the POSITRONIC GLOBE

22 Mile Patrol. 6 Roadside IEDs. Zero Margin of Error.

SEP 2018 STRATEGIC INITIATIVE UPDATE

IN THIS ISSUE 2019 And Beyond – It Would Strategic Initiative Update Be Hard… 1 2019 And Beyond – by Greg Rocque, President It Would Be Hard… Sales Success Story It would be hard to look forward and 2 Global Positioning System understand our new Fiscal Year – 2019, III (GPSIII)- Lockheed Martin which started on September 3rd – Space Systems without appreciating what happened in Did You Know? 4 Final Assembly Fiscal Year 2018. In short, the industry Global Moments exploded with new spending by defense 3 Go Red For Women contractors and aerospace companies who are optimistic about the future and have placed orders for large products and components using our connectors. Yep – orders in the industry were up Gregory S. Rocque some 20% and at Positronic as well. For Positronic, we saw some long-time records get broken for orders, backlogs and sales. You can be excited! It would be hard to have recognized the areas in our business that were not able to scale as quickly as they could have, were it not for the increased volume we faced. As our backlog grew, our On-Time Delivery suffered, as well Visit our intranet as our margins as we jumped through hoops to keep up. Make no mistake, to stay up-to-date the Leadership Team and I recognize that YOU jumped through hoops in an on the latest news all-out effort to fulfill what our customers needed and deliver on our promises. Still, it was not enough to satisfy our customers’ expectations nor our own. and information! However, it created a GREAT opportunity to learn and pause to assess where connectpositronic.com/intranet we want to go and how we will get there. password: strategic It would be hard to look at our problems and easily see where to begin to get them fixed. It would be, but it is not. Your entire Leadership Team got together A password is required for those logging in outside of the company. from around the world to take a hard look at our issues and devise a plan Please note: we change the to address them. Any notion of doing business as usual was left at the door. password periodically. Continued on page 5

1 THE SCIENCE OF CERTAINTY. / www.connectpositronic.com SALES SUCCESS STORY Global Positioning System III (GPSIII)- Lockheed Martin Space Systems by Liz Crain, Americas Territory Manager

awarded to Rockwell International, a Boeing division, in 1974, and the company successfully launched their first 18 in 1984. Since then, Lockheed Martin has been awarded the next three generations; GPS IIR (1997), GPS IIR-M (2005), GPS III (2018). GPS IIR launched 12 satellites with a design life of 7.5 years. GPS IIR-M launched 8 satellites with a design life of 7.5 years. GPS III will launch 10 satellites with a design life of 15 years. GPS III will deliver three times higher quality signals, three times more power, and anti-jamming capabilities that will be eight times better than GPS IIR-M. In addition, it will include a new L1C civil signal. This signal will allow the GPS III to broadcast with other international satellite systems, helping improve connectivity with civilians. Lockheed Martin is focused on providing the U.S. Air Force an affordable, resilient, low-risk GPS III solution. Positronic is poised to help them fulfill those requirements, having the quality, reliability, and mission-critical connector performance needed for the GPS III satellites. Video on YouTube: https://youtu.be/MysI2_Sbmsg

Lockheed Martin Space Systems, located in Denver, Colorado, is currently building the most powerful GPS satellites ever designed for the U.S. Air Force. Positronic was successfully able to partner with Lockheed Martin and “design-in” our connectors as part of this program. This series of satellites, known as GPS III, are due to launch by end of 2018. The U.S. Air Force requirements for GPS III were much more rigorous than previous GPS satellite generations. Therefore, Lockheed Martin needed to re- evaluate every aspect of the design. This re-evaluation gave Positronic the opportunity to present our product as a perfect fit for their redesign. The combination of Positronic having a long-standing relationship with Lockheed Martin, a competitive product in the aerospace industry, and working closely with the engineers at Lockheed Martin allowed us to capture this business. The GPS III series will be the fourth generation of satellites as part of the GPS Constellation. The GPS Constellation is a mix of old and new satellites. The first generation was

THE SCIENCE OF CERTAINTY. / www.connectpositronic.com 2 PII/GLOBAL MOMENTS Go Red For Women On 24 August 2018, team members from our Guests of the luncheon received some pampering with Headquarters' office participated in the Go Red for hand massages, fun photo opportunities, and they were Women Luncheon in Springfield, . Positronic able to participate in various fundraisers, such as bidding has been a proud sponsor of this event for many years on handbags full of gifts. Each luncheon also includes and actively encourages participation in programs that speakers who shares their story about heart disease, how promote healthy lifestyles. The luncheon is organized it has impacted their lives, and the impact on loved ones. by the American Heart Association, whose goal is to Positronic is an active participant in this program because educate and build awareness about heart disease in we believe in educating others about health and being women and encourage them to take action to save active members in our community to share positive more lives. messages and encouragement to those around us.

Front row (left to right): Daryla Lash, Nikki Smith, Lisa Scheffler. Back row: Dallas Minnix, Kristi Harden, Paula Bradford, Dianna Lewing, and Cheryl Hardin.

From left to right: Chrissy McIntire, Cheryl Hardin, Dianna Lewing, From left to right: Paula Bradford, Daryla Lash, Dallas Minnix Kristi Harden and Nikki Smith. and Carol Gordon.

THE SCIENCE OF CERTAINTY. / www.connectpositronic.com 3 DID YOU KNOW FINAL ASSEMBLY

1st Shift Final Assembly

2nd Shift Final Assembly

Final Assembly is the place where every department’s ready every couple of minutes. This is playing into the hard work comes together to produce the connectors lean concept that we as a company are that our customers need. Final Assembly has changed embracing. Each cell has a quota of completed connectors a lot in the last year. There is a new style of production to meet in each shift, which is broken down into hourly in this area, which is bringing impressive results. It all increments. Final Assembly currently has 13 cells with an started with implementing cells within Final Assembly overall quota of 18,000 connectors per day. that are dedicated to building one specific series of Since the new layout of the cells and the more structured connectors. The cells are set up so that jobs are worked work flow, efficiency in the area has improved. Final start to finish in a Piece Flow Style. “What is a Piece Flow Assembly was 40% efficient in April and is now 73% Style?” you ask. Piece Flow is where operators in each efficient. The amount of late jobs in the beginning of this cell start with the first step in building the connector then year was around 3,000, and now, thanks to all the hard pass it to the next operator to perform the second step, work, there are only 600 late jobs left, with the number then on to the next operator to complete the third step, continuing to decline every day. Shipping over $1 million and so on until the connector is completed and ready to dollars of product in a week used to be a rarity; now go to the inspection process. Working jobs this way has we have done it 13 weeks out of 14, with a world record enabled Final Assembly to have completed connectors Continued on page 5

THE SCIENCE OF CERTAINTY. / www.connectpositronic.com 4 5 DID YOU KNOW Continued from page 4 amount of shipments at $1,624,736 during the week with different people, all to accomplish one goal-BUILD ending August 24th! Amazing! QUALITY CONNECTORS. The operators who build our connectors are the most The numbers don’t lie; things are improving. Final important part of Final Assembly. The demand on them is Assembly is just embarking on the “Lean” journey. It is big, and they have stepped up. These individuals work a long road with plenty of opportunities to improve our hard every day, most of the time staying late or coming in manufacturing processes, but with determination and the early to help with the work load. They move from cell to hard work of these employees, the sky is the limit! cell as needed, performing different operations, working

STRATEGIC INITIATIVE UPDATE Continued from page 1

And many new ideas were vetted from everyone. And, in Team committed to seeing it through. And, I think I the end, we developed our 2019 imperatives. What was represent all of them when I say we are committed, we are interesting is that we all knew Positronic was poised for enthusiastic, and we are optimistic about our future. You sustainable growth, and we were making choices that will see and learn a lot about the plan starting this month, would help us achieve that kind of growth. These choices and you will all learn about your role in that plan. And, I will touch all of us in the coming days. personally invite you to join us on this journey. I need your It would be hard to overlook who benefits from growth. help. Will you help me? Our customers will benefit because we will be in a new It would be hard to have imagined one year ago that the class of suppliers who have the resources to be a long- Board would create a new President role in the company, term partner. Our shareholders benefit from a growing and that I would be invited to fill that role. What an honor business, and we will generate the growth capital we will it is to be part of this successful, 52-year-old leader in the need. And, the employees will benefit from the new career electronics industry. Positronic has come a long way, and opportunities that are generated as a company grows. its future is even brighter. I look forward to working with It would be hard to do this without a plan and a Leadership you to see new heights and break new records.

5 THE SCIENCE OF CERTAINTY. / www.connectpositronic.com