State of the Company

June 1, 2006

In our last open letter, we were focused on recovering from some very severe performance issues created by previous ownership. For those not aware, QAF acquired this company out of bankruptcy in December of 2004. It is with great satisfaction and pride that we can now announce the recovery effort as being a complete and unequivocal success.

At this point, on-time delivery exceeds 98%, quality issues are virtually non-existent and customer satisfaction is at an exceptionally high level. In short, Quality Aluminum Forge has returned to its place of being a premier supplier in the precision forging industry. Obviously, getting to this position took a commitment from management, the people on the front lines, and financial support from ownership. Going forward, we have every intention of maintaining this same commitment, and our customers can expect nothing less.

Along with upgrading our management and technical staff there has been significant capital expenditure activity. Since taking over the company, improvements and maintenance to previously neglected equipment is constant and ongoing. Major purchases and additions to our capabilities have been in the machining and die sinking areas. Over the past year we have acquired six new high-speed machining centers. This increased capacity has completely reversed our dependence on outside sources for production machining operations. On the die sinking side, we have added a Kasuga Quantum Q-1500. This machine has the size and technical capability to efficiently produce all our tooling requirements. With a high degree of success and on-time delivery, QAF has manufactured over seventy new forging dies over the past year.

The company is now running at a very efficient level and we are comfortable with our position. Sales have been increasing at a steady rate but we still have room in our backlog for new business. At present, Long Term Agreements represent approximately 50% of our sales and delivery to schedules are completely under control. Current lead times on reorders and new business are probably the best in the industry. We are now quoting as low as 10 weeks on reorders and 14 weeks for new tooling.

We realize that customer satisfaction is measured by a wide criteria and everyone at QAF is committed to that end. We believe that our recovery performance and the positive position we are now in is a true testimonial to that commitment. We welcome you to get on board and see for yourself.

Once again, we want to extend our sincere thanks for your loyalty and perseverance.

Sincerely,

Tristano Caracciolo – President
Sergio Piva – Vice President-Engineering
Dick Robinson – Vice President-Sales