Neville Chemical has been in contract negotiations with our hourly plant workers. On July 15, 2006 the contract between Neville Chemical Company and the United Steel Workers Union expired. Since that date, we have operated under a series of contract extensions in an effort to bring these negotiations to a successful conclusion. We regret that we have failed to resolve key issues and negotiations were broken off after union negotiators rejected the company’s last, best and final offer.

This action has resulted in a work stoppage that began at 11:59 pm on July 31, 2006. Consequently, manufacturing operations at our Neville Island production facility have ceased. These events force us to implement force majeure on the entire range of resins and resin solutions produced at our Neville Island, PA facility.

The management of Neville Chemical is aware of the serious consequences this action will create in the global hydrocarbon resin market. More importantly, we regret the effect that this work stoppage may have upon our customers and suppliers. However, we believe that it is imperative to negotiate a labor agreement that is reflective of the economic changes and challenges faced by our company in order to remain a viable and competitive resin manufacturer in a dynamic global market.

All of us at Neville deeply appreciate your understanding in this difficult situation. We will do our utmost to settle this issue and to limit the inconvenience that this action causes.