Knowlton Manufacturing Monthly Update In this Issue: International GDP Growth Forecasts Machine Tool Industry Outlook U.S. Economy, Employment What’s New At KMC and Customer Testimonial March 10, 2006

Forecasts for 2006 International GDP Growth Forecasts According To Kiplinger Text: ‘05 ‘06 Canada2.9%3.1% Euro Zone1.3%1.8% Mexico 3.1%3.5% China9.9%9.4% Japan2.3%2.2% United Kingdom 3.3%3.3% South Korea3.8%4.6% Brazil2.4%3.5% India7.0%7.0% World Average 3.3%3.3% United States3.5%3.1% Source: The Kiplinger Letter, Feb. 17, 2006 BACK

Market Economists are expecting 2006 employment to grow at a rate that resembles that of New jobs per month are expected to total 168,000 and hourly wages are expected to grow at 3.1% this year. Further, the unemployment rate is expected to mirror that of last year or possibly be a little lower. The growth in employment and capital spending is being explained by the need for businesses to open more production capacity to meet demand. Source: Business Week, January 23, 2006 US Economy, Employment Back To Contents Page

Machine Tool Industry Outlook Back To Contents Page Machine tool demand is expected to increase over the next few years. The reasons for the expected growth are rising operating rates, growing industrial production, and improving balance sheets. Capacity utilization rates are expected to remain strong in 2006, which is an indicator of rising operating rates. Industrial production growth was increasing in late 2005, and this trend is expected to continue. November (2005) output increased by 2.8 percent above the previous year, and is expected to continue accelerating in The main challenge facing domestic suppliers of machine tools is the increased presence of foreign competition. Customer service after the sale is the major advantage domestic suppliers have over foreign competitors, and should be harnessed at every sale, according to Eli Lustgarden, Vice President of Longbow Research. Source: The Stamping Journal, February 2006.

What’s New At KMC? Back To Contents Page We have expanded our capabilities to include several assembly functions. We are currently producing several subassemblies for our customers, and are looking to expand our sales base in this area. Please call for a quote today-in addition to supplying high quality tooling and stampings, we are dedicated to providing the highest quality assemblies at competitive prices, along with great service. Customer Testimonial of the Month: With Today’s multiple vendors for steel stamping, Knowlton Manufacturing has become my #1 choice. From their extremely competitive pricing to their ability to stock my material and warehouse some of my stamped product, Knowlton Manufacturing is truly known as “The Service People.” -Joe Fronczek The Dee Sign Company