Accellent Inc. Announces Third Quarter 2006 Financial Results.

WILMINGTON, Mass. -- Accellent Inc. (the "Company"), a wholly owned subsidiary of Accellent Holdings Corp. ("Accellent"), announced results for the three and nine months ended September 30, 2006.

Historical Financial Results

Third Quarter Financial Results

Net sales for the third quarter of 2006 increased 2.8% to $119.9 million compared with $116.7 million in the corresponding period of 2005. The net loss for the third quarter of 2006 was $(6.5) million compared to net income in the corresponding period of 2005 of $2.9 million. Compared to the third quarter of 2005, the third quarter of 2006 included $8.7 million in higher interest costs, $4.3 million of primarily non-cash losses due to changes in the fair value of our interest rate hedging instruments and $2.7 million in higher amortization expense related to the Kohlberg Kravis Roberts & Co. L.P. ("KKR") and Bain Capital ("Bain") acquisition of the Company on November 22, 2005 (the "2005 transaction"), partially offset by $3.6 million in lower non-cash compensation charges.

Nine Months Financial Results

Net sales for the nine months ended September 30, 2006 increased 7.7% to $366.3 million compared with $340.3 million in the corresponding period of 2005. The net loss for the first nine months of 2006 was $(10.9) million compared to net income in the corresponding period of 2005 of $11.9 million. Compared to the first nine months of 2005, the first nine months of 2006 included $25.0 million in higher interest costs, $8.2 million in higher amortization expense and non-cash inventory step-up charges of $6.4 million related to the 2005 transaction, partially offset by $1.8 million of non-cash gains due to changes in the fair value of our interest rate hedging instruments, and $1.2 million in lower non-cash compensation charges.

Pro Forma 2006 Financial Results (1)

Third Quarter Pro Forma Financial Results

Giving pro forma effect to the 2005 transaction and the Company's acquisitions of Campbell Engineering, Inc. ("Campbell") and Machining Technology Group, LLC ("MTG") as if they had occurred as of January 1, 2005, net sales for the third quarter ended September 30, 2006 decreased 2.4% to $119.9 million compared with net sales of $122.8 million in the corresponding period of 2005. The Company's facility rationalization program negatively impacted the 2006 sales growth rate by approximately 1%. Excluding the impact of the previously disclosed ramp-down impact of a select product line, net sales increased 7%.

Adjusted EBITDA (2) for the three months ended September 30, 2006 was $25.7 million, a decrease of 6.1% compared to Adjusted EBITDA of $27.4 million in the corresponding period of 2005. Adjusted EBITDA declined due to lower sales, a less favorable product mix and higher costs primarily related to new production start-up.

Nine Months Pro Forma Financial Results

Pro forma net sales for the nine months ended September 30, 2006 increased 1.8% to $366.3 million compared with pro forma net sales of $359.8 million in the corresponding period of 2005. The Company's facility rationalization program negatively impacted 2006 net sales by approximately 1%. Excluding the impact of the previously disclosed ramp-down impact of a select product line, net sales increased 9%.

Adjusted EBITDA for the nine months ended September 30, 2006 increased 1.0% to $79.9 million compared to Adjusted EBITDA of $79.2 million in the corresponding period of 2005.

Reconciliations of non-GAAP financial measures to GAAP financial measures are provided in the financial statements accompanying this press release.

First and Second Quarter Restatement for Hedge Accounting Under SFAS 133

Separately, the Company announced that it has restated financial statements for the first and second quarters of 2006 in order to reflect the Company's conclusion that certain derivative instruments relating to interest rate swap and collar agreements did not qualify for cash flow hedge accounting. The Company believed the initial accounting treatment for these interest rate swap and collar agreements treated as hedges properly reflected the intent and economics of the underlying transactions; however, the interpretations of how to apply Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), and how to adequately provide documentation for such instruments so as to qualify for hedge accounting are very complex. Based on an evaluation of the Company's hedge documentation, management has concluded the documentation with respect to these instruments did not meet the requirements of SFAS 133. Therefore, the unaudited condensed consolidated financial statements for the first and second quarters of 2006 have been restated to reflect any changes in the market value of these derivative instruments in the condensed consolidated statements of operations rather than in "accumulated other comprehensive income (loss)," a component of stockholder's equity. Additionally, any previously realized amounts associated with these derivatives have been reclassified out of interest expense, net into the "gain on derivative instruments" line item in the condensed consolidated statements of operations.

The impact of the restatement will be to increase net income by $3.5 million in the first quarter of 2006 and by $2.6 million in the second quarter of 2006. The restatement will not impact the Company's previously reported Adjusted EBITDA as defined in its senior secured credit agreement. Continued application of fair value accounting for the derivatives may result in greater fluctuations in net income for future periods, unless and until the Company, at its discretion, satisfies the documentation requirements for the designation of the interest rate swap and collar agreements as cash flow hedges in accordance with SFAS 133.

Conference Call

Ron Sparks, President and Chief Executive Officer, and Stew Fisher, Executive Vice President and Chief Financial Officer, will discuss third quarter results in a conference call scheduled for today, November 14, at 5:00 p.m. (Eastern Time). The teleconference can be accessed live on the Internet through the Investor Relations section of the Accellent Web site at www.accellent.com or by calling [phone] pass code 69977911. Please visit the Web site or dial in 10 to 15 minutes prior to the beginning of the call to download and install any necessary audio software. A replay of the conference call will be available via www.accellent.com or by telephone at [phone] pass code 79666906.

About Accellent

Accellent Inc. provides fully integrated outsourced manufacturing and engineering services to the medical device industry in the cardiology, endoscopy and orthopaedic markets. Accellent has broad capabilities in design & engineering services, precision component fabrication, finished device assembly and complete supply chain management. These capabilities enhance customers' speed to market and return on investment by allowing companies to refocus internal resources more efficiently. For more information, please visit www.accellent.com.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. All statements included herein, other than statements of historical fact, may constitute forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the risk factors contained in the Company's Form 10-K for the year ended December 31, 2005 filed with the Securities and Exchange Commission on March 30, 2006. All forward-looking statements are expressly qualified in their entirety by such factors.

[TABLE OMITTED]
[TABLE OMITTED]
[TABLE OMITTED]
[TABLE OMITTED]
[TABLE OMITTED]

______________

(1) The Company has presented pro forma results of operations for the periods presented because (i) its 2005 historical results do not include operating results of Campbell and MTG and (ii) the capital structure changed significantly on November 22, 2005 as a result of the KKR and Bain acquisition of the Company and the related financings and other transactions. Accordingly, the Company believes the pro forma results of operations presented herein are useful in understanding its 2006 and 2005 operating results. The Company's pro forma results of operations for the periods presented give effect to the following transactions as if they had occurred on January 1, 2005: the acquisitions of Campbell and MTG; and the new debt incurred in connection with the KKR and Bain acquisition of the Company. The pro forma information included herein is presented for comparative purposes only and does not purport to represent what the Company's results of operations would actually have been had these transactions occurred on the date indicated or to project the Company's results of operations for any future period or date. The basis for the Company's pro forma results related to the acquisitions is detailed in the Company's registration statement on Form S-4 filed with the Securities and Exchange Commission (Commission File No. 333-130470) on February 14, 2006.

(2) EBITDA and Adjusted EBITDA presented in this press release are supplemental measures of our performance that are not required by, or presented in accordance with GAAP. EBITDA and Adjusted EBITDA are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity.

EBITDA represents net income (loss) before net interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA is defined as EBITDA further adjusted to give effect to unusual items, non-cash items, the pro forma effect of acquisitions as if they had taken place at the beginning of the periods covered by the covenant calculation and other adjustments, all of which are required in calculating covenant ratios and compliance under the indenture governing our senior subordinated notes and under our senior secured credit facility. For the periods presented, Adjusted EBITDA includes adjustments for: restructuring and other related charges, gains and losses from derivative instruments, gain on sale of property, non-operating currency transaction losses, certain stock compensation related charges, severance, gain on recovery of accounts receivable acquired as part of MedSource acquisition, write-off of inventory step-up, executive relocation, losses from closed facilities, acquired Adjusted EBITDA from Campbell and MTG for the periods prior to the actual date of each respective acquisition, acquisition deal expenses and management fees.

We believe that the presentation of EBITDA and Adjusted EBITDA is appropriate to provide additional information to investors about the calculation of certain financial covenants in the indenture governing our senior subordinated notes and under our senior secured credit facility. Adjusted EBITDA is a material component of these covenants. We also present EBITDA because we consider it an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of high yield issuers, many of which present EBITDA when reporting their results.