Machining, Heat Treating, Products, Materials Research

Corporate Profile

Structure

2

Shareholders = Family Owned

Board of Directors = Owners, Past Secretary

Officers = (2) Sons (Co-Presidents), (2) Sons (VP/Mgr.), (2) Non-Family

(Corp. Controller/VP/Mgr.)

(20+) Non-Family Managers, Supervisors, Engineers

Established 1946 in Erie, PA

Pennsylvania Incorporated 1960

Non-Union Facility

Modern Industries was founded in Erie, Pennsylvania, in 1946, by a 26 year old,

second generation immigrant, World War II sailor, and tool and die craftsman Herbert

S. Sweny. Incorporated in Pennsylvania in 1960, Modern is guided by the vision of a

strong work ethic, a thirst for knowledge, and mutual respect. With family ownership,

a strong management team, and a dedicated and loyal workforce, Modern has been

able to make decisions based on long-term benefit rather than short-term gain.

Founder, Herbert S. Sweny

Divisions

3

Machining Division

Materials Research Division

Heat Treating Division Products DivisionModern consists of four operating divisions that are complementary to each other's technology needs and also to Modern's customer base.

Each division has its own operating staff structure, but each benefits from corporate synergy in functional areas from accounting and human

resources to purchasing, plant engineering, marketing, sales, quality systems and computer systems. In each area of endeavor whether

Machining, Heat Treating, Materials Research, or Products, Modern enjoys an excellent reputation in the industries it serves and holds

"preferred supplier" status for the majority of its customer base. Modern's closely linked business divisions have enabled us to easily share both

resources and ideas to the benefit of each and every customer. Late-model, state-of-the-art facilities prevail throughout. With extensive

enterprise systemization, automation, and safety and quality fail-safes, continuous improvement is a way of life. At Modern, a proactive "Just

Do It!" attitude is complemented by a strong reliance on teamwork.

Divisions

4

Production manufacturing and

sub-assembly

Cellular, FMS oriented

Long Term partnerships

ISO/TS 16949 & ISO 9001

AS9100

Machining Division

Divisions

5

Heat Treating Division

Commercial heat treating

500+ accounts - Fortune 100 to tool & die

Dominant source in regions

Industry leading facilities

Extensive metallurgical resources

TS 16949 Registered

ISO 9001

Nadcap

Divisions

6

Materials Research Division Materials testing and research

Environmental and Industrial Hygiene

1,000 accounts - Fortune 100 to tool & die

National markets

Strong engineering and technician resources

State of the art technology

A2LA, ISO/IEC 17025,

& NELAC lab accreditation

ISO 9002 and ISO 16949 registered

AIHA LAP, LLC

PA Department of Agriculture (dairy)

Divisions

7

Products Division

Custom Shock Absorbers

SpeedLoc Product Line

Self contained shock absorbers and motion controls

Quick Change Fixturing and Modular CNC Tooling

95 OEM accounts national and some export

Design, engineering, assembly, and test

Turnkey “Form-fit-function”

Corporate Demographics

8

2013 2014

Sales$21,000,0001450 Active Customers

371 New Customers

$25,000,0001600 Active Customers

400 New Customers

Facilities400,000 ft.²

6 Buildings

4 Locations

400,000 ft.²6 Buildings

4 Locations

Stakeholders 160 190

Open Capacity 40% 35%

Investment $ $600,000 $1,100,000

Growth at Modern has been fueled by developing new services to benefit its overall customer base, and also by aggressively responding to the wants and needs of customers. Modern has traditionally prepared itself for controlled, manageable growth by adding to its work force, buildings and equipment in sync with customer and market development. Satisfying, then exceeding, its most demanding customer challenges has moved Modern closer to achieving "World Class Standards“; standards that have already been reached by Modern in some areas. Modern has committed to this process to provide solid sustainability for generations.

Workforce

9

Work Category# of

Employees

% of

total

Average

SeniorityClerical, Administrative Support 19 9% 8

Inspection, Manufacturing Support (Direct) 15 5% 10

Maintenance 15 7% 7

Manufacturing, Assembly, Test (Direct) 133 60% 9

Management 15 7% 22

Supervisory 10 4% 15

Sales, Engineering, Technician 14 6% 5

Grand Total 221 100% 10

A new visitor to Modern will quickly recognize a busy, hustling environment with the presence of a strong work ethic throughout. Professionalism

and maturity are exhibited in every employment category. Each department in the company features an excellent balance of hands-on experience,

technical knowledge and managerial skills. The average seniority of employees at Modern speaks both to the company's growth and to its position as

an attractive employer in a manufacturing region with large numbers of highly skilled workers. Even during periods of rapid employment growth,

Modern's total work force has consistently averaged a tenure of five years or more.

Work force development is supported by “Modern's Educational Assistance Benefit Program”, which compensates employees up to 100 percent of

the cost for outside course work. There are numerous avenues of employee training at Modern both external and in-house.

Financial

10

Financial Partners = First Niagara

Insurance Partner = Liberty Mutual

Outside Auditors = Schaffner, Knight,

Minnaugh Company, P.C.

Modern faces the future from a position of financial stability. A solid equity position is supported by close working relationships

with financial providers and advisors. Modern has a history of rapid book depreciation methods, relatively low debt maintenance,

and aggressive reinvestment into its core business and technology support systems. Modern is well positioned with its financial

providers to fully pursue the exciting growth programs that our customers are requesting.

Corporate Citizenship

11

School Plant Tour

Company Picnic

Perry 200 Parade Modern Sponsors

Volunteering and contributions by Modern, it’s management, and employees, include:

Arts Councils

Community Development

Employee Community Fund

Hospitals

Manufacturers Association

Professional Associations

Public TV Fundraising Group Volunteers

School Plant Tours

K - Trade - College

Social Agencies

United Way

American Heart Association

Special Events

Sport League Sponsors

Teacher in-service programs

Trade Schools

Regional Universities

Many Other

At Modern Industries, as with most fine companies across the United States, the concept of community involvement has always been a mainstay.

From teachers groups and student plant tours to job fairs and trade associations; from employee volunteer groups to sport league sponsorships,

social agency board involvement, and many more, Modern's positive impact on the community goes far beyond its significant corporate financial

contributions. This tradition of ongoing community involvement was initiated by the founder and has been adopted throughout the organization.

Markets

12

Diesel Engines 10%

Energy 8%

Rail transportation 15%

Pneumatic Controls 2%

Aerospace/Defense 2%

Military/Government 2%

Automotive 10%

Tool & Die 3%

Textile/Apparel Machinery 3%

Processed Materials 5%

Industrial Machining 7%

Environmental 3%

Other 30%

Modern Industries serves a wide variety of customers throughout our four divisions. One common thread to 95 percent of these markets is

METALS. Segments of industrial markets comprised of hundreds of small specialty companies account for significant portions of Modern's

sales and projected growth. Other significant resources are directed toward multi-billion dollar customers with multiple product lines, numerous

shipped-to locations, and corporate purchasing strategies. Modern's strength lies in targeting firms that are committed to concentrating their

resources on what they do best. These customers are committed long-term to the benefits of outside service specialists such as Modern

Industries. With this marketing approach by Modern, the goal is account development-oriented and long-term, partnership-oriented; not strictly

job-oriented. The concept is to form a strategic alliance through dedicated value-added services. This concept is equally attractive to a both

small and large companies whose products involve production machined components, heat treating for improved properties, materials research

and analysis, and sub-assembly and relational testing.

13

Modern's market emphasis has led to the development of a most impressive customer

list, each leaders in their own areas of strategic technology. Showing on screen are just a

few of the fine firms that have partnered with Modern for long-term success.

Customer Ship-to Locations

Modern Operating Locations Misc. USA West (trace)

UK - Shotts, Darlington,

Huddersfield

Brazil - Sao Paulo

Japan, Misc. Europe (trace)

Mexico - Del Rio

Tampa, FL

Modern - Erie, PA

Morristown, TN

Huntington, IN

Columbus, IN

Detroit, MI1000+ Active Accounts - MHT/MRD - Erie

Pittsburgh, Buffalo, Rochester, Cleveland

Milwaukee, WI

Regional Customers

Jamestown, NY

St Marys, PA

Asheville, NC

Charlotte, NC

Modern – Pittsburgh

Free-Col - Meadville, PA

Key Supply Partners

14

To become a key provider to so many world class customers, requires strong relationships with your own supply partners that you can

depend on. That's just what Modern has done over the years, with a key supplier list that reads like a Who's Who in American Industry." We

are pleased and proud to share the credit for Modern's ongoing success with our progressive supply base -- dedicated companies who have

shared their expertise, delivered high performance and persevered through challenging times.

First Niagara - Buffalo, NY

Cincinnati Milacron, Cincinnati, OH

Meadville Forge - Meadville, Pa

Advance Cast Products -

Meadville, Pa

PNC Financial - Pittsburgh, Pa

Okuma - Charlotte, NC

Wasino Corporation

Miyano Corporation - Woodale, IL

Castle Metals -

Cleveland, OH

Impact Forge, Net Forge, Omni

Forge, Remington Ind.

Columbus, IN

Grede Foundries, Inc. - Iron Mt. MI

Eaton Steel – Chicago, IL

Kitako – Chicago, IL

Castwell Foundry – Skokie, IL

Advance Powder Metals, WI

Brockway Press Metals, PA

Erie, Buffalo, Rochester,

Cleveland, Pittsburgh – 200

Suppliers

Quality

15

2013 AS 9100

2009 A2LA Accredited

2006 ISO 9001 and TS 16949 Registered

2003 Nadcap Accreditation; Aerospace

2001 NELAP Accredited; Environmental Testing

1998 A2LA Accredited; Chemical & Mechanical (since 1995)

1997 American Axle Mfg. - Supplier Recognition Award

1997 Lloyd’s Register Quality Assurance - QS-9000 Certificate of Approval.

1997 Lord Corporation - TQM/Certified Supplier Award

10-97 Lloyd’s Register Quality Assurance - ISO 9002 Certificate of Approval.

<250 PPM - 90% of Customer Base

"Preferred Supplier" status and "Supplier of the Year" awards are not easy to come by, so having over 80 percent of Modern's dominant customer

base award such accolades to Modern Industries is high praise indeed. At the heart of this is dedicated people working in harmony, day-in and day-

out, across three shifts to deliver top-notch quality. Modern has consistently demonstrated excellent performance with emphasis on continuous

improvement of quality systems and fail-safing, in line with ISO 9001, TS-16949, and other standards for excellence.

Services & Facilities Lists

16

CNC TURNING LATHES (65+ LATHES)

Four spindle high output Single Spindle with 4- Axis cutting

Single Spindle with Auto load capabilities Precision Single Spindle

2 Spindle Lathes with Live Tooling

CNC HORIZONTAL MACHINING (25+HMC’s)

50 Taper Centers with Shuttle Loading 50 Taper Centers with Dual Pallets

40 Taper Centers with Dual Pallets

CNC VERTICAL MACHINING (20+ VMC’s)

40 Taper, Two Spindle with Dual Pallets 30 Taper, Single Spindle with Dual Pallet

40 Taper, Single Spindle with Dual Pallet 30 Taper, Single Spindle with Table

BROACHING (8+)

Robot Loading

Horizontal and Vertical

HONING

Powerstroked Precision Honing Extrude Honing

High Production Vertical Diamond Sizing

AUTOMATIC SCREW MACHINING

Single Spindle Multiple Spindle

GRINDING

Centerless Grinding Double Disk Grinding Blanchard Grinding

Surface Grinding Lapping

SECONDARY AND FINISHING EQUIPMENT

High Pressure Coolant Delivery Systems Multi Spindle / Single Spindle Drill Presses & Tapping machines

Conventional Mills and Lathes Single Plane Balancer

Parts Washers, Sand & Shot Blasters Vibratory Finishers

INSPECTION AND QUALITY SYSTEMS

□Coordinate Measuring Systems ISO 9001 Registered since 1997 □ TS-16949

MATERIALS TESTING LABORATORY - MODERN RESEARCH DIVISION

Chemical Analysis, Mechanical Properties, Micro Hardness, Scanning Electron Microscopes, Metallography, Impact Testing,

NDT and more. ISO 17025 & A2LA Accredited

COMMERCIAL HEAT TREATING - MODERN HEAT TREAT DIVISION

Full Range of Furnaces, Processes and Atmospheres, Vacuum, all Casing Processes, Anneal / Normalize, Quench and

Temper, Controlled Atmosphere

Low, Medium and High Volume ISO, Nadcap Accredited

√ Celled Manufacturing

√ Precision Machining

√ Automated Loading

√ High Production Turning, Milling, Drilling

√ Sub Tier Management & Support Services

√ Sub-Assembly and Secondary Operations

√ Casting & Forging Specialists

√ On-Site Tooling design & Manufacturing

√ ISO 9001, QS 9000, TS 16949 Registered Quality Systems

125,000 Sq. Ft. of Manufacturing

120,000 Sq. Ft. of Warehouse and S/R

150,000 Sq. Ft. of Corporate and other Divisions

Facilities

17

613 Building (150,000 sq. ft.)

Corporate Offices

Heat Treating

Materials Research

Products

Facilities

18

533 Building (100,000 sq. ft.)

Machining Division

Manufacturing

Engineering

Shipping & Receiving

645 Building (120,000 sq. ft)

Warehouse

Shipping & Receiving