revenues increased by $1,990,000 or 2.3% in 1998 when compared to
1997. The increase was due to higher U.S. and European shipments offset by lower
shipments to Asia from the Company's Swiss manufacturing facilities. Foreign
exchange translation rates minimally affected 1998 when compared to 1997.


                                      -15-
<PAGE>   16
         Gross profit as a percent of total revenues decreased to 44.3% in 1999
as compared to 45.1% in 1998 and 44.8% in 1997. The reduction in gross margin in
1999 as compared to 1998 and 1997 was primarily due to sales mix.

         Selling, general and administrative (SG&A) expense decreased by
$1,320,000 or 4.8% in 1999 compared to 1998, after remaining constant in 1998
when compared to 1997. The decrease in 1999 SG&A was due to the lower foreign
exchange translation rates previously described offset in part by restructuring
costs in Europe of $710,000 relating to the Hasler business. As a percent of
total revenues, SG&A was 30.1% in 1999, 31.2% in 1998 and 31.9% in 1997.

         Research and development (R&D) expenditures increased by $373,000 or
12.5% in 1999 and by $212,000 or 7.7% in 1998 as compared to 1998 and 1997,
respectively. R&D expenses increased due to greater emphasis on the development
of new products. The 1999 increase as compared to 1998 was offset in part by
lower foreign exchange translation rates. R&D expense as a percent of total
revenues was 3.8% in 1999, 3.3% in 1998 and 3.2% in 1997.

         Interest expense decreased by $219,000 or 30.7% in 1999 and by $419,000
or 37.0% in 1998 as compared to 1998 and 1997, respectively. The 1999 and 1998
decreases from 1998 and 1997, respectively, were primarily due to weighted
average lower debt levels and lower interest rates on some loans. Interest
expense as a percent of total revenues was 0.6% in 1999, 0.8% in 1998 and 1.3%
in 1997.

         Income before income taxes was $8,644,000 in 1999, $8,718,000 in 1998
and $7,309,000 in 1997. The changes during the periods were the result of the
items discussed above.

         The 1999, 1998 and 1997 provisions for income tax of $1,885,000,
$2,125,000 and $1,865,000, respectively, were related primarily to the Company's
results in the United States and Germany. The effective tax rates were 21.8% for
1999, 24.4% for 1998 and 25.5% for 1997. The Company has New Jersey state and
foreign tax loss carryforwards that total $4,300,000 and $2,600,000,
respectively, which, if realized, would have an estimated future benefit of
$212,000 and $735,000, respectively.

         The Company does not believe that inflation has had a material impact
on the results of operations during the last three years.

         The Company's backlog decreased by 13.4% at the end of 1999 compared to
1998 (at constant foreign exchange rates), primarily due to the shipment of a
large order in the fourth quarter of 1999 that was included in the 1998 year-end
backlog. The bulk of the year-end 1999 backlog consists of orders that will be
ready for delivery in less than 120 days.


                                      -16-
<PAGE>   17

         The Company's backlog increased by 19.6% at the end of 1998 compared to
1997 (at constant foreign exchange rates), primarily due to increased order
volume at the United States and Swiss manufacturing facilities. Whereas in prior
years the bulk of the Company's backlog represented orders that would be ready
for delivery in less than 120 days, this was not the case at the end of 1998.
The year-end 1998 backlog consisted of orders most of which would be delivered
in 1999, but only about 40% of such backlog was expected to be shipped in the
first quarter of 1999.

LIQUIDITY AND CAPITAL RESOURCES

         All current loan agreements are with the Company's U.S. and Swiss
manufacturing subsidiaries.

         At January 1, 2000, the Company's Swiss subsidiary had 7.0 million
Swiss francs ($4.4 million) in short-term lines of credit with Swiss lenders, of
which $2,543,000 was borrowed under these lines of credit and $1,854,000 was
available for future borrowings. The annual interest rate on the amounts
borrowed at January 1, 2000 was 6.25%. In addition to the short-term lines of
credit, the Company's Swiss subsidiary had mortgage borrowings of 10.3 million
Swiss francs ($6.4 million) with maturities through 2002. These mortgages
carried annual interest rates ranging from 3.25% to 4.0%.

         In June 1998, the Company's U.S. manufacturing subsidiary refinanced
its 20-year mortgage with a U.S. lender for $2,700,000 at an annual interest
rate of 7.625%. Monthly principal and interest payments are $25,143. Every five
years the bank has the right to review the mortgage and adjust its terms,
including due dates and interest rates, with the first such right occurring in
June 2003. At January 1, 2000, the amount borrowed under the mortgage was
$2,562,000.

         Also in June 1998, the Company's U.S. manufacturing subsidiary entered
into a two-year secured revolving credit facility with a U.S. lender that
provides for a maximum borrowing of $5,000,000, subject to certain borrowing
limitations based upon inventory and accounts receivable levels. During 1999,
this credit facility was extended one year through July 2001. The annual
interest rate as of January 1, 2000 was 8.5% (prime rate as published). At
January 1, 2000, there were no outstanding borrowings under the facility, and
$5,000,000 was available for future borrowings.

         On March 20, 2000, the Company borrowed $7,000,000 from a loan facility
in the same amount that had been entered into with a U.S. bank on February 4,
2000 and used these funds, together with $1,194,000 of available cash and a
borrowing of $950,000 on the $5,000,000 revolving credit facility referred to
above, to repurchase 508,000 shares of its Common Stock. The $7,000,000 loan is
payable in equal monthly installments of principal plus accrued interest over a
four year period and is secured by liens on the same collateral securing other
loans from the same U.S. bank. One-half of the loan bears interest at the fixed
rate of 8.23% for the first

                                      -17-
<PAGE>   18
two years and the other half is subject to a variable rate of interest equal to
one month LIBOR plus 1.85 percent (7.66% at the date of borrowing).

         The Company's capitalization at the end of 1999, 1998 and 1997 is set
forth below:

(Dollars in thousands)

<TABLE>
<CAPTION>
                                                              Fiscal Year
                                                 -------------------------------------
                                                  1999           1998           1997
                                                 -------        -------        -------
<S>                                              <C>            <C>            <C>
Short-term debt, including current
 portion of long-term debt                       $ 4,627        $ 1,534        $ 3,148
Long-term debt                                     7,252          9,638         10,619
                                                 -------        -------        -------
Total debt                                        11,879         11,172         13,767
Shareholders' equity                              25,210         22,274         18,892
                                                 -------        -------        -------

Total debt and shareholders' equity              $37,089        $33,446        $32,659
                                                 =======        =======        =======
  (total capitalization)

Percent total debt to total capitalization            32%            33%            42%

Percent long-term debt to equity                      29%            43%            56%

Percent total debt to equity                          47%            50%            73%
</TABLE>

         Total debt increased in 1999 and decreased in 1998 by $707,000 and
$2,595,000, respectively. Total debt without the effect of foreign currency
translation increased in 1999 and decreased in 1998 by $1,961,000 and
$3,031,000, respectively.

         At the end of 1999 and 1998, working capital was $14,057,000 and
$11,446,000, respectively, and the ratio of current assets to current
liabilities was 1.65 and 1.49, respectively. Working capital increased in 1999
primarily due to funds provided from operations.

         In 1999, 1998 and 1997, the Company utilized internally generated funds
to meet its working capital needs while in 1999 it also used short-term
borrowings to meet its needs.

         Net cash provided by operating activities was $2,995,000 in 1999,
$7,615,000 in 1998 and $12,594,000 in 1997. The decrease in operating cash flow
since 1997 was primarily the result of an increase in accounts receivable and
inventory and a reduction in accounts payable and accrued expenses. In 1999 and
1998, net income and depreciation and amortization were the principal components
of cash provided by operating activities.

         The average number of days to convert accounts receivable to cash was
82 days in 1999 compared to 70 days in 1998 and 66 days in 1997. The average
number of days to

                                      -18-
<PAGE>   19
convert inventory into accounts receivable was 78 days in 1999 and 1998 compared
to 88 days in 1997.

         Net cash used in investing activities was $2,804,000, $2,835,000 and
$3,955,000 in 1999, 1998 and 1997, respectively. Capital expenditures were
$2,605,000, $2,713,000, and $3,000,000 in 1999, 1998 and 1997, respectively.
Funds used in 1997 to acquire a Canadian company were $783,000. The Company has
a year 2000 commitment for capital of approximately $1,000,000 associated with
its Hasler brand restructuring. In addition, the Company expects to make capital
expenditures necessary to maintain its facilities and operations in a normal
fashion and, where required, to further its growth and other business
objectives.

         Cash used in financing activities in 1999 and 1998 was primarily used
for the purchase of 166,400 shares in 1999 and 250,000 shares in 1998 of the
Company's Common Stock as well as for debt reduction in 1998 and 1997. In 1999,
cash was obtained from operations as well as from short-term borrowings. In 1998
and 1997, cash was primarily obtained from the cash flow provided by operations.
Cash and short-term investments decreased to $3,093,000 at the end of 1999 from
$3,220,000 a year earlier.

         Changes in foreign exchange rates, particularly with respect to the
Swiss franc and German mark, caused a translation decrease in shareholders'
equity of $1,754,000 in 1999 following an increase of $574,000 in 1998 and a
decrease of $560,000 in 1997.

EUROPEAN MONETARY UNION - EURO

         On January 1, 1999, the eleven member countries of the European Union,
which does not include Switzerland, established fixed conversion rates between
their existing sovereign currencies, and adopted the euro as their new common
legal currency. As of that date, the euro began trading on currency exchanges,
but the legacy currencies will remain legal tender in the participating
countries for a transition period between January 1, 1999 and January 1, 2002.

         During the transition period, non-cash payments can be made in euros,
and parties can elect to pay for goods and services and transact business using
either the euro or a legacy currency. Between January 1, 2002 and July 1, 2002,
the participating countries will introduce euro notes and coins and withdraw all
legacy currencies so that they will no longer be available.

         The Company has not encountered significant difficulties with the euro.
Since the Company's sales in Europe have been from two manufacturing plants
located in Switzerland, and since some sales are made in Swiss francs and others
in local currencies, the relationship of the euro to the Swiss franc is
important to the Company, just as the relationship of the Swiss franc and German
mark has been important in the past.


                                      -19-
<PAGE>   20
         The euro conversion may affect cross-border competition by creating
cross-border price transparency. The Company regularly assesses its pricing and
marketing strategies in order to ensure that it remains competitive in the
European market. The Company also implemented a new information technology
system in Europe on January 4, 1999 to allow for transactions to take place in
both the legacy currencies and the euro and also for the eventual elimination of
the legacy currencies. The Company's foreign currency exchange risk in
participating countries may be reduced as the legacy currencies are converted to
the euro. The Company will continue to evaluate issues involving the
introduction of the euro, including accounting, tax and legal issues. Based on
current information and the Company's current assessment, the Company does not
believe that the euro conversion has had or will have a material adverse affect
on its business, results of operations, cash flows or financial condition.

FORWARD-LOOKING STATEMENTS

         The Private Securities Litigation Reform Act of 1995 (the "Act")
provides a safe harbor for forward-looking statements made by or on behalf of
the Company. The Company and its representatives may from time to time make
written or oral statements that are "forward-looking," including statements
contained in this report and other filings with the Securities and Exchange
Commission, reports to the Company's shareholders and news releases. All
statements that express expectations, estimates, forecasts and projections are
forward-looking statements within the meaning of the Act. In addition, other
written or oral statements which constitute forward-looking statements may be
made by or on behalf of the Company. Words such as "expects," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts,"
"may," "should," variations of such words and similar expressions are intended
to identify such forward-looking statements. These statements are not guarantees
of future performance and involve certain risks, uncertainties and assumptions
which are difficult to predict. Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted in or suggested by such
forward-looking statements. The Company undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise.

         A wide range of factors could materially affect future developments and
the performance of the Company, including the following: (i) increasing price
and product/service competition by domestic and foreign competitors, including
new entrants; (ii) the mix of products/services sold by the Company; (iii) rapid
technological changes and developments and the Company's ability to continue to
introduce competitive new products on a timely and cost-effective basis; (iv)
changes in U.S. and global financial and currency markets, including significant
interest rate and foreign currency exchange rate fluctuations; (v) protection
and validity of patent and other intellectual property rights, both of the
Company and its competitors; (vi) the cyclical nature of the Company's business
as a capital goods supplier; (vii) possible future litigation and governmental
proceedings; (viii) the availability of financing and financial resources in the
amounts, at the times and on the terms required to support the Company's future
business, including capacity expansions and possible acquisitions; (ix) the loss
of key customers,

                                      -20-
<PAGE>   21
employees or suppliers; (x) the failure to carry out marketing and sales plans;
(xi) the failure successfully to integrate acquired businesses, if any, into the
Company without substantial costs, delays or other operational or financial
problems; (xii) economic, business and regulatory conditions and changes which
may affect the level of new investments and purchases made by customers,
including general economic and business conditions that are less favorable than
expected; and (xiii) domestic and international political and economic
conditions.

         This list of factors that may affect future performance and the
accuracy of forward-looking statements is illustrative, but it is by no means
exhaustive. Accordingly, all forward-looking statements should be evaluated with
the understanding of their inherent uncertainty.

ITEM 7A.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Not Applicable.

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The consolidated financial statements of the Company and its
subsidiaries and supplementary data required by this item are attached to this
annual report on Form 10-K beginning on page F-1.

ITEM 9.           CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                  FINANCIAL DISCLOSURES.

         None.

                                    PART III

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         The information concerning directors and compliance with Section 16(a)
of the Securities Exchange Act of 1934 called for by Item 10 of Form 10-K will
be set forth under the captions "Election of Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" in the Company's definitive proxy
statement, to be filed within 120 days after the end of the fiscal year covered
by this annual report on Form 10-K, and is incorporated herein by reference.

         The required information as to executive officers is set forth in Part
I hereof and incorporated herein by reference.


                                      -21-
<PAGE>   22

ITEM 11.        EXECUTIVE COMPENSATION.

ITEM 12.        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The information called for by Items 11 and 12 of Form 10-K will be set
forth under the captions "Executive Compensation" and "Security Ownership of
Certain Beneficial Owners and Management," respectively, in the Company's
definitive proxy statement, to be filed within 120 days after the end of the
fiscal year covered by this annual report on Form 10-K, and is incorporated
herein by reference.

ITEM 13.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         None.

                                     PART IV

ITEM 14.        EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K.

         (a) 1. Financial Statements. Financial Statements listed in the
accompanying Index to Financial Statements and the Financial Statement Schedule
appearing on page F-1 are filed as part of this annual report on Form 10-K.

                  2. Financial Statement Schedule. The Financial Statement
Schedule listed in the accompanying Index to Financial Statements and the
Financial Statement Schedule appearing on page F-1 are filed as part of this
annual report on Form 10-K.

                  3.       Exhibits. (see (c) below).

         (b)      Reports on Form 8-K.

                  The Company did not file a report on Form 8-K during the
quarter ended January 1, 2000.

         (c)      Exhibits.

                  The following is a list of exhibits filed as part of this
annual report on Form 10-K. Where so indicated, exhibits which were previously
filed are incorporated by reference. For exhibits incorporated by reference, the
location of the exhibit in the previous filing is indicated in parentheses.



                                      -22-
<PAGE>   23
3.1      Restated Certificate of Incorporation, as amended (Filed as Exhibit 3.1
         to the Company's annual report on Form 10-K for the year ended January
         2, 1999 ("1998 Form 10-K") and incorporated herein by reference)

3.2      By-Laws, as amended (Filed as Exhibit 3.2 to the Company's annual
         report on Form 10-K for the year ended January 1, 1994 and incorporated
         herein by reference)

4.1      Form of Certificate for Shares of Common Stock (Filed as Exhibit 4.1 to
         the 1998 Form 10-K and incorporated herein by reference)

4.2      Rights Agreement dated as of October 3, 1991 with First Interstate Bank
         of Arizona, N.A., as Rights Agent (Filed as Exhibit 1 to the Company's
         report on Form 8-K dated October 3, 1991 and incorporated herein by
         reference)

4.3      Amendment, dated as of March 6, 2000, to Rights Agreement, dated as of
         October 3, 1991, with American Stock Transfer & Trust Company, as
         successor Rights Agent

10.1     1986 Stock Option Plan, as amended and restated (Filed as Exhibit
         10.2.1 to the to the Company's annual report on Form 10-K for the year
         ended January 4, 1992 ("1991 Form 10-K") and incorporated herein by
         reference)**

10.2     1988 Stock Option Plan for Non-Employee Directors (Filed as Exhibit
         10.2.4 to the Company's annual report on Form 10-K for the year ended
         December 31, 1988 and incorporated herein by reference)**

10.3     K-Tron International, Inc. 1996 Equity Compensation Plan, as amended
         (Filed as Exhibit 10.3 to the 1998 Form 10-K and incorporated herein by
         reference)**

10.4     K-Tron International, Inc. Amended and Restated Employee Stock Purchase
         Plan (Filed as Exhibit 10.2 to the Company's report on Form 10-Q for
         the quarterly period ended September 28, 1996 and incorporated herein
         by reference)**

10.5     Amended and Restated K-Tron International, Inc. Profit-Sharing and
         Thrift Plan**

10.6     K-Tron International, Inc. Supplemental Executive Retirement Plan
         (Filed as Exhibit 10.2.7 to the 1991 Form 10-K and incorporated herein
         by reference)**

10.7     Employment Agreement dated as of October 6, 1997 by and between K-Tron
         International, Inc. and Edward B. Cloues, II (Filed as Exhibit 10.1 to
         the



                                      -23-
<PAGE>   24

         Company's report on Form 10-Q for the quarterly period ended September
         27, 1997 and incorporated herein by reference)**

10.8     Amendment No. 1 to Employment Agreement dated October 5, 1998 by and
         between K-Tron International, Inc. and Edward B. Cloues, II (Filed as
         Exhibit 10.1 to the Company's report on Form 10-Q for the quarterly
         period ended October 3, 1998 and incorporated herein by reference)**

10.9     Employment Agreement dated as of May 7, 1999 by and between K-Tron
         International, Inc. and Ronald R. Remick**

10.10    Form of Employment Agreement with certain employees of the Company,
         which are identical in all material respects except for the employee,
         amount of salary to be paid and date of execution (Filed as Exhibit
         10.12 to the Company's annual report on Form 10-K for the year ended
         January 3, 1998 and incorporated herein by reference)**

10.11    Form of Indemnification Agreement with certain directors and officers
         of the Company listed on Schedule 10.11, which are identical in all
         material respects except for the director or officer who is a party
         thereto and the date of execution**

10.12    Leasing Agreement dated October 30, 1990 between CS Immobilien Leasing
         AG, Zurich and Hasler Freres SA, with limited guaranty of K-Tron Soder
         AG (Filed as Exhibit 10.1(b) to the Company's report on Form 8-K dated
         October 30, 1990 and incorporated herein by reference)

10.13    Amendment, dated January 25, 1991, to Leasing Agreement, dated October
         30, 1990, between CS Immobilien Leasing AG, Zurich and Hasler Freres SA
         and to the related limited guaranty of K-Tron Soder AG (Filed as
         Exhibit 10.3.3 to the Company's annual report on Form 10-K for the year
         ended December 29, 1990 and incorporated herein by reference)

10.14    Note dated February 4, 2000 from K-Tron America, Inc. in favor of The
         Bank of Gloucester County (Filed as Exhibit (b)(1) to Amendment No.1 to
         the Company's Tender Offer Statement on Schedule TO dated February 16,
         2000 and incorporated herein by reference)

10.15    Mortgage Note dated June 11, 1996 from K-Tron America, Inc. in favor of
         The Bank of Gloucester County

10.16    Loan Modification Agreement dated June 24, 1998 between K-Tron
         America, Inc and the Bank of Gloucester County



                                      -24-
<PAGE>   25
10.17    Note dated June 24, 1998 from K-Tron America, Inc. in favor of The Bank
         of Gloucester County

10.18    Loan Modification Agreement dated as of July 22, 1999 between K-Tron
         America, Inc. and The Bank of Gloucester County

21.1     Subsidiaries

23.1     Consent of Arthur Andersen LLP

24.1     Power of Attorney (Included on Signature Page)

27.1     Financial Data Schedule
----------------
**       Management contract or compensatory plan or arrangement required to be
         filed or incorporated as an exhibit


         COPIES OF THE EXHIBITS ARE AVAILABLE TO SHAREHOLDERS (UPON PAYMENT OF A
         $.20 PER PAGE FEE TO COVER THE COMPANY'S EXPENSES IN FURNISHING THE
         EXHIBITS) FROM RONALD R. REMICK, SENIOR VICE PRESIDENT AND CHIEF
         FINANCIAL OFFICER, K-TRON INTERNATIONAL, INC., ROUTES 55 AND 553, P.O.
         BOX 888, PITMAN, NEW JERSEY 08071-0888.



                                      -25-
<PAGE>   26
                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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.

                                               K-TRON INTERNATIONAL, INC.


Date:  March 28, 2000                          By   /s/ Edward B. Cloues, II
                                                 -------------------------------
                                                     Edward B. Cloues, II
                                                     Chief Executive Officer


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

         Each person in so signing also makes, constitutes and appoints Edward
B. Cloues, II, Chairman and Chief Executive Officer of K-Tron International,
Inc., and Ronald R. Remick, Senior Vice President, Chief Financial Officer and
Treasurer of K-Tron International, Inc., and each of them acting alone, as his
true and lawful attorneys-in-fact, in his name, place and stead, to execute and
cause to be filed with the Securities and Exchange Commission any or all
amendments to this report.


<TABLE>
Signature                                      Date                                 Capacity
---------                                      ----                                 --------

<S>                                            <C>                                  <C>
 /s/ Edward B. Cloues, II                      March 28, 2000                       Chief Executive Officer
----------------------------                                                        (principal executive
     Edward B. Cloues, II                                                           officer) and Chairman of
                                                                                    the Board of Directors

 /s/ Ronald R. Remick                          March 28, 2000                       Senior Vice President,
----------------------------                                                        Chief Financial Officer
     Ronald R. Remick                                                               and Treasurer (principal
                                                                                    financial officer)

 /s/ Alan R. Sukoneck                          March 28, 2000                       Vice President, Chief
----------------------------                                                        Accounting and Tax
     Alan R. Sukoneck                                                               Officer (principal
                                                                                    accounting officer)
</TABLE>



                                      -26-
<PAGE>   27

<TABLE>
<CAPTION>
Signature                                      Date                                 Capacity
---------                                      ----                                 --------
<S>                                            <C>                                  <C>
 /s/ Leo C. Beebe                              March 28, 2000                       Director
------------------------------
     Leo C. Beebe


  /s/ Norman Cohen                             March 28, 2000                       Director
------------------------------
     Norman Cohen


  /s/ Robert A. Engel                          March 28, 2000                       Director
------------------------------
     Robert A. Engel


  /s/ Richard J. Pinola                        March 28, 2000                       Director
------------------------------
     Richard J. Pinola


  /s/ Hans-Jurg Schurmann                      March 28, 2000                       Director
------------------------------
     Hans-Jurg Schurmann


  /s/ Jean Head Sisco                          March 28, 2000                       Director
------------------------------
     Jean Head Sisco
</TABLE>




                                      -27-
<PAGE>   28
K-TRON INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS
AS OF JANUARY 1, 2000
TOGETHER WITH AUDITORS' REPORT


<PAGE>   29




                   K-TRON INTERNATIONAL, INC. AND SUBSIDIARIES


         INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE



<TABLE>
<CAPTION>
<S>                                                                                               <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                                           F-2

K-TRON INTERNATIONAL, INC. AND SUBSIDIARIES:

   Consolidated Balance Sheets - January 1, 2000 and January 2, 1999                               F-3

   Consolidated Statements of Operations for the Fiscal Years Ended January 1,
     2000, January 2, 1999 and January 3, 1998                                                     F-5

   Consolidated Statements of Changes in Shareholders' Equity for the Fiscal
     Years Ended January 1, 2000, January 2, 1999 and January 3, 1998                              F-6

   Consolidated Statements of Cash Flows for the Fiscal Years Ended January 1,
     2000, January 2, 1999 and January 3, 1998                                                     F-7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                         F-9

SCHEDULE:
   Schedule II--Valuation Reserves                                                                 S-1
</TABLE>


                                      F-1
<PAGE>   30





                  REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To K-Tron International, Inc.:

We have audited the accompanying consolidated balance sheets of K-Tron
International, Inc. (a New Jersey corporation) and subsidiaries as of January 1,
2000 and January 2, 1999, and the related consolidated statements of operations,
changes in shareholders' equity, and cash flows for each of the three fiscal
years in the period ended January 1, 2000. These financial statements and the
schedule referred to below are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements and
this schedule based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of K-Tron
International, Inc. and subsidiaries as of January 1, 2000 and January 2, 1999,
and the results of their operations and their cash flows for each of the three
fiscal years in the period ended January 1, 2000, in conformity with accounting
principles generally accepted in the United States.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to
financial statements as of January 1, 2000 and for each of the three fiscal
years in the period ended January 1, 2000, is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.



                                                     /s/ Arthur Andersen LLP





Philadelphia, Pennsylvania
    February 16, 2000





                                      F-2
<PAGE>   31




                   K-TRON INTERNATIONAL, INC. AND SUBSIDIARIES


                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                             (dollars in thousands)



<TABLE>
<CAPTION>
                                                                                    January 1,           January 2,
                                                                                      2000                 1999

<S>                                                                               <C>                   <C>
CURRENT ASSETS:
   Cash and cash equivalents                                                      $     3,093           $     3,220
   Accounts receivable (less allowance for doubtful
     accounts of $924 and $1,286)                                                      20,500                19,034
   Inventories                                                                         10,193                10,743
   Deferred income taxes                                                                  473                   819
   Prepaid expenses and other current assets                                            1,516                 1,177
                                                                                  -----------           -----------

              Total current assets                                                     35,775                34,993

PROPERTY, PLANT AND EQUIPMENT, net of
   accumulated depreciation of $27,307 and $27,066                                     14,611                16,215

PATENTS, net of accumulated amortization of $554
   and $479                                                                               879                   751

GOODWILL, net of accumulated amortization
   of $4,062 and $4,113                                                                 3,486                 4,454

OTHER ASSETS                                                                               19                   204
                                                                                  -----------           -----------

              Total assets                                                        $    54,770           $    56,617
                                                                                  ===========           ===========
</TABLE>







   The accompanying notes are an integral part of these financial statements.



                                      F-3
<PAGE>   32


                   K-TRON INTERNATIONAL, INC. AND SUBSIDIARIES


                           CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND SHAREHOLDERS' EQUITY

                    (dollars in thousands except share data)



<TABLE>
<CAPTION>
                                                                                      January 1,         January 2,
                                                                                         2000               1999
<S>                                                                              <C>                <C>
CURRENT LIABILITIES:
   Notes payable to banks                                                        $         2,543    $           254
   Current portion of long-term debt                                                       2,084              1,280
   Accounts payable                                                                        5,691              6,965
   Accrued expenses and other current liabilities                                          3,200              4,034
   Accrued payroll                                                                         2,713              4,307
   Accrued commissions                                                                     1,971              2,609
   Customer advances                                                                       1,134              1,810
   Accrued warranty                                                                        1,294              1,055
   Income taxes payable                                                                    1,088              1,233
                                                                                 ---------------    ---------------

              Total current liabilities                                                   21,718             23,547
                                                                                 ---------------    ---------------

LONG-TERM DEBT, net of current portion                                                     7,252              9,638
                                                                                 ---------------    ---------------

DEFERRED INCOME TAXES                                                                        303                423
                                                                                 ---------------    ---------------

OTHER NONCURRENT LIABILITIES                                                                 287                735
                                                                                 ---------------    ---------------

COMMITMENTS AND CONTINGENCIES (Note 11)
SERIES A JUNIOR PARTICIPATING PREFERRED SHARES, $.01 par value, 50,000 shares             --                 --
   authorized; none issued

SHAREHOLDERS' EQUITY:
   Preferred stock, $.01 par value; 950,000 shares
     authorized; none issued                                                              --                 --
   Common stock, $.01 par value; 50,000,000 shares  authorized; 4,374,505 and
     4,328,555 shares issued                                                                  44                 43
   Paid-in capital                                                                        16,103             15,505
   Retained earnings                                                                      28,598             21,839
   Cumulative translation adjustment                                                      (1,946)              (192)
                                                                                 ---------------    ---------------

                                                                                          42,799             37,195
   Treasury stock, 1,447,350 and 1,295,450 shares, at cost                               (17,589)           (14,921)
                                                                                 ---------------    ---------------

              Total shareholders' equity                                                  25,210             22,274
                                                                                 ---------------    ---------------

              Total liabilities and shareholders' equity                         $        54,770    $        56,617
                                                                                 ===============    ===============
</TABLE>




   The accompanying notes are an integral part of these financial statements.





                                      F-4
<PAGE>   33






                   K-TRON INTERNATIONAL, INC. AND SUBSIDIARIES


                      CONSOLIDATED STATEMENTS OF OPERATIONS

                    (dollars in thousands except share data)



<TABLE>
<CAPTION>
                                                                           For the Fiscal Year Ended

                                                              January 1,         January 2,          January 3,
                                                                  2000              1999                1998

<S>                                                         <C>                <C>                 <C>
REVENUES                                                    $       87,887     $       89,142      $       87,152

COST OF REVENUES                                                    48,931             48,946              48,121
                                                           ---------------    ---------------     ---------------

              Gross profit                                          38,956             40,196              39,031
                                                           ---------------    ---------------     ---------------

OPERATING EXPENSES:
   Selling, general and administrative                              26,464             27,784              27,821
   Research and development                                          3,353              2,980               2,768
                                                           ---------------    ---------------     ---------------

                                                                    29,817             30,764              30,589
                                                           ---------------    ---------------     ---------------

              Operating income                                       9,139              9,432               8,442

INTEREST EXPENSE                                                       495                714               1,133
                                                           ---------------    ---------------     ---------------

              Income before income taxes                             8,644              8,718               7,309

INCOME TAX PROVISION                                                 1,885              2,125               1,865
                                                           ---------------    ---------------     ---------------

              Net income                                    $        6,759     $        6,593      $        5,444
                                                            ==============     ==============      ==============

BASIC EARNINGS PER SHARE                                    $        2.28      $        2.10       $        1.72
                                                            =============      =============       =============

DILUTED EARNINGS PER SHARE                                  $        2.23      $        2.03       $        1.69
                                                            =============      =============       =============

AVERAGE COMMON SHARES OUTSTANDING                                2,962,000          3,133,000           3,162,000

AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING          3,026,000          3,243,000           3,227,000
</TABLE>




   The accompanying notes are an integral part of these financial statements.



                                      F-5
<PAGE>   34



                   K-TRON INTERNATIONAL, INC. AND SUBSIDIARIES


           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                             (dollars in thousands)



<TABLE>
<CAPTION>
                                      Common Stock                              Cumulative           Treasury Stock
                                                         Paid-in   Retained     Translation
                                    Shares     Amount    Capital   Earnings     Adjustment      Shares         Amount       Total
<S>                                <C>          <C>     <C>        <C>          <C>            <C>          <C>            <C>
BALANCE,
   DECEMBER 29, 1996               4,200,328    $42    $14,120     $ 9,802      $  (206)       1,062,950    $  (10,564)    $13,194
     Comprehensive income-
       Net income                         --     --         --       5,444           --               --            --       5,444
       Translation adjustments            --     --         --          --         (560)              --            --        (560)
                                                                                                                           -------
       Total comprehensive
         income                                                                                                              4,884
                                                                                                                           -------
     Issuance of stock                70,972      1        713          --           --          (10,000)          100         814
                                   ---------    ---    -------     -------      -------       ----------    ----------     -------

BALANCE,
   JANUARY 3, 1998                 4,271,300     43     14,833      15,246         (766)       1,052,950       (10,464)     18,892
     Comprehensive income-
       Net income                         --     --         --       6,593           --               --            --       6,593
       Translation adjustments            --     --         --          --          574               --            --         574
                                                                                                                           -------
       Total comprehensive
         income                                                                                                              7,167
                                                                                                                           -------
     Issuance of stock                57,255     --        672          --           --           (7,500)           74         746
     Purchase of treasury shares          --     --         --          --           --          250,000        (4,531)     (4,531)
                                   ---------    ---    -------     -------      -------       ----------    ----------     -------

BALANCE,
   JANUARY 2, 1999                 4,328,555     43     15,505      21,839         (192)       1,295,450       (14,921)     22,274
                                  ----------    ---    -------     -------      -------       ----------    ----------     -------
     Comprehensive income-
       Net income                         --     --         --       6,759           --               --            --       6,759
       Translation adjustments            --     --         --          --       (1,754)              --            --      (1,754)
                                                                                                                           -------
       Total comprehensive
         income                                                                                                              5,005
                                                                                                                           -------
     Issuance of stock                45,950      1        598          --           --          (14,500)          168         767
     Purchase of treasury shares          --     --         --          --           --          166,400        (2,836)     (2,836)
                                  ----------    ---    -------     -------      -------       ----------    ----------     -------

BALANCE,
   JANUARY 1, 2000                 4,374,505    $44    $16,103     $28,598      $(1,946)       1,447,350    $  (17,589)    $25,210
                                  ==========    ===    =======     =======      =======       ==========    ==========     =======
</TABLE>


   The accompanying notes are an integral part of these financial statements.



                                      F-6
<PAGE>   35



                   K-TRON INTERNATIONAL, INC. AND SUBSIDIARIES


                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (dollars in thousands)



<TABLE>
<CAPTION>
                                                                                              For the Fiscal Year Ended

                                                                                January 1,            January 2,          January 3,
                                                                                  2000                  1999                 1998

<S>                                                                            <C>                   <C>                   <C>
OPERATING ACTIVITIES:
   Net income                                                                  $  6,759              $  6,593              $  5,444
   Adjustments to reconcile net income to
     net cash provided by operating activities-
       Depreciation and amortization                                              3,362                 3,158                 2,977
       Amortization of deferred gain on
         sale/leaseback transaction                                                (367)                 (374)                 (380)
       Deferred income taxes                                                        226                    81                  (321)
       Changes in assets and liabilities--
         Accounts receivable, net                                                (3,298)               (3,113)                  250
         Inventories                                                               (299)                 (442)                2,991
         Prepaid expenses and other
           current assets                                                          (495)                  (53)                   88
         Other assets                                                               170                   229                  (532)
         Accounts payable                                                          (786)                1,314                  (286)
         Accrued expenses and other
           current liabilities                                                   (2,571)                  285                 1,928
         Accrued warranty                                                           394                    99                   112
         Income taxes payable                                                      (100)                 (162)                  323
                                                                               --------              --------              --------

                Net cash provided by
                  operating activities                                            2,995                 7,615                12,594
                                                                               --------              --------              --------

INVESTING ACTIVITIES:
   Business acquired                                                                 --                    --                  (783)
   Capital expenditures                                                          (2,605)               (2,713)               (3,000)
   Investment in patents                                                           (199)                 (122)                 (172)
                                                                               --------              --------              --------

                Net cash used in investing activities                            (2,804)               (2,835)               (3,955)
                                                                               --------              --------              --------
</TABLE>


                                   (Continued)



                                      F-7
<PAGE>   36





                   K-TRON INTERNATIONAL, INC. AND SUBSIDIARIES


                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (dollars in thousands)

                                   (Continued)



<TABLE>
<CAPTION>
                                                                             For the Fiscal Year Ended
                                                                 January 1,          January 2,         January 3,
                                                                    2000                1999               1998
<S>                                                          <C>                 <C>                <C>
FINANCING ACTIVITIES:
   Net borrowings (payments) under notes payable to banks    $         2,511     $        (1,142)   $        (6,925)
   Proceeds from issuance of long-term debt                           --                   1,005                689
   Principal payments on long-term debt                                 (550)             (2,894)              (867)
   Purchase of treasury stock                                         (2,836)             (4,531)            --
   Proceeds from issuance of common stock                                767                 746                814
                                                             ---------------     ---------------    ---------------

              Net cash used in
                financing activities                                    (108)             (6,816)            (6,289)
                                                             ---------------     ---------------    ---------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
   EQUIVALENTS                                                          (210)                102               (275)
                                                             ---------------     ---------------    ---------------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                    (127)             (1,934)             2,075

CASH AND CASH EQUIVALENTS:
   Beginning of year                                                   3,220               5,154              3,079
                                                             ---------------     ---------------    ---------------

   End of year                                               $         3,093     $         3,220    $         5,154
                                                             ===============     ===============    ===============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
     Cash paid during the year for-
       Interest                                              $           496     $           772    $         1,182
                                                             ===============     ===============    ===============

       Income taxes                                          $         1,663     $         2,275    $         1,951
                                                             ===============     ===============    ===============
</TABLE>







   The accompanying notes are an integral part of these financial statements.



                                      F-8
<PAGE>   37


                   K-TRON INTERNATIONAL, INC. AND SUBSIDIARIES


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1. NATURE OF OPERATIONS:

K-Tron International, Inc. and its subsidiaries (the "Company") design, produce,
market, and service gravimetric and volumetric feeders, pneumatic conveying
systems and related equipment for processing bulk solids in a wide variety of
manufacturing processes. The Company has manufacturing facilities in the United
States, Switzerland and Canada, and its equipment is sold throughout the world.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
its subsidiaries, all of which are wholly owned. All material intercompany
accounts and transactions have been eliminated.

Fiscal Year

The Company's fiscal year is reported on a fifty-two/fifty-three week period.
Fiscal years ended January 1, 2000 (referred to herein as "1999") and January 2,
1999 (referred to herein as "1998") each include fifty-two weeks, while the
fiscal year ended January 3, 1998 (referred to herein as "1997") includes
fifty-three weeks.

Cash and Cash Equivalents

Cash equivalents represent all highly liquid, interest-bearing investments
purchased with maturities of three months or less.

Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or
market.

Property, Plant and Equipment

Property, plant and equipment is carried at cost and is depreciated on a
straight-line basis over the following estimated useful lives: buildings and
improvements, 30 to 50 years; automotive equipment, 3 years; machinery and
equipment, 3 to 10 years; and furniture and fixtures, 5 to 7 years. Leasehold
improvements are amortized over the shorter of the estimated useful lives of
such assets or the remaining term of the applicable lease.



                                      F-9
<PAGE>   38


Patents

Patents are stated at cost less accumulated amortization. The costs of patents
are amortized on a straight-line basis over the remaining economic life of the
respective asset, but in no event longer than the remaining legal life.

Goodwill

Excess of cost over net assets acquired is amortized on a straight-line basis
over 15 years. Subsequent to an acquisition, the Company continually evaluates
whether later events and circumstances have occurred that indicate the remaining
estimated useful life of this asset may warrant revision or that the remaining
balance may not be recoverable.

Income Taxes

Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes." Deferred
income taxes are provided for differences between amounts shown for financial
reporting purposes and those included with tax return filings that will reverse
in future periods. Additionally, the effects of income taxes are measured based
upon enacted tax laws and rates.

Revenue Recognition

Revenue is recognized when goods are shipped.

Research and Development

Expenditures for research, development and engineering of products are expensed
as incurred.

Foreign Currency

Assets and liabilities denominated in foreign currencies are translated to U.S.
dollars at current rates of exchange at year-end. Revenues and expenses are
translated at average rates prevailing during the year. The Company incurred
foreign currency transaction gains of approximately $98,000, $4,000 and $177,000
for 1999, 1998 and 1997, respectively. Translation gains and losses are recorded
as a separate component of shareholders' equity.

Fair Value Disclosures

The carrying value of financial instruments such as cash, accounts receivables
and payables and other current assets and liabilities approximates their fair
value, based on the short-term nature of these instruments. The carrying amount
of the Company's long-term debt and notes payable approximates their fair value.
The fair value is estimated based on the current rates offered to the Company
for debt and notes payable of the same remaining maturities.




                                      F-10
<PAGE>   39


Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates.

New Accounting Pronouncements

In fiscal 2001, the Company is required to adopt the provisions of SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." The Company does
not anticipate that the adoption will have a material impact on the consolidated
financial statements.

3.       INVENTORIES:

Inventories consist of the following:

<TABLE>
<CAPTION>
                                                                 January 1,          January 2,
                                                                    2000                1999
                                                                         (in thousands)

<S>                                                          <C>                 <C>
           Components                                        $         8,299     $         8,504
           Work-in-process                                             1,755               1,820
           Finished goods                                                139                 419
                                                             ---------------     ---------------

                                                             $        10,193     $        10,743
                                                             ===============     ===============
</TABLE>

4. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                 January 1,          January 2,
                                                                    2000                1999
                                                                         (in thousands)

<S>                                                          <C>                 <C>
           Land                                              $         1,064     $         1,215
           Buildings and improvements                                 15,797              17,240
           Automotive equipment                                          686                 676
           Machinery and equipment                                    12,441              12,169
           Furniture and fixtures                                     11,930              11,981
                                                             ---------------     ---------------

                                                                      41,918              43,281
           Less- Accumulated depreciation
               and amortization                                      (27,307)            (27,066)
                                                             ---------------     ---------------

                                                             $        14,611     $        16,215
                                                             ===============     ===============
</TABLE>

Depreciation of property, plant and equipment for 1999, 1998 and 1997 was
$2,760,000, $2,345,000 and $2,457,000, respectively.




                                      F-11
<PAGE>   40


5. NOTES PAYABLE TO BANKS AND LONG-TERM DEBT:

At January 1, 2000, the Company's Swiss subsidiary had 7.0 million Swiss francs
($4.4 million) in short-term lines of credit with Swiss lenders, of which
$2,543,000 was borrowed under these lines of credit with $1,854,000 available
for future borrowings. The annual interest rate on the amounts borrowed at
January 1, 2000 was 6.25%. In addition to the short-term lines of credit, the
Company's Swiss subsidiary had mortgage borrowings of 10.3 million Swiss francs
($6.4 million) with maturities through 2002 and with annual interest rates
ranging from 3.25% to 4.0% from its Swiss lenders.

In June 1998, the Company's U.S. manufacturing subsidiary refinanced its 20-year
mortgage with a U.S. lender for $2.7 million at an annual interest rate of
7.625%. Monthly principal and interest payments are $25,143. The lender has the
right to review and adjust the terms of the mortgage every five years.

Also in June 1998, the U.S. manufacturing subsidiary entered into a two-year
secured revolving credit facility with a U.S. lender that provides for a maximum
borrowing of $5.0 million, subject to certain maximum borrowing limitations
based upon inventory and receivable levels. During fiscal 1999, this credit
facility was extended one year through July 2001. The annual interest rate as of
January 1, 2000 was 8.5%. As of January 1, 2000, there were no outstanding
borrowings under this credit facility, and $5.0 million was available for future
borrowings.

Under the terms of the U.S. mortgage and revolving credit facilities, fixed
assets with a book value of $2,870,000, and accounts receivable and inventory
with a book value of $13,681,000 are pledged as collateral. In addition, fixed
assets with a book value of $4,175,000 are pledged as collateral under the Swiss
mortgages.

Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                          January 1,         January 2,
                                                                             2000               1999
                                                                                   (in thousands)

<S>                            <C>                                     <C>                 <C>
    U.S. mortgage, interest at 7.625% per annum                        $         2,562     $         2,644
    Non-U.S. mortgages, interest at market rates (3.25% to 4.0% at
        January 1, 2000 and 2.95% to 5.0% at January 2, 1999)                    6,444               7,542
    Other                                                                          330                 732
                                                                       ---------------     ---------------

                                                                                 9,336              10,918
    Less-  Current portion                                                      (2,084)             (1,280)
                                                                       ---------------     ---------------

                                                                       $         7,252     $         9,638
                                                                       ===============     ===============
</TABLE>


                                      F-12
<PAGE>   41


Future annual payments required on long-term debt are as follows (in thousands):

<TABLE>
<CAPTION>
               Fiscal Year                                           Amount
               -----------                                           ------
<S>                                                                  <C>
               2000                                                  $    2,084
               2001                                                       1,772
               2002                                                       3,266
               2003                                                       2,214
               2004                                                         --
               Thereafter                                                   --
                                                                    -----------
                                                                     $    9,336
                                                                    ===========
</TABLE>

6. EMPLOYEE BENEFIT PLANS:

The Company has a profit-sharing and thrift plan (the "Plan") for all U.S.
employees who have worked for the Company for at least six months and who are
employed at the end of the year. All Company contributions to the Plan are at
the discretion of the Board of Directors. The Company's profit-sharing
contribution vests over a five-year period. In addition, employees may
voluntarily participate in the thrift plan and authorize payroll deductions
ranging from 1% to 15% of their compensation. Related matching Company
contributions are vested immediately. The Board of Directors authorized matching
contributions of 100% of the first 6% of participants' compensation for 1999 and
1997, and 110% of the first 6% of participants' compensation for 1998. The Board
of Directors did not authorize any 1999, 1998 or 1997 contribution to the
profit-sharing portion of the Plan.

Substantially all foreign employees participate in defined contribution group
pension plans. Contributions are paid by the employee and employer at
percentages that vary according to age and other factors.

The expense associated with the thrift plan for 1999, 1998 and 1997 was
$405,000, $443,000 and $355,000, respectively. The foreign pension expense for
1999, 1998 and 1997 was $1,008,000, $1,231,000 and $1,066,000, respectively.

In June 1981, the Company adopted an employee stock purchase plan under which
eligible employees of the Company may elect to participate through payroll
deductions for up to 10% of their gross compensation. Such deductions are used
to purchase common stock of the Company at a price equal to 85% of the market
value, not to exceed $25,000 in stock in any year. Under this plan, the Company
issued 15,706 shares of common stock at an average price of $13.25 in 1999,
14,241 shares of common stock at an average price of $14.92 in 1998 and 17,468
shares of common stock at an average price of $10.72 in 1997.




                                      F-13
<PAGE>   42


7. SHAREHOLDERS' EQUITY:

In 1991, the Board of Directors determined the rights on 50,000 shares of the
authorized preferred stock as the Series A Junior Participating Preferred Shares
(the "Series A Preferred Shares"). Each one one-hundredth of a share of the
Series A Preferred Shares carries voting and dividend rights that are equivalent
to one share of the common stock. The voting and dividend rights are subject to
adjustment in the event of a dividend on common stock which is payable in common
stock or any subdivisions or combinations with respect to the outstanding shares
of common stock (see Note 8).

The Board of Directors has not determined the rights on the remaining 950,000
shares of the authorized preferred stock as of January 1, 2000.

The Company had a stock option plan for nonemployee directors (the "1988 plan")
which expired in November 1998, but under which option grants remain
outstanding. The plan provided that each eligible director was granted a single
option to purchase 10,000 shares of the Company's common stock at a price equal
to the fair market value at the date of grant. The aggregate number of shares
which could be issued under the plan was 100,000. These options had a term of
ten years and became exercisable in four equal annual installments beginning on
the date of the grant.

The Company's 1986 Stock Option Plan, as amended (the "1986 plan"), expired in
January 1996, but option grants under the 1986 plan remain outstanding. Key
employees of and consultants to the Company could be granted options to purchase
shares of the Company's common stock. These options could be either incentive
stock options or nonqualified stock options. The Stock Option Committee under
the 1986 plan determined the term of each option, but no option could be
exercisable more than ten years from the date the option was granted. The Stock
Option Committee also determined the option exercise price per share. With
respect to incentive stock options, the exercise price must at least equal the
fair market value of a share of common stock as of the date the option was
granted.

In 1996, the Company adopted the 1996 Equity Compensation Plan (the "1996
plan"), with features similar to the 1986 plan, except that the maximum number
of shares that may be issued is 450,000. The 1996 plan was amended in 1998,
increasing the maximum number of shares that may be issued to 600,000, and
allowing nonemployee directors to receive grants thereunder at fair market
value. The 1996 plan is administered by a committee selected by the Board of
Directors.




                                      F-14
<PAGE>   43

A summary of the Company's stock option and restricted stock grant activity for
the plans referred to above for the three fiscal years ended January 1, 2000 is
as follows:

<TABLE>
<CAPTION>
                                                                      Average
                                                                      Price
                                                  Outstanding        Per Share      Available
                                                  -----------        ---------      ---------
<S>                                               <C>           <C>                <C>
    BALANCE,
        DECEMBER 29, 1996                           248,684                         500,000
           Granted                                  100,000     $     14.00        (100,000)
           Canceled                                  (1,500)           8.00          --
           Exercised                                (56,150)           9.37          --

    BALANCE,
        JANUARY 3, 1998                             291,034                         400,000
           1996 plan amendment                                                      150,000
           Granted                                  105,000           17.75        (105,000)
           Canceled                                  (5,850)           9.33           1,000
           Exercised                                (43,550)          10.07          --
           Restricted stock granted                  20,000           --            (20,000)
           Restricted stock exercised                (7,500)          --             --
           1988 plan expiration                      --               --            (50,000)
                                                    -------                         -------
    BALANCE,
        JANUARY 2, 1999                             359,134                         376,000
           Granted                                   59,500           17.80         (59,500)
           Canceled                                 (15,534)          11.47           5,334
           Exercised                                (32,933)           9.15          --
           Restricted stock granted                   2,000          --              (2,000)
           Restricted stock exercised               (14,500)         --              --
                                                    -------                         -------
    BALANCE,
        JANUARY 1, 2000                             357,667                         319,834
                                                    =======                         =======
</TABLE>


As of January 1, 2000, thirty-one employees held options under the 1986 plan for
an aggregate of 72,600 shares at exercise prices from $6.25 to $12.50 with a
weighted average price of $8.22. These options expire in varying amounts through
the year 2005. As of January 1, 2000, thirty-nine employees and six nonemployee
directors held options under the 1996 plan for an aggregate of 256,167 shares at
exercise prices from $14.00 to $19.00 with a weighted average price of $16.33.
These options expire through 2009. As of January 1, 2000, under the 1988 plan,
three directors held options for an aggregate of 28,900 shares at exercise
prices from $9.25 to $11.00 with a weighted average price of $10.18. These
options expire in varying amounts through the year 2004.

In July 1998, the Company repurchased 250,000 shares of its common stock,
representing approximately 7.7% of its then outstanding common stock. The
purchase price was $4,531,250, or $18.125 a share.

During fiscal 1999, the Company repurchased an additional 166,400 shares of its
common stock in three separate transactions, representing approximately 5.5% of
its outstanding common stock as of the beginning of the fiscal year. The total
purchase price was $2,836,000, or an average of $17.04 a share.



                                      F-15
<PAGE>   44

On February 16, 2000, the Company commenced a tender offer to purchase for cash
up to 450,000 shares of its common stock, representing approximately 15.4% of
the Company's then outstanding shares, for $18.00 per share. The tender offer
will expire, unless extended, at 5:00 p.m., New York City time, on Friday, March
17, 2000.

The share repurchase will be financed partly with available cash, but primarily
by using a new $7.0 million credit facility that was obtained from a U.S. bank
on February 4, 2000.

Pro Forma Information

As permitted under SFAS No. 123, the Company has elected to continue to account
for compensation cost using the intrinsic value-based method of accounting as
prescribed by Accounting Principles Board (APB) Opinion No. 25, "Accounting for
Stock Issued to Employees." SFAS No. 123 does require the Company to disclose
pro forma net income and pro forma earnings per share amounts, as if
compensation expense were recognized for options granted after fiscal year 1994.
Using this approach, net income and earnings per share would have been reduced
to the pro forma amounts indicated in the table:

<TABLE>
<CAPTION>
                                                                  1999            1998           1997
                                                              ------------    -----------    -----------
                                                                   (in thousands, except per share)

<S>                                                           <C>             <C>            <C>
       Net income - as reported                               $     6,759     $     6,593    $     5,444
       Net income - pro forma                                       6,340           6,090          5,256
       Basic earnings per share - as reported                        2.28            2.10           1.72
       Basic earnings per share - pro forma                          2.14            1.94           1.66
       Diluted earnings per share - as reported                      2.23            2.03           1.69
       Diluted earnings per share  - pro forma                       2.10            1.88           1.63
</TABLE>

This pro forma impact may not be representative of the effects for future years,
and could increase if additional options are granted and amortized over the
vesting period.

For disclosure purposes, the fair value of each stock option granted is
estimated on the date of grant using the Black-Scholes option-pricing model with
the following weighted average assumptions: no dividend yield; expected
volatility of 41.45%, 44.13% and 43.60%; risk-free interest rate of 5.17%, 5.85%
and 6.02%; and expected life of 6.00 years, 6.38 years and 6.00 years in 1999,
1998 and 1997, respectively.

The Black-Scholes option-pricing model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option-pricing models require the input of subjective
assumptions, including the expected stock price volatility.



                                      F-16
<PAGE>   45

8. SHAREHOLDER RIGHTS PLAN:

The Company has a Shareholder Rights Plan (the "Rights Agreement") which was
adopted by the Board of Directors on October 3, 1991. The Rights Agreement
provides that each share of the Company's common stock outstanding as of October
14, 1991 has associated with it one right ("Right") to purchase one
one-hundredth of a share of the Series A Preferred Shares at an exercise price
of $40 per share. Such exercise price is subject to adjustment as described in
the Rights Agreement.

The Rights will be exercisable only 10 days following a public announcement that
a person or group has acquired or obtained the right to acquire beneficial
ownership of 20% or more of the outstanding common stock of the Company, or not
later than 65 days after the commencement of a tender offer or an exchange offer
that would result in a person or group beneficially owning 20% or more of the
outstanding common stock. In either such case, the Rights would entitle
shareholders (other than the 20% acquiror) to purchase for $40 the number of
shares of the Company's common stock which would have a market value of $80. In
the event that the Company is acquired in a merger or other business
combination, the Rights would entitle the shareholders (other than the acquiror)
to purchase securities of the surviving company at a similar discount. In lieu
of requiring payment of the exercise price of the Rights upon the occurrence of
the above-noted events, the Company may permit the holders to simply surrender
the Rights and receive the number of shares of the Company's common stock which
would have a market value of $40.

The Company can redeem the Rights at $.01 per Right at any time until the 20th
day following a public announcement that a person or a group has acquired or
obtained the right to acquire beneficial ownership of at least 20% of the
Company's outstanding common stock. The redemption period may be extended by the
Board of Directors as long as the Rights are still redeemable. The Rights expire
October 14, 2001.

9.   INCOME TAXES:

Following are the domestic and foreign components of the income before income
taxes:

<TABLE>
<CAPTION>
                                                                         Fiscal Year Ended

                                                        January 1,          January 2,         January 3,
                                                          2000                 1999               1998
                                                      ------------       -------------      ---------------
                                                                         (in thousands)

<S>                                                   <C>                 <C>                <C>
        United States                                 $      5,196        $        6,595     $        2,387
        Foreign                                              3,448                 2,123              4,922
                                                    --------------      ----------------   ----------------

           Income before income taxes                 $      8,644        $        8,718     $        7,309
                                                      ============        ==============     ==============
</TABLE>




                                      F-17
<PAGE>   46

The income tax provision (benefit) consists of the following:

<TABLE>
<CAPTION>
                                                                      Fiscal Year Ended
                                                    ---------------------------------------------------
                                                    January 1,          January 2,           January 3,
                                                        2000                1999                 1998
                                                    ----------         -----------          -----------
                                                                       (in thousands)
<S>                                                 <C>                <C>                  <C>
    Current:
      Federal and state                             $    1,524         $     1,938          $     2,061

      Foreign                                              103                 106                  125
                                                    ----------         -----------          -----------

             Total current                               1,627               2,044                2,186


    Deferred:
      Federal and state                                    270                  56                 (325)
      Foreign                                              (12)                 25                    4
                                                    ----------         -----------          -----------

             Total deferred                                258                  81                 (321)
                                                    ----------         -----------          -----------

    Total income tax provision                      $    1,885         $     2,125          $     1,865
                                                    ==========         -----------          ===========

</TABLE>

Significant components of the deferred tax accounts at January 1, 2000 and
January 2, 1999, are as follows:

<TABLE>
<CAPTION>
                                                            January 1,            January 2,
                                                             2000                  1999
                                                           -----------          ------------
                                                                   (in thousands)
<S>                                                        <C>                  <C>
    Deferred tax assets:
      Depreciation                                         $     22             $    126
      Accrued liabilities                                       310                  501
      Net operating loss carryforwards                        1,112                2,445
      Inventory basis differences                               138                  223
      Other                                                     478                  213
                                                           --------             --------

                                                              2,060                3,508
      Valuation allowance                                    (1,248)              (2,580)
                                                           --------             --------

           Total assets                                         812                  928
                                                           --------             --------

    Deferred tax liabilities:
      Depreciation                                             (566)                (230)
      Other                                                     (76)                (302)
                                                           --------             --------

           Total liabilities                                   (642)                (532)
                                                           --------             --------
    Net deferred asset                                     $    170             $    396
                                                           ========             ========
</TABLE>


                                      F-18
<PAGE>   47


Foreign and U.S. state operating loss carryforwards as of January 1, 2000 were
$2.6 million and $4.3 million, respectively. Of the $2.6 million of foreign
losses, $1.7 million are available to offset future income through 2002. The
balance of $900,000 has an unlimited carryforward period. U.S. state operating
losses are available through 2006.

A valuation allowance is provided when it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The Company has
established valuation allowances for all foreign and state net operating loss
carryforwards and certain other deferred tax assets for which realization is
dependent on future taxable earnings.

At January 1, 2000, retained earnings include $12.9 million of undistributed net
income of foreign subsidiaries. Management considers such income to have been
permanently invested and, therefore, no federal income taxes have been provided
for these items.

A reconciliation of the provision for income taxes and the amounts that would be
computed using the statutory federal income tax rates is set forth below:

<TABLE>
<CAPTION>

                                                                          Fiscal Year Ended
                                                           January 1,          January 2,          January 3,
                                                              2000                1999                1998
                                                           ----------         ------------       --------------
                                                                              (in thousands)
<S>                                                        <C>               <C>                 <C>
     Income tax provision on income before income
         tax at statutory federal income tax rates         $     2,939       $     2,964         $     2,485
     Foreign tax rate differential                                (199)              (58)               (237)
     State tax, net of federal benefit                             134               263                 133
     U.S. and foreign permanent tax differences                     21              (440)                708
     Change in valuation allowance                                (870)             (532)             (1,307)
     Other                                                        (140)              (72)                 83
                                                           -----------      ------------         -----------

     Income tax provision                                  $     1,885       $     2,125         $     1,865
                                                           ===========       ===========         ===========
</TABLE>


10. EARNINGS PER SHARE:

The Company adopted SFAS No. 128, "Earnings Per Share," which requires that the
Company report Basic and Diluted Earnings Per Share. Basic Earnings Per Share
represents net income less preferred dividends divided by the weighted average
number of common shares outstanding. Diluted Earnings Per Share is calculated
similarly, except that the denominator includes weighted average number of
common shares outstanding plus the dilutive effect of options, warrants,
convertible securities and other instruments with dilutive effects if exercised.




                                      F-19
<PAGE>   48


The Company's Basic and Diluted Earnings Per Share are calculated as follows:

<TABLE>
<CAPTION>
                                                   Net Income
                                                    Available
                                                    To Common                      Earnings
                                                  Shareholders         Shares      Per Share
                                                  ------------       ---------     ---------
                                                   For the Fiscal Year Ended January 1, 2000
                                                   -----------------------------------------
<S>                                               <C>               <C>            <C>
Basic                                             $6,759,000         2,962,000       $2.28

               Common Share Equivalent of
                   Options Issued                     --                64,000        (.05)
                                                  ----------         ---------      ------

Diluted                                           $6,759,000         3,026,000        $2.23
                                                  ==========        ==========        =====


                                                   For the Fiscal Year Ended January 2, 1999
                                                   -----------------------------------------
Basic                                             $6,593,000         3,133,000       $2.10

               Common Share Equivalent of
                   Options Issued                     --              110,000         (.07)
                                                  ----------         ---------      ------

Diluted                                           $6,593,000         3,243,000        $2.03
                                                  ==========        ==========        =====


                                                  For the Fiscal Year Ended January 3, 1998
                                                  -----------------------------------------

Basic                                             $5,444,000         3,162,000       $ 1.72

               Common Share Equivalent of
                   Options Issued                     --                65,000         (.03)
                                                  ----------         ---------      ------


Diluted                                           $5,444,000         3,227,000        $1.69
                                                  ==========        ==========        =====
</TABLE>



Diluted earnings per common share are based on the weighted average number of
common and common equivalent shares outstanding during each year. Such average
shares include the weighted average number of common shares outstanding plus the
shares issuable upon exercise of stock options after the assumed repurchase of
common shares with the related proceeds.




                                      F-20
<PAGE>   49


11. COMMITMENTS AND CONTINGENCIES:

The Company leases certain office and plant facilities and equipment under
noncancellable leases. These leases expire in periods ranging from one to five
years and, in certain instances, provide for purchase options.

Immediately prior to the 1990 acquisition of Hasler, the Company's heavy feeder
division, the acquired company entered into a sale/leaseback agreement on its
real property in Switzerland. The net proceeds of this transaction were
distributed to the seller as a dividend. The gain from this transaction has been
classified as Other Noncurrent Liabilities in the Company's consolidated balance
sheets. This deferred gain is being amortized over the life of the resulting
operating lease (ten years). Amortization of the deferred gain for 1999, 1998
and 1997 was $367,000, $374,000 and $380,000, respectively.

As of January 1, 2000, future minimum payments under operating leases having
noncancellable terms in excess of one year are summarized below:

<TABLE>
<CAPTION>
                                                          Operating
                                                           Leases
                                                       --------------
                                                       (in thousands)

<S>                                                  <C>
                2000                                   $     717
                2001                                         218
                2002                                          67
                2003                                          44
                2004                                          21
                                                       ---------
                                                       $   1,067
                                                      ==========
</TABLE>

Rent expense for 1999, 1998 and 1997 was $768,000, $702,000 and $647,000,
respectively.

The Company has employment contracts with eight executives. Except in one case
when two years advance notice is required, these contracts may be terminated by
the Company on one year's advance notice. Under the agreements, each individual
is guaranteed minimum compensation over the contract period. As of January 1,
2000, the estimated future obligation under these contracts is $977,200 (2000)
and $420,000 (2001).

12. MANAGEMENT SEGMENT INFORMATION:

The Company has adopted the provisions of SFAS No. 131, "Disclosures About
Segments of an Enterprise and Related Information." SFAS No. 131 introduced a
new model for segment reporting called the management approach. The management
approach is based on the way that the chief operating decision-maker organizes
segments within a company for making operating decisions and assessing
performance.

The Company is engaged in one business segment, the development, manufacturing
and marketing of gravimetric and volumetric feeders, pneumatic conveying systems
and related equipment. The Company operates in two primary geographic locations,
North America and Western Europe.




                                      F-21
<PAGE>   50



<TABLE>
<CAPTION>
                                                              North             Western       Elimi-        Consoli-
                                                             America            Europe        nations         dated
                                                                                    (in thousands)
<S>                                                     <C>                 <C>           <C>            <C>
FISCAL YEAR ENDED
  JANUARY 1, 2000
   Revenues-
     Sales to unaffiliated customers                    $       36,226      $    51,661   $    --        $      87,887
     Sales to affiliates                                         3,509            2,907        (6,416)          --
                                                        --------------      -----------   -----------    -------------
              Total sales                               $       39,735      $    54,568   $    (6,416)   $      87,887
                                                        ==============      ===========   ===========    =============

   Operating income                                     $        5,405      $     3,752   $       (18)   $       9,139
                                                        ==============      ===========   ===========    =============

   Interest expense                                                                                               (495)
                                                                                                         -------------

   Income before income taxes                                                                            $       8,644
                                                                                                         =============

   Capital expenditures                                 $          826      $     1,779                  $       2,605

   Depreciation and amortization
     expense                                                     1,265            2,097                          3,362
             Total assets                                       21,700           33,070                         54,770


FISCAL YEAR ENDED
  JANUARY 2, 1999:
     Revenues-
       Sales to unaffiliated customers                  $       37,642      $    51,500   $    --        $      89,142
       Sales to affiliates                                       3,645            1,881        (5,526)          --
                                                        --------------      -----------   -----------    -------------

              Total sales                               $       41,287      $    53,381   $    (5,526)   $      89,142
                                                        ==============      ===========   ===========    =============
     Operating income                                   $        6,860      $     2,425   $       147    $       9,432
                                                        ==============      ===========   ===========
     Interest expense                                                                                             (714)
                                                                                                         -------------

     Income before income taxes                                                                          $       8,718
                                                                                                         =============

     Capital expenditures                               $        1,121      $     1,592                  $       2,713

     Depreciation and amortization
       expense                                                   1,376            1,782                          3,158
              Total assets                                      20,212           36,405                         56,617

FISCAL YEAR ENDED
  JANUARY 3, 1998:
     Revenues-
       Sales to unaffiliated customers                  $       35,507      $    51,645   $    --        $      87,152
       Sales to affiliates                                       1,976            1,931        (3,907)          --
                                                        --------------      -----------   -----------    -------------

              Total sales                               $       37,483      $    53,576   $    (3,907)   $      87,152
                                                        ==============      ===========   ===========    =============

     Operating income                                   $        3,040      $     5,607   $      (205)   $       8,442
                                                        ==============      ===========   ===========
     Interest expense                                                                                           (1,133)
                                                                                                         -------------

     Income before income taxes                                                                          $       7,309
                                                                                                         =============

     Capital expenditures                               $        1,003      $     1,997                  $       3,000

     Depreciation and amortization
       expense                                                   1,005            1,972                          2,977
              Total assets                                      21,276           32,973                         54,249
</TABLE>



                                      F-22
<PAGE>   51

13. QUARTERLY FINANCIAL INFORMATION (Unaudited):

The following table summarizes quarterly financial data for fiscal 1999 and
1998:

<TABLE>
<CAPTION>
   1999                       First          Second          Third        Fourth
---------                     -----          ------          -----        ------
<S>                         <C>            <C>            <C>           <C>
Revenues                    $19,840        $22,617        $21,688       $23,742
Gross Profit                  9,121         10,027          9,925         9,883
Net Income                    1,360          1,819          1,670         1,910
Basic Earnings Per Share        .46            .62            .56           .65

Diluted Earnings Per Share      .44            .60            .55           .63
</TABLE>



<TABLE>
<CAPTION>
     1998                         First         Second          Third         Fourth
---------                         -----         ------          -----         ------
<S>                             <C>            <C>            <C>            <C>
Revenues                        $21,455        $22,366        $21,244        $24,077
Gross Profit                      9,640         10,373          9,493         10,690
Net Income                        1,307          1,815          1,578          1,893
Basic Earnings Per Share            .40            .56            .52            .63

Diluted Earnings Per Share          .39            .54            .51            .60
</TABLE>




                                      F-23
<PAGE>   52



                                                                     SCHEDULE II

                           K-TRON INTERNATIONAL, INC.

                               VALUATION RESERVES


<TABLE>
<CAPTION>
                                          Balance at      Additions
                                           Beginning       Charged                             Balance at
                                           of Period      to Income      Deductions(1)       End of Period
                                       -------------   ------------      -------------      ---------------
<S>                                    <C>             <C>               <C>                <C>
FISCAL YEAR ENDED JANUARY 1, 2000:
     Allowance for doubtful accounts   $   1,286,000   $     39,000      $     401,000      $        924,000

FISCAL YEAR ENDED JANUARY 2, 1999:
     Allowance for doubtful accounts       1,119,000        208,000             41,000             1,286,000

FISCAL YEAR ENDED JANUARY 3, 1998:
     Allowance for doubtful accounts       1,037,000        184,000            102,000             1,119,000


FISCAL YEAR ENDED JANUARY 1, 2000:
     Provision for restructuring
       reserve                                --            710,000            260,000               450,000

FISCAL YEAR ENDED JANUARY 2, 1999:
     Provision for restructuring
       reserve                                --               --                 --                   --

FISCAL YEAR ENDED JANUARY 3, 1998:
     Provision for restructuring
       reserve                                --               --                 --                   --
</TABLE>



(1)      Accounts written off less recoveries, net of foreign exchange
         translation adjustment.


                                                    S-1

<PAGE>   53

                                 EXHIBIT INDEX


Exhibit
Number              Description


[S]      [C]
3.1      Restated Certificate of Incorporation, as amended (Filed as Exhibit 3.1
         to the Company's annual report on Form 10-K for the year ended January
         2, 1999 ("1998 Form 10-K") and incorporated herein by reference)

3.2      By-Laws, as amended (Filed as Exhibit 3.2 to the Company's annual
         report on Form 10-K for the year ended January 1, 1994 and incorporated
         herein by reference)

4.1      Form of Certificate for Shares of Common Stock (Filed as Exhibit 4.1 to
         the 1998 Form 10-K and incorporated herein by reference)

4.2      Rights Agreement dated as of October 3, 1991 with First Interstate Bank
         of Arizona, N.A., as Rights Agent (Filed as Exhibit 1 to the Company's
         report on Form 8-K dated October 3, 1991 and incorporated herein by
         reference)

4.3      Amendment, dated as of March 6, 2000, to Rights Agreement, dated as of
         October 3, 1991, with American Stock Transfer & Trust Company, as
         successor Rights Agent

10.1     1986 Stock Option Plan, as amended and restated (Filed as Exhibit
         10.2.1 to the to the Company's annual report on Form 10-K for the year
         ended January 4, 1992 ("1991 Form 10-K") and incorporated herein by
         reference)**

10.2     1988 Stock Option Plan for Non-Employee Directors (Filed as Exhibit
         10.2.4 to the Company's annual report on Form 10-K for the year ended
         December 31, 1988 and incorporated herein by reference)**

10.3     K-Tron International, Inc. 1996 Equity Compensation Plan, as amended
         (Filed as Exhibit 10.3 to the 1998 Form 10-K and incorporated herein by
         reference)**

10.4     K-Tron International, Inc. Amended and Restated Employee Stock Purchase
         Plan (Filed as Exhibit 10.2 to the Company's report on Form 10-Q for
         the quarterly period ended September 28, 1996 and incorporated herein
         by reference)**

10.5     Amended and Restated K-Tron International, Inc. Profit-Sharing and
         Thrift Plan**


<PAGE>   54

10.6     K-Tron International, Inc. Supplemental Executive Retirement Plan
         (Filed as Exhibit 10.2.7 to the 1991 Form 10-K and incorporated herein
         by reference)**

10.7     Employment Agreement dated as of October 6, 1997 by and between K-Tron
         International, Inc. and Edward B. Cloues, II (Filed as Exhibit 10.1 to
         the Company's report on Form 10-Q for the quarterly period ended
         September 27, 1997 and incorporated herein by reference)**

10.8     Employment Agreement dated as of May 7, 1999 by and between K-Tron
         International, Inc. and Ronald R. Remick**

10.9     Amendment No. 1 to Employment Agreement dated October 5, 1998 by and
         between K-Tron International, Inc. and Edward B. Cloues, II (Filed as
         Exhibit 10.1 to the Company's report on Form 10-Q for the quarterly
         period ended October 3, 1998 and incorporated herein by reference)**

10.10    Form of Employment Agreement with certain employees of the Company,
         which are identical in all material respects except for the employee,
         amount of salary to be paid and date of execution (Filed as Exhibit
         10.12 to the Company's annual report on Form 10-K for the year ended
         January 3, 1998 and incorporated herein by reference)**

10.11    Form of Indemnification Agreement with certain directors and officers
         of the Company listed on Schedule 10.11, which are identical in all
         material respects except for the director or officer who is a party
         thereto and the date of execution**

10.12    Leasing Agreement dated October 30, 1990 between CS Immobilien Leasing
         AG, Zurich and Hasler Freres SA, with limited guaranty of K-Tron Soder
         AG (Filed as Exhibit 10.1(b) to the Company's report on Form 8-K dated
         October 30, 1990 and incorporated herein by reference)

10.13    Amendment, dated January 25, 1991, to Leasing Agreement, dated October
         30, 1990, between CS Immobilien Leasing AG, Zurich and Hasler Freres SA
         and to the related limited guaranty of K-Tron Soder AG (Filed as
         Exhibit 10.3.3 to the Company's annual report on Form 10-K for the year
         ended December 29, 1990 and incorporated herein by reference)

10.14    Note dated February 4, 2000 from K-Tron America, Inc. in favor of The
         Bank of Gloucester County (Filed as Exhibit (b)(1) on Amendment No.1 to
         the Company's Tender Offer Statement on Schedule TO dated February 16,
         2000 and incorporated herein by reference)



<PAGE>   55

10.15    Mortgage Note dated June 11, 1996 from K-Tron America, Inc. in favor of
         The Bank of Gloucester County

10.16    Loan Modification Agreement dated June 24, 1998 between K-Tron America,
         Inc. and The Bank of Gloucester County

10.17    Note dated June 24, 1998 from K-Tron America, Inc. in favor of The Bank
         of Gloucester County

10.18    Loan Modification Agreement dated as of July 22, 1999 between K-Tron
         America, Inc. and The Bank of Gloucester County

21.1     Subsidiaries

23.1     Consent of Arthur Andersen LLP

24.1     Power of Attorney (Included on Signature Page)

27.1     Financial Data Schedule


**       Management contract or compensatory plan or arrangement required to be
         filed or incorporated as an exhibit