3/7/17 WS Steel Subject: Destruct Cut Hi Geoff, I wanted to fire you an email on the success of the destruct cut feature on PEP 2017. In the past, we have had difficulties with cutouts flipping up on the machines and causing damage to nozzles. While PEP was a vast improvement over our previous nesting software when it came to advanced sequencing to avoid such occurrences, it is nearly impossible to create a perfect sequence that avoids all potential collisions, especially when PEP software has such high plate utilization. Our latest laser machine, the Trump 5040 fiber laser runs even closer to the cutting surface and at lightning fast speeds, further exacerbating the collision avoidance challenge. The destruct cut option allows us to apply destruct cut within a set of parameters that we choose to breakup cutouts into small pieces that fall through the slats, so that we can avoid downtime and maintenance costs due to collisions. We have two lasers that can run 24-7 with minimal operator supervision, and now we can run those machines with less staff supervision costs and increased up time. In the past, we had to tab all of the cutouts to be 100% sure to avoid collisions, but those tabs had to be removed by hand at the part picking station and any marks left behind had to be polished out. The destruct cut adds a small amount of cut time to the nest, however those costs are quickly offset considering the rising cost of machine operator labor and maintenance, so overall we are thrilled with the efficiencies gains at our finger tips with the destruct cut feature. We are running machines through the weekend without supervision and pulling parts immediately on Monday morning. Our lead times are shortening and shop floor efficiencies are improving as a result. We are always excited to see the continuous advancements with the already industry leading PEP software. Have a great day, Ellery Note: destruct cuts vary according to the size of the cutouts, lead-in location and sequence cut direction. Destruct cuts that come close to a lead-in are offset.