Acme Manufacturing Company Designs & Builds Integrated Finishing and Manufacturing Systems for Customers Worldwide

• Centerless Grinding Systems

• Coil Grinding Systems

• Integrated Robotic Finishing Systems

• Buffing

• Polishing

• Grinding

• Deburring

• Superfinishing

Thomas M. McKaig, CFOAcme Manufacturing Company

Auburn Hills, Michigan, USA

COMPANY BACKGROUND

•G.A. Carlson, Sr. interviewed with Henry Ford

•Founded Acme in 1910 in Detroit, Michigan

•Early machinery made by Acme polished parts for the Model T

•Four Generations of the Carlson family have led the company

•Operating in Michigan for over 101 years

•In the 1990s decided to diversify away from automotive industry

•Automotive is now less than 5% of sales

G.A. “Fritz” Carlson III and

Glen A. Carlson Jr.

COMPANY BACKGROUND

G.A. Carlson Sr.

PARTIAL CUSTOMER LIST

•Acme has been exporting equipment since the 1950s

•Recipient of the President’s “E” Award in 1992 from The U.S. Department of Commerce as recognition for efforts in export expansion

•Acme first used The EXIM Bank Working Capital Guarantee Program in 1994

•You do not have to be a big company to export

•Acme covers the world with approximately 60 people and six representatives

EXPORTING HISTORY

•China – Acme Mfg. Co. China - Ling Yun

•India – Acme Mfg. Co. India – G R Reddy

•Brazil - Pungibtecnica – Marcelo de Americo

•Ireland – Acorn Processes – Pat Murphy

•United Kingdom – SAL Abrasives Ltd.– Nigel Pendlebury

•Korea – Shinkie Company Ltd. – Mr. Cho

VERY IMPORTANT TO HAVE A LOCAL PRESENCE

INTERNATIONAL REPRESENTATION

37%34%

40%

28% 28%

63%

68% 67%

51%

68%

10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Year

Exp

ort

Sale

s as

% o

f T

otal

EXPORTS AS A PERCENTAGE OF TOTAL SALES

•Acme equipment sells from $250K to $5M and can take up to twelve months to complete

•Typical payment terms on foreign sales10% down payment against a standby LC80% at clean on board bill of lading10% after final acceptance

•Ordinarily, banks will not lend on WIP or foreign accounts receivable

•Standby LCs are required for advance payments and must be 100% collateralized

NEED FOR EXIM BANK

•Without the EXIM Working Capital Guarantee Program, Acme would not be able to accept foreign orders with unfavorable payment terms

•The EXIM program has enabled Acme to grow its export business and consequently grow the company

•Over $10M in contracts have been financed under the EXIM Working Capital Guarantee Program over the last 18 months

•EXIM helps level the playing field when quoting against foreign competitors who receive support from their governments

NEED FOR EXIM BANK

•Politics can influence EXIM Bank (i.e lobbyists)

•Start the application process early

•Talk to your bank about the transaction on the front end to make sure that there are no issues

•Factor the cost of EXIM into your selling price 75 to 150 basis point facility feeAttorney feesLetter of credit fees

•When at the negotiating table in a foreign country, it is nice to know EXIM support is available

THINGS TO KEEP IN MIND

•Canada•Mexico•Venezuela•Brazil•China

•Korea•Taiwan•Germany•Russia•India

•Participating in International Trade Shows is very important and very expensive (Acme has spent over $100K on shows in 2011)•Our European competitors have been subsidized by their local governments for years•Acme is interested in learning more about the new Michigan STEP Program to help support international trade show participation

INTERNATIONAL TRADESHOW PARTICIPATION