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FOUNDRY EVALUATION: 12 STEPS TO HELP YOU DO IT RIGHT A foundry's ability to consistently provide a fair price, reliable deliveries, excellent quality and responsive service is dependent upon its performance in twelve areas. We strongly recommend these factors be considered when evaluating your existing and potential casting sources. STEP 1: CONDUCT AND ENVIRONMENTAL AUDIT Is the foundry in compliance with the updated water, air, and solid waste disposal regulations and standards? When was it last inspected by !A and what were the results? Are all permits and reporting requirements current, such as "!# $, %$#$, $A&A $ec. '(' )orm &? What are the solid waste disposal costs pro*ected to be in two years? #oes the foundry have the commitment and financial strength to ma+e the substantial capital investments in pollution abatement equipment. Is that commitment being demonstrated by installing environmental control equipment? ,as a site inspection been conducted by a professional environmental engineer? STEP 2: DETERMINE DEPTH OF MANAGEMENT Is there a succession plan? What will happen if a +ey manager is incapacitated? Is there sufficient management horsepower to manage all the new governmental compliance activities, state-of-the-art equipment installations, introduction of advanced quality and production system, and human resource development without *eopardi.ing the foundry's performance in offering a fair price, reliable deliveries, responsive service and excellent quality? STEP 3: EXAMINE THE FOUNDRY'S CAPITAL EXPENDITURE AND INVESTMENTS RECORD Are they reinvesting in their own business and developing strategies for the long term, or simply maintaining wages until the /hairman retires? 0y not replacing worn machinery and investing in technology, a foundry is in a state of liquidation-intentional or not. STEP 5: REVIEW PRODUCT LIABILITY INSURANCE #on't settle for a simple 1yes1 answer--get a copy of the foundry's policy to ma+e sure it is for more than minimum 2and possibly insufficient3 coverage. STEP 6: REQUEST A FULL FINANCIAL STATEMENT AND ANNUAL REPORT ,as the foundry you are considering published its earnings or paid dividends lately? $olvent companies are proud of their accomplishments and should willingly share this information.

STEP : DETERMINE REAL ESTATE VALUE %arginal operations sitting on millions of dollars worth of property are sorely tempted to sell out and head for )lorida. Is the foundry worth more dead than alive? STEP !: CHEC" CREDIT AND PAYMENT HISTORY "inety-day payers with little or no real borrowing power may have trouble +eeping up with the financial demands of your pro*ects. 4al+ to the foundry industry suppliers. STEP #: DETERMINE SI$E AND FINANCIAL ABILITY FOR HANDLING AND FINANCING LARGE ORDERS /an a foundry handle a big *ob--or even many small ones? /an they provide 1*ust-in-time1 delivery? %ore importantly, can the foundry generate the additional wor+ing capital required to meet the demands of an expensive pro*ect? STEP 1%: CONDUCT A QUALITY AUDIT ,ave your quality control people reexamine existing sources through a formal audit. Is there a lac+ of technical depth and controls or an inability to assimilate $!/ techniques? STEP 11: DETERMINE THE RELATIONSHIP BETWEEN MANAGEMENT AND LABOR Is it a union shop with a classic confrontational style or is there evidence of a progressive team approach in use? STEP 12: VISIT THE PRESIDENT AND TOUR THE FACILITY 4here is no better way to get direct answers to your concerns about a vendor than a personal call. http566www.unicastco.com6 valuation6