1.INDUSTRIAL PARTS DEPOT (IPD) NEWS June 15, 2000 31CHNEWS http://www.ipdparts.com/ IPD NEW PRODUCT ADDITIONS INCLUDE BLOCK REPAIR PARTS, MISC. OTHER 6/15/00 IPD says "Save that old engine". During the last quarter, IPD has added to their product line, block repair parts for Caterpillar 3200, 3300, 3400, 342, 343, 346, 348, 349, 1693, 353, 379, 398, 399, and 3500 series engines. They have also added additional offerings of Valve Seats/Guides, Pistons, Cylinder Kits, Gasket Sets, In Frame Overhaul Kits, and misc. other for Caterpillar applications. (4/00 - IPD, Internet) PART PRICE ANNOUNCEMENT, 9/12/94 VS. 6/29/98 11/98 Pricing & Market Research calculated the following IPD net and list price changes from their 9/12/94 list price levels to their 6/29/98 levels on selected parts. Additional detail is available. Direct all questions to Brad L. Sauder.Major/Minor Class 2A Piston, Rod, Liner & Related Parts 2C Cylinder Head and Valve Parts 2D Cooling System Parts 2E Air Intake and Exhaust System 2G Fuel System Parts 2H Engine Gaskets 2K Turbochargers 2Q Engine Bearings 2R Filters 5H Transmission Gaskets 6S Seals 8B Sleeve Bearings - Except Engine 8H Hardware 8J Gaskets and Shims TotalTotal % Change Net List -15.9% 11.5% 20.2% 8.0% -3.7% 14.4% 8.2% 10.4% 18.4% 9.4% 1.1% 7.3% 19.6% 22.9% 10.7%-9.0% 10.1% 15.5% 4.0% 3.1% 14.4% 5.2% 10.8% 15.6% 9.2% 4.3% 7.5% 13.8% 10.3% 8.6%

2. INDUSTRIAL PARTS DEPOT (IPD) February 8, 1999 31CH Also see 31CH-NEWS for additional information ---INTERNET:http://www.ipdparts.comCOMPETITIVE TYPE:Manufacturer (GET, Engine) DistributorMAJOR PRODUCT CLASSES:Engine GETDrive Train Hydraulics UndercarriageLOCATIONS: World headquarters/manufacturing -Torrance, California 23231 S. Normandie Ave.Leases 130,000 sq. ft. in one-story concrete-block building situated on seven acres of land. There are a total of three one-story buildings on the property. Industrial section on main street. (6/98 - D&B) IPD sales or distribution centers are located in the following cities/country: (6/98 - D&B) -Phoenix, Arizona Salt Lake City, Utah Portland, Oregon Cleveland, Ohio Livermore, California (Near San Francisco) Norcross, Georgia (Near Atlanta) El Cajon, California (Near San Diego) Houston, Texas N. Las Vegas, Nevada (not on 12/94 D&B) Kolding, Denmark (not on 12/94 D&B) Distribution center for Europe. New South Whales (Sydney), AustraliaEMPLOYMENT: 1974 - 39 1975 - 45 1977 - 75, 45 1978 - 100, 75 1979 - 180, 90At headquarters At headquarters At headquarters 3. Apr Jan May Sep May Mar Mar Jun Dec1980 - 200 1982 - 225, 90 1983 - 265, 90 1984 - 330, 110 1985 - 330, 110 1986 - 350, 175 1988 - 330, 175 1990 - 350, 175 1991 - 350, 175 1993 - 300, 160 1994 - 260, 150 1995 - 230, 150 1996 - 230, 150 1997 - 300, 225 1998 - 300, 225 1998 - 300, 225At headquarters (D&B, 4/83) At headquarters (D&B, 8/84) At headquarters (D&B, 9/85) At headquarters (D&B, 10/86) At headquarters (D&B, 7/87) At headquarters (D&B, 6/89) At headquarters (D&B, 4/90) At headquarters (D&B, 6/91) At headquarters (D&B, 11/93) At headquarters (D&B, 12/94) At headquarters (D&B, 8/95) At headquarters (D&B, 11/96) At headquarters (6/98 - D&B) At headquarters (6/98 - D&B) At headquarters (2/99 - D&B)SALES: Fiscal year ends September 30. ---- $ 4,000,000 (D&B) - $ 7,000,000 (D&B) - $15,000,000 (D&B) - $19,500,000 (D&B) - $25,000,000 (D&B) - $32,000,000 (D&B, 2/82) - $30,000,000 (D&B Financial Profile, 12/83) - $28,000,000 (D&B, 8/84) - $39,045,000 (D&B, 9/85) - $39,000,000 (D&B, 9/86) - $39,000,000 projected (D&B, 10/86) - $43,000,000 projected (D&B, 7/87) - $46,304,000 - Nov. 1, 1987 through Oct. 30, 1988 15,304,000 - Gross profit 1,350,000 - Net Income (D&B, 4/90) 1989 - $42,051,924 - Oct. l, 1988 through Sept. 30, 1989 13,808,326 - Gross profit 1,089,306 - Net Income (D&B, 4/90) Revenues decreased due to the sale of the IPD location in Cincinnati, OH. 1974 1975 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 19881990 1991 1992 1993- $43,000,000 projected (D&B, 4/90) - $39,000,000 (D&B , 11/93) - $38,000,000 (D&B , 11/93) - $39,500,000 Profits = $500,000 - (D&B, 12/94) 4. 1994 - $39,500,000 projected 5/3/94 (D&B, 12/94) - 20% of total 1994 sales are derived from export. Over the last 3 years, international sales have been up. (D&B, 12/94) - $39,928,261 Profits=$1,855,397 (D&B, 8/95) 1995 - $41,000,000 projected 5/3/95 (D&B, 8/95) - No 1995 sales information on 11/96 D&B, but worth has increased $4,157,000 in last two years, to Sept. '95 level of $14,904,344. 1996 - $43,101,000 (6/98 - D&B) 1997 - $48,906,840 (2/99 - D&B) ---20% of total sales are derived from export. (2/99 - D&B) HISTORY: 1955 1957-1979-1980-1981-1989-1992 1996-1997-Industrial Parts Depot, Inc. (IPD) was incorporated in Torrance, California by Robert Rasmussen. Pacific Tractor & Equipment was formed as a leasing company. Leased tractors are used to test IPD's parts products. 1976 - IPD purchased Renker Tool and Gauge in Thousand Oaks, California. IPD purchased Paramount Supply, an independent wholesale and retail parts dealer in Cleveland, Ohio, with branches in Columbus and Cincinnati. This was the first significant expansion into the Northeastern U.S. The Ohio based operations were renamed on Jan. 1, 1982, Industrial Parts Depot, Inc., Paramount Division and have equipped the Cincinnati branch with dozer and scraper edge manufacturing and heat treating equipment. Cincinnati branch sold January 1989, now known as Industrial Parts of Cincinnati (IPC). 70% of sales are from the manufacture of cutting edges. IPD purchased Jahn's Quality Pistons, a former supplier of pistons and castings. Jahn's was sold in 1985 and IPD installed their own foundry for making pistons and castings. Industrial Parts Depot International Inc., chartered to market IPD products throughout the free world. This subsidiary has since been dissolved. (D&B, 4/90) Purchased equipment from Earle M. Jorgensen Co. (Steel Processor) to apply tungsten-carbide material onto wear parts; i.e., cutting edges. Closed Commerce City, CO (near Denver) facility. Expands warehouse in Torrance, CA. According to IPD's Internet site, last updated 6/15/96, their main warehouse in Torrance, California, had just expanded into another 33,000 sq. ft. building. Reportedly, IPD badly needed the room to continue increasing product coverage and market growth. (11/96 - Internet) Opens new branch in Sydney, Australia. IPD recently opened their Distribution Center for Australia and New Zealand. IPD Australia Pty. Ltd. is located at 14 Prince William Drive, Seven Hills N.S.W. 2147, Sydney, Australia. (2/97 - IPD Internet)PRODUCTS: The following comes from IPD's Internet site (11/96): "IPD differs from traditional aftermarket companies by not simply imitating Original Equipment Manufacturers (OEMs), but by offering products that have been developed with the input of our customers. IPD innovations offer options to an engine rebuilder that will improve the performance and extend the service life of diesel engines. IPD innovations in ground engaging tool manufacturing include being first to develop hot formed end-bits, first to 5. provide shaped and differentially heat-treated grouser bars, and pioneering the use of Boron steel alloys to improve tool life and reduce breakage. IPD--Innovation, not imitation!" Engine Parts - IPD's heavy duty engine products for most applications will include many of the following items: -New Cylinder Head Castings Valves and Valve Train Components Engine Bearings New Water and Oil Pumps, and Repair Parts New and Remanufactured Fuel Injection Pumps and Components Valve Lifters, Including Roller Types for 3200, 3400 & 3500 Engines New Camshafts and Crankshafts Crankshaft Vibration Dampeners Flywheel Ring Gears New and Remanufactured Turbochargers and Parts Special Service Tools for the Diesel Engine Repair MarketIPD's Caterpillar engine series coverage includes: 311, 315, 318, 336, 330, 333, 336, 339, 342, 343, 346, 348, 349, 353, 379, 397, 398, 399, 1100, 1600, 3100, 3200, 3300, 3400 and 3500. IPD also carries parts for natural gas applications. Ground Engaging Tools - IPD's ground engaging tools are available for a wide range of equipment. In addition, IPD will custom manufacture many items to customer specifications. Field specialists are available to help evaluate and design tools for particular applications at no charge. -Cutting Edges for Dozers, Scrapers & Loaders (custom blades and tungsten carbide available. Bucket & Ripper Teeth Grader Blades Tamper Caps Corner & End Bits Shanks & Shank Protectors Grouser Bars Bogie Guides Saddle Repair Blocks Plow Bolts, Nuts, Pins, Locks & AccessoriesElevating Scraper Parts: - Asphalt, Paver, Pick-up, Scraper & Undercarriage Chain - Sprockets - Flight & Sprocket Bolt Kits - Idler & Roller Assemblies - Guides, Brackets & Inserts - Router Bits & Blades (11/96 - IPD, Internet) ---- 6. There is nothing currently on IPD's Internet site about Drive Train or Hydraulic product offering. (11/96) ---Agrees to mark rebuilt fuel nozzles with "REMFG-IPD". At the request of Caterpillar, through our Patent Department, IPD has agreed to comply with Federal Trade Commission (FTC) rules by identifying fuel nozzles they rebuild with a "REMFG-IPD" stamped in the housing in a permanent manner. (5/97) IPD has since provided Caterpillar with an acceptably identified IPD rebuilt nozzle. (5/13/97 - E.C. Goodale, Patent Dept.) ---Expands Remanufactured Engine Components Product Line. NACD, L.A. District, obtained an Industrial Parts Depot (IPD) remanufactured products price list, effected date August 1, 1995. Over the years, we have occasionally heard that IPD was offering some Reman product, including cylinder heads and 3208 Engines, but this is the first time we have actually received a complete price list of the products they are currently offering. It appears they have at least increased their coverage of reman product. We are unsure how much if any of the remanufacturing IPD is actually doing themselves. If not done by IPD, we do not know where they are sourcing the reman components. According to the price list, IPD is now offering the following remanufactured product for Caterpillar engines: -Camshafts and Kits Connecting Rods Crankshafts Cylinder Heads Cylinder Packs-Fuel Injection Nozzles Long Blocks Short Blocks Water PumpsAlthough the provided list does not display the IPD name or logo, like all other literature we have seen, we have been assured by a customer that IPD is offering the above product and that they have used the cylinder packs. Model and part number detail is available in P&MR's Competitive Information Library, AH9410. If anyone has additional detail, please share it with us. (8/1/95 - IPD Price List and RBRodgers, P&MR) ---From June 12, 1995, to September 26, 1996, IPD imported seven shipments via water, totaling 108,202 lbs. cargo weight. Below is a summary by exporter. Exporter ========City/Country ============Arrived =======Cargo Lbs. ==========Description ===========Metisa?, Brazil09/26/9645,437Metalurgica Mogi GuacuMogi Guacu, Brazil07/12/96 03/13/9624,398 31,351 Total: 55,749Colmeia?, Brazil07/21/951,732Auto PartsSudo GasketTokyo, Japan09/10/962,103A F GasketsVishal MallcablesGujarat, India01/02/961,940Piston SetsGrouser Bars Piston Parts Piston Parts 7. National Engineering?, Kuwait06/12/951,241Spare Parts(11/20/96 - PIERS Report) ---Manufactures and distributes replacement parts for diesel engines and heavy equipment (100%). (2/99 - D&B) ---Eight percent of total purchases are imports. Major countries of import are Brazil and Japan. (2/99, 6/98, 11/96 and 8/95 D&Bs) On 12/94 D&B, Italy was included in this 8%. ---IPD does do some manufacturing, but does not manufacture all the parts they sell. Engine parts sales are considered to be larger than 30%. (8/92 - JMCoker, Eng. Div., Cust. Services) ---IPD manufactures their own line of GET cutting edges and end bits, including motor grader edges. (GRKlett, 5/90) ---Engine parts manufactured by IPD include pistons, liners, and fuel nozzles. (1990) ---IPD also acts as a distributor for many other parts manufacturers. Most of the following partial list of manufacturers was obtained from Construction Equipment Magazine's 1990 Buyer's Guide: Supplier ======== ESCO H&L Tooth Co. Hensley, G.H. Berkley Forge Pengo Corona Clipper & Forge Co. Miba Sintermetall AG Phillips Gasket California Gasket & Rubber Corp. (CGR) Italtractor Berco Clevite Heavy Duty Engine Parts Federal-Mogul Corp. Ghinassi Dipaco Inc. Pyramid Parts, Div. of American Alloy Corp. Baldwin Filters McCaffrey, M.P., Inc. Roto-Master (Merged into Garrett 3/88) Stanadyne Diesel Systems Trek, Div. of Letts Industries CEI (Italy)Product (Source of Info.) ========================== GET Tips/Adapters (CPRs) Tips/Adapters (CPRs) Tips/Adapters Tips/Adapters (H190, 9/89) Bucket & Trencher Tips (H190, 9/89) -Gaskets (Dan Donaldson, Reman, 11/95) U/C U/C (CPRs) Engine parts Engine bearings Cylinder Heads (H190, 9/89) Fuel systems -Filters Buckets Turbochargers Fuel Systems -DT Gears 8. Other manufacturers that have been reported as suppliers to IPD. SupplierProductsMayo Ohio Crankshaft Div. of Park-Ohio Industries Ajax Schwitzer SIRT AeroquipRadiators Cores 1/80 Crankshafts 10/87 Hardware Turbochargers Engine & Drive Train Hose & FittingsPRODUCT FEATURES: IPD claims the following features: --IPD offers the innovative 3-ring piston for the 3200 series which has been proven to reduce blow-by and increase power and engine life. This design is so effective, the OEM uses it now too! For special mining and extreme cold climate operation, IPD developed and now offers special highcompression pistons for the 3300 series. IPD modified the skirt design of the 3400 series piston to improve strength and oil retention. Certain applications of the 3400 series engines experience oil cavitation problems leading to damaged crankshaft bearings. IPD offers an optional bearing set having a pressure relief groove that helps control cavitation and promotes optimum service life. All IPD Cat liners are manufactured using premium alloys and induction-hardening to assure liner flange strength and improved wear resistance. (11/96 - IPD, Internet)QUALITY: "Providing a high-quality, reasonably-priced alternative to original equipment replacement parts is a main objective of IPD. To assure our capability to deliver the best overall value to our customers, IPD has committed itself to adapting its quality system to one based on the ISO 9000 standard. It will be a lengthy process." (11/96 - IPD, Internet) ---Specific information on products manufactured +/or distributed by IPD can be obtained from the CTRS and PCBS portion of the MIS text retrieval system "FIND." (11/96) ---RECEIVES "QUALITY VENDOR" STATUS FROM U.S. GOVERNMENT - IPD reports they have been awarded "Quality Vendor" status by the U.S. government for three consecutive years. IPD says rebuilders rely on it for the highest quality, technical support, and availability. They also claim that parts are made in the U.S. and only IPD parts go in IPD boxes. In addition, IPD states consistency is an IPD hallmark. (2/95 - Truck Parts & Service Magazine) DISTRIBUTION & GEOGRAPHIC AREAS SERVED: IPD claims to have a nationwide network of distribution depots and over 400 worldwide dealers. (11/96 - IPD, Internet) ---- 9. Percent of sales by customer type and region: Customer Type ============= Dealers Retailers ======= ========= Jul 1987 --Feb 1989 --Apr 1990 --Jan 1991 --May 1993 --Sep 1994 65% 35% May 1995 70% 30% Mar 1996 70% 30% Mar 1997 --Jun 1998 --Dec 1998 --(Various D&B reports)Region ====== U.S. International ==== ============= 85% 15% 88% 12% 88% 12% 88% 12% 80% 20% 80% 20% 80% 20% 80% 20% 80% 20% 80% 20% 80% 20% ----Major countries of export: Sep 1994 May 1995 Mar 1996 Mar 1997 Jun 1998 Dec 1998-Mexico, Canada, Australia, Middle Eastern Countries Mexico, Canada, Australia, South America, Latin America and Middle Eastern Countries (20%). Same as May 1995. Same as May 1995. Same as May 1995. Same as May 1995. (Various D&B reports) ---From April 26, 1995, to September 7, 1996, IPD made 19 export shipments via water, totaling 85,051 lbs. cargo weight. Below is a summary by destination port. Destination Port ================Ship Date =========Cargo Lbs. ==========Description ===========From IPD's Torrance, CA Headquarters: Calcutta, India08/13/961,863Spares for Fishing VesselBombay, India04/26/958,158Spares for Cat 578Callao, Peru07/16/96 04/08/961,905 1,883 Total: 3,788Maracaibo,07/02/962,610Tractor Parts Tractor PartsDiesel Engine Parts 10. Venezuela07/02/96 06/12/96 05/11/951,766 14,458 10,726 Total: 29,560Diesel Engine Parts Diesel Engine Parts Diesel Engine PartsJeddah, Saudi Arabia10/28/95 09/25/956,063 7,770 Total: 13,833Diesel Engine Parts Spares for Cat MachinesCairo, Egypt09/13/952,383Diesel Engine PartsAuckland, New Zealand06/09/951,214Diesel Engine PartsSt. Thomas, Virgin Islands09/07/96410Roatan, Honduras07/19/964506/06/96 03/06/96 09/08/953,201 3,999 4,101 Total: 11,301From IPD's Norcross, GA branch: Engine PartsGasket, Bearing, Valve, Etc.From IPD's Cleveland, OH branch: Isafjordhur, IcelandDiesel Engine Parts Spare Parts Engine Parts(11/20/96 - PIERS Report) ---Activity in Kuwait - COSA has reported that IPD has become active in Kuwait, promoting their product by distributing customer testimonial letters. (7/1/93 - MRStevens, COSA, Geneva) PRICING: List price information is available in Pricing's CIS system, the most current effective Aug. 1, 1995. (6/98) MARKETING: PRODUCT SUPPORT: WARRANTY: Warranty of IPD is perceived as superior. (3/95 - DHarmon, NC Machinery) ---GET IPD warrants free of charge against breakage all cutting edges, end bits, and router bits sold by IPD if the following provisions are met: o properly installed and used in normal manner 11. o were defective by virtue of having been broken in use Warranty excludes labor, hardware, downtime, or other cost or loss associated with product failure. (Brochure, Oregon Logging Conference, 2/89) Engine-For engine parts manufactured or distributed by IPD or its affiliated companies and distributors and marketed for use in the U.S. and Canada. Warranted to be free from defects in workmanship and material under normal use for 180 days or 50,000 miles or 1,800 hours of operation, whichever occurs first from date of installation. Engine parts for on-highway truck applications are warranted for 12 months or 100,000 miles, whichever occurs first from date of installation. IPD's responsibility is limited to repairing or replacing parts they agree have been defective. IPD will reimburse for all parts and labor, including any progressive damage. IPD will pay for maintenance items such as oil, antifreeze, filters, and hoses that are not reusable due to failure. More detailed information on warranties is available in Market Services Competitive Information Library. (11/89)GENERAL: Ranked as an 'A' Engine (Cyl. Kit) Competitor, 'A' GET (Edge) Competitor and a 'D' (major distributor) Full-Line Competitor. (3/00) ---IPD is a privately held company, 50% owned by IPD Trust and 50% by Western Brass Works Inc. (6/98 - D&B) ---Cummins Announces Settlement of Patent Infringement Law Suit - Cummins Engine Co., Inc., announced settlement of a patent infringement lawsuit filed in mid-September 1991, against Industrial Parts Depot (IPD) of Torrance, CA. The complaint involved the unauthorized manufacture and sale by IPD of the patented cylinder liner for the Cummins L10 engine. The settlement provides for a permanent injunction against IPD, prohibiting IPD from making, using, or selling replacement cylinder liners for the Cummins L10 engine. (1/23/92 - Business Wire) APPARENT MARKETING STRATEGY: According to IPD, they provide a reasonably priced alternative with OEM integrity, a comprehensive product line, and superior customer service. (11/96 - IPD, Internet) ---In the past two years, it is believed that more emphasis has been put on engine parts than undercarriage. (8/92 JMCoker, Cust. Services, Eng. Div.) ---Recent advertising promotes "IPD Quality Parts" and improvements on OEM designs (extra piston rings compared to Cat, Navistar, etc.) (8/92 - JMCoker, Cust. Services, Eng. Div.) ASSESSMENT OF STRENGTHS: ASSESSMENT OF WEAKNESSES: Lack of complete line. Limited engineering capability. Dependent on supplier quality. Changing customer make-up -- more small customers - increased corporate buying. (BSC, 1983) 12. FUTURE OUTLOOK: Financial condition good. (2/99 - D&B) LAST D&B: February 8, 1999 DUNS 02-870-1092 Standard Industrial Code (SIC)/Description 35190200 - Manufactures replacement parts 5084 - Wholesale trade, industrial machinery and equipment LAST PROFILE REVIEW/UPDATE: February 8, 1999