Technitrol Reports Q309 Results, Board Declares Dividend

http://www.businesswire.com/news/home/20091102006338/en

Results reflect strengthening demand and continued operating profit improvement
PHILADELPHIA--(Business Wire)--
Technitrol, Inc. (NYSE:TNL) announced financial results from continuing
operations for its third fiscal quarter and nine months ended September 25,
2009. The presentation of these results and comparative results in prior periods
treat the company`s former Medtech and MEMS businesses, sold in the second
quarter of 2009, and its Electrical Contact Products Group (Electrical), which
is held for sale, as discontinued operations. Third-quarter highlights from
continuing operations include:

* revenues of $101.4 million, up 10.1% from $92.1 million in the prior quarter
due to recently recovering demand but down 40.0% from $169.0 million in the
third quarter of 2008 due to the impact of the global recession;
* GAAP operating profit of $1.2 million. For comparability, non-GAAP operating
profit, which excludes severance, impairment and other associated costs of
approximately $2.6 million (primarily a settlement loss on unused real estate),
was $3.8 million in the third quarter, compared with $2.5 million in the second
quarter and $13.5 million in the third quarter of 2008 (see non-GAAP tables).
The 51.3% sequential-quarter improvement in non-GAAP operating profit reflects:

* operating leverage from higher sales volumes, partly offset by higher costs
due to cessation of employee furloughs, ramping up of production capacity and
build-up of the production work force in China, where competition for labor has
intensified with the recent escalation of manufacturing activity; and
* unplanned costs amounting to $1.2 million related mainly to legal expenses and
provisions for various customer issues. These costs are not expected to recur in
the fourth quarter;

* non-GAAP earnings per diluted share of $0.11, compared with a loss of ($0.05)
in the prior period and earnings of $0.33 in the third quarter of 2008. The
favorable comparison with the prior quarter reflects stronger operating results
and foreign-exchange gains in the third quarter versus losses in the second
quarter;
* EBITDA of $8.4 million, compared with $6.9 million in the prior quarter and
$20.0 million in the third quarter of 2008;
* repayment of approximately $7.5 million of local European term debt related to
discontinued operations and reflected as a reduction in the "Liabilities held
for sale" balance.; and
* net loss from discontinued operations of $13.4 million, which comprised
primarily write-downs of net assets of these operations to their estimated
disposal values, allocation of interest expense and adjustments to certain
liabilities of these businesses. Operationally, Electrical, which had positive
EBITDA in the third quarter, has been experiencing a demand recovery that has
been stronger than originally expected, particularly in Europe and China,
leading to stronger-than-expected operating results which are expected to
improve in the coming quarters.

Revenues across both of Technitrol`s primary markets increased in the third
quarter from the prior quarter.

Quarter ended
Market 9/25/2009 6/26/2009 9/26/2008
Communication $78,235 $73,288 $129,912
Power 23,146 18,783 39,062
Total 101,381 92,071 168,974

* Shipments for Communication products increased 6.8% from the second quarter.

* Notable within this group was a sequential-quarter revenue increase of almost
13% for wireline network components, led by resurgent demand in the local area
networking (LAN) market. Recent sales in this product group understate true
demand levels due to capacity constraints in China;
* Wireless component shipments were up 1.6% from the second quarter.
Strengthening demand for smart-phone acoustical components and global
positioning system (GPS) antennas was offset by slightly lower shipments of
handset antennas. While handset production generally has begun to recover from
earlier in 2009, a significant portion of handset antenna business currently
served by the Communication Group has begun a transition away from OEM-driven
hardware development and manufacturing, a transition led by a large OEM customer
seeking to purchase full handset modules (and all components within) from single
manufacturing sources in order to reduce its costs. Accordingly, the
Communication Group is adjusting its marketing and engineering efforts to
significantly increase its support for OEMs which have not embraced this
sourcing change and for the sources which will provide full handsets to the OEM
principally driving this change;

* Third-quarter revenues in the Power Group were up 23.2% from the previous
quarter. Power produced the strongest sequential-quarter sales increase due to
rebounding demand for power management components and initial recovery of
activity in automotive components that had been constrained during the recent
production relocation to China.

Based on customer input and internal analysis, Technitrol expects fourth-quarter
2009 revenues from continuing operations to increase modestly from third-quarter
levels to between $103 million and $106 million. The company expects continued
sequential-quarter demand improvement, particularly for networking and
automotive components, and a continuation of the negative effects of handset
supply chain changes on antenna demand in the near term. Excluding severance,
asset-impairment and other associated costs, fourth-quarter operating profit is
expected to continue its sequential-quarter improvement, reflecting operating
leverage from somewhat stronger revenues than the third quarter, partly offset
by the continuing effects of high acquisition and retention costs for production
labor in China. The company expects fourth-quarter adjusted EBITDA to be at
least $9 million. Technitrol believes that it will continue generating
sufficient EBITDA and free cash flows in the foreseeable future to remain
compliant with the covenants of its credit agreement.

Separately, Technitrol announced that its board of directors declared a
quarterly shareholder dividend of $0.025 per common share, an amount equal to
that declared in the previous quarter, payable January 15, 2010 to shareholders
of record on January 1, 2010.

Cautionary Note

Statements 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 from time to time in Technitrol`s SEC reports including, but not limited
to, those discussed in the company`s Form 10-Q for the quarter ended June 26,
2009 in Item 1a 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)." All such risk factors are
incorporated into this report by reference as though set forth in full. This
report should be read in conjunction with item 1a of the Form 10-Q.

Based in Philadelphia, Technitrol is a worldwide producer of electronic
components, electrical contacts and assemblies and other precision-engineered
parts and materials for manufacturers in the wireless and wireline
communications, military/aerospace, automotive and electrical equipment
industries. For more information, visit Technitrol`s Web site at
http://www.technitrol.com.

Investors:Technitrol`s quarterly conference call will take place on Monday,
November 2, 2009 at 5:00 p.m. Eastern Time.The dial-in number is (412)
858-4600.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 7:00 p.m. on November 2, 2009 and concluding at midnight, November
9, 2009.For telephone replay, dial (412) 317-0088 and enter access code
374010#.For Internet replay, use the link from our home page mentioned above.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per-share amounts)
Quarter Ended Nine Months Ended
9/25/2009 9/26/2008 9/25/2009 9/26/2008

Net sales $ 101,381 $ 168,974 $ 293,425 $ 501,978
Cost of goods sold 74,154 126,339 220,305 381,827
Gross profit 27,227 42,635 73,120 120,151
Selling, general and administrative expenses 23,399 29,144 66,503 93,136
Severance, impairment and other associated costs 2,619 4,860 82,867 9,272
Operating profit (loss) 1,209 8,631 (76,250 ) 17,743

Interest expense, net (757 ) (1,022 ) (2,091 ) (2,147 )
Other income (expense), net 3,190 (833 ) 5,083 6,051
Earnings (loss) from continuing operations before income taxes 3,642 6,776 (73,258 ) 21,647
Income tax expense (benefit) 1,368 (2,902 ) 2,856 589
Net earnings (loss) from continuing operations 2,274 9,678 (76,114 ) 21,058
Loss from discontinued operations, net of taxes (13,358 ) (4,123 ) (117,523 ) (896 )
Net (loss) earnings (11,084 ) 5,555 (193,637 ) 20,162
Non-controlling interest, net of taxes (352 ) (204 ) (451 ) (598 )
Net (loss) earnings attributable to Technitrol, Inc. (11,436 ) 5,351 (194,088 ) 19,564

Basic earnings (loss) per share from continuing operations 0.05 0.23 (1.88 ) 0.50
Basic loss per share from discontinued operations (0.33 ) (0.10 ) (2.88 ) (0.02 )
Basic (loss) earnings per share (0.28 ) 0.13 (4.76 ) 0.48

Diluted earnings (loss) per share from continuing operations 0.05 0.23 (1.88 ) 0.50
Diluted loss per share from discontinued operations (0.33 ) (0.10 ) (2.88 ) (0.02 )
Diluted (loss) earnings per share (0.28 ) 0.13 (4.76 ) 0.48

AMOUNTS ATTRIBUTABLE TO TECHNITROL, INC.

Net earnings (loss) from continuing operations $ 1,922 $ 9,474 $ (76,565 ) $ 20,460
Net loss from discontinued operations (13,358 ) (4,123 ) (117,523 ) (896 )
Net (loss) earnings (11,436 ) 5,351 (194,088 ) 19,564

FINANCIAL POSITION
(in thousands, except per-share amounts) 9/25/2009 12/26/2008
(unaudited)

Cash and equivalents $ 39,516 $ 41,401
Trade receivables, net 66,823 128,010
Inventories 43,124 127,074
Other current assets 19,336 58,568
Assets held for sale 85,047 0
Fixed assets 42,588 152,731
Other assets 83,688 262,127
Total assets 380,122 769,911
Current portion of long-term debt 0 17,189
Short-term debt 0 0
Accounts payable 53,512 75,511
Accrued expenses 60,169 86,477
Liabilities held for sale 30,092 0
Long-term debt 127,000 326,000
Other long-term liabilities 51,049 56,602
Total liabilities 321,822 561,779
Shareholders' equity 58,300 208,132
Net worth per share 1.42 5.08
Shares outstanding 41,169 40,998

NON-GAAP MEASURES (UNAUDITED)
(in thousands except per-share amounts)

1. Adjusted EBITDA
Quarter Ended
9/25/09 6/26/09 9/26/08

Net (loss) earnings attributable to Technitrol, Inc. $ (11,436 ) $ (108,104 ) $ 5,351
Net loss from discontinued operations 13,358 103,100 4,123
Non-controlling interest 352 111 204
Income taxes 1,368 1,544 (2,902 )
Interest expense, net 757 655 1,022
Other (income) expense (3,190 ) 2,031 833
Depreciation and amortization 4,555 4,330 6,504
EBITDA 5,764 3,667 15,135
Severance, impairment and other associated costs 2,619 3,193 4,860
Adjusted EBITDA 8,383 6,860 19,995

2. Net (loss) earnings per diluted share excluding severance, impairment and
other associated costs and other adjustments

Quarter Ended
9/25/09 6/26/09 9/26/08

Net (loss) earnings per diluted share $ (0.28 ) $ (2.65 ) $ 0.13
Diluted loss per share from discontinued operations 0.33 2.53 0.10
After-tax severance, impairment and other associated costs, per share 0.06 0.07 0.10
Net earnings (loss) per diluted share excluding severance, impairment and other associated costs 0.11 (0.05 ) 0.33

3. Operating profit excluding severance, impairment and other associated costs

Quarter Ended
9/25/09 6/26/09 9/26/08

Operating profit (loss) $ 1,209 $ (663 ) $ 8,631
Pre-tax severance, impairment and other associated costs 2,619 3,193 4,860
Operating profit, excluding severance, impairment and other associated costs 3,828 2,530 13,491

1. Adjusted EBITDA (net income plus income taxes, depreciation and amortization,
excluding interest and other expense/income and excluding severance, impairment
and other associated costs and other adjustments) is not a measure of
performance under accounting principles generally accepted in the United States.
Adjusted EBITDA should not be considered a substitute for, and an investor
should also consider, net income, cash flow from operations and other measures
of performance as defined by accounting principles generally accepted in the
United States as indicators of our profitability or liquidity. EBITDA is often
used by shareholders and analysts as an indicator of a company`s ability to
service debt and fund capital expenditures. We believe it enhances a reader`s
understanding of our financial condition, results of operations and cash flow
because it is unaffected by capital structure and, therefore, enables investors
to compare our operating performance to that of other companies. We understand
that our presentation of adjusted EBITDA may not be comparable to other
similarly titled captions of other companies due to differences in the method of
calculation.

2,3. Based on discussions with investors and equity analysts, we believe that a
reader`s understanding of Technitrol`s operating performance is enhanced by
references to these non-GAAP measures. Removing charges for severance,
impairment and other associated costs facilitates comparisons of operating
performance among financial periods and peer companies. These charges result
exclusively from production relocations and capacity reductions and / or
restructuring of overhead and operating expenses to enhance or maintain
profitability in an increasingly competitive environment. Impairment charges
represent adjustments to asset values and are not part of the normal operating
expense structure of the relevant business in the period in which the charge is
recorded.

Copyright © 2009 Technitrol, Inc. All rights reserved. All brand names and
trademarks are properties of their respective holders.

Technitrol, Inc.
David Stakun, 215-942-8428

Copyright Business Wire 2009