Exhibit index
is on Page 12
UNITED STATES
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1996, or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ______________ to ______________.
Commission File No. 1-5375
TECHNITROL, INC.
(Exact name of registrant as specified in Charter)
PENNSYLVANIA 23-1292472
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
1210 Northbrook Drive, Suite 385
Trevose, Pennsylvania 19053
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, 215-355-2900
including area code:
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to the filing requirements for at least the
past 90 days. YES [ X ] NO [ ]
Common Stock - Shares Outstanding as of June 30, 1996: 8,007,882
Page 1 of 14
TECHNITROL, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 1996 and December 31, 1995
In thousands of dollars, except for share data
June 30, Dec. 31,
Assets 1996 1995
------ -------- ---------
Current Assets:
Cash and cash equivalents $ 19,447 $ 13,894
Receivables:
Trade 37,892 33,431
Other 232 308
Inventories 31,514 32,962
Prepaid expenses and other current assets 2,831 2,019
-------- --------
Total current assets 91,916 82,614
Property, plant and equipment 82,433 81,063
Less accumulated depreciation 38,209 35,935
-------- --------
Net property, plant and equipment 44,224 45,128
Deferred income taxes 4,858 4,132
Excess of cost over net assets acquired 10,524 10,957
Other assets 808 2,109
-------- --------
$152,330 $144,940
======== ========
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Current installments of long-term debt $ 2,021 $ 2,023
Accounts payable 7,911 8,359
Accrued expenses 32,866 28,990
-------- --------
Total current liabilities 42,798 39,372
Long-term liabilities:
Long-term debt, excluding
current installments 7,592 15,102
Other long-term liabilities 6,267 5,705
Shareholders' equity:
Common stock 1,361 1,342
Additional paid-in capital 39,113 36,907
Retained earnings 61,620 52,517
-------- --------
102,094 90,766
Less: Cost of treasury stock (4,509) (4,535)
Unearned compensation under stock
award plan (1,051) (697)
Cumulative translation adjustment (861) (773)
-------- --------
Total shareholders' equity 95,673 84,761
-------- --------
$152,330 $144,940
======== ========
See accompanying Notes to Consolidated Financial Statements.
Page 2 of 14
TECHNITROL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands of dollars)
Three Months Six Months
Ended June 30 Ended June 30
----------------- -------------------
1996 1995 1996 1995
------- ------- -------- -------
1. Net sales $68,028 $39,394 $130,880 $79,437
2. Costs and expenses applicable
to sales
a) Cost of goods sold 44,161 26,737 85,945 55,390
b) Selling, general and
administrative expenses 15,895 9,057 29,265 17,681
------- ------- ------- -------
Total costs and expenses
applicable to sales 60,056 35,794 115,210 73,071
------- ------- ------- -------
3. Other operating income
a) Gain on the sale of the
Products Division -- -- 1,471 --
------- ------- ------- -------
4. Operating profit 7,972 3,600 17,141 6,366
5. Other income (expense)
Interest (39) (313) (162) (548)
Other (51) -- (33) (96)
------- ------- ------- -------
Total other income (expense) (90) (313) (195) (644)
------- ------- ------- -------
6. Earnings before taxes 7,882 3,287 16,946 5,722
7. Income taxes 2,646 1,267 6,244 2,010
------- ------- ------- -------
8. Net earnings $ 5,236 $ 2,020 $10,702 $ 3,712
======= ======= ======= =======
9. Weighted average common and
equivalent shares outstanding 8,081 6,042 8,045 6,042
10. Earnings per share $ .65 $ .33 $ 1.33 $ .61
11. Dividends declared per share $ .10 $ .10 $ .20 $ .195
Amounts are in thousands except for earnings per share and dividends per share.
See accompanying Notes to Consolidated Financial Statements.
Page 3 of 14
TECHNITROL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended June 30, 1996 and 1995
(In thousands of dollars)
June 30, June 30,
1996 1995
--------- ---------
Cash flows from operating activities:
Net earnings $10,702 $ 3,712
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 4,708 2,722
Gain on sale of Products Division assets (1,471) --
Changes in assets and liabilities net of
effect of sale of Products Division assets:
Increase in accounts payable and accrued expenses 5,106 1,293
(Increase) in accounts receivable (4,738) (1,034)
(Increase) decrease in inventories 290 (3,355)
Other, net (656) (501)
------- -------
Net cash provided by operating activities 13,941 2,837
------- -------
Cash flows from investing activities:
Proceeds from the sale of Products Division assets 3,671 --
Acquisition of common stock warrants of
Pulse Engineering -- (4,769)
Capital expenditures (3,422) (2,920)
Proceeds from sale of property, plant and equipment 12 17
------- -------
Net cash provided by (used in) investing activities 261 (7,672)
------- -------
Cash flows from financing activities:
Dividends paid (1,591) (1,179)
Proceeds of long-term debt -- 5,000
Principal payments of long-term debt (7,511) (2,011)
Net repayment of short-term debt -- (769)
Proceeds from exercise of stock options 472 --
------- -------
Net cash provided by (used in) financing activities (8,630) 1,041
------- -------
Net effect of exchange rate changes on cash (19) 119
Net increase (decrease) in cash and cash equivalents 5,553 (3,675)
Cash and cash equivalents at beginning of year 13,894 8,716
------- -------
Cash and cash equivalents at June 30 $19,447 $ 5,041
------- -------
See accompanying Notes to Consolidated Financial Statements.
Page 4 of 14
TECHNITROL, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) Accounting Policies
-------------------
For a complete description of the accounting policies of
Technitrol, Inc. and its consolidated subsidiaries ("the Company"),
refer to Note 1 of Notes to Consolidated Financial Statements included
in the Company's Form 10-K filed for the year ended December 31, 1995.
Reclassifications
Certain amounts in the 1995 financial statements have been
reclassified to conform with the current year's presentation.
(2) Acquisitions and Divestitures
-----------------------------
On September 29, 1995, the Company completed the acquisition of
Pulse Engineering, Inc. ("Pulse"), pursuant to an Agreement and Plan
of Merger dated May 23, 1995. As a result of the merger, Pulse became
a wholly-owned subsidiary of the Company. Pulse, headquartered in San
Diego, California, and with manufacturing operations in the People's
Republic of China, Taiwan, the Philippines and Ireland, designs,
manufactures and markets electronic components and modules primarily
for manufacturers of local area networks and telecommunications
systems.
The total purchase price approximated $61.5 million and consisted
of cash due to the former Pulse stockholders, stock issued to the
former Pulse stockholders, stock options assumed, and related
acquisition costs. The fair value of the assets acquired and
liabilities assumed approximated $66.5 million and $14.0 million,
respectively. The excess of cost over net assets acquired
approximated $9.0 million and is being amortized over 15 years. The
purchase price was arrived at pursuant to arms-length negotiations
taking into account all pertinent factors including, but not limited
to, the nature, monetary and strategic value of the assets being
acquired, business prospects of Pulse and the synergies of Pulse with
the existing operations of the Electronic Components Segment of the
Company.
Approximately 1,785,000 shares of Technitrol common stock at a
then fair market value of $16.375 per share were issued to former
holders of Pulse common stock. The cash portion of the purchase
price, including cash paid to the former stockholders of Pulse and
related acquisition costs, was approximately $27.6 million. In
addition, all outstanding options to purchase Pulse common stock were
assumed by the Company. Approximately 269,000 shares of Technitrol
common stock became issuable upon exercise of such options. Except
for approximately 33,000 options which were not vested at the
acquisition date, all assumed options became immediately exercisable
at prices ranging from $1.73 to $15.61. The options have various
expiration dates, the latest of which is in April 2001.
The acquisition has been accounted for by the purchase method of
accounting. Had Pulse been acquired on January 1, 1995, unaudited
consolidated pro forma results of operations of the Company would have
been (in thousands, except for earnings per share):
Six Months Ended
June 30, 1995
----------------
Sales $128,480
Net earnings $7,450
Earnings per share $0.93
Page 5 of 14
TECHNITROL, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements, continued
(2) Acquisitions and Divestitures (continued)
-----------------------------------------
This unaudited information is provided for comparative purposes
only. It does not purport to be indicative of the results that
actually would have occurred if the acquisition had been consummated
on the date indicated or which may be obtained in the future. The pro
forma earnings per share amounts include the effect of shares issued
and stock options assumed in connection with the merger.
On February 27, 1996, the Company sold certain assets of the
Products Division to an unrelated party. As a result of the sale, the
Company discontinued its production and marketing of document counters
and dispensers, the sales of which approximated $4.9 million in 1995.
The consideration received approximated $3.7 million and the pre-tax
gain of approximately $1.5 million that was realized on the sale
(after recognition of related costs and expenses) was included in
operating profit for the quarter ended March 31, 1996.
(3) Inventories
-----------
Inventories consist of the following (in thousands):
June 30, December 31,
1996 1995
-------- ------------
Finished goods $ 9,861 $12,926
Work in process 9,159 8,888
Raw materials 12,494 11,148
------- -------
$31,514 $32,962
======= =======
(4) Supplemental Disclosure of Non-cash Transactions
------------------------------------------------
During the six months ending June 30, 1996 and 1995, the Company
issued to employees stock pursuant to the Company's Restricted Stock
Plan having a fair value of $555,000 and $406,000, respectively.
(5) Restructuring Charges
---------------------
Restructuring and related costs are recognized in accordance with
Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)."
During the second quarter of 1996, the Company initiated a
restructuring plan aimed at reducing the costs of manufacturing within
its Electronics Components Segment. Accordingly, reserves were
established for employee separation costs related to the relocation of
a majority of the production capacity of the Company's production
facility in Taiwan to the Company's production facility in the
Philippines. Charges of $1,950,000 are included in selling, general
and administrative expenses for the second quarter, including payments
made to terminated employees during the quarter of $1,137,000. The
remaining reserve of $813,000 will be used for separation costs to be
paid during the second half of 1996. The employees involved in the
plan are primarily direct production workers in Taiwan. A limited
number of indirect employees are also involved. A total of 121 direct
and 12 indirect employees were terminated during the second quarter.
Approximately 160 additional employees have been notified of the
restructuring plan and will be terminated and paid during the second
half of 1996.
Page 6 of 14
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- -------------------------
The results for the six months ended June 30, 1996 have been
prepared by Technitrol's management without audit or participation by
its independent auditors. In the opinion of management, the financial
statements fairly present the results of Technitrol's operations for
the periods presented and the consolidated balance sheet at June 30,
1996. To the best knowledge and belief of Technitrol, all normal
recurring accruals and adjustments have been made to properly reflect
income and expenses attributable to this period.
Liquidity and Capital Resources
- -------------------------------
At June 30, 1996, the Company's consolidated cash balance was
approximately $19.4 million. This represents an increase of $5.5
million from the end of 1996. Total working capital was $49.1 million
at the end of the second quarter. The significant positive cash flow
during the first half of 1996 enabled the Company to increase its cash
reserves in addition to repaying approximately $7.5 million in long-
term debt.
During the first half of 1996, cash provided by operations was
$13.9 million. The cash flow from operations included earnings of
$10.7 million and depreciation and amortization of $4.7 million.
Significant increases in accounts payable and accrued expenses during
the quarter also contributed to the cash flow from operations. This
increase of $5.1 million includes an increase in current income taxes
payable. Certain expenses including reorganization expenses of Lloyd
instruments, Ltd. ("Lloyd") in Germany, were incurred during the first
half and are not presently deductible for income tax purposes. The
sale of the Products Division in the first quarter also contributed to
a higher level of current income taxes payable. Higher accounts
payable related to the higher level of raw material inventories during
1996 also contributed to the increase. Accounts receivable increased
by $4.7 million during the half as a result of the record sales level
in the second quarter. Total inventories decreased slightly from the
end of 1995. Finished goods inventories decreased since the end of
1995 while raw material inventories increased as noted above. The
higher level of finished goods at December 31, 1995 included
inventories of the Electronic Components Segment in the Far East which
were increasing in anticipation of the Chinese New Year Holiday in
February 1996. Finished goods inventories were used to maintain
customer shipments while certain production facilities were closed
during the holiday period. Raw material inventories increased during
1996 as the Company's sales increased and production planning
activities reflected the higher sales level.
Cash provided by investing activities was $0.3 million during the
first half of 1996. The cash received from the sale of the Company's
Products Division approximated $3.7 million and capital expenditures
were $3.4 million during the six months. The Products Division sale
occurred on February 27, 1996 and a portion of the funds received were
used to repay debt, as noted below.
Debt repayments totaled $7.5 million during the six months and
comprised the majority of the cash used in financing activities. The
Company's primary credit facility of $45.0 million includes a
revolving credit portion and a term loan. The $7.0 million that was
outstanding under the revolver at December 31, 1995 was repaid in its
entirety during the first quarter of 1996. Separately, $0.5 million
was repaid under the term loan during the second quarter. The Company
received $0.5 million from the exercise of stock options during 1996.
The options exercised during the first half of 1996 were among those
assumed in connection with the acquisition of Pulse in 1995. No new
options have been granted. Dividends of $1.6 million were paid during
the period.
Management expects that the Company will generate sufficient cash
flow during the remainder of 1996 to fund its operating requirements,
capital expenditures, interest and debt amortization payments. In
addition, internally generated funds may be used for acquisitions of
suitable businesses or assets upon terms acceptable to the Board of
Directors. It is expected that dividends will continue to be paid on
a quarterly basis in 1996.
Page 7 of 14
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
- -------------------------------------
Recent balance sheet composition has been:
June 30, December 31, June 30,
1996 1995 1995
-------- ----------- --------
Cash & cash equivalents 13% 10% 6%
Other current assets 48% 47% 55%
Plant, property &
equipment 29% 31% 27%
Other assets 10% 12% 12%
---- ---- ----
Total 100% 100% 100%
==== ==== ====
Current liabilities 29% 28% 27%
Long-term debt excluding
current installments 4% 10% 20%
Other non-current
liabilities 4% 4% 0%
Shareholders' equity 63% 58% 53%
---- ---- ----
Total 100% 100% 100%
==== ==== ====
Results of Operations
- ---------------------
For the three months ended June 30, 1996:
Revenues
--------
Sales in the second quarter of 1996 were $68.0 million, a record
for the Company and an increase of 72.7% over the same period in 1995.
The increase over 1995 was primarily attributable to the sales of
Pulse Engineering, Inc. ("Pulse"), which was acquired by the Company
in September 1995. The Electronic Components Segment, which includes
Pulse, experienced significant demand from its customers in the
computer, local area network (LAN) and telecommunication markets. The
sales level in this Segment is expected to decline somewhat in the
third quarter, as Pulse's overall second quarter order entry was less
than sales. This decline in orders (occurring primarily in the United
States and to a lesser extent in Asia) is believed to be the result of
widely observed inventory adjustments and project deferrals occurring
within the industry. Based on customer forecasts, order entry at
Pulse is expected to rebound in the fourth quarter.
Sales of the Metallurgical Products Segment increased from the
sales level during the same period of 1995. Volume increases at
Advanced Metallurgy, Inc. ("AMI") were the primary cause of the
increased sales in this Segment. Domestic economic conditions
affecting the manufacturers of circuit protection, power control and
power distribution equipment continue to have a significant impact on
the sales volume of AMI. These conditions were favorable during the
second quarter of 1996. Higher market prices for metals, which are
factored in customer prices for certain products of the Segment, also
contributed to the sales increase.
Sales for the Test & Measurement Products Segment in the quarter
were lower than the prior year period as a result of the sale of the
Products Division during the first quarter of 1996. (The sales of
that Division were approximately $2.9 million for the first six months
of 1995). Without the effect of the Products Division sales, the Test
& Measurement Segment experienced a sales increase during the second
quarter of 1996 compared to the second quarter of 1995. Sales
increased at both John Chatillon & Sons, Inc. ("Chatillon") and at
Lloyd, the two operating units which remain in the Segment.
Page 8 of 14
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
- -------------------------------------
Cost of Sales and Operating Expenses
------------------------------------
During the second quarter, the Company's gross margin was 35.1%,
an increase from 32.1% in the second quarter of 1995. The higher
gross margin was primarily the result of manufacturing efficiencies
and higher shipments within the Electronic Components Segment and the
Metallurgical Products Segment. Gross margin and operating profit in
the Metallurgical Products Segment continued to recover due to a
combination of lower overheads, selective price increases, a
passthrough of certain raw material (metal) costs and higher sales
volume.
Operating profits of the Electronic Components Segment during the
quarter were negatively impacted by restructuring charges incurred
relative to certain Far East operations. These charges resulted from
the decision by management to shift a majority of the production from
the Segment's operation in Taiwan to its Philippines production site
in order to further lower manufacturing costs. While that alternative
had been contemplated for some time, the final decision to effect the
change and the costs associated with that decision were determined
during the second quarter. The total charge was $1.95 million, or
approximately $0.14 per share after tax, and related primarily to
employee severance payments in Taiwan. More than half of these
payments were made in June and the remainder will be paid during the
second half of 1996. This type of expense is not expected to be
recurring.
Earnings of the Test and Measurement Products Segment decreased
slightly from the comparable prior year period. Operating profits at
Chatillon were lower during the second quarter of 1996 than in the
comparable prior year period. The operating profit in 1996 reflected
certain non-recurring administrative costs, including those associated
with executive recruiting. This decrease at Chatillon exceeded an
increase in operating profits at Lloyd.
Total selling, general and administrative expenses for the
quarter were $15.9 million compared to $9.0 million for the same
period in 1995. This represents an increase of 75.5%. The increase
includes the effect of Pulse selling, general and administrative
expenses as Pulse was acquired subsequent to the second quarter of
1995. Also included in the 1996 expenses are the restructuring
charges of $1.95 million related to the severance payments in Taiwan
as noted above.
Interest
--------
Net interest expense decreased during the period to $39,000,
significantly less than the $313,000 that was incurred in the prior
year period. During the second quarter of 1996, the level of debt
outstanding was lower than in 1995. The cash flow generated in recent
quarters has provided the Company with higher levels of cash reserves
which are invested in short-term deposit instruments. The earnings on
these investments reduces the amount of net interest expense incurred
by the Company. The rate on the term debt balance of $9.5 million at
June 30, 1996 was fixed at 6.65%.
Income Taxes
------------
The effective income tax rate for the quarter was 33.6%, a
decrease from the effective rate of 38.5% during the second quarter of
1995. The decrease was caused by proportionately more taxable income
earned by the Company's offshore operating units, especially the Pulse
entities, which generally incur lower tax rates than those experienced
by the Company's domestic operations.
Page 9 of 14
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
- -------------------------------------
For the Six Months Ended June 30, 1996:
Sale of the Products Division
-----------------------------
The Company sold the assets of its Products Division (a provider
of currency counters and dispensers) for a pre-tax gain of
approximately $1.5 million, or $.09 per share after tax, during the
first quarter of 1996. The Products Division was included in the End
User/Finished Products Segment, the name of which has been changed to
the Test & Measurement Products Segment.
Revenues
--------
Total sales for the first six months of 1996 were $130.9 million,
an increase of 64.8% from the sales of $79.4 million recorded in the
prior year period. Most of the sales increase is attributable to the
inclusion of Pulse during 1996. Sales of the Metallurgical Products
Segment also increased relative to the same period in 1995, with an
increase in sales at AMI exceeding a sales decrease at Chace Precision
Metals, Inc. The remaining operating units of the Test & Measurement
Products Segment experienced a sales increase. (The Products Division
was sold during the first quarter of 1996.) On a year-to-date basis,
the increased sales of Chatillon accounted for most of the increase of
the Segment. The sales of Lloyd were approximately the same as in the
prior year. However, the orders entered at Lloyd, which is based in
England, were higher than the sales during the first six months of
1996, while the orders entered at Chatillon were lower than
Chatillon's sales for the same period.
Cost of Sales and Operating Expenses
------------------------------------
The year-to-date gross margin in 1996 was 34.3% compared to 30.3%
in 1995. The increased margin was driven primarily by the Electronic
Components Segment and specifically the addition of Pulse.
Manufacturing efficiencies relative to that Segment's operations in
China, which had begun to be realized during the second half of 1995,
continued during 1996.
Total selling, general and administrative expenses were $29.3
million during the six months ended June 30, 1996, compared with $17.7
for the same period in 1995. The increase includes the addition of
Pulse, the restructuring expenses incurred relative to the Electronic
Components Segment's operation in Taiwan and higher administrative
spending necessary to support the increased level of sales in 1996.
Interest
--------
Net interest expense for the first six months of 1996 was
$162,000 compared to $548,000 in the comparable prior year period.
Approximately $7.5 million of long-term debt was repaid during the
first half of 1996, resulting in a lower level of debt outstanding.
Additionally, increasing cash reserves resulted in larger amounts of
interest income during the period.
Income Taxes
------------
The effective year-to-date income tax rate for the first six
months of 1996 was 36.8% compared to 35.1% during 1995. The higher
rate in 1996 was the result of higher non-deductible expenses,
including reorganization expenses of Lloyd incurred in Germany and the
amortization of goodwill associated with the acquisition of Pulse.
Also contributing to the higher rate in 1996 was the sale of certain
assets of the Products Division which occurred in the first quarter.
The effective tax rate for the second quarter alone was 33.6%,
significantly less than the rate in the first quarter.
Page 10 of 14
PART II. OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS NONE
ITEM 2 CHANGES IN SECURITIES NONE
ITEM 3 DEFAULTS UPON SENIOR SECURITIES NONE
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The regular annual meeting of shareholders was held on May
22, 1996. Messrs. Thomas J. Flakoll, J. Barton Harrison
and Graham Humes were elected to a three-year term as
directors of the Company. KPMG Peat Marwick LLP was
selected as the Company's independent public accountants
for the year ended December 31, 1996. The results of the
votes were as follows:
For Withhold Authority
--- ------------------
Thomas J. Flakoll 6,394,156 175,020
J. Barton Harrison 6,394,156 175,020
Graham Humes 6,393,792 175,384
For Against Abstain
--- ------- -------
KPMG Peat Marwick LLP 6,431,831 129,530 7,815
ITEM 5 OTHER INFORMATION NONE
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The Exhibit Index is on page 13.
(b) Reports on Form 8-K NONE
Page 11 of 14
EXHIBIT INDEX
DOCUMENT
3.(i) Articles of Incorporation Incorporated by reference to Form 10-K
for the year ended December 31, 1995
(ii) By-laws Incorporated by reference to Form 10-K
for the year ended December 31, 1995
4. Instruments defining rights Incorporated by reference from Form 10-K
of security holders for the year ended December 31, 1982.
11. Statement re computation
of per share earnings Page 13
27. Financial Data Schedule Electronic Filing Only
Page 12 of 14
EXHIBIT (11) COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
-------- -------- ------- --------
Net earnings $5,236,000 $2,020,000 $10,702,000 $3,712,000
Primary earnings per share:
Weighted average number of
common shares outstanding 7,996,863 6,042,000 7,956,412 6,042,000
Add: Shares arising from the
assumed exercise of stock
options (as determined under
the Treasury Stock Method) 84,595 -- 88,190 --
---------- ---------- ----------- ----------
Weighted average of common
and equivalent shares 8,081,458 6,042,000 8,044,602 6,042,000
---------- ---------- ----------- ----------
Primary earnings per share $ .65 $ .33 $ 1.33 $ .61
========== ========== =========== ==========
Fully diluted earnings per share (1):
Weighted average of common and
equivalent shares outstanding
(as determined for the
Primary earnings per share
calculation above) 8,081,458 6,042,000 8,044,602 6,042,000
Add: Additional shares arising
from the assumed exercise of
stock options (as determined
under the Treasury Stock
Method) -- -- -- --
---------- ---------- ----------- ----------
Weighted average of common
and equivalent shares 8,081,458 6,042,000 8,044,602 6,042,000
---------- ---------- ----------- ----------
Fully diluted earnings
per share $ .65 $ .33 $ 1.33 $ .61
========== ========== =========== ==========
Note (1): This calculation is submitted in accordance with the
Securities Act of 1933 Release No. 5,133 although it is not required
by footnote 2 to paragraph 14 of APB Opinion No. 15 because it results
in dilution of less than 3%.
Page 13 of 14
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
TECHNITROL, INC.
------------------------------------
(Registrant)
August 2, 1996 /s/Albert Thorp, III
- ----------------------------- -------------------------------------
(Date) Albert Thorp, III
Vice President - Finance, Treasurer and
Chief Financial Officer
August 2, 1996 /s/Drew A. Moyer
- ----------------------------- --------------------------------------
(Date) Drew A. Moyer
Corporate Controller, Assistant Treasurer
and Principal Accounting Officer
Page 14 of 14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 19447
<SECURITIES> 0
<RECEIVABLES> 37892
<ALLOWANCES> 0
<INVENTORY> 31514
<CURRENT-ASSETS> 91916
<PP&E> 82433
<DEPRECIATION> 38209
<TOTAL-ASSETS> 152330
<CURRENT-LIABILITIES> 42798
<BONDS> 7592
<COMMON> 1361
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</TABLE>
