Energy and Environmental Fees Update

Dear Valued Customer,

Recently our company has made changes that have allowed us to save on energy usage in our many processing services. The energy fee was 3.5%, but is being reduced to 2.5% to reflect a reduction in our plant-wide energy utilization. Beginning on March 1, 2012, this decrease in energy usage will be reflected in a saving on your invoices.

Also, we have reviewed our environmental compliance component, and have found that a slight price increase is necessary to remain compliant with local, state and federal regulations. For this reason, our environmental fee will need to be increased from 4.2% to 5%. The environmental fee is not tied to labor or production services, but is a fee that is specially related to government regulation compliance. This slight additional cost of .3% will also be shown on customer invoices beginning March 1, 2012.

We are working hard to remain your preferred supplier for heat treating and processing services. And, we want you to know that all of the benefits and services that you have come to expect from Phoenix Heat Treating will still be provided. As a fourth-generation heat treating company, we are committed to being one of the leading heat treating and processing services companies in the southwest.

Thank you for you continued patronage.

Mark Kissinger,
Controller, Phoenix Heat Treating, Inc.