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To: GARY P GROBBEL who wrote (2519)	8/29/2002 6:28:07 PM
From: GARY P GROBBEL	Read Replies (2) \| Respond to of 3054

HSR......from 10k filed today: HI-SHEAR PRODUCTS Hi-Shear's products were originally introduced for the United States space program, and consist primarily of pyrotechnic power cartridges and various types of aerospace separation devices designed to meet the demand for reliable high performance devices with the strength to fasten two structures under rigorous conditions and then provide quick release upon command. In addition, the Company designs and manufactures electronic systems that sequentially fire the pyrotechnic devices according to pre-programmed parameters. These electronic devices are used in missiles, launch vehicles, fighter aircraft ejection seats and other applications. The Company also adapts its technology to produce products for other applications where pyrotechnic power is desirable. Hi-Shear's products can be grouped into four product categories as follows: POWER CARTRIDGES/INITIATORS. Satellites, missiles, and other space vehicles require substantial stand-by power to perform certain timing-dependent functions such as separation, cutting and deployment. Hi-Shear designs, markets and manufactures pyrotechnic power cartridges/initiators that have a high-energy output. These power cartridges are hermetically sealed electro-explosive devices that are compact, lightweight, environment and corrosion resistant and operate with ultra high reliability. The power cartridge provides the energy to operate the Company's separation devices, pin pullers, thrusters, actuators and cutters. These devices are used to open satellite doors, deploy solar panels, booms, communications antennae, missile fins, and in driving stage separation on many of today's major launch vehicles. Hi-Shear manufactures the highest reliability NASA standard initiator used throughout the Space Shuttle. CARTRIDGE ACTUATED DEVICES. The Company's cartridge actuated devices are gas-activated products utilized for satellites, missiles and other space vehicles. These devices include separation nuts, separation bolts, thrusters, wing/fin actuators, cutters and pin pullers. They are designed for use as standard high strength fastening hardware with the ability to separate and/or release components or structures on command. These devices provide the low shock mechanical action required for rapid separation or deployment of structures or components in multistage launch vehicles, nose cones and capsules, launching pads and sleds, ejection seats, booster rockets, tanks, solar arrays, antenna booms and other devices. The Company maintains an active development program for new designs, including low shock deployment systems for the increasingly lighter satellites used in communications and intelligence gathering. 1 ELECTRONIC PRODUCTS. Hi-Shear is a key supplier both in the U.S. and overseas of sequencers for the U.S. Air Force ACES II crew ejection seat installed in many fighter aircraft, including the A-10, B-2, F-15 and F-16. The Company originally developed the Analog Recovery Sequencer, which electronically triggers various ordnance events that deploy parachutes and rockets in connection with the pilot's ejection from fighter aircraft. These safety units have a service life of seven years after which they must be replaced or refurbished. Hi-Shear also supplies electronic safe arm fuzes for tactical and conventional military programs. The Company's upgraded Patriot (PAC-3) missile system product is fully developed and has entered the low rate initial production (LRIP) and full-scale production phases. The Company employs a proprietary initiator that, when removed, permits full testing of the electronics without risk to personnel or damaging the integrity of the missile system. This allows for economical system safety checks, and also a shelf life estimated at 30 years making it among the longest in the industry. EMERGENCY CUTTERS. Hi-Shear pyrotechnic emergency cutters are fast, safe, and reliable rescue tools designed for use in a wide range of emergency situations for fire and rescue, law enforcement, and military rescue teams. The LIFESHEAR cutter's light weight, mobility and ease of use enable it to quickly cut through a variety of tough materials and auto parts in order that a victim can readily be extracted from a life threatening situation or access can be quickly gained to a locked area. The LIFESHEAR tool was used by rescue workers at the site of the World Trade Center disaster in New York City. Hi-Shear's European licensee is manufacturing and selling the LIFESHEAR product in its assigned territory. CUSTOMERS AND CONTRACTS Most of the Company's customers tend to be large aerospace prime or subcontractors. Lockheed Martin and the Boeing Company together accounted for 47% of the Company's revenues in fiscal year 2002. The Company's Government customers include the U.S. Air Force, U.S. Navy, U.S. Army, NASA and other agencies of the government. Sales to the United States Government as direct sales represented 11% of revenue in fiscal year 2002. Contract awards and contract competition phases vary from year to year, and therefore sales distribution among customers during any one fiscal year should not be considered indicative of future sales to those customers.