Harbor Acquisition Corporation and Elmet Technologies, Inc. Announce Elmet's First Quarter 2007 Results

Business Wire, June 18, 2007

AEM sales increase 15% in first quarter of 2007 year over year

BOSTON & LEWISTON, Maine -- Harbor Acquisition Corporation (AMEX: HAC, HAC.U, HAC.WS) ("Harbor") and Elmet Technologies, Inc. ("Elmet"), announced the financial results for Elmet's first quarter ended April 1, 2007.

Elmet is a privately-held, fully-integrated manufacturer of custom designed and engineered advanced enabling materials ("AEM") products that are manufactured primarily with molybdenum and tungsten. On October 17, 2006, Harbor and Elmet announced they signed a definitive agreement for Harbor to acquire Elmet. Following consummation of the acquisition, Elmet's current management team, led by John S. Jensen, CEO, will continue to lead the organization and the combined company will change its name to Elmet Technologies Corporation.

"Elmet showed continued strength in our sales and backlog of AEM products in the first quarter of 2007," commented Mr. Jensen, CEO of Elmet. "We are continuing to invest in manufacturing improvements, new products and sales and marketing, directed at growing our AEM product line. This investment has manifested itself in increased AEM sales to new and existing customers in 2007."

Q1 2007 Results

Sales for the first quarter of 2007 increased to $14.5 million from $14.4 million for the first quarter of 2006, primarily as a result of increased sales of AEM products, which were partially off-set by a reduction in sales of contract lighting products.

Sales of AEM products increased to $9.9 million for the first quarter of 2007 from $8.7 million for the first quarter of 2006, an increase of approximately 15%, primarily due to continued growth in demand for products used in the medical, semi-conductor, electronics and furnace markets.

Contract sales, consisting of sales of lighting products under a supply agreement, decreased to $2.6 million for the first quarter of 2007 from $3.7 million for the first quarter of 2006, a decrease of 30%, primarily due to weaker demand for these products.

Sales of purchase products decreased to $2.0 million for the first quarter of 2007 from $2.1 million for the first quarter of 2006.

Gross profit increased to approximately $5.0 million for the first quarter of 2007 from $4.8 million for the first quarter of 2006, as a result of a continued shift to higher margin AEM products. Gross margin increased to 34.3% for the first quarter of 2007 from 33.1% for the first quarter of 2006 as a result of improved product mix and manufacturing performance.

Elmet's selling, general and administrative expenses increased to $2.1 million for the first quarter of 2007 from approximately $1.3 million for the first quarter of 2006, primarily as a result of costs associated with the sale of Elmet to Harbor ($0.4 million), increased costs associated with the debugging and installation of an enterprise software system ($0.2 million), and increased sales and marketing costs ($0.1 million). Elmet believes costs associated with the debugging and installation of its enterprise software system will cease during the third quarter of 2007.

Net income decreased to $1.2 million for the first quarter of 2007 from $1.6 million for the first quarter of 2006, primarily as a result of increase selling, general and administrative expenses.

Backlog as of April 1, 2007 was $11.5 million. Backlog consists primarily of purchase orders received for products deliverable within 90 days. Backlog should not be relied upon as indicative of Elmet's revenues for any future period.

Earnings before interest, taxes, depreciation and amortization ("EBITDA"), which is a non-GAAP measure, for the first quarter of 2007 excluding non-recurring expenses related to the proposed transaction with Harbor, as well as expenses associated with the enterprise software system, increased to $4.3 million compared to $4.1 million for the first quarter of 2006. The increase in adjusted EBITDA was primarily attributable to a favorable mix shift to AEM products with higher margins and improved cost controls in Elmet's manufacturing facility.

The table below reconciles Elmet's adjusted EBITDA (as described in the preceding paragraph) to Elmet's net income (loss) from continuing operations for the quarters ended April 2, 2006 and April 1, 2007.

[TABLE OMITTED]

1. Includes (i) professional service fees and expenses for the transactions described in Harbor proxy statement, and (ii) implementation expenses paid to information technology consultants and temporary employees for installing and debugging Elmet's enterprise software system.

About Elmet Technologies, Inc.

Originally founded in 1929, Elmet was founded in late 2003 and became an independent company in early 2004 when its current CEO Jack Jensen led the management buyout of Elmet from its former parent, Philips Electronics North America Corporation. Under Jensen and his management team, Elmet has enjoyed growth by providing innovative refractory metal solutions to OEMs serving such industries as data storage, semiconductor, medical, electronics and lighting. Elmet now employs approximately 240 personnel, including highly-skilled sales, design, engineering, and production professionals at its Lewiston, Maine headquarters. Elmet's products are typically custom-engineered components used in products such as medical imaging devices, silicon wafer chip manufacturing equipment, and specialty commercial and residential lighting applications.