Key Principal Partners Has Strong 2004 with New Investments of Over $140 Million; Public-to-Private, China Investment and Niche Expertise Highlight 2004 Transactions.

CLEVELAND -- Key Principal Partners, a $1 billion private investment firm, announced that it has completed ten investments in 2004, investing approximately $142 million. KPP provided subordinated debt, preferred equity and common equity in both non-control and control situations to middle market companies in 2004 in a diverse range of industries. In total, KPP has made more than $500 million in investments in over 50 companies since it began investing in 1998.

KPP attributes its success to dedicated investment professionals who combine over 200 years of completing successful transactions with strong operational experience and insights, as well as specific expertise in public-to-private transactions, family wealth management and sponsorless, non-controlling investments. This year they added China to their expertise set, completing the first buyout of a manufacturing business by a U.S.-based private equity firm.

"Over the past year, the deal team has invested significant time and dollars understanding the opportunities that face our companies, both domestically and abroad," said John Sinnenberg, managing partner of Key Principal Partners. "We're proud that we've been able to help our middle market portfolio companies intelligently assess both the risks as well as the opportunities presented by an increasingly global economy. The experience of our management team in China over the last decade significantly enhances our resources.

"From the latter half of 2003 through the fourth quarter of 2004, we saw a very active market for capital," according to Sinnenberg. "What has been notable is the receptivity among high-quality companies with dedicated management teams to KPP as a non-controlling investment partner who adds value beyond the capital invested. As a result, we have been able to invest within an acceptable level of risk and with attractive returns for investors."

Another hallmark of 2004 has been KPP's focus and increased expertise in helping manufacturers address global competition through a China strategy and facilitating public companies going private, issues that will increasingly challenge middle market companies.

"Looking ahead to 2005, we believe there will be an increasing supply of capital marked by more non-traditional lenders playing in the mezzanine arena and a market characterized by a surplus of capital chasing the needs of middle market companies," Sinnenberg noted. "Our leadership in the non-controlling investment market and unique deal sourcing capability combine to yield a dynamic that should allow us to identify new portfolio companies at an acceptable pace. In fact, KPP, which is currently investing out of a pool of $500 million, will likely seek to raise a new fund in the near future.

"We still believe there are literally thousands of family-owned companies, private and public company management teams and fundless sponsors who are looking for expertise, commitment and partnership beyond that required to complete a deal. That will be become the salient differentiator for successful private equity firms."

KPP Investments in 2004:

--ASIMCO Technologies, Inc. - Led a $97 million common equity investment in ASIMCO Technologies Ltd. to facilitate the acquisition of the company. ASIMCO is the largest independent manufacturer of automotive and heavy-duty truck components in China.

--Alpha Sintered Metals - Common equity and subordinated debt investment to facilitate the acquisition of Alpha Sintered Metals. ASM is a family held business that designs and manufactures highly precise powdered metal components.

--Energy Conversion Systems (ECS) - $17 million investment of subordinated debt and equity to facilitate the acquisition of the auto and consumer electronics components businesses of The Morgan Crucible Company plc.

--Empire Beauty Schools - $16 million in the form of common stock to facilitate the company's acquisition of five post-secondary cosmetology schools, and support future growth. Empire is the largest operator of post-secondary cosmetology schools in the United States.

--EPIC Technologies, Inc. - $10 million in senior subordinated debt and $2 million in junior subordinated debt and equity to support the recapitalization of this specialty electronic assemblies provider.

--Focus Windows and Doors - $10 million in common stock to recapitalize Focus Doors and Windows. Focus is a regional door and window manufacturer based in Montreal, Quebec.

--Honsador Lumber - $18 million in common stock to acquire the largest wholesale building products distributor in Hawaii, and two of its affiliates, Honolulu Wood Treating (HWT) and Ariel Truss.

--Integrity Media, Inc. - $15 million in senior subordinated debt to support the company's going-private transaction. Integrity is a media/ communications company that is primarily focused on the publishing and distribution of Christian music and books.

--Jonathan Engineered Solutions (JES) - $14 million in subordinated debt and $2.5 million in common equity to facilitate the acquisition of Jonathan Engineered Solutions, Inc. JES is the leading manufacturer of custom steel and aluminum slides unitized in commercial and industrial applications.

--Xaloy - $6 million in senior subordinated debt and $3 million in equity in support of the acquisition of the company, the world's largest manufacturer of bimetallic barrels and feed screws for the plastics machinery industry.

About Key Principal Partners

Key Principal Partners (KPP) is a nationally recognized private investment firm providing capital to middle market companies throughout North America. KPP utilizes mezzanine and equity capital to fund the growth, buyout, refinancing or acquisition of profitable companies. In addition, KPP provides liquidity to shareholders of privately held stock. Distinctively, KPP's flexible approach to structuring investments does not require control of companies. KPP has approximately $1 billion in capital under management and can invest $5 million to $25 million in companies with at least $20 million in revenue. Headquartered in Cleveland, KPP is affiliated with KeyCorp, an $88 billion financial services firm and has offices in Boston, Greenwich and San Francisco. Visit us at www.keyprincipalpartners.com.