Technitrol Reports Record $1.52 2Q EPS; Up 141% Year to Year.

Business Editors/Hi-Tech Writers

PHILADELPHIA--(BUSINESS WIRE)--July 25, 2000

Technitrol, Inc. (NYSE: TNL) reported net earnings for its second fiscal quarter ended June 30, 2000 of $24.9 million, or $1.52 per diluted share, compared with $10.3 million, or $.63 per diluted share, in the second quarter of 1999.

Consolidated second-quarter revenues were a record $163.2 million, up 27.6% over the same period last year and up 6.9% over the first quarter of 2000.

Earnings before interest, taxes, depreciation and amortization (EBITDA, defined as operating profit plus depreciation and amortization) were $35.6 million, versus $19.2 million in the comparable 1999 period and $25.5 million, including non-recurring items, in the first quarter of 2000.

Electronic Components Segment

Sales in the Electronic Components Segment (ECS) increased sequentially for the eighth consecutive quarter, to a record $104.9 million. Second-quarter revenues were up 13.3% from the previous quarter and 44.2% from the second quarter of 1999. Segment operating profit was $26.8 million.

"We are seeing unprecedented levels of new product development by customers across all of the ECS's primary product groups - data networking, telecommunications and power conversion," said Technitrol Chairman and Chief Executive Officer James M. Papada, III. "In each product category, Pulse's market leadership position enabled it to achieve record shipments in the second quarter, while we held operating expenses at or below budgeted levels.

"As in the first quarter, acquisitions played no additive role in the ECS's remarkable sequential-quarter and year-over-year revenue comparisons," Papada said. "Pulse's customers continue to experience very strong demand for broadband access technology - via coaxial cable or digital subscriber line -- voice-over-Internet capabilities, latest-generation networking equipment, and feature-rich wireline and wireless connectivity. As the leading supplier of magnetic components to these markets, we are in an excellent position to continue sharing in their dramatic growth.

"While this level of demand cannot continue forever without interruption, the outlook for at least the next 12 months remains very positive. Despite record shipments, the ECS's backlog, though a less-reliable predictor of short-term volumes than it once was, increased 65% over the course of the second quarter. Order entry for the first few weeks of the third quarter has remained strong," Papada said.

"As we address demand in our current markets, we are proceeding with our effort to expand Pulse's products and services into new business areas, such as build-to-print magnetic components for the power conversion industry," Papada said, "and we continue to search out suitable acquisition candidates to become our partners in future growth."

Electrical Contact Products Segment

In the Electrical Contact Products Segment (ECPS), formerly the Metallurgical Components Segment, revenues increased 5.8% from the second quarter of 1999, reflecting improved European markets and contributions from AMI Doduco-Italy (formerly MEC Betras Italia, acquired late in December 1999).

The increase is in spite of a Euro 11.1% weaker, on average, relative to the dollar in the second quarter of 2000 than in the 1999 period. Had average exchange rates in the second quarter of 1999 been in effect in the 2000 quarter, revenues would have increased 14.1% year over year.

"As we expected, European markets continued to strengthen, while North American markets have remained solid," Papada said. "Increased industrial production has fueled a rebound in the machine tool market, while infrastructure upgrades - particularly in North America -- have driven demand for contact products used in electrical distribution equipment. Sales to automotive relay and control manufacturers continue to benefit from increases in the number of safety, convenience and comfort features in the typical vehicle.

"While single-family home building may moderate slightly due to rising interest rates, we believe the outlook for continued strength in commercial construction and multifamily construction is good," Papada said.

"The appliance markets have also been quite strong."

Despite a weaker Euro, the ECPS's $3.5 million second-quarter operating profit was 51.7% higher than in the comparable 1999 period. Operating margin improvement reflected increased efficiencies from higher sales volumes, coupled with proportionately lower operating expenses driven by improved cost controls and the segment's Strategy 2000 work force streamlining and process improvement initiatives. Operating profit increased 18.4% from the previous quarter.

"As the second half of 2000 unfolds, we believe AMI Doduco's results will benefit significantly from our Strategy 2000 programs," Papada said. "We are on target to achieve our planned employment reduction in Germany, and we have begun to fabricate stamped parts at lower cost in Estonia. By year-end, we expect our Estonian part stamping as well as tool and die making operations to be in full swing. Meanwhile, we continue with our plans to aggressively grow our business in high-growth, high-value-added component subassemblies in Germany and to accelerate continuous process improvements throughout AMI Doduco's worldwide operations. We are very pleased with the progress made by the ECPS in the first half of 2000, and we anticipate continued improvements this year and next."

Consolidated Effective Tax Rate

Technitrol's effective tax rate in the second quarter of 2000 was 19.8%, consistent with the previous quarter's 20.1% before non-recurring items and lower than the 23.8% reported in the second quarter of 1999 due to a higher proportion of taxable income from low-tax jurisdictions in the 2000 quarter.

Cautionary Note

The statements made by James M. Papada, III in the above report are "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. Actual results may differ materially due to the risk factors listed below as well as others listed from time to time in Technitrol's SEC reports including, but not limited to, those discussed in the Company's 10-Q report for the quarter ended March 31, 2000 in Item 2 under the caption "Factors That May Affect Our Future Results (Cautionary Statements for Purposes of the `Safe Harbor' Provisions of the Private Securities Litigation Reform Act of 1995)."

These risk factors include, but are not limited to, the following:

-- Changing market and economic conditions;

-- Rapid technological change that could cause obsolescence of or

reduction in demand for our products;

-- Fluctuations in the price of our products;

-- The timing of our customers' product introductions;

-- Reduction in gross margin due to changes in sales mix, method

of distribution or the acquisition of businesses with

lower-margin product lines;

-- Inability to obtain sufficient quantities of raw materials;

-- Level of success in integrating acquisitions;

-- Political, regulatory and currency risks associated with

operating in foreign countries;

-- Strains on our operations, information systems and human

resources associated with rapid growth; and

-- Legal liabilities unknown to us at the present time.

Based in Philadelphia, Technitrol is a worldwide producer of electronic components, electrical contacts and assemblies and other precision-engineered parts and materials for manufacturers of networking, broadband/Internet access, telecommunications and computer equipment, electrical switching devices, and other products. For more information, visit Technitrol's Web site at http://www.technitrol.com.

Investors: Technitrol's quarterly conference call will take place today at 5:00 p.m. Eastern Time. The dial-in number is 612/332-0634. Also, the call will be broadcast live over the Internet. Visit www.technitrol.com. On-demand Internet and telephone replay will be available beginning at 9:00 p.m. today and concluding at midnight, August 1.

For telephone replay, dial 320/365-3844 and enter access code 527724.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per-share amounts)

                            Quarter Ended         Six Months Ended
                        6/30/00      7/2/99      6/30/00     7/2/99
                        -------------------------------------------

Net sales             $ 163,186   $ 127,857    $ 315,879   $ 253,087
Cost of goods sold      100,644      87,829      199,196     174,920
Selling, general and
 administrative
 expenses                32,252      26,159       63,270      51,489
Restructuring and
 other non-recurring
 items                     --          --          3,305        --
                      ---------   ---------    ---------   ---------
Operating profit         30,290      13,869       50,108      26,678
Interest and other
 income (expense)           728        (388)         740      (1,429)
                      ---------   ---------    ---------   ---------
Net earnings before
 taxes                   31,018      13,481       50,848      25,249
Income taxes              6,134       3,206        9,132       6,238
                      ---------   ---------    ---------   ---------
Net earnings             24,884      10,275       41,716      19,011

Earnings per share:
 Basic                     1.54         .64         2.59        1.19
 Diluted                   1.52         .63         2.55        1.17
Weighted average
 common and equivalent
 shares outstanding      16,362      16,244       16,325      16,227



BUSINESS SEGMENT INFORMATION (UNAUDITED)
(in thousands)
                              Quarter Ended        Six Months Ended
                            6/30/00     7/2/99    6/30/00      7/2/99
                            -----------------------------------------
Net sales
 Electronic
  Components               $104,862   $ 72,711    197,391     140,465
 Electrical Contact
  Products (1)               58,324     55,146    118,488     112,622
                           --------   --------   --------    --------
  Total net sales           163,186    127,857    315,879     253,087
Operating profit
 Electronic
  Components                 26,808     11,573     46,990      20,462
 Electrical Contact
  Products                    3,482      2,296      6,423       6,216
 Electrical Contact
  Products Segment
  restructuring and
  other non-recurring
  items                        --         --       (3,305)       --
                           --------   --------   --------    --------
  Total operating profit     30,290     13,869     50,108      26,678


(1) Segment name changed from Metallurgical Components effective May
24, 2000





FINANCIAL POSITION
(in thousands, except per-share amounts)

                                       6/30/00           12/31/99
                                       -------           --------
                                     (unaudited)
Cash and equivalents                 $  108,827          $  88,161
Other current assets                    181,351            151,127
Fixed assets                             85,937             82,722

Other assets                             58,051             59,229
     Total assets                       434,166            381,239
Current liabilities                     117,451             97,437
Long-term liabilities                    57,994             68,167
     Total liabilities                  175,445            165,604
Shareholders' equity                    258,721            215,635
Net worth per share                       15.79              13.26
Shares outstanding                       16,385             16,266