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Vertex ToolingJuly 10th, 2012

Estimate EstimateStandard Patty 2 1/2 D Form Tenderform

Drum 25.8$ Drum 25.8$ Drum 25.8$ Inner Platten 9.2$ Inner Platten 9.2$ Inner Platten 9.2$ Fill Slot 2.4$ Fill Slot 2.4$ Fill Slot 2.4$ Knockout Bars 1.7$ Knockout Bars 1.7$ Knockout Bars 1.7$ Drum Support 0.3$ Drum Support 0.3$ Drum Support 0.3$

Fill Plate 9.1$ One Time ConversionFill Blanks 1.0$ One Time Conversion

Total Cost 39.4$ 39.4$ 49.5$

+ 27K Capital - Fixturing

Vertex Drum Production Costs

Quoting out drum and platens with Tracamatic and C&M – quotes due 7/12

1m Vertex 1m Vertex Competative InfoWeight Reduction Weight Increase Std & 2 1/2 DThinner Patty Larger Patty New Revo Drum 630

Drum Rework 3.6$ Drum Rework 5.6$ Drum 18.0$ Est. Horizontal Lathe Est. 5 Axis CNCNew Inner Platten 9.2$

Total Cost 12.8$ 5.6$ 18.0$

Will need a rework fixture at a cost of $27,100for weight reduction

Estimated Lead Time 3 weeks

Vertex Drum Rework Costs

Current Process1. Complete Drum Design – 5 – 10 Days2. Rough ID and Rough Length (Niigata) - 1 Day 3. Rough OD (Lathe) – 1 Days4. Semi-Finish OD off Centers (Lathe) – 1 Day5. Semi-Finish Bore ID & length (Niigata) – 1 Day6. Finish Hone OD (OSW) – 5 Days7. Finish mill length & Chamfers (Nigata) – 2 Days8. Semi-Finish OD – center on ID (Lathe) – 1 Day9. Finish Grind OD –center on ID (OSW) – 4 Days10. 5 Axis machining - mill cavities (SNK) - 4 Days

11. Debur ID and OD by Hand – 1 Day12. Chrome - 7 Days13. Attached Gears- ½ Day

Total: 35 – 45 Working Days (7-9 weeks)

Proposed Process

1. Finalize Prints – 3 Days2. Mill cavities (SNK) - 4-5 days 3. Debur ID and OD by Hand – 1 Day4. Chrome (w/o interior fixturing) - 5-7 Days5. Attached Gears - ½ Day

Total: 10- 15 Working Days (2-3 weeks)

Need to have “stock thickness” to reduce lead time

Vertex Drum Lead Time

Suggested Stock Sizes:

Nugget Drum .284McChicken Drum .30010 to 1 Drum .2224 to 1 Drum .390

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Vertex Tooling - AppendixJuly 10th, 2012

$25.8K*

$1.7K*

$1.0K

$9.1K

$2.4K

$9.2K*

$0.3K

Major Tooling Change

(+ Outer Fill Plate) $49.5K Cost

“Minor” Tooling * Change (Patty Size) - $39.4K Cost

$0.3K

$0.3K

^$6K

$18K

Vertex Drum Tooling Detail

Inside Diameter Machining

- 2 ½ D / Ribble Machining Fixture

- Rework / Drum ID Change

Current idea – Walco would build a large holding fixture – and run on their large vertical lathe

Fixtures have NOT been released – Estimated Lead Time 12 weeksRisks include tolerancing and finish. Walco thinks they can hit 63 m finishWalco may also need some sort of surface polishing fixture if 63 m finishdoes not meet requirements

Walco has quoted: $27,100 rework fixture

At some point we will need to make a decision to kick off 2 ½ D fixturing and/or rework fixture

Vertex Drum Rework Fixture

RevoFormer 500/600/700

Forming Machine & Tooling / Estimating Competators Tooling Costs vs Formax ($ Thousands) 5/5/12

Formax - Vertex

400 # 500 * 630 * 250 500 1000 F19 Ultra 700

Machine Cost 170$ 133$ 141$ 210$ 270$ 143$ 189$ 308$ VF TF

Drum Cost Each 15$ 18$ 18$ 28$ 37$ 5.0$ 5.3$ 5.7$ 5 Tool Sets Cost 75$ 90$ 90$ 140$ 185$ 25$ 27$ 29$

Total Cost 245$ 223$ 231$ 350$ 455$ 168$ 216$ 337$ w/o Mold Plates

Sell Price 320$ 447$ 461$ 443$ 758$ 404$ 446$ 693$

Margin 50% 50% 50% 40% 40% 58% 52% 51%

Known Actuals in Green # With Feeder 344$ 391$ 634$ Estimates in White * Without Feeder Machine Only

Additional Tooling 30$ 36$ 36$ 56$ 74$ 10$ 11$ 11$

Formax - Plate Formers Revo

Competitor tooling costs can be fairly closely estimated

RevoPortioner / Drum Cost Calculation

Mfg - Sintered Drum / Burnished OD - Fixed OD / No ID requirements- Fixed Internal Parts- Hardware – looks to be able to be reused

Current – Sell Price $35K (630 Drum) Cost – Estimated at $18K- Drum with roll / burnish? $10-12K

- Could be rolled or cast in cylinder- OD 5 axis Machining – Program & Machine $5k- Hardware? Estimate $2-3K

Current LT – 8 weeksPotential LT – 3-4 wks – don’t know why it can’t be shorter…. If local machined- Keep fixed drums on shelf- Only Programming & Machining w/5 Axis Lathe- LT may be including made in Europe / may face

reduced LT if machined in US

ReworkAdd weight - Looks possible - $5K? Don’t see why notReduce weight- With burnished OD – not possible –

Key competitive edge

Note – Revo may be working on a “sectional” production drum similar to their test drum.

RevoPortioner / Drum Mfg Information