To: All Stocking Distributors

From: Joseph M. Pro Jr.

Date: October 5, 2007

Subject: A105 Forged Carbon Steel Fittings, Unions and Branch Connections

The following list price sheets will be effective November 5, 2007:

*A105 Forged Carbon Steel Fittings and Unions Price Sheet J-36. This is a weighted average increase of 5.5% over Price Sheet J-35.

*A105 Forged Carbon Steel Branch Connections Price Sheet JOT-11. This is a weighted average increase of 8% over Price Sheet JOT-10.

These increases are directly related to increasing costs of steel, energy, transportation and insurance. Additionally, we are reviewing pricing, services, terms and conditions, of all other product categories that have been affected by these rising costs.

Should these costs continue to escalate we will be required to adjust prices accordingly.

Copies of the price sheets can be obtained from our Website (www.Pennusa.com) in a few weeks and hard copies will be sent upon request.

All of us at Pennsylvania Machine Works, Inc. extend our appreciation for your continued support through the purchase of our quality products. If you have any questions please do not hesitate to contact your sales representative at 1-800-PENNUSA. Thank you.

Sincerely,

Joseph M. Pro Jr.
President