Carolina Precision Technologies

Business Report 2020-2021

Your Leading
Manufacturer for
Medical Device
& Aerospace
Precision Parts

Q U A L I T Y D R I V E N . O N -T I M E D E L I V E R Y. PAT I E N T F O C U S E D .
Table of Contents Message from our CEO, Chris Cashman
Management Team ....................................................................................................................................................................... 01. I hope this 2020/21 Business Report will provide you a glimpse into the inner workings of Carolina Precision
Message from Our CEO ............................................................................................................................................................. 02. Technologies (CPT) so you may better realize our capabilities, understand our desire to perform in an exemplary
Corporate Overview .................................................................................................................................................................... 03. manner, and gain a positive perspective regarding our team. CPT brings a competitive advantage to manufacturers
Investments & Growth ............................................................................................................................................................... 04. in need of highly evolved resources for contract manufacturing of precision-machined components, products and
Market Segments: Medical Device Solutions .................................................................................................................. 06. some related supply chain integration. Our facilities are guided by the knowledge that American manufacturing
Market Segments: Aerospace Solutions ............................................................................................................................. 08. must compete in sectors vital to the world economy: among these medical, aerospace and defense, and the broader
Manufacturing Capabilities ...................................................................................................................................................... 09. industrial sectors in need of precision machining services.
Quality & Regulatory .................................................................................................................................................................. 11.
Culture & Core Values ................................................................................................................................................................ 12. Our strategy is to create professional long-term partnerships with our customers. We will focus on growing
organically and via acquisition. We have 3 facilities which allows us to load balance and specialize, but also share
capacity to best serve our customers. We strive to lead the industry in quality, on-time delivery and are focused on
making a difference in patient’s lives and in aerospace safety.
Carolina Precision Technologies’ executive management team is experienced in manufacturing and in implementing
the processes, procedures, and integrated operations to build and scale organizations. We excel in design for
manufacturing (DFM) and our experienced team of manufacturing engineers is instrumental in automating processes
that enable our customers to increase production volumes and profit margins. In order to grow rapidly and effectively,
we are committed to providing a superior customer experience by designating resources to a dedicated team that is
always ready to provide technical service and process support. In order to scale and provide our customers – existing
and future – a single source supply chain, we will invest to move up and down the continuum of solutions and
capabilities in order to become that “one source.”
Culturally, we place a high value on our member’s passion and commitment to teamwork, trust, integrity, and mutual
respect. We believe that transparency, responsibility and accountability are fundamental, critical attributes to achieving
long-term success. Our employees have a strong desire to partner and create value to a market-leading and disciplined
Management Team team on the cutting edge of innovation in the medical industry. They are excited to make a difference in people’s lives.
They want to produce parts and products that provide the best outcomes and highest levels of patient safety.
Our goals are to serve our customers and provide our employees with a safe and productive workplace by
Christopher M. Cashman Mark Cole exemplifying our four key pillars of LEAD – Leadership, Execution, Accountability, and Discipline. By implementing
Chief Executive Officer & President Associate Vice President, Mooresville Operations these core values, our team members personify all that is good about Carolina Precision. It starts with “BELIEVE &
ACHIEVE” – an important reminder that we all need to stay in the present and maintain a positive attitude in what
Kevin Burke Brian Klesh we do and where we are going.
Chief Financial Officer Vice President, Warminster Operations
On behalf of the entire Carolina Precision team, we look forward to building strong partnerships with the manufacturer
Kevin Lilly Justin Meyers community. Let us know how we can team up with you!
Vice President of Commercial Operations Associate Vice President, Putnam Operations
CHRIS’ SIGNATURE PLACEHOLDER
Mike Jerome
Vice President of Manufacturing Christopher M. Cashman
1 Your Leading Manufacturer of Medical Device & Aerospace Precision Parts Quality Driven. On-Time Delivery. Patient Focused. 2
Corporate Overview Investments & Growth
Our strategy is to collectively invest in organic expansion and merged acquisition of advanced precision-machining
technologies and supply chain services that best serve the unique needs of each of our customer segments. Based
on the markets served, we strive to be quality driven, provide on-time delivery and focused on making a difference in
patient’s lives and in aerospace safety.
The acquisition of MK Precision in 2016 and Renchel Tool in 2019 has strengthened our growing leadership position
in the medical device (orthopedic, spine implants and instruments) market. Our latest acquisition, Renchel Tool Inc.,
is a contract manufacturer with a focus on complex, precision machined orthopedic instruments and implants used
during hip, knee, spine, and extremities surgeries as well as aerospace/petrochemical applications.
CAPITAL INVE ST M ENTS
Capital investments will continue to support the purchase of new equipment resources, implementing further
automation to create efficiencies and product output to meet client demand. Our established precision manufacturing
platform qualifications enables CPT to scale quickly and grow with significant manufacturer customer accounts. We
have a proven growth trajectory with compelling expansion opportunities and an entrepreneurial management team
with 160 years combined tenure in precision machining specific to the medical device and aerospace industries.
Quality Driven. On-Time O UR BACKGROUND
Delivery. Patient Focused. Carolina Precision Technologies (CPT) is a world-class ISO 9001:2015, ISO The following factors enable CPT to address a fast-paced and ever evolving marketplace where outsourcing for
13485:2016 and AS 9100D:2016-certified precision contract manufacturer contract manufacturing services continues to show strong demand:
with 125+ machining centers, and over 70,000 square feet of production floor
Our Vision space. We service the commercial medical device and aerospace industries PATIENT PROTECTION & AFFORDABLE CARE ACT AGING BABY BOOMER GENERATION
with manufacturing plants in Warminster, PA; Putnam, CT; and Mooresville, Uninsured Americans 1 Growing Por!on of Popula!on 1
CPT is a recognized industry NC. CPT specializes in the production of precision products for applications in 49
49
50 46 46 Under 18 100
45
leader in high-value, spinal and orthopedic implants/medical instruments, as well as aviation, brake Over 65 95
80
tight-tolerance precision and wheel, landing gear, fire detection, suppression and oxygen systems. 40 74 76 78 80
36 Gro 60
machined products in in
g y C u s wth
to 49
29 29 29 m in 40
30 as o Pa er
the medical device and CPT has over 30 years of industry experience with all of its acquired t

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ty

ra e n t s
aerospace end-markets. companies. Originally formed in 1998 as Carolina Precision Manufacturing,

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the company was later acquired in 2015 by Linx Partners. In 2016, CPT 10' 11' 12' 13' 14' 15' 16' 17' Year 2016 Year 2035 Year 2060
completed its first acquisition in its purchase of MK Precision (est. 2005),
Our Mission a precision manufacturer in Pennsylvania servicing the spinal implant and OEMs INCREASE OUTSOURCING INCREASED OUTSOURCING

Inc

ical
OEM Survey Results 2 Medical Ver!cal 3
instrument markets. In 2019, Chris Cashman joined as Chief Executive

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To provide our customers Officer and later that year CPT completed its second acquisition in its

g
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O li a n c in ng $100,000
Tes"ng 41% s e R i s u rc i
“Yes, We
with outstanding products purchase of Renchel Tool, a niche contract manufacturer in Connecticut Outsource” Contract M#g. 43% Ou
tso
$80,000
37%
and precision machined providing complex orthopedic implants and instruments. Machining 43% $60,000
“No, We Don't”
parts that not only exceed 63% Molding 50% Maintenance
40,000
Implementa!on Tes!ng &
expectations, but offer an CPT has a long history of delivering high-precision, high-complexity 24%
Design/Develop
Steriliza!on $20,000
40% 7% 29%
unparalleled level of quality components nationwide. Our team of experienced engineers, CNC Contract Mfg.
‘22 ‘23 ‘24 2025
2014 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20 ‘21
US-Based Interna"onal Both No Preference
and service excellence. machinists and dedicated quality control personnel scrutinize each phase of Upgrade Services Regulatory YEAR
development and use only the best technology available. All figures in millions; (1) US Census Bureau (2) Medtronic (3) FMI Consulting
3 Your Leading Manufacturer of Medical Device & Aerospace Precision Parts Quality Driven. On-Time Delivery. Patient Focused. 4
 Market Segments: Medical Device Solutions
COMPE TITIVE ADVANTAGE In Medical Device, CPT specializes in custom spinal implants and complex expandable cages, bone screws, bone plates,
CPT differentiates based on quality, experience, design expertise and lead times that beat the industry. We partner orthopedic instruments, and other devices for the spine, orthopedic, extremity, trauma, and therapeutic drug delivery
with our customers to provide resilient long-term solutions that are tailored to meet their needs. markets with a patient-focused approach. With our team’s combined expertise and inventory of state-of-the-art
equipment, we are able to offer cannulated bone screw capabilities of up to 155mm in length with a 1mm diameter hole.
CPT facilities are premier contract manufacturers of surgical instruments, implants, other medical devices and
aerospace parts for these industry leading companies. We provide exceptional customer service and value by O RTHOP EDICS & SP INE
focusing on effective quality systems and open communications with our customers. We cultivate a talented and We are at the forefront of orthopedics and spinal
capable workforce by empowering employees, promoting training, and implementing the right tools and technologies. implants. With deep expertise in both plastic and metal
materials, we provide complete solutions including:
CPT is focused with customers on best in class products, long term agreements and forecast and capacity planning
that ensure the availability of products when the customers need them. CPT engages early in the DFN process, j Implants: low-to high-volume manufacturing;
conducts prototype manufacturing and also handles our partners “instrument specials” needs. specializing in expandable cage configurations and
stabilization systems
j Instruments: traditional and robotic; reusable and
complex, tight-tolerance assembly
j Delivery Systems: best-in-class design; low-to high-
volume manufacturing
Best-In-Class
Manufacturing
Capabilities CLINICAL M AR KE TS
CPT assists our clients to support manufacturing needs for medical device products utilized in various surgical
procedures to help people bend, run, and achieve full range of motion – giving them the ability to live life to the
fullest. Key therapeutic areas of focus to address these needs include:
Differentiated j Spine: as the world’s population ages, spinal surgery is becoming more commonplace. Along with the deterioration
Best-In-Class Partnership that comes with natural aging, spinal tumors and trauma can cause decayed, diseased or collapsed discs that are
Products Approach very painful and need to be repaired.
j Large Joints: innovative implants, instruments, and technologies that assist with large joint surgeries to provide
optimal outcomes for patients with musculoskeletal injuries.
j Trauma: catastrophic incidents or injuries frequently require orthopedic related surgeries and associated use of
complex medical device products to perform multiple types of these repairs.
j tre ities innovative new implant systems/products with a focus to reduce pain and optimize function for
multiple lower extremity deficiencies to restore mobility, alleviate pain and improve the quality of life serve to
meet the need of primary and revision surgeries.
j Sports Medicine: with an active younger or older population, sports injuries continue to grow and patients and
Prominent
Reputation with
Utilization of athletes need to restore performance and range of motion as quickly as possible.
Leading
Blue Chip
Technology
Customers MEDICAL DEVICE INDUSTRY CREDENTIALS
j ISO 9001:2015 Certified
j FDA Registered
j ISO 13485:2016 Certified
5 Your Leading Manufacturer of Medical Device & Aerospace Precision Parts Quality Driven. On-Time Delivery. Patient Focused. 6
 Market Segments: Aerospace Solutions
In Aerospace, CPT specializes in precise products with rigid specifications and can achieve tolerances within +/-
SPINAL IMPLANTS: .0001 with volumes greater than 10,000 EAU and often beyond 100,000 units.
j Complex Expandable
j Cervical Fixation Our featured product lines include micro precision products, nozzles and apparatus components, fittings connectors
j Interbody Devices and various hex nut/polygon type parts in an assortment of materials to meet the needs of the aerospace industry.
j Spinal Access These parts contain a wide variety of materials extending from plastics, copper alloys, aluminum alloys, steels,
j Vertebral Body Replacements stainless steels, and exotic materials that go into fiber optics, aviation fire detection and suppression systems, oxygen
j Thoracolumbar Fixation systems, wheel and brake, landing gear, and other system assemblies.
SYSTEMS & PRODUCTS WE MANUFACTURE:
ORTHOPEDIC / TRAUMA / EXTREMITY IMPLANTS: j Wheel / Brake / Landing Gear
j Anchorage j Oxygen Systems
j Cannulated Screw Systems j Fire Detection
j Hip Stems j Suppression Systems
j Custom Implants j Quick Connect / Disconnect Valve Systems
j Trauma Fixation Plating
INSTRUMENTS:
j Acetabular Cup Impactor j Convex Trials
j Broach Handle j Torque Drivers
j Spinal Disc Spacer & Spreaders j Depth Gauges
j Tibial Trials j Mallets
j Mid-Femoral Sizer j Slap-Hammers
j Drill Guides & Drill Stops j Retractors
j Dilators j Trial Wedges
DRUG DELIVERY SYSTEMS:
j Respiratory reservoir-based controlled drug delivery
systems
j Drug core is surrounded by a polymer film
j Drug release rate is controlled by the properties of AEROSPACE INDUSTRY CREDENTIALS
the polymer j AS9100:2016 Certified
j ITAR Registered
j ISO 9001:2015 Certified
7 Your Leading Manufacturer of Medical Device & Aerospace Precision Parts Quality Driven. On-Time Delivery. Patient Focused. 8
Manufacturing Capabilities
CPT has the flexibility to handle a full range of medical device and aerospace manufacturing needs. Our partners can Warminster, Pennsylvania (PA)
scale with us as a single-source supplier. Whether small runs or high-volume production, CPT delivers a consistent Our 21,500 ft² facility in Warminster, PA focuses on manufacturing surgical implants and instruments for the spinal
level of quality and performance to reduce risk and provide added stability for the manufacturer. orthopedic markets. It houses 53 CNC machining centers utilizing high-performing, 7 and 5-axis capable Chiron and
Haas machine cells and Citizen-Cincom Swiss multi-axis turning centers. This facility is ISO 13485 certified.
Our experienced team of manufacturing engineers has been instrumental in automating processes that enable our
customers to increase production volumes and profit margins. We are competitively priced with parts that have utna Conne ti ut C
volumes greater than 10,000 EAU. By utilizing turning and milling in one process, our Swiss lathes deliver the Our 17,000 ft² facility in Putnam, CT focuses on manufacturing orthopedic instrumentation and implants for spine,
workpiece to the tool more efficiently and effectively to create intricate, geometrically complicated pieces. Because extremity and trauma. It houses 28 CNC machining centers and uses the latest in multi-axis CNC machining technology
of this, we can quickly solve our customers’ business challenges and optimize quality, efficiency and costs. CPT has with experience in tight tolerance components and assemblies. With the latest CNC 5-axis milling Super- Cells, we
achieved our success by committing to the following four principles of production: provide the economic advantages of “lights out” manufacturing on products of volume. This facility is ISO 13485 certified.
j Quality at the Source: It all begins with manufacturing our parts correctly at the machine. Mooresville, North Carolina (NC)
j Process Control: Our high-volume, close-tolerance production environment relies upon a consistent adherence to Our 29,500 ft² facility in Mooresville, NC focuses on manufacturing complex, tight tolerance aerospace parts as well
procedures and controls, established from decades of learning and improving. as surgical implants and instrumentation. It houses specifically 41 of our 7-axis and 8-axis Citizen-Cincom CNC Swiss
j Product Flow: Producing millions of parts on-time and on-quality requires a consistent dedication to monitoring machining centers. This facility is AS9100 and ISO 13485 certified.
and flowing parts each day.
j Lean: Our management and team leaders understand that elimination of waste and continuous improvement is MATERIALS / PROCESSING
paramount to achieving long-term success. CPT has unique capabilities and experience in machining and finishing with the necessary materials and processes required
to manufacture and assemble complex components for the medical and aerospace device industries. We use contaminate-
CAROLINA PRECISION TECHNOLOGIES FACILITIES free machines and bring on new technologies as needed. We are continually adding processes and capabilities to meet
Carolina Precision Technologies is made up of three facilities in NC, PA and CT with over 70,000 sq. ft. of customer needs. The charts below provide an overview of the machining equipment, finishing processes and materials
manufacturing space combined. Each with the capabilities to: CPT utilizes in the products and parts we manufacturer. We are actively evaluating additional capabilities and services.
j Offer machining centers with skilled personnel Machining: Finishing: Materials:
and robust quality systems j CNC Multi-Axis Swiss Turning j Laser Marking j Titanium
j Manufacture precise products, tight tolerance CPT Putnam j Multi-Axis CNC Milling j Passivation/Ultrasonic Cleaning j Aluminum
components and assemblies that meet our clients’ 51 Ridge Road j Vertical Milling j Environmentally-Controlled j Brass
Putnam, CT 06260
rigid specifications and are capable of achieving 17,000 ft² Facility
j Multi-Axis/Multi-Tasking Machining, Assembly & j Stainless Steel/Steels
tolerances within +/- .0001 ISO 13485 Certified Mill/Turn Packaging Area j Cobalt Chrome
j Utilize machines that are the most versatile in the j Wire EDM j Anodizing j Delrin
CPT Warminster
compact category – offering stability, advanced j Laser Markers/Welders j Micro-blasting j lnconel
309 Camars Dr.
dynamics and numerous configurations that can Warminster, PA 18974 j Citizen Screw j De-Burring & Burr-Free Parts j Hastelloy
be tailored for each device we manufacture 21,500 ft² j Tumbling j NiTinol
ISO 13485 Certified
j Provide economic advantages of “lights out” Manual Equipment: j Heat Treat j PEEK
manufacturing on products of volume with the CPT Mooresville (HQ) j Hardinge HLVH Tool Room j Chrome Coating j Plastics
latest “5 Axis” milling technologies 1055 Gateway Dr. Lathe j Electro-Polishing j Copper
Mooresville, NC 28115
j Quickly solve our customers’ business challenges j Okuma LS Lathe j Plating j Super Alloys
29,500 ft² Facility
and optimize our quality, efficiency and costs AS9100 & ISO 13485 Certified j Bridgeport Vertical Miller j Grinding j Exotic Materials
j Exceed our customer’s expectations by being very j Harig Tool Room j Engravings
competitive on comparable products Surface Grinder j Laser Welding nspe tion
j Klausing Band Saw j Vision Systems
j Vertical Band Saw j Programmable CMM Inspection
9 Your Leading Manufacturer of Medical Device & Aerospace Precision Parts Quality Driven. On-Time Delivery. Patient Focused. 10
Quality & Regulatory Culture & Core Values
Carolina Precision Technologies understands that we are not just manufacturing products – we are making ORGANIZATIONAL CULTURE
components and finished devices that will be used to enhance a patient’s life or to keep aerospace industry personnel CPT supports a culture of passion, integrity, teamwork, trust, and mutual respect. Employees often want to join and
and travelers safe. Our Global Quality Vision and Policies are designed to ensure consistent high quality and partner with a strong and disciplined team on the cutting edge of innovation in the medical device and aerospace
compliance at every location, on every project, at every stage of the product manufacturing cycle. industry. They want to make a difference in people’s lives. They want to produce parts and products that make a
difference in systems that provide safety to citizens.
Quality Vision Quality Control Our goals are to serve our customers and provide our employees with a safe and productive workplace. Our ability to
achieve these goals focuses on four key pillars.
Quality is at the forefront of everything that we do Carolina Precision Technologies is
because lives depend on us. To achieve this vision, we committed to providing our customers
pledge to maintain a manufacturing culture of quality and with the highest quality products
compliance. We will strive daily to achieve our mantra delivered on time with exceptional
LEAD as it applies to every product we make: Leadership, service. Our goal is to exceed customer,
Execution, Accountability & Discipline. statutory and regulatory requirements,
as well as maintain and continually
improve the effectiveness of our quality
Quality Policy management system.
Leadership Execution Accountability Discipline
CPT is committed to providing quality medical devices and Quality is at the forefront of what we do
aerospace parts. We maintain compliance with current because our components and finished
industry quality and regulatory requirements as well as devices save or enhance lives every day. We strive to support these key pillars through implementing our core values as part of our company culture. We set our
those of our customers. We monitor, manage risk, and take We have developed robust systems and standards high and strive for continuous improvement in all that we do – requiring us to stay true to our core values:
action throughout our processes to ensure the continued control processes to ensure reliable,
effectiveness of our quality management system. consistent product performance. j Take Pride in Who We Are j Invest in Quality by Recognizing Innovation & Superior
j Instill Integrity and Trust in Every Aspect of Our Product Performance
Business j Make a Difference in Patient’s Lives and in Aerospace
REGULATORY & COMPLIANCE j Empower Teamwork and Mutual Respect at Every Safety
With 30 years of Medical Device and Aerospace manufacturing experience, we have developed a thorough Level of Our Organization j Demonstrate Passion for What We Do Each Day
understanding of the complex regulatory environment. Every product is manufactured to exact specification, in full
compliance with manufacturer specifications and FDA guidelines. CULTURE & SUSTAINABILITY
Sustainability at CPT starts with our Core Principles, which includes strong values, sound corporate governance
We achieve our success of high quality by committing to four principles of production. and detailed oversight of compliance and risk management. These core elements will result in a deep-rooted and
passionate company culture that unites all CPT employees in the common spirit of collaboration, teamwork, creativity
j We focus on quality at the source where it begins with manufacturing our parts correctly at each machine. and innovation to solve our customers’ most complex challenges.
j We ensure through process control that our high-volume, close-tolerance production environment relies upon a
consistent adherence to procedures and controls, established from decades of learning and improving. Our Strategy
j We pay close attention to our product flow as we produce thousands of parts on-time and on-quality each day. Embodied in CPT’s expansion model with an emphasis on talent development is a proven, scalable and sustainable
This requires a consistent dedication to monitoring and flowing parts. approach. CPT’s success will be driven by our focus on Operational Excellence, New Product Development, Global
j Our management and team leaders understand lean approaches to manufacturing and that elimination of waste and Market Expansion, and Strategic Acquisitions – with a disciplined approach to focus on Cash Generation and
and continuous improvement are paramount to achieving long-term success. Capital Deployment.
11 Your Leading Manufacturer of Medical Device & Aerospace Precision Parts Quality Driven. On-Time Delivery. Patient Focused. 12
Our People
Success and execution start with our people. Our performance-driven culture will rely heavily on our diverse
teams to execute our strategy and embrace our values by doing the right thing every day, in every interaction. We
want to support inclusive environments where our employee’s ideas are valued. Clear, concise, and transparent
communications are critical to the positive experiences our employees have at CPT.
“Making all the complex and intricate medical instruments used for surgeries gives employees an
o erwhel in sense of pride nowin that our hard wor is oin to a e so eone else s life a li le
be er – Patrick, CPT Employee since 2005
C instills a er tea oriented approa h with the rew of a hinists and pro ide plent of
aintained apable a hines to et the wor done –Brian, CPT Employee since 2016
ur olutions
Our Solutions within the medical device industry OUR STRATEGY
are making a difference in patient’s lives and j Opera!onal Excellence
Strategic Acquisi!on
that of their families as well as contribute to the j
j Global & Market Expansion
safety and operations in the aerospace industry. j New Product Development
Supporting these solutions are deep customer j Capital Resource
Development
relationships, leading technology/process
innovation, an expanding manufacturing footprint,
differentiated product quality and downstream
surgical outcomes, a flexible supply/delivery chain CPT CORE
and socially responsible processes. PRINCIPLES
Strong Values
Sound Governance
Compliance &
Risk Management
Oversight
OUR SOLUTIONS OUR PEOPLE
j Technology & Process Innova!on j Safety First
j Differen!ated Product Quality j Talent Development
j Strong Customer Rela!onships j Global Diversity & Inclusion
j Supply Chain & Delivery Flexibility j Environmentally Conscious
j Socially Responsible Processes j Community Focused
j Ethical Business Prac!ces
13 Your Leading Manufacturer of Medical Device & Aerospace Precision Parts Quality Driven. On-Time Delivery. Patient Focused. 14
 Warminster Putnam Mooresville
309 Camars Drive 51 Ridge Road 1055 Gateway Drive
Warminster, PA 18974 Putnam, CT 06260 Mooresville, NC 28115
(215) 675-4590 (860) 315-9017 (704) 662-3480
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