collaborating to promote policies which will improve New York Citys environment while creating high quality jobs for New Yorkers.

This year, we were also re-designated as the official New York State Regional Technology Development Center for New York City.

ITAC receives significant financial support from the New York State Office of Science, Technology and Academic Research (NYSTAR), New Yorks high-technology economic development agency, and the National Institute of Standards and Technol-ogy Manufacturing Extension Partnership (NIST MEP). ITAC serves as New York Citys NYSTAR-designated Regional Technology Development Center and is one of nearly 350 MEP locations across the country. ITAC also receives significant support from New York City.

About ITAC

The Industrial and Technology Assistance Corporation (ITAC) is a not-for-profit economic development organization whose mission is to strengthen the New York City economy by improving the performance of small- to mid-sized firms that produce technical and manufactured products.

ITAC combines education, consulting, training and research into programs that support the growth of these firms.

Workshops focus on industry best practices, while our consulting services leverage the expertise of staff professionals and a wide re-source network. Through on-site training and one-on-one coaching, ITAC builds staff skills

so that companies can change and adapt. Our research into New York Citys changing business sectors help manufacturing and technology firms take advantage of market-place opportunities.

During FY 2006, ITAC assisted 404 busi-nesses a 25% increase over 2005! We also delivered 13 business assessments, 40 strategic and business plans, and countless workshops ranging from supervisory skills to technology funding.

As a result of these services, ITAC clients reported that they created and retained 627 jobs, reduced their costs by $8.7 million, increased or retained $48.6 million in sales, and invested $10.2 million in new buildings and equipment.

ITAC served on the citywide Zoning For Jobs coalition, which advocates for New York Citys industrial businesses and the New York City Apollo Alliance, an association of business, labor, environmental advocates and community-based organizations

February 2007

People and potential thats what New York City is all about. Throughout 2006, The Industrial and Technology Assistance Corporation [ITAC] was in the midst of both: helping to create a more fertile environment for job creation and retention, and providing businesses with the know-how to capitalize on their potential.

I am pleased to present the Industrial & Technology Assistance Corporations Fiscal Year 2006 Annual Report. Through training, expert consulting services, education and advocacy, ITAC continues to help individual firms thrive in New York City.

Our performance is measured by the success of our client companies their growth, competitiveness and productivity. ITACs network of university, consulting and economic development partnerships enables us to leverage our effective-ness far beyond our individual efforts. Healthy manufacturing and technology businesses contribute to the diversity of jobs and multiply their impact throughout every sector of the economy.

Through our wide array of services, ITAC provides firms with the tools to increase capacity and manage growth. Whether a company needs to develop more business to use newfound production capacity resulting from process improvement, or institute the internal systems needed to accommodate explosive growth, ITAC can help them build bridges to attain their goals.

ITACs goal in FY 2006 was to identify New York City firms that were poised for growth and provide services to turn possibilities into reality. We helped them to write strategic plans to take advantage of their unique strengths and linked them with funding sources to execute their business models. Other ITAC clients were introduced to new production technologies or assisted in bringing their own promising technologies to market. Finally, we aided firms in reducing shop-floor waste and saving money with the purchase of energy-efficient equipment.

Nurturing New York Citys business growth is important not only to the hundreds of thousands of families who depend on manufacturing and technology jobs, but also to the citys main export sectors (including construction, hospitality, finance and real estate) that rely on locally-produced products to function smoothly. These firms provide quality jobs that support New York families and help to diversify and stabilize the local economy.

ITACs accomplishments are a testament to the unflagging dedication of ITACs staff, resource network, board of directors, funders and partners. Many thanks to you all our accomplishments would not be possible without your support.

Sincerely,

Sara P. Garretson, ITAC President

253 Broadway, Room 302 New York, NY 10007-2300 t 212.442.2990 f 212.442.4567 www.itac.org

NYSTAR Funded

a NIST Network MEP Affiliate

Through the Manufacturing Extension Program (MEP), ITAC offers an array of services to hone the competitive edge of New York City manufacturing firms:

Strategic and business planning

Sales and marketing

Human resources services and training

Lean manufacturing

Relocation support and plant layout

Environmental and energy assistance

Advanced technology for manufacturers

Over the past year, ITAC helped 123 local manufacturing businesses meet the challenges of global competition by adopting best practices, reaching new markets, cutting costs, and implementing new technology. Whether they need to relocate a factory, meet customers demands for product quality certification, develop a strategic plan, or train their workforce, New York City manufacturers turn to ITAC for assistance. Our educational and assessment programs reached an additional 281 firms.

ITACs Lean Enterprise program helps participating firms embark upon the lean journey by teaching them to apply core Lean principles to streamline their processes. ITAC hosted 5 public Lean Manufacturing work-shops in FY 2006, training 33 individuals from 18 firms. We also delivered 52 on-site Lean sessions which resulted in enhanced skills for New York workers.

In response to increased manufacturing relocation activity across the city, ITAC launched its MoveSmart/StayLean program, which supports local industrial firms through the entire relocation process. The program includes helping firms plan for future needs, introducing them to service providers, de-veloping new plant layouts, and overseeing overall relocation management.

As the result of an agreement between the Mayor and City Council, ITAC was able to offer subsidized MoveSmart/StayLean services to North Brooklyn manufacturers (see sidebar next page).

Manufacturing Competitiveness

ITAC is always there for us and willing to give advice and support to help our business succeed.

Anthony Giumenta, Jr., COO Architectural Grille

ITAC gave us a fresh perspective, and encouraged us to focus on continuous improvement.

David Haber, Vice President D.W. Haber

D.W. Haber: Adopting Lean Manufacturing

This fourth-generation Bronx metalworking firm, which produces and repairs silver plate catering pieces for the hospitality industry, needed to improve its work-in-process (WIP) and turnaround times.

Company VP David Haber worked with ITAC to learn more about Lean Manufacturing and implement its techniques on his shop floor. ITAC trained Haber and his staff in Lean principles and reorganized processes to improve efficiency including cross training the production staff to create a more flexible workforce.

D.W. Haber was able to drastically reduce WIP and significantly improve its lead times. Repairs that previously required six weeks are now turned around in just three.

Thanks to the increased production capacity gained from Lean improvements, the company has shipped record amounts of product in the last few months, with no overtime or additional hires required.

Architectural Grille: Laying the foundation for growth

Though Architectural Grille was thriving in its new Brooklyn location, the Giumenta family knew it could improve its processes for manufacturing grilles and vents.

Together with ITAC, the company conducted a series of training and strategic planning sessions to upgrade the firm principals general business skills, identify growth opportunities, and steps to increase workforce efficiency.

As a result of these sessions, Architectural Grille is overhauling its production processes and refining its personnel policies, including the development of a new employee manual, to ensure compliance with current federal and state employment regulations.

As Architectural Grille grows, it will promote floor staff to supervisory and sales positions and continue to rely on ITAC to help build the skills of its workforce.

With increased relocation activity among New York City manufacturers, ITAC saw an opportunity to help these firms stay produc-tive and remain in the city; we created the MoveSmart and StayLean Program.

MoveSmart helps relocating manufacturers develop a plan to optimize new real estate, while StayLean shows firms how to use their current space more efficiently and streamline operations to improve profitability.

In 2006, ITAC received funding to offer subsidized MoveSmart/StayLean services to manufacturers located in the recently re-zoned North Brooklyn area. After meeting with more than 40 businesses in the affected area, we did follow on work with eleven. Six firms opted for Stay Lean and four for Move Smart. Among the latter is Nulux, a lighting manufacturer that was forced to relocate when its building was sold. We were able to assist four of the firms which had planned to relocate to accommodate their planned growth in their current facility. One firm con-solidated several facilities into one location.

City Councilwoman Diana Reyna has successfully sponsored a citywide expansion of the MoveSmart/StayLean program for Fiscal Year 2007.

Move Smart / Stay Lean

In FY 2006, ITAC assisted over 110 technology entrepreneurs in developing and bringing their products to market. Our technology clients value ITACs ability to link them to academic, funding and technical resources, while providing services such as:

Entrepreneurship training

Business plan assistance

Identifying and applying for R&D grants

Development of strategic R&D partnerships

Intellectual property information

Preparation for debt or equity financing

ITACs FastTrac business development program targets technology entrepreneurs and firms that are poised for their second phase of growth. Last year, over 30 participants completed this hands-on boot camp, with 6 receiving funding as a result of ITACs efforts.

As the New York City-based partner in the Small Business Administration Federal and State Technology (FAST) Partnership, ITAC supported small businesses in applying for federal Small Business Innovation Research (SBIR) funds. In FY 2006, ITAC assisted 40 companies in filing SBIR applications, with awardees ranging from a developer of academic testing software to a biotechnology firm.

ITAC was also recognized by the Space Alliance Technology Outreach Program (SATOP) as the leading source of referrals for its engineering services in New York City.

In FY 2006, ITAC launched TechNYC, a program to identify local businesses engaged in product innovation and research and development. Random surveys were conducted to determine the opportunities and challenges faced by these firms. Additionally, ITAC analyzed employment and other data to determine the economic impact of technology firms in the region. A formal report with key findings and policy recommendations will be released in early 2007.

Technology

ITAC gelled all I needed in every aspect of my firm legal, financial and or-ganizational and paired me up with the resources I needed to make it happen.

John Haller, Founder PortableApps.com

The FastTrac speakers were excellent able to break down the com-ponents of a successful business into easy-to- understand pieces.

Lucien Harriot, President Mechanism Digital

PortableApps.com: Off to the right start

When John Haller of PortableApps.com completed ITACs FastTrac program, he knew he was well on his way to developing his business idea: a community website and platform for computer users to replicate their PC on any Windows-based computer. But Haller also recognized that there was more work to be done to bring his product to market and create a viable business.

ITAC helped Haller finalize his business plan, prepared him to meet with financial backers, and introduced him to a team of profes-sionals including an intellectual property attorney, a technology PR firm, and potential investors to launch his product.

PortableApps.com has received widespread coverage in the mainstream media and leading technology publications such as PC Magazine, Information Week, and Wired.

Mechanism Digital: Investing in their own growth

Lucien Harriot saw that competition was increasing in his marketplace, with more firms developing the 3D film and TV animations for which Mechanism Digital was known. Recognizing that he needed to know more about the science of business to remain competitive, Harriot registered for ITACs FastTrac entrepreneur boot camp course.

When class discussion turned to marketing his firm to outside investors, Harriot was initially skeptical, as he was planning to keep the firm privately held. His viewpoint shifted when ITAC convinced him to view himself as the key investor when gauging the wisdom of company expenditures.

Through FastTrac, Harriot gained an ability to analyze potential business strategies and quantify outcomes, resulting in better targeting and wiser expenditures. He also improved his productivity by more effectively leveraging the expertise of his staff.

Hidden beneath the radar of the New York City economy, there is an emerging industry the development of serious games. Think Digital Games and what probably comes to mind is a video game played for fun. Some games, however, are serious business including those used by the U.S. Depart-ment of Defense to train fighter pilots or games that achieve health or education objectives.

During 2006, ITAC helped this emerging industry in several ways.

On March 29, 2006, with NYSTAR we hosted a Roundtable on Digital Simulation for Homeland Security which was attended by some 75 experts in Digital Media, Gam-ing, Homeland Security and Academic Research Centers. The day long conference discussed new developments in Digital Media as it relates to Homeland Security efforts, and what the future holds for this ever-changing medium.

ITAC also participated in the creation of Games 4 Change (G4C), the regional chapter of the Serious Games Initiative, an association of firms participating in this new industry. We also collaborated with G4C to develop a partnership with the New School University which is resulting in the creation of a new lab within the University which will support innovation in this growing medium.

Supporting an Emerging Industry

For over a decade, ITAC has assisted companies in reducing their environmental footprint while improving their bottom line. ITAC has used complementary approaches with clients: first, focusing on getting waste materials out of the dumpster and creating value by recycling; second, by applying Lean manufacturing.

ITACs goal is to help companies understand that environmental improvements and business growth go hand-in-hand:

Reducing and recycling solid waste

Reducing use of water

Lowering energy use and cost

Preventing pollution

In FY 2006, ITAC substantially overhauled its Sustainable Business service offerings, tailoring them to help local firms take advantage of ever-increasing green oppor-tunities. We supported the transition of the NY Wa$tematch program to a new program manager which freed our staff to redirect energy towards supporting local firms in their efforts to develop greener products and processes.

During FY 2006, our Sustainable Business Unit assisted approximately 100 firms to save over $800,000 in waste disposal costs; in turn their activities resulted in the diversion of 6,207 tons from the waste stream.

ITAC and NYIRN conducted a study and co-authored a report entitled Manufacturing Green: Producing a Sustainable NYC. This report (see following page) outlines the opportunities for local businesses to become green building suppliers, and offers policy recommendations to expand these business opportunities for local firms. The report also highlights growth in demand for environ-mentally sensitive products, especially throughout the construction supply chain.

Sustainable Business

ITAC helped us examine the different departments in our company to reduce waste and make things more efficient.

Lucky Lee, Vice President of Sales Luckys Real Tomatoes

Working with ITAC has proven to be a really great partnership for HCC. They have helped me grow my business

Lisa Hendrickson, President Hendrickson Cabinet

Luckys Real Tomatoes: From Red to Green

Top restaurants and their customers love Luckys red ripe tomatoes harvested in Florida and transported with care to New York City and 20 cities across the country.

This vibrant family-owned business was referred to ITAC through the North Brooklyn Relocation Assistance Program, when it felt limited by its current facility and an inability to expand due to new zoning regulations.

Luckys soon found that there were numerous ways it could take advantage of ITACs expertise. By applying the principles of Lean enterprise, the company was able to improve functions as diverse as order processing, truck parking and product distribution.

ITAC was also able to improve Luckys waste handling processes, locating a vendor that recycled tomato waste into organic compost for farmers an improvement that reduced Luckys trash hauling costs by 30%.

Hendrickson Custom Cabinets: Putting Waste to Work

Hendrickson Custom Cabinets (HCC) designs, manufactures and installs custom cabinetry for high-end residences across New York City. Due to the customized nature of its work, HCC faced large amounts of leftover lumber and wood waste that it wanted to reduce in keeping with its corpo-rate credo: Courtesy, Respect, Generosity.

ITAC conducted a Lean assessment to identify ways in which HCC could reduce waste. Lumber is now repurposed into art materials used by more than 70 City elementary schools and sawdust is sold to the Bronx manufacturer of a compound to clean up oil spills. The company has also adopted greener processes, including a new finishing technique that lowers VOCs by 30%.

With the launch of a new consulting practice, HCC has turned its green expertise into a brand-new revenue stream advising other firms on the use of green building materials.

In partnership with the New York Industrial Retention Network (NYIRN), ITAC has been tracking the increase in high-performance buildings, or green construction, for several years.

Together, the two organizations set about documenting this trend. The resulting 2005 report, Building Green: New Opportunities for New York City Manufacturers, docu-mented the rise in green construction as a fundamental shift rather than a passing fad.

A subsequent survey of city manufacturers uncovered a keen interest in developing green products, and identified the need for a wide range of assistance programs. These needs, along with recommendations to address them, are outlined in a second ITAC/NYIRN report, Manufacturing Green: Producing A Sustainable NYC.

Recommendations include developing:

More networking opportunities for manufac-turers and product specifiers. Better links between manufacturers and resources for financing and R&D. Programs to help mature businesses adapt to changing market conditions.

During FY 2007, ITAC will be developing and delivering services aimed at helping building products firms to take advantage of the opportunities presented by the increase in high performance buildings.

Manufacturing Green: Producing A Sustainable NYC

When manufacturing businesses need a little extra help to optimize their human resources, they can tap into ITACs vast network of contacts and resources. Here they will find assistance for delivering special-ized training, recruiting skilled employees, and developing effective human resource policies and systems.

ITACs workforce development services ad-dress a variety of needs:

Building the HR infrastructure needed by growing businesses

Conducting human resource audits to ensure regulatory compliance

Recruiting qualified candidates for middle management positions

Building employees skills through technical and non-technical training

Improving supervisory skills

Identifying grant funding for training programs and guiding firms through the application process

ITAC is committed to building workforce skills for companies so their employees can enhance their contribution to the companys competitiveness. During FY 2006, ITAC delivered training to upwards of 750 workers in 33 firms in various skill areas, including manufacturing process improvement (lean manufacturing), customer service, super-visory development, computer skills, and quality assurance. Some of these training sessions were conducted in Spanish and Chinese as well as English. Most of the training was provided for shop floor workers and clerical support staff.

As a result of specialized training, several firms obtained ISO 9000 and other ISO related internationally recognized certifications.

Finally, in FY 2006 ITAC helped five firms recruit eight new managerial employees; we conducted HR audits for two firms; and helped four firms create new personnel manuals.

Workforce Development

ITACs supervisory training program was excellent for our company. We will continue to use ITAC as a resource as our company grows.

Ho Sing Lee, President Wonton Foods

We can count on ITAC to expose us to manufacturing and industrial opportunities and resources of which we would have otherwise been unaware.

Harvey Fein, President DFB Sales

Wonton Foods: Training Supervisors

With much of its middle management staff promoted from the production floor, upper management at North Brooklyn-based Wonton Foods recognized that these employees needed additional training to become more effective managers.

Wonton turned to ITAC, which created a training program for 22 middle managers from 14 different departments. The pro-gram, conducted in English and Chinese, addressed skills such as effective manage-ment practices, communication, time management, goal setting and delegation.

As a result, Wonton management reports positive changes among all 14 departments. Uniform policies and procedures were established and enforced, departmental functions were improved, and better inter-personal relations among the staff has led to decreased conflict.

DFB Sales: HR Infrastructure

New York Citys continuing building boom, combined with heightened interest in green building products, represented a significant growth opportunity for DFB Sales in Long Island City. To keep up with demand for its solar shades and durable applied wall surfaces, the company needed to expand its operations and add a number of skilled positions.

ITAC worked with DFB to create the infrastructure needed to support the expansion, including a new organizational chart, job descriptions, and recruiting.

The companys new employees have all flourished, reports DFB President Harvey Fein, particularly the inside production manager. With his expertise, DFB has implemented a number of cost-saving measures.

DFBs dedicated workforce is the key to the companys growth, and its ongoing partnership with ITAC only serves to make DFB stronger.

During the course of FY 2006, a number of ITAC clients received New York State training grants. These grants enabled the businesses to leverage their investment in their workers, particularly their shop floor and clerical workers. The skills developed out of these training programs are transfer-able to other industries. Some examples of our training projects are:

Ellanef Manufacturing Corp. employs over 300 people in the manufacture of precision parts for aircraft. Over the course of a year, ITAC trained approximately 200 workers in lean manufacturing principles and applications. Ellanef credits the training with enabling employees to increase company sales by $5 million and implement cost savings of $1.5 million.

Honeybee Robotics Inc. develops robotic solutions for NASA, utilities and a broad range of other applications. Honeybee is training their workforce in preparation for attaining ISO 9001 certification required by their customers.

Major food manufacturers now need ISO 22000 certification to sell internationally; the training also addresses HAACP require-ments. Some of the food companies we are training towards certification include: Fat Witch Bakery, maker of brownies; Damas-cus Bakery, producer of pita bread, and Twin Marquis, manufacturer of Chinese food.

Wolf Gordon produces and distributes wallpaper. ITAC delivered training in supervisory development and customer service. Most of the people trained had been promoted from entry level shop floor positions. The company is so pleased with the results of the training that they have committed to additional training which will be outside of any grant funding.

Investing in the New York City Workforce

Financial Statement Fiscal Year 2006

INCOME

Federal $1,272,951

New York State $1,371,053

New York City $346,260

Program Revenue $1,049,544

Private Sector Support $96,371

TOTAL INCOME $4,136,179

EXPENSES

Salaries $2,437,051

Program - Non Personnel $1,051,128

Administrative - Non Personnel $554,846

TOTAL EXPENSES $4,043,025

INCOME LESS EXPENSES $93,154

Location of ITAC Client Firms

Financial Statement Fiscal Year 2006

Bronx10%Queens

19%Brooklyn35%

Manhattan26%

Other10%

City of New York

Consolidated Edison

Empire State Development Corporation

JPMorgan Chase

NASA Space Alliance Technology Outreach Program National Institute of Standards and Technologys Manufacturing Extension Partnership

New York City Council

New York City Department of Sanitation

New York City Department of Small Business Services

NYS Department of Labor/Workforce Development and Training Division

NYS Office of Science Technology and Academic Research

Sovereign Bank (formerly Independence Community Bank)

Valley National Bank

Funding Sources

ITAC Board of Directors 2006

Joyce Healy (Chairperson) CEO Visual Graphic Systems

Carolyn Everett Executive Director CUNY Economic Development Corp.

Vicki R. Keenan Regional Manager, NY/NJ Metro Area Printing and Imaging Association of New York State, Inc.

Richard Kennedy Senior Director Cushman and Wakefield

Arthur Kressner Director, Power Supply Research and Development Consolidated Edison Co. of NY Inc.

Oliver Lednicer Chairperson Manufacturers Association of NYC

Fred Levine President Marcus & Weisen, Inc

Richard Loiacono President Kruysman

Al Mangels President Lee Spring Co.

Joe McDermott Executive Director Consortium for Worker Education

Alex Neuburger (Secretary) President Magic Novelty Company, Inc.

Timothy G. Noble (Treasurer) Vice President JPMorgan Chase Bank

Nigel Pearce (Chairman of Audit Committee) Managing Director Finance New York City, LLC

Mal Schuster Sr. Project Manager Pfizer Inc.

Ex-Officio Robert W. Walsh Commissioner New York City Department of Small Business Services

Design by www.pauldmillerdesign.com Photography by Veronica Price

ITAC created and retained 627 jobs

ITAC reduced clients costs by $8 million

ITACs work helped businesses increase or retain $48 million in sales

ITACs clients invested $10 million in new building and equipment

253 BroadwayNew York NY 10007

Tel: 212 442 2990www.itac.org

2007 ITACThis report is printed on paper made of 10% post consumer waste.