A Brief Company Outline of State Machine Tool Co., Inc.,

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1 A Brief Company Outline of State Machine Tool Co., Inc., Who We Are: State Machine Tool Co., Inc is a full service CNC machine tool distributor concentrating our focus on the metal cutting industry of Wisconsin and Upper Michigan. Established in 1933 as a sole proprietorship, State has grown and prospered, becoming one of the top suppliers of CNC manufacturing equipment in the Midwest. Corporate sales include not only stand-alone machine tools, as we also provide fully automated machining systems in ever growing numbers to our customers. Our customer base is primarily composed of Medium to Large OEM's, Tier One and Tier Two sub-contract machine shops and aero-space suppliers. In fact, supplying one-source, turn-keyed manufacturing packages now comprises more than 60% of annual sales. We fully expect this percentage of turn-key sales to grow steadily in the coming years. Our Mission is Twofold: Our first objective is to obtain strong corporate sales by providing state-of-the-art machining solutions to the metal cutting industries within our area of coverage, being certain that our solutions include machine tools and auxiliary equipment that are of high quality, then deliver the ordered equipment in a timely manner and upon installation, to provide comprehensive training in use and maintenance of the equipment. Our second objective is to be certain to maintain our customer's total satisfaction with all equipment purchased by providing excellent mechanical and electrical service resources to minimize any potential equipment downtime, and to build a satisfying working relationship between our customer's employees and our own, thus helping to assure future business for our company and the equipment manufacturers for whom we are a distributor for their products. By fully accomplishing our mission above, we shall assure the future success of State Machine Tool Co., Inc. and thus provide security for it's owners and employees. Office and Service Center, Waukesha, Wisconsin

2 Company Sales: Over ninety percent of State Machine Tool Company's sales had been composed of product manufactured by Hitachi Seiki Co., LTD and it's manufacturing subsidiaries in the United States and Europe. Whereas other distributors felt compelled to offer many lines of equipment, our company 's sales strategy had been to focus our efforts in the promotion and sales of Hitachi Seiki machining and turning centers, along with the sale of support equipment, automation, tooling and fixtures for the end users applications. Our premise for the above was, and is, that our sales are directly proportional to the amount of knowledge we have on the equipment we offer. More working knowledge provides increased customer satisfaction with the equipment and thus greater repeat and overall sales growth. State Machine Tool Co., Inc. was the exclusive representative of Hitachi Seiki Machine Tools for our Wisconsin and Upper Michigan Territory. Appointed at the 1980 IMTS machine tool show, our company has sold well over 1,200 Hitachi Seiki machine tools and has been awarded by Hitachi Seiki Ltd., the "President's Letter of Thanks" award a record seventeen times within the twenty years we have represented the company. This award was highly limited to only five distributors outside of Japan, and is awarded not merely for outstanding sales, but the recipients must have also provide advanced technical service and engineering of CNC Machine Tools and Automation. In September of 2002, State Machine Tool was appointed the Toyoda Machinery USA distributorship for Wisconsin at the 2002 IMTS Show. In our first full year of Toyoda representation, we received Toyoda s top award by being selected the: International Dealer of The Year

3 New Machine CNC Machine Tool Lines Represented by State Machine Tool Co., Inc. Horizontal Machining Centers Vertical Machining Centers Cylindrical & Universal Grinders Horizontal Machining Centers High Speed Verticals #40 / #50 Taper Rotary Pallet Machining Centers FMS Systems and Transfer Lines Automated Turning Centers Twin Spindle Gantry Loaded Cells Inverted Turning Centers Large Multi Axes Capacity CNC Turning Vertical Centers Turning High Y Axis Production CNC Lathes V.T.L. s with A.T.C & A.T.C. Live Multi Tooling, Turret and Chuck Multi Spindle Changers Lathes 5 Axis Vertical Machining Centers Horizontal/Vertical Machining Centers Pallet Pool & FMS Systems RoboDrill RoboDrill CNC Drill / Tap / Mill Simple Large Automation Diameter Turning / Robot Loading Centers Double Column Bridge Machines High Speed DDR Rotary Tables Die/Mold Vertical Machining Centers High Speed Drill/Tapping Centers Vertical Machining Centers Five Axis Vertical Machining Centers Turnkey Solutions for High Production

4 Our Capabilities: In-House Service: Over the past 20 years, we have concentrated our sales efforts on CNC machinery and related products. We learned from early on, that it is unreasonable to expect the machine tool builder to provide instant service and parts for our customers machine tools, despite the growing demands of our customers for 24 / 7 response. Accordingly, State Machine Tool set out to build a strong, in-house service department with the capability to meet the day-to-day service requirements of our customers. We handle all phases of technical support including installation of the machine, warranty service on machine and control, as well as continued non-warranty services. To meet our customers service expectations, we realized that we needed highly skilled and experienced technicians capable of not only mechanical and hydraulic repair, but also capable of electrical trouble shooting and repair, control ladder writing and the ability to write software for the controls. Today, we can truly state that our service capability is equal with the best of OEM machine tool builder s factory service technicians. This is not to say that we are better than the factory service technicians, but we are certain that we can respond far more quickly and economically to our local customer base. Furthermore, our continuous investment in our service department has resulted in the addition of a small fleet of service vans, enabling our technicians to arrive on the jobsite with not only the proper tools with them, but also with most common spare parts such as proximity switches, solenoids, relays, pumps, control panel components and alike. We also have a larger cube style truck with a 1500 pound tailgate lift capable of transporting complete components to and from the jobsite such as headstocks, chip conveyors, spindle assemblies, and even saddle assemblies of machining centers. State Machine is very self sufficient! In addition to providing outstanding field service, we also support our customer base with telephone support to their servicemen on diagnosis and repair of less complex needs for service, thus saving time and money for builder, distributor and the end-user as well. Our in-house service desk also schedules service with our field service technicians and coordinates with our parts department to assure that the parts required to do the repair are present when our technicians arrive. The combined benefits of our in-house service desk and field service capabilities results in achieving same day field service arrival for over 75% of incoming customer requests and over 96% arrival average within less than 24 hours of initial request for service.

5 In-House Application / Engineering At State Machine Tool Co., we realize that simply having a quality product line to sell, an experienced sales staff to sell it, and strong in-house service to keep the machine running properly is only part of the total equation to sell CNC equipment and support the end-user. Machine tools are purchased to machine parts; good parts, to print specification and within the allotted cycle times quoted. Therefore, we also offer to our customers and the machine builders we represent equally strong applications and engineering support. Our application staff is prepared to assist our customers in selecting the proper machine configuration, work holding required, machining process, cutting tools and provide the operator/programmer training to run the machine efficiently. On larger projects requiring multiple machines, we provide with our quotations floor layouts of the equipment in both paper and CAD formats to assist the end-user in planning the plant area required to produce his parts. In addition to the above, we specialize in offering complete turnkey packages for the machine tools we represent including not only the program, fixture and cutting tools, but all the more often the addition of automation, gauging with feedback, integration with existing equipment and the design and build of special purpose machines to be used within the manufacturing cell. Our strong line of credit, in-house material handling equipment, adequate floor space and strong vendor relationships forged from years of experience in working as partners on turnkey projects provides the remainder of the tools required to have a successful run-off on a timely basis. Quite frankly, we believe that in order for a machine tool distributor to survive in the future, he must offer these real services and benefits to both the machine builder and the end-user. Those distributors who have not built there organizations to provide these engineered services and simply serve as sales outlets, will soon cease to exist, their capabilities being easily replaced by a site on the world wide web. We are determined not to succumb to such a fate. State Machine was awarded Toyoda Machinery Distributor for Wisconsin after the collapse of Hitachi Seiki. The redirection of our skills toward support and sales of Toyoda resulted in record sales of units of machining centers for Toyoda as well as some very High-Tech Gantry Loaded Transfer Cells Systems Designed and Installed by State Machine Tool Company. Accordingly, in our very first year of representing the Toyoda Machine Tool Line, we were awarded with the 2003 International Toyoda Machine Tool Distributor of the year award. And in 2005 we were received the North America Distributor of the year award from Toyoda. In addition we received International Distributor Award for 2006 from NTC Japan. We are very proud to have earned these distinguished achievements.

6 Typical Turn-Key Projects Customer Profile: Major Small Engine Manufacture Work Piece: Twin Engine Cylinder Block Scope: Provide A & B fixtures, cutting tools, auto hydraulic clamping, program and run-off on our floor. Install & Train Machine: Seven (7) Toyoda FA450III HMC Spindle 15,000Rpm with HSK63 Customer Profile: Major Aluminum Die Caster Work Piece: Ford Water Pump Casting Scope: Provide Special Drilling Machine, Special Chucks & Jaws, Pallet Tooling for Part Conveyor System, Integrate 5 CNC Turning Centers to system, Program and Run-Off. Machines: 5 Inverted Turning Centers & Special Drilling Machine

7 Customer Profile: Large Diesel Engine Manufacturer Work Piece: Cylinder Head Scope: Replaced 4 machine cell with new HMC Linear Pallet System, Program and Run-Off. Design and build special 90 degree Pallet Tilting Load Unload Station. Machines: HMC with 12 Pallet Rail Guided System Work Piece: Cylinder Block Scope: Rough and Finish Boring of Centrifugally Cast Cylinder Liners Machine: Special Purpose Boring Machine with Auto Gauging and Auto Compensating Finish Boring System

8 Turn-Key Tooling, Fixtures and Integration Examples Double Acting Pneumatic and Hydraulic Clamping System with Part Sensing and Internal Datum Wash. Machine Toyoda FH550S HMC. Right: Recently turn keyed on our floor, run-off, then shipped and in-stalled at Kohler Co, in Hattiesburg, MS. Order was placed in Mid- October. Machine was set-up, hydraulic power for fixture clamping, light curtains, mist collector, etc installed, Fixtures built, (2) parts programmed, tooled, runoff to cpk 1.66, packed and re-installed at plant for training of operators 3 shifts. Completed 12 weeks

9 Some of Our Turn-Key Customers Include We ve also turn-keyed parts for our tier one customers including components for Let State Machine Find A Solution For Your Manufacturing Requirements