2003 was a good year for Ellwood Texas Forge. Our oil and gas business, around the world, was stronger than expected. Ellwood Texas Forge's military activity (forgings for missiles, ordnance, helicopter shafts, aircraft landing gear etc.) was steady. Given the economy, our industrial business was also quite good but with low demand for power generation and aircraft engine forgings. Again this year, we added several new parts and customers. High natural gas costs were a problem but we managed to be more efficient in our use of gas and to pass a portion of these higher costs along to our customers.

Ellwood Texas Forge's quality and environmental certifications were maintained - ISO 9001:2000, AS 9100:2000, NADCAP and ISO 14001. Our efforts in lean manufacturing, cost reduction, lead time reduction etc. continued with some success.

A new CNC milling machine was added late in the year. This will allow us to machine complex, die and product shapes which previously had to be contracted out.

2004 is expected to be a similar year for Ellwood Texas Forge. Ongoing cost pressures from natural gas and, more recently, increased raw material costs are causing us to increase prices after years of reducing them. In addition to this, we will again be trying to offset higher costs with further productivity and cost reduction projects.

Again this year, we thank our customers, employees, suppliers and owners for their ongoing support.

2003 Review

January 1, 2004