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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
    FORM 10-K
   ANNUAL REPORT PURSUANT TO
    SECTIONS 13 OR 15(D)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 29, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
    OF THE SECURITIES EXCHANGE ACT OF 1934For 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

22-1759452(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)Routes 55 and 553
    P.O. Box 888
    Pitman, New Jersey(Address of principal
    executive offices)

08071-0888(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 RegisteredNone

None  Securities registered pursuant to Section 12(g) of the
    Act:
 Common Stock, par value $.01 per share
 (Title of class)
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o  Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE
  Form 10-K, Form 10-K
 CERTAIN DEFINITIONS




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PART I
  Item 1.
    Business.  General
        Available
    Information
  http://www.ktroninternational.com. Form 10-K, Form 10-Q, Form 8-K Form 10-K Form 10-K. 08071-0888.
  Process
    Group
       2




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Process
    Equipment: K-Tron Feeders Brand
  Feeders.
  lock-up
      Weight Sensors and Controls.
  Manufacturing.
 3




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Competition.
  Process
    Equipment: Premier Pneumatics Brand
  Conveying Equipment.
    Manufacturing.
  Competition.
 4




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Process
    Equipment: Service and Parts
    Process
    Equipment: K-Tron Colormax Brand
        K-Tron
    Electronics
    Size
    Reduction Group
  U.S.-based
 5




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##### Table of Contents



Penn Crusher Equipment.
  tm
  24-inch
  Jeffrey Equipment.
      Gundlach Equipment.
   6




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##### Table of Contents



Rader Equipment.
    Replacement Parts.
  Manufacturing. 18-month
  Competition.
  Customers
   7




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Suppliers
    Patents
    Research
    and Development
      Backlog
    18-month
  Employees
   8




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Executive
    Officers of the Registrant
    Name

Age

PositionEdward B. Cloues, II


60


Chairman of the Board of Directors and Chief Executive OfficerKevin C. Bowen


56


Senior Vice President, Process Group and President and Chief
    Executive Officer of K-Tron America, Inc.Lukas Guenthardt


49


Senior Vice President, Corporate DevelopmentDonald W. Melchiorre


59


Senior Vice President, Size Reduction Group and President and
    Chief Executive Officer of Pennsylvania Crusher CorporationRonald R. Remick


61


Senior Vice President, Chief Financial Officer and Treasurer     K-Tron
  K-Tron,
  K-Trons K-Tron
     9




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Item 1A.
    Risk
    Factors.  Our businesses and operations are subject to a number of
    risks and uncertainties that are described below, but these
    risks and uncertainties are not the only ones we face.
    Additional risks and uncertainties of which we are unaware, or
    that we currently deem immaterial, may become important factors
    that could harm our business. Our business, financial condition
    or results of operations could suffer as a consequence of any of
    these risks and uncertainties.
  Competition
    could adversely affect our business and results of
    operations.
    Our
    substantial sales abroad subject us to the risk of adverse
    foreign currency fluctuations which could negatively impact our
    results of operations.
    We
    operate in cyclical industries.
    The
    loss of a large customer could have an adverse effect on our
    operating results.
    We are
    dependent on our key personnel.
    We are
    dependent on some of our suppliers.
   10




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We
    engage in acquisitions, and we may encounter difficulties in
    integrating these businesses and, therefore, may not realize the
    anticipated benefits of the acquisitions.
    Our
    business and operating results depend in part on continued
    successful research, development and marketing of new or
    improved products, and there can be no assurance that we will
    continue successfully to introduce new or improved products on a
    timely and cost-effective basis.
    Protection
    and validity of our patents and intellectual property rights, or
    the efforts of third parties to enforce their own intellectual
    property rights against us, may in the future result in costly
    and
    time-consuming
    litigation.
    We may
    be subject to other costly litigation and governmental
    proceedings which could adversely affect our business or results
    of operations.
    Our
    indebtedness may affect our business and may restrict our
    operating flexibility.
    
    limit our flexibility in planning for, or reacting to, changes
    in our business or in the markets in which we compete; 11




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
    place us at a competitive disadvantage relative to our
    competitors, some of which may have lower debt service
    obligations or greater financial resources than we do;
    limit our ability to borrow additional funds;
    limit our ability to make acquisitions;
    limit our ability to make capital expenditures;
    limit our ability to conduct research and development; and
    increase our vulnerability to adverse economic, financial market
    and industry conditions, including recessions and higher
    interest rates.    Political
    and economic instability and health issues in the United States
    or abroad may have an adverse effect on our operating
    results.
    Terrorist
    attacks and threats may disrupt our operations and negatively
    impact our business, revenues, costs and stock
    price.
    Extensive
    environmental laws and regulations affecting the production of
    electric power could result in electric power generators
    shifting from coal to natural gas-fired power plants, which
    would adversely affect our size reduction
    business.
   12




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We are
    subject to special risks relating to doing business in China as
    a result of our acquisition of certain assets of Wuxi Chenghao
    by Wuxi K-Tron Colormax.
      Item 1B.
    Unresolved
    Staff
    Comments.    Item 2.
    Properties.             13




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Item 3.
    Legal
    Proceedings.    Item 4.
    Submission
    of Matters to a Vote of Security
    Holders.   14




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PART II
  Item 5.
    Market
    for Registrants Common Equity and Related Shareholder
    Matters and Issuer Purchases of Equity
    Securities.  Market
    Information
    High


LowFiscal Year 2006First Quarter

$
48.68


$
35.95Second Quarter

$
52.85


$
46.81Third Quarter

$
66.00


$
49.70Fourth Quarter

$
76.46


$
60.86Fiscal Year 2007First Quarter

$
79.99


$
66.58Second Quarter

$
104.88


$
71.02Third Quarter

$
103.30


$
79.00Fourth Quarter

$
120.73


$
93.40     Equity
    Holders
    Dividend
    Policy
   15




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Performance
    Graph
  line-of-business
  COMPARISON
    OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
    K-TRON INTERNATIONAL, INC., DOW JONES WILSHIRE U.S. INDUSTRIAL
    MACHINERY
    INDEX AND STANDARD & POORS 500 STOCK
    INDEX
  
  ASSUMES
    $100 INVESTED ON DECEMBER 27, 2002
    ASSUMES DIVIDENDS REINVESTED
    THROUGH FISCAL YEAR ENDING DECEMBER 29, 2007
  12/27/2002


01/02/2004


12/31/2004


12/30/2005


12/29/2006


12/28/2007K-TRON INTERNATIONAL, INC.



100.00




145.56




202.67




283.21




570.00




916.03DOW JONES WILSHIRE U.S. INDUSTRIAL MACHINERY



100.00




138.60




167.14




164.61




184.54




231.33S&P 500



100.00




128.68




142.69




149.70




173.34




182.87  16




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Item 6.
    Selected
    Financial
    Data.    Form 10-K.
  Fiscal Year EndedDec. 29


Dec. 30


Dec. 31


Jan. 1


Jan. 32007(1)


2006(2)


2005


2005


2004(3)FINANCIAL SUMMARY ($000s):Revenues

$
201,677


$
148,127


$
118,940


$
112,494


$
94,676Income before taxes


30,142



19,381



12,201



8,732



5,243Net income


21,321



12,872



7,282



6,610



3,723Total assets


184,118



140,996



89,110



93,665



83,081Working capital


52,242



28,962



25,565



23,778



17,121Additions to property, plant, and equipment


2,265



2,604



2,206



1,601



3,311Depreciation and amortization


5,573



4,634



3,868



4,062



2,873PER SHARE ($):Basic net earnings

$
7.93


$
4.95


$
2.85


$
2.65


$
1.53Diluted net earnings


7.49



4.59



2.68



2.53



1.49Book value


34.62



25.02



19.23



18.02



14.35CAPITALIZATION ($000s):Shareholders equity

$
93,953


$
65,381


$
49,520


$
45,559


$
35,114Long-term debt


36,913



34,364



12,675



18,598



24,574Short-term debt(4)


1,201



404



4,316



4,185



3,541Total debt


38,114



34,768



16,991



22,783



28,115RATIOS:Return on average shareholders equity (%)


26.8



22.4



15.3



16.4



11.7Return on revenues (%)


10.6



8.7



6.1



5.9



3.9Long-term debt to shareholders equity (%)


39.3



52.6



25.6



40.8



70.0Current assets to current liabilities


2.1



1.8



2.0



1.9



1.8Average inventory turnover


4.8



4.6



4.6



4.6



4.1Average accounts receivable turnover


8.1



7.3



6.0



5.6



5.0OTHER DATA:Shares outstanding (000s)(5)


2,713



2,613



2,576



2,528



2,447Shareholders of record


179



193



207



221



224Number of employees


732



625



460



467



474     (1)
    
    The 2007 consolidated financial statements include the
    acquisitions of certain assets of Wuxi Chenghao from
    March 28, 2007 and of Rader from September 15, 2007.(2)
    
    The 2006 consolidated financial statements include the
    acquisitions of Gundlach from March 4, 2006 and of Premier
    from October 6, 2006.(3)
    
    The 2003 consolidated financial statements include the
    acquisition of Penn Crusher and its subsidiary from
    January 2, 2003. Fiscal 2003 was a 53-week year; all other
    years in this table were 52-week years.(4)
    
    Including current portion of long-term debt.(5)
    
    Net of treasury stock of 2,003 shares as of the end of each
    fiscal year. 17




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Overview
    of Business
      assembly-and-test
       18




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Critical
    Accounting Assumptions and Estimates
        Depreciable
    Lives of Plant and Equipment
       19




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Allowance
    for Doubtful Accounts
      Asset
    Impairment Determinations
        
    The intended use of assets and the expected cash flows resulting
    directly from such use;
    Industry specific economic conditions;
    Customer preferences and behavior patterns; and
    The impact of applicable regulatory initiatives, if any.    Income
    Taxes
     20




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non-U.S. income
  Inventory
    Reserve
    Warranty
    Reserve
   21




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Legal
    Contingencies
    Results
    of Operations
  Overview
        Acquisitions
     22




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##### Table of Contents



Foreign
    Exchange Rates
    non-U.S. dollar-based non-U.S. dollar-based non-U.S. dollar-based
 23




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##### Table of Contents



2007





2006





2005Average U.S. dollar equivalent of one Swiss franc


0.834







0.799







0.803% change vs. prior year






+4.4
%






−0.5
%Average U.S. dollar equivalent of one euro


1.372







1.258







1.244% change vs. prior year






+9.1
%






+1.1
%Average U.S. dollar equivalent of one British pound sterling


2.002







1.846







1.818% change vs. prior year






+8.5
%






+1.5
%Average Swiss franc equivalent of one euro


1.644







1.574







1.549% change vs. prior year






+4.4
%






+1.6
%Average Swiss franc equivalent of one British pound sterling


2.399







2.310







2.264% change vs. prior year






+3.9
%






+2.0
%   Presentation
    of Results and Analysis
    2007


2006


2005Total revenues


100.0
%


100.0
%


100.0
%Cost of revenues


57.2



57.9



58.0Gross profit


42.8



42.1



42.0Selling, general and administrative


25.8



26.8



28.9Research and development


1.2



1.5



2.0Operating income


15.8



13.8



11.1Interest expense, net


0.8



0.7



0.8Income before income taxes


15.0



13.1



10.3Income tax provision


4.4



4.4



4.2Net income


10.6
%


8.7
%


6.1
%Year-end backlog (at year-end 2007 foreign exchange rates, in
    thousands of dollars)

$
70,712


$
51,417


$
26,071        24




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25




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18-month
  Liquidity
    and Capital Resources
  Revolving
    Credit Debt
      6-month
     26




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Expiration of InterestRate Period


Per Annum RateOne-month LIBOR loan

$
2,250,000
*


12/31/2007



5.684
%Six-month LIBOR loan


4,000,000
**


1/31/2008



6.245
%Six-month LIBOR loan


5,000,000



3/31/2008



5.944
%Six-month LIBOR loan


1,500,000



4/30/2008



5.707
%Eighteen-month interest rate swap


2,000,000



5/31/2009



4.985
%Two-year interest rate swap


2,000,000



9/24/2009



5.605
%Three-year interest rate swap


5,000,000



10/13/2009



6.085
%Two-year interest rate swap


3,000,000



10/31/2009



5.385
%Two-year interest rate swap


2,000,000



11/30/2009



4.925
%Three-year interest rate swap


2,000,000



9/24/2010



5.665
%Four-year interest rate swap


5,000,000



10/13/2010



6.095
%$
33,750,000     *
    
    At its December 31, 2007 expiration, this loan was replaced
    by a $2,250,000 six-month LIBOR loan at 5.593% per annum through
    June 30, 2008.**
    
    At its January 31, 2008 expiration, this loan was replaced
    by a $1,700,000 one-month LIBOR loan at 4.156% per annum through
    February 29, 2008, and the balance of $2,300,000 was paid
    off. At its February 29, 2008 expiration, the $1,700,000
    one-month LIBOR loan was replaced by a $1,700,000 one-month
    LIBOR loan at 4.0% per annum through March 31, 2008.  Gundlach
    Acquisition Debt
    Other
    Bank Debt
     27




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Future
    Payments Under Contractual Obligations
    Payment Due by PeriodLess than


1-3


3-5


More thanContractual Obligations

Total


1 Year


Years


Years


5 years(Dollars in thousands)Long-term debt obligationsDebt maturities

$
38,114


$
1,201


$
3,163


$
33,750


$
Contractual interest


9,598



2,159



4,018



3,421



Operating lease obligations


2,841



1,401



1,310



130



Purchase obligations


19,769



18,842



927







Total

$
70,322


$
23,603


$
9,418


$
37,301


$
     Capitalization
    2007


2006


2005(Dollars in thousands)Short-term debt, including current portion of long-term debt

$
1,201


$
404


$
4,316Long-term debt


36,913



34,364



12,675Total debt


38,114



34,768



16,991Shareholders equity


93,953



65,381



49,520Total debt and shareholders equity (total capitalization)

$
132,067


$
100,149


$
66,511Percent total debt to total capitalization


29%



35%



26%Percent long-term debt to equity


39%



53%



26%Percent total debt to equity


41%



53%



34%       Other
    Items
   28




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Forward-Looking
    Statements
  Form 10-K
 29




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Item 7A.
    Quantitative
    and Qualitative Disclosures About Market
    Risk.    Foreign
    Exchange Rate Risk
      non-U.S. operations non-U.S. operations
  Interest
    Rate Risk
    Item 8.
    Financial
    Statements and Supplementary
    Data.  Form 10-K page F-1.
  Item 9.
    Change
    In and Disagreements with Accountants on Accounting and
    Financial
    Disclosures.   30




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Item 9A.
    Controls
    and
    Procedures.  Evaluation
    of Disclosure Controls and Procedures
    Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
      Form 10-K.
   31




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Changes
    in Internal Control over Financial Reporting
   32




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Report of
    Independent Registered Public Accounting Firm
     Internal Control 
    Integrated Framework
  K-Tron K-Tron K-Tron
        Internal Control  Integrated
    Framework
 33




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##### Table of Contents



GRANT
    THORNTON LLP
    34




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Item 9B.
    Other
    Information.    PART III
  Item 10.
    Directors,
    Executive Officers and Corporate
    Governance.  Form 10-K Form 10-K,
    Item 11.
    Executive
    Compensation.  Form 10-K Form 10-K,
  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Shareholder
    Matters.  Form 10-K Form 10-K,
  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.  Form 10-K Form 10-K,
  Item 14.
    Principal
    Accounting Fees and
    Services.  Form 10-K Form 10-K,
 35




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##### 



PART IV
  Item 15.
    Exhibits
    and Financial Statement
    Schedules.  Financial
    Statements. Form 10-K:
   
 PageReport of Independent Registered Public Accounting Firm


F-1Consolidated Balance Sheets as of December 29, 2007 and
    December 30, 2006


F-2Consolidated Statements of Income for the Fiscal Years Ended
    December 29, 2007, December 30, 2006 and
    December 31, 2005


F-3Consolidated Statements of Changes in Shareholders Equity
    for the Fiscal Years Ended December 29, 2007,
    December 30, 2006 and December 31, 2005


F-4Consolidated Statements of Cash Flows for the Fiscal Years Ended
    December 29, 2007, December 30, 2006 and
    December 31, 2005


F-5Notes to Consolidated Financial Statements


F-6List of Officers with an Employment AgreementList of current directors and officers with an Indemnification AgreementSubsidiariesConsent of Grant Thornton LLPChief Executive Officer Certification pursuant to Rule 13a-14(a) or 15d-14a)Chief Financial Officer Certification pursuant to Rule 13a-14(a) or 15d-14a)Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350    Financial Statement
    Schedule. Form 10-K:
   
 PageSchedule II  Valuation and Qualifying Accounts
    for the Fiscal Years Ended December 29, 2007,
    December 30, 2006 and December 31, 2005


S-1    Exhibits. Form 10-K.
  ExhibitNumber

Description2
.1

Stock Purchase Agreement, dated as of October 5, 2006, by
    and among Robert B. Korbelik, individually, The Robert B.
    Korbelik Trust dated December 14, 1995, as amended
    July 20, 2000, and Premier Pneumatics, Inc., a Delaware
    corporation (Filed as Exhibit 2.1 to our report on
    Form 8-K
    dated September 29, 2006 and filed with the Securities and
    Exchange Commission on October 5, 2006 (October 2006
    Form 8-K)
    and incorporated herein by reference)3
.1

Restated Certificate of Incorporation, as amended (Filed as
    Exhibit 3.1 to our annual report on
    Form 10-K
    for the year ended January 2, 1999 (1998
    Form 10-K)
    and incorporated herein by reference)3
.2

Amended and Restated By-laws (Filed as Exhibit 3.1 to our
    report on
    Form 8-K
    dated December 18, 2007 and incorporated herein by
    reference)4
.1

Rights Agreement dated as of October 16, 2001 with American
    Stock Transfer & Trust Company, as Rights Agent
    (Filed as Exhibit 4.1 to our report on
    Form 8-K
    dated October 16, 2001 and incorporated herein by reference)10
.1

K-Tron International, Inc. 2006 Equity Compensation Plan (Filed
    as Exhibit 10.1 to our report on
    Form 8-K
    dated June 20, 2006 and incorporated herein by reference)**10
.2

K-Tron International, Inc. 2006 Equity Compensation Plan, as
    amended on May 11, 2007 (Filed as Exhibit 10.1 to our
    report on
    Form 10-Q
    for the quarterly period ended June 30, 2007 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

Amendment
    2001-1 to
    the Amended and Restated K-Tron International, Inc. 1996 Equity
    Compensation Plan (Filed as Exhibit 10.4 to our annual
    report on
    Form 10-K
    for the year ended December 29, 2001 and incorporated
    herein by reference)** 36




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##### Table of Contents



ExhibitNumber

Description10
.5

K-Tron International, Inc. Supplemental Executive Retirement
    Plan (Filed as Exhibit 10.2.7 to our annual report on
    Form 10-K
    for the year ended January 4, 1992 and incorporated herein
    by reference)**10
.6

Amendment
    2007-1 to
    the K-Tron International, Inc. Supplemental Executive Retirement
    Plan (Filed as Exhibit 10.4A to our annual report on
    Form 10-K
    for the year ended December 30, 2006 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 our 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 our
    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 (Filed as
    Exhibit 10.9 to our annual report on
    Form 10-K
    for the year ended January 1, 2000 (1999
    Form 10-K)
    and incorporated herein by reference)**10
.10

Form of Employment Agreement with our officers listed in
    Exhibit 10.11, 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 our annual report on
    Form 10-K
    for the year ended January 3, 1998 and incorporated herein
    by reference)**10
.11

List of officers with an Employment Agreement in the form
    provided in Exhibit 10.10* **10
.12

Form of Indemnification Agreement with our current directors and
    officers listed in Exhibit 10.13, which are identical in
    all material respects except for the director or officer who is
    a party thereto and the date of execution (Filed as
    Exhibit 10.11 to the 1999
    Form 10-K
    and incorporated herein by reference)**10
.13

List of current directors and officers with an Indemnification
    Agreement in the form provided in Exhibit 10.12* **10
.14

Loan Agreement, dated as of September 29, 2006, among
    K-Tron International, Inc., K-Tron Investment Co., K-Tron
    Technologies, Inc., K-Tron America, Gundlach Equipment
    Corporation, Pennsylvania Crusher Corporation and Jeffrey
    Specialty Equipment Corporation, as Borrowers and the Financial
    Institutions referred to on the signature pages as Lenders and
    Citizens Bank of Pennsylvania, individually as a Lender and as
    Agent (Filed as Exhibit 10.1 to the October 2006
    Form 8-K
    and incorporated herein by reference)21
.1

Subsidiaries*23
.1

Consent of Grant Thornton LLP*31
.1

Chief Executive Officer Certification pursuant to
    Rule 13a-14(a)
    or 15d-14(a) of the Securities Exchange Act of 1934*31
.2

Chief Financial Officer Certification pursuant to
    Rule 13a-14(a)
    or 15d-14(a) of the Securities Exchange Act of 1934*32
.1

Chief Executive Officer and Chief Financial Officer
    Certification pursuant to 18 U.S.C. Section 1350*     *
    
    Filed herewith**
    
    Management contract or compensatory plan or arrangement required
    to be filed or incorporated as an exhibit  Exhibits.
  Financial Statement
    Schedules.
 37




---



##### Table of Contents



SIGNATURES
      By
    EDWARD B.
    CLOUES, II        Signature

Date

CapacityEDWARD B.
    CLOUES, IIEdward
    B. Cloues, II

March 12, 2008

Chief Executive Officer 
    (principal executive officer)
    and Chairman of the Board of DirectorsRONALD R.
    REMICKRonald
    R. Remick

March 12, 2008

Senior Vice President,
    Chief Financial Officer and Treasurer
    (principal financial officer)ALAN R.
    SUKONECKAlan
    R. Sukoneck

March 12, 2008

Vice President,
    Chief Accounting and Tax Officer
    (principal accounting officer)NORMAN
    COHENNorman
    Cohen

March 12, 2008

DirectorROBERT A.
    ENGELRobert
    A. Engel

March 12, 2008

DirectorEDWARD T.
    HURDEdward
    T. Hurd

March 12, 2008

DirectorRICHARD J.
    PINOLARichard
    J. Pinola

March 12, 2008

Director




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##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES




---



##### 



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Index to
    Consolidated Financial Statements and Financial Statement
    Schedule
   
 PageReport of Independent Registered Public
    Accounting Firm


F-1Consolidated Balance Sheets as of
    December 29, 2007 and December 30, 2006


F-2Consolidated Statements of Income for the Fiscal
    Years Ended December 29, 2007, December 30, 2006 and
    December 31, 2005


F-3Consolidated Statements of Changes in
    Shareholders Equity for the Fiscal Years Ended
    December 29, 2007, December 30, 2006 and
    December 31, 2005


F-4Consolidated Statements of Cash Flows for the
    Fiscal Years Ended December 29, 2007, December 30,
    2006 and December 31, 2005


F-5Notes to Consolidated Financial Statements


F-6Schedule:Schedule II  Valuation and
    Qualifying Accounts for the Fiscal Years Ended December 29,
    2007, December 30, 2006 and December 31, 2005


S-1




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
     page S-1.
      Share-Based
    Payment
  Internal Control 
    Integrated Framework
  GRANT
    THORNTON LLP
     F-1




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Consolidated
    Balance Sheets
  December 29,


December 30,2007


2006(Dollars in thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents

$
30,853


$
14,038Restricted cash


1,183



420Accounts receivable, net of allowance for doubtful accounts of
    $1,065 and $852


30,987



23,364Inventories, net


30,233



23,467Costs and estimated earnings in excess of billings


2,801



Deferred income taxes


1,904



1,617Prepaid expenses and other current assets


3,778



3,649Total current assets


101,739



66,555Property, plant and equipment, net of accumulated depreciation
    of $38,813 and $36,115


27,424



29,316Patents, net of accumulated amortization of $1,531 and $1,398


1,496



1,457Goodwill


27,385



24,094Other intangibles, net of accumulated amortization of $1,729 and
    $1,026


22,320



17,762Notes receivable and other assets


3,562



1,665Deferred income taxes


192



147Total assets

$
184,118


$
140,996LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt

$
1,201


$
404Accounts payable


11,973



8,397Accrued expenses and other current liabilities


16,517



11,618Accrued commissions


3,923



3,009Billings in excess of costs and estimated earnings


2,028



Customer advances


6,639



8,233Income taxes payable


4,581



4,270Deferred income taxes


2,635



1,662Total current liabilities


49,497



37,593Long-term debt, net of current portion


36,913



34,364Deferred income taxes


3,286



3,583Other non-current liabilities


469



75Series B Junior Participating Preferred Shares,
    $0.01 par valueAuthorized 50,000 shares; issued none






Shareholders equity:Preferred stock, $0.01 par value. Authorized
    950,000 shares; issued none






Common stock, $0.01 par value. Authorized
    50,000,000 shares; issued 4,716,383 and
    4,615,623 shares


47



46Paid-in capital


24,568



20,319Retained earnings


90,576



69,255Accumulated other comprehensive income


6,276



3,275121,467



92,895Treasury stock, 2,002,574 shares, at cost


(27,514
)


(27,514
)Total shareholders equity


93,953



65,381Total liabilities and shareholders equity

$
184,118


$
140,996    F-2




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##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Consolidated
    Statements of Income
  For the Fiscal Year EndedDecember 29,


December 30,


December 31,2007


2006


2005(Dollars in thousands, except share data)Revenues:Equipment and parts

$
190,088


$
139,174


$
111,342Services and freight


11,497



8,953



7,598Other


92







Total revenues


201,677



148,127



118,940Cost of revenues:Equipment and parts


105,671



77,592



61,923Services and freight


9,778



8,229



7,021Total cost of revenues


115,449



85,821



68,944Gross profit


86,228



62,306



49,996Operating expenses:Selling, general, and administrative


51,961



39,614



34,330Research and development


2,389



2,262



2,44954,350



41,876



36,779Operating income


31,878



20,430



13,217Interest (expense), net


(1,736
)


(1,049
)


(1,016
)Income before income taxes


30,142



19,381



12,201Income tax provision


8,821



6,509



4,919Net income

$
21,321


$
12,872


$
7,282Basic earnings per share

$
7.93


$
4.95


$
2.85Diluted earnings per share


7.49



4.59



2.68Weighted average common shares outstanding (basic)


2,688,000



2,600,000



2,555,000Weighted average common and common equivalents shares
    outstanding (diluted)


2,848,000



2,804,000



2,719,000    F-3




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Consolidated
    Statements of Changes in Shareholders Equity
 Fiscal
    Years ended December 29, 2007, December 30, 2006 and
    December 31, 2005
  AccumulatedOtherCommon Stock


Paid-in


Retained


Comprehensive


Treasury StockShares


Amount


Capital


Earnings


Income (loss)


Shares


Amount


Total(Dollars in thousands, except share data)Balance, January 1, 2005


4,530,416


$
45


$
18,204


$
49,101


$
5,723



2,002,574


$
(27,514
)

$
45,559Comprehensive income:Net income














7,282















7,282Translation adjustments


















(4,235
)










(4,235
)Unrealized gain on interest rate swap, net of tax


















35











35Total comprehensive income






























3,082Issuance of stock


47,750



1



878



















879Balance, December 31, 2005


4,578,166



46



19,082



56,383



1,523



2,002,574



(27,514
)


49,520Comprehensive income:Net income














12,872















12,872Translation adjustments


















1,849











1,849Unrealized loss on interest rate swap, net of tax


















(97
)










(97
)Total comprehensive income






























14,624Issuance of stock


37,457







1,237



















1,237Balance, December 30, 2006


4,615,623



46



20,319



69,255



3,275



2,002,574



(27,514
)


65,381Comprehensive income:Net income














21,321















21,321Translation adjustments


















3,237











3,237Unrealized loss on interest rate swap, net of tax


















(236
)










(236
)Total comprehensive income






























24,322Issuance of stock


100,760



1



4,249



















4,250Balance, December 29, 2007


4,716,383


$
47


$
24,568


$
90,576


$
6,276



2,002,574


$
(27,514
)

$
93,953    F-4




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##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Consolidated
    Statements of Cash Flows
  For the Fiscal Year EndedDecember 29,


December 30,


December 31,2007


2006


2005(Dollars in thousands)Operating activities:Net income

$
21,321


$
12,872


$
7,282Adjustments to reconcile net income to net cash provided by
    operating activities:Gain on disposition of assets


(92
)






Depreciation and amortization


5,573



4,634



3,868Non-cash compensation


453



337



175Deferred income taxes


344



240



390Changes in assets and
    liabilities-net
    of business combinations:Accounts receivable, net


(1,466
)


468



1,794Inventories, net


(833
)


(3,184
)


(925
)Prepaid expenses and other current assets


571



(1,177
)


(291
)Other assets


125



275



341Accounts payable


(769
)


699



273Accrued expenses and other current liabilities


1,821



3,824



(2,399
)Net cash provided by operating activities


27,048



18,988



10,508Investing activities:Proceeds from disposition of assets


428







Businesses acquired, net of cash acquired


(16,339
)


(32,975
)


Capital expenditures


(2,265
)


(2,604
)


(2,206
)Restricted cash


(763
)


(420
)


Other


(30
)


(43
)


(14
)Net cash used in investing activities


(18,969
)


(36,042
)


(2,220
)Financing activities:Net repayments under notes payable to banks






(804
)


(1,296
)Proceeds from issuance of long-term debt


24,130



38,065



Principal payments on long-term debt


(20,794
)


(22,510
)


(4,476
)Tax benefit from stock option exercises


2,076



289



132Proceeds from issuance of common stock


1,333



133



474Net cash provided by (used in) financing activities


6,745



15,173



(5,166
)Effect of exchange rate changes on cash and cash equivalents


1,991



868



(514
)Net increase (decrease) in cash and cash equivalents


16,815



(1,013
)


2,608Cash and cash equivalents:Beginning of year


14,038



15,051



12,443End of year

$
30,853


$
14,038


$
15,051Supplemental disclosures of cash flow information:Cash paid during the year for:Interest

$
2,166


$
937


$
1,097Income taxes


6,057



5,858



4,240Business acquired through buyer notes

$
446


$
3,000


$
    F-5




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##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  December 29,
    2007, December 30, 2006 and December 31,
    2005
  (1)
    Nature of
    Operations    (2)
    Summary
    of Significant Accounting Policies  (a)
    Principles
    of Consolidation      (b)
    Fiscal
    Year    (c)
    Cash
    and Cash Equivalents and Restricted Cash    (d)
    Inventories  first-in,
  (e)
    Property,
    Plant and Equipment    (f)
    Patents   F-6




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##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (g)
    Goodwill
    and Other Intangible Assets      (h)
    Income
    Taxes    (i)
    Revenue
    Recognition and Allowance for Doubtful Accounts    
    Persuasive evidence of an arrangement exists.
    Delivery has occurred or services have been rendered.
    The sellers price to the buyer is fixed or determinable.
    Collectibility is reasonably assured.  start-up No. 00-21
  
    Risk of ownership has passed to the buyer.
    The buyer has made a fixed commitment to purchase the goods in
    writing.
    The buyer requested the transaction to be on a bill and hold
    basis.
    There is a fixed and reasonable delivery date.
    No specific performance obligations by the seller remain.
    The goods are segregated from other inventory and not available
    to others.
    The product is complete and ready for shipment. F-7




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
     
    The date by which the Company expects payment and whether the
    Company has modified its normal billing and credit terms to the
    buyer.
    The Companys history with bill and hold transactions.
    The buyer must bear risk of loss.
    The Companys custodial function is insurable and insured.
    The business reasons for the bill and hold arrangement have not
    introduced a contingency to the buyers fixed commitment to
    purchase the goods.      (j)
    Research
    and Development    (k)
    Foreign
    Currency      (l)
    Share-Based
    Compensation     F-8




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
        2006(In thousands,except per share)Income from continuing operations before income taxes

$
62Net income

$
38Basic earnings per share

$
0.01Diluted earnings per share

$
0.01       2005(In thousands,except per share)Net income  as reported

$
7,282Deduct stock option employee and director compensation expense
    determined, net of related tax effect


(126
)Net income  pro forma


7,156Basic earnings per share  as reported


2.85Basic earnings per share  pro forma


2.80Diluted earnings per share  as reported


2.68Diluted earnings per share  pro forma


2.63  F-9




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
      (m)
    Fair
    Value of Financial Instruments    (n)
    Derivative
    Instruments    (o)
    Use of
    Estimates    (p)
    New
    Accounting Pronouncements  non-U.S. income
 F-10




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
          (3)
    Acquisitions   F-11




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Useful Life


2006(In thousands)Property, plant and equipment


Various


$
1,347Goodwill


Indefinite



1,877Customer relationships


15 years



1,500Drawings


25 years



1,430Tradenames


Indefinite



720$
6,874     2006(In thousands)Cash

$
389Accounts receivable


2,597Inventories


2,151Other current assets


175Property, plant and equipment


4,267Goodwill


1,877Customer relationships


1,500Drawings


1,430Tradenames


720Accounts payable


(502
)Accrued expenses and other current liabilities


(2,338
)Deferred tax liabilities


(1,764
)$
10,502      F-12




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Useful Life

2006(In thousands)Property, plant and equipment

Various

$
2,327Goodwill

Indefinite


20,010Customer relationships

10 years


2,200Tradenames

Indefinite


2,600$
27,137     2006(In thousands)Cash

$
1,595Accounts receivable


2,291Inventories


2,266Other current assets


47Property, plant and equipment


3,455Goodwill


20,010Customer relationships


2,200Tradenames


2,600Accounts payable


(833
)Accrued expenses and other current liabilities


(6,178
)$
27,453       2006


2005(In thousands, except per share)(Unaudited)Revenues

$
166,307


$
139,837Net Income


13,460



7,521Diluted earnings per share


4.80



2.77    F-13




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Useful Life

2007(In thousands)Patents

10 years

$
200Goodwill

Indefinite


2,294Customer relationships

10 years


2,700Drawings

25 years


1,160Tradenames

Indefinite


1,400Other Asset

4 months


27$
7,781     2007(In thousands)Cash

$
1,670Accounts receivables, net


5,207Inventories, net


5,084Costs in excess of billings, net of billings in excess of costs


1,568Other current assets


531Property, plant and equipment


52Patents


200Goodwill


2,294Customer relationships


2,700Drawings


1,160Tradenames


1,400Accounts payable


(2,821
)Accrued expenses and other current liabilities


(3,713
)$
15,332    F-14




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
      (4)
    Inventories    2007


2006(In thousands)Components

$
22,759


$
18,697Work-in-process


8,480



5,580Finished goods


775



739Inventory reserves


(1,781
)


(1,549
)$
30,233


$
23,467     (5)
    Property,
    Plant and Equipment    2007


2006(In thousands)Land

$
2,011


$
1,946Buildings and improvements


27,846



27,161Automotive equipment


304



400Machinery and equipment


18,739



18,685Furniture and equipment, including computer equipment and
    software


17,337



17,23966,237



65,431Less accumulated depreciation and amortization


(38,813
)


(36,115
)$
27,424


$
29,316    F-15




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (6)
    Intangible
    Assets    2007


2006Gross





GrossCarrying


Accumulated


Carrying


AccumulatedAmount


Amortization


Amount


AmortizationAmortized intangible assetsPatents

$
3,027


$
1,531


$
2,855


$
1,398Drawings


6,140



754



4,980



545Customer relationships


11,299



975



8,598



481$
20,466


$
3,260


$
16,433


$
2,424Unamortized intangible assetsTrademarks and tradenames

$
6,610






$
5,210       Amount(In thousands)Fiscal year:2008

$
1,1122009


1,1122010


1,1122011


1,1122012


1,112Thereafter


11,646$
17,206   (7)
    Accrued
    Warranty    2007


2006(In thousands)Beginning balance

$
1,538


$
989Accrued warranty of acquired businesses


258



265Accrual of warranty expense


2,127



1,439Warranty costs incurred


(1,775
)


(1,187
)Foreign exchange adjustment


46



32Ending balance

$
2,194


$
1,538  F-16




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (8)
    Notes
    Payable to Banks and Other Long-Term Debt      6-month
     F-17




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Expiration ofInterest Rate


Per AnnumPeriod


RateOne-month LIBOR loan

$
2,250,000
*


12/31/2007



5.684
%Six-month LIBOR loan


4,000,000
**


1/31/2008



6.245
%Six-month LIBOR loan


5,000,000



3/31/2008



5.944
%Six-month LIBOR loan


1,500,000



4/30/2008



5.707
%Eighteen-month interest rate swap


2,000,000



5/31/2009



4.985
%Two-year interest rate swap


2,000,000



9/24/2009



5.605
%Three-year interest rate swap


5,000,000



10/13/2009



6.085
%Two-year interest rate swap


3,000,000



10/31/2009



5.385
%Two-year interest rate swap


2,000,000



11/30/2009



4.925
%Three-year interest rate swap


2,000,000



9/24/2010



5.665
%Four-year interest rate swap


5,000,000



10/13/2010



6.095
%$
33,750,000     *
    
    At its December 31, 2007 expiration, this loan was replaced
    by a $2,250,000 six-month LIBOR loan at 5.593% per annum through
    June 30, 2008.**
    
    At its January 31, 2008 expiration, this loan was replaced
    by a $1,700,000 one-month LIBOR loan at 4.156% per annum through
    February 29, 2008, and the balance of $2,300,000 was paid
    off.         F-18




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2007


2006(In thousands)U.S. revolving line of credit

$
33,750


$
30,000U.S. mortgage


1,364



1,553U.S. term notes


3,000



3,000Other






21538,114



34,768Less current portion


(1,201
)


(404
)Total long-term debt, net of current portion

$
36,913


$
34,364     Amount(In thousands)Fiscal year:2008

$
1,2012009


2,1632010


1,0002011


33,7502012


$
38,114   (9)
    Employee
    Benefit Plans        (10)
    Shareholders
    Equity and Share Compensation Plans   F-19




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
             F-20




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    WeightedAverage





Weighted AverageOption


Aggregate


Remaining ContractualShares


Exercise


Intrinsic


Terms (in years)Under


Price


Value


Options


OptionsOption


per Share


($000)


Outstanding


ExercisableBalance, January 1, 2005


349,167


$
14.66







4.60



3.79Granted


4,000



30.34Cancelled/Forfeited


(750
)


12.20Exercised


(38,750
)


12.21Balance, December 31, 2005


313,667



15.17







3.79



3.00Exercised


(28,457
)


14.89Balance, December 30, 2006


285,210



15.20







2.96



3.01Exercised


(91,760
)


14.51Balance, December 29, 2007


193,450


$
15.52


$
20,212



2.49



2.49     (11)
    Shareholder
    Rights Plan    (12)
    Income
    Taxes    2007


2006


2005(In thousands)United States

$
16,957


$
12,756


$
8,456Foreign


13,185



6,625



3,745Income before income tax

$
30,142


$
19,381


$
12,201  F-21




---



##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2007


2006


2005(In thousands)Current:Federal and state

$
5,677


$
4,638


$
3,259Foreign


2,800



1,635



1,292Total current


8,477



6,273



4,551Deferred:Federal and state


244



124



247Foreign


100



112



121Total deferred


344



236



368Total income tax provision

$
8,821


$
6,509


$
4,919     2007


2006(In thousands)Deferred tax assetsFixed assets and intangibles

$
66


$
26Accrued liabilities


717



763Net operating loss carryforwards


635



430Inventory basis differences


820



661Foreign tax credit carryforwards


216



216Other


426



2822,880



2,378Valuation allowance


(784
)


(614
)Total assets


2,096



1,764Deferred tax liabilitiesDepreciation


(4,799
)


(4,141
)Other


(1,122
)


(1,104
)Total liabilities


(5,921
)


(5,245
)Net deferred tax liability

$
(3,825
)

$
(3,481
)      F-22




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##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
   2007


2006


2005(In thousands)Income tax provision on income before income tax at statutory
    federal income tax rates

$
10,248


$
6,783


$
4,148Increase in incremental tax rate to 35%


8



69



Foreign tax rate differential


(1,592
)


(598
)


(304
)State tax net of federal benefit


351



454



340U.S. and foreign permanent tax differences


(116
)


(195
)


(250
)Changes in valuation allowance


(15
)


(29
)


(96
)Increase (decrease) in tax reserve, net


(63
)


25



190Foreign cash repatriation rate differential










891Income tax provision

$
8,821


$
6,509


$
4,919       (13)
    Related
    Party Transactions    (14)
    Earnings
    Per Share   F-23




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##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Net incomeAvailableto Common





EarningsShareholders


Shares


per Share2007:Basic

$
21,321,000



2,688,000


$
7.93Common share equivalent of options outstanding






160,000



(0.44
)Diluted

$
21,321,000



2,848,000


$
7.492006:Basic

$
12,872,000



2,600,000


$
4.95Common share equivalent of options outstanding






204,000



(0.36
)Diluted

$
12,872,000



2,804,000


$
4.592005:Basic

$
7,282,000



2,555,000


$
2.85Common share equivalent of options outstanding






164,000



(0.17
)Diluted

$
7,282,000



2,719,000


$
2.68     (15)
    Commitments
    and Contingencies      OperatingLeases2008

$
1,4012009


9722010


3382011


1112012


19Thereafter


$
2,841      F-24




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##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    (16)
    Management
    Geographic Information   F-25




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##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Americas


EMEA/Asia


Eliminations


Consolidated(In thousands)2007:Revenues:Sales to unaffiliated customers

$
133,708


$
67,969


$



$
201,677Sales to affiliates


4,858



5,710



(10,568
)


Total sales


138,566



73,679



(10,568
)


201,677Operating income


19,224



12,685



(31
)


31,878Interest expense














(1,736
)Income before income taxes














30,142Capital expenditures


1,193



1,072







2,265Depreciation and amortization expense


3,964



1,609







5,573Total assets


123,473



60,645







184,1182006:Revenues:Sales to unaffiliated customers


97,138



50,989







148,127Sales to affiliates


3,338



3,503



(6,841
)


Total sales


100,476



54,492



(6,841
)


148,127Operating income


13,967



6,547



(84
)


20,430Interest expense














(1,049
)Income before income taxes














19,381Capital expenditures


2,129



475







2,604Depreciation and amortization expense


3,135



1,499







4,634Total assets


98,616



42,380







140,9962005:Revenues:Sales to unaffiliated customers


73,748



45,192







118,940Sales to affiliates


2,606



3,040



(5,646
)


Total sales


76,354



48,232



(5,646
)


118,940Operating income


9,682



3,461



74



13,217Interest expense














(1,016
)Income before income taxes














12,201Capital expenditures


1,239



967







2,206Depreciation and amortization expense


2,426



1,442







3,868Total assets


59,902



29,208







89,110  F-26




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##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2007


2006


2005(In thousands)AmericasU.S.

$
104,615


$
81,771


$
62,808All others


29,093



15,367



10,940Total


133,708



97,138



73,748EMEA/AsiaChina


6,812



2,222



1,368France


3,528



3,358



4,525Germany


11,108



14,212



8,728Great Britain


9,286



7,715



7,186Netherlands


7,727



1,225



1,621All others


29,508



22,257



21,764Total


67,969



50,989



45,192$
201,677


$
148,127


$
118,940   (17)
    Quarterly
    Financial Information (Unaudited)    2007 by QuarterFirst


Second


Third


FourthRevenues

$
46,884


$
47,566


$
48,172


$
59,055Gross profit


19,639



20,557



20,115



25,917Net income


4,879



5,253



4,930



6,259Basic earnings per share


1.83



1.96



1.83



2.31Diluted earnings per share


1.72



1.84



1.72



2.18   2006 by QuarterFirst


Second


Third


FourthRevenues

$
32,114


$
36,761


$
34,886


$
44,366Gross profit


13,151



16,265



13,919



18,971Net income


2,317



3,356



2,738



4,461Basic earnings per share


0.90



1.29



1.05



1.71Diluted earnings per share


0.84



1.20



0.97



1.57  F-27




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##### Table of Contents



K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
  Financial
    Statement Schedule




---



##### Table of Contents



Schedule II
  K-TRON
    INTERNATIONAL, INC. AND SUBSIDIARIES
    Valuation and Qualifying Accounts
    Years Ended December 29, 2007, December 30, 2006 and
    December 31, 2005
  Balance at


Additions





BalanceBeginning


Charged





at Endof Period


to Income


Deductions(1)


of PeriodFiscal year ended December 29, 2007Allowance for doubtful accounts

$
852,000


$
349,000
(2)

$
136,000


$
1,065,000Fiscal year ended December 30, 2006Allowance for doubtful accounts

$
682,000


$
305,000
(3)

$
135,000


$
852,000Fiscal year ended December 31, 2005Allowance for doubtful accounts

$
751,000


$
121,000


$
190,000


$
682,000     (1)
    
    Accounts written off less recoveries, net of foreign exchange
    translation adjustment.(2)
    
    $150,000 charged to income plus $199,000 allowance for doubtful
    accounts of acquired businesses.(3)
    
    $119,000 charged to income plus $186,000 allowance for doubtful
    accounts of acquired businesses.   S-1




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description2
.1

Stock Purchase Agreement, dated as of October 5, 2006, by
    and among Robert B. Korbelik, individually, The Robert B.
    Korbelik Trust dated December 14, 1995, as amended
    July 20, 2000, and Premier Pneumatics, Inc., a Delaware
    corporation (Filed as Exhibit 2.1 to our report on
    Form 8-K
    dated September 29, 2006 and filed with the Securities and
    Exchange Commission on October 5, 2006 (October 2006
    Form 8-K)
    and incorporated herein by reference)3
.1

Restated Certificate of Incorporation, as amended (Filed as
    Exhibit 3.1 to our annual report on
    Form 10-K
    for the year ended January 2, 1999 (1998
    Form 10-K)
    and incorporated herein by reference)3
.2

Amended and Restated By-laws (Filed as Exhibit 3.1 to our
    report on
    Form 8-K
    dated December 18, 2007 and incorporated herein by
    reference)4
.1

Rights Agreement dated as of October 16, 2001 with American
    Stock Transfer & Trust Company, as Rights Agent
    (Filed as Exhibit 4.1 to our report on
    Form 8-K
    dated October 16, 2001 and incorporated herein by reference)10
.1

K-Tron International, Inc. 2006 Equity Compensation Plan (Filed
    as Exhibit 10.1 to our report on
    Form 8-K
    dated June 20, 2006 and incorporated herein by reference)**10
.2

K-Tron International, Inc. 2006 Equity Compensation Plan, as
    amended on May 11, 2007 (Filed as Exhibit 10.1 to our
    report on
    Form 10-Q
    for the quarterly period ended June 30, 2007 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

Amendment
    2001-1 to
    the Amended and Restated K-Tron International, Inc. 1996 Equity
    Compensation Plan (Filed as Exhibit 10.4 to our annual
    report on
    Form 10-K
    for the year ended December 29, 2001 and incorporated
    herein by reference)**10
.5

K-Tron International, Inc. Supplemental Executive Retirement
    Plan (Filed as Exhibit 10.2.7 to our annual report on
    Form 10-K
    for the year ended January 4, 1992 and incorporated herein
    by reference)**10
.6

Amendment
    2007-1 to
    the K-Tron International, Inc. Supplemental Executive Retirement
    Plan (Filed as Exhibit 10.4A to our annual report on
    Form 10-K
    for the year ended December 30, 2006 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 our 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 our
    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 (Filed as
    Exhibit 10.9 to our annual report on
    Form 10-K
    for the year ended January 1, 2000 (1999
    Form 10-K)
    and incorporated herein by reference)**10
.10

Form of Employment Agreement with our officers listed in
    Exhibit 10.11, 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 our annual report on
    Form 10-K
    for the year ended January 3, 1998 and incorporated herein
    by reference)**10
.11

List of officers with an Employment Agreement in the form
    provided in Exhibit 10.10* **10
.12

Form of Indemnification Agreement with our current directors and
    officers listed in Exhibit 10.13, which are identical in
    all material respects except for the director or officer who is
    a party thereto and the date of execution (Filed as
    Exhibit 10.11 to the 1999
    Form 10-K
    and incorporated herein by reference)**10
.13

List of current directors and officers with an Indemnification
    Agreement in the form provided in Exhibit 10.12* **10
.14

Loan Agreement, dated as of September 29, 2006, among
    K-Tron International, Inc., K-Tron Investment Co., K-Tron
    Technologies, Inc., K-Tron America, Gundlach Equipment
    Corporation, Pennsylvania Crusher Corporation and Jeffrey
    Specialty Equipment Corporation, as Borrowers and the Financial
    Institutions referred to on the signature pages as Lenders and
    Citizens Bank of Pennsylvania, individually as a Lender and as
    Agent (Filed as Exhibit 10.1 to the October 2006
    Form 8-K
    and incorporated herein by reference)




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##### Table of Contents



ExhibitNumber

Description21
.1

Subsidiaries*23
.1

Consent of Grant Thornton LLP*31
.1

Chief Executive Officer Certification pursuant to
    Rule 13a-14(a)
    or 15d-14(a) of the Securities Exchange Act of 1934*31
.2

Chief Financial Officer Certification pursuant to
    Rule 13a-14(a)
    or 15d-14(a) of the Securities Exchange Act of 1934*32
.1

Chief Executive Officer and Chief Financial Officer
    Certification pursuant to 18 U.S.C. Section 1350*     *
    
    Filed herewith**
    
    Management contract or compensatory plan or arrangement required
    to be filed or incorporated as an exhibit