Sra slide show austin powder co.

STRATEGIC REVIEW and ANALYSIS: Austin Powder Company Thursday, August 25, 2011 1

SRAStructure The Benchmark and Recommendations ,[object Object]

Management Overview of Services

10 11 POSSIBLE CANDIDATE TO REMOVE 1 LINE @$44.07R1

110 Management Overview: The following section provides a complete overview of the communications deployed at Austin Powder Company. This is intended for management personnel to gain a sense of the overall products in use and the associated costs. 22

Local Services- 23 110 Currently DCT Telecom provides the main Local PRI to Austin Powder Company headquarters for Local Service in Cleveland Ohio. There is also one Local PRI in Midland Texas with AT&T, as well a newly installed Local PRI at the Red Diamond facility in McArthur Ohio via Time Warner Business Class. This newly installed Time Warner PRI at Red Diamond has not yet billed prior to delivery of this report. In addition to those three Local PRI’s; AT&T, Frontier and Verizon are the three main carriers who provide the lion’s share of local lines to Austin’s major sites, along with many ancillary carriers to augment Austin Powder Company’s more rural locations across the US and Canada. The following table depicts the monthly costs for current local services:

Local Services- Continued 24 110-111

Local Services- Continued 25 111

Local Services- Continued 43 120 Notables Items on Local Service- Cramming and Wire Maintenance fees are below. The following table outlines these charges previously approved per Austin to be removed:

Local Services- Continued 46 121-122 Corrected

47 Local Services- Continued 122 Notables Items on Local Service Continued- ,[object Object],Geostar Recommendation R2: Internal Review and remove ,[object Object],Geostar bid this PRI service with Time Warner Cable with the following results (other carriers similar in price but due to TWC offer to bring service in via fiber* for other possible benefits it is chosen here). Other bidders included XO Communications, Paetec, and First Communications. Their bid documents are located in section 8 of the appendix material provided. DCT current costs- $729.83 (includes circuit, usage, numbers, caller ID costs) TWC offer - $433.00 monthly Savings potential - $296.83 monthly *TWC is offering a fiber run into the main headquarters for this PRI and a main Internet connection. Internet connection will be discussed later in this report. Geostar Rec R3: Change Carrier

48 Local Services- Continued 122-123 Notables Items on Local Service Continued- ,[object Object]

TELUS account# (212194477 1) in Calgary bills $12.00 per on all 9 lines on this account in order to publish them in the phone directory- totaling $108.00per month

Frontier account# (304-877-6682) in Mt. Hope, WV- $0.92Geostar Rec R4: Remove all or partial Geostar Rec R5: Remove ,[object Object],[object Object]

50 Local Services- Continued 123-124 Notables Items on Local Service Continued- ,[object Object],Geostar Rec R7: Verify Need ,[object Object],Geostar Rec R8: Remove ,[object Object]

Line 770-304-0883, which bills on AT&T account# (770-304-0808 (243 0623)) at the Madras site in Newnan, GA rings into “AMS Locksmith Co.” dispatch center. Monthly cost for this line is $67.33

Foothills Telephone account# (MAGBUS-154091) at the Manton site in Martin, KY contains two lines only. Both of those lines ring into other businesses. Line 606-884-5166 actually rings into “Frazier Creek Mining”, while 606-884-5167 rings into “Appalachian Security”. Monthly cost for these two lines combined totals $38.80Geostar Rec R9: Remove if no affiliation

51 Local Services- Continued 124 Notables Items on Local Service Continued- ,[object Object],Geostar Rec R10: Remove Geostar Rec R11: Remove and seek credit ,[object Object]

During Test Call phase it was learned that three lines (956-831-2313, 7760, and 7792) at Austin Star Detonator at the Brownsville, TX site are charged for a feature called “Local Plus/ aka Extended Local Calling Area”. This feature essentially makes in state calls Local. Monthly cost per line is $140.00. Total for all three lines combined carrying this feature is $420.00Geostar Rec R12: Remove

52 Local Services- Continued 124 Notables Items on Local Service Continued- Twelve Toll Free numbers are billing on these Local services invoices at $10.00each per month or $120.00 monthly – plus usage. ,[object Object],Geostar Rec R13: Remove charges and place with chosen LD Carrier ,[object Object]

866-938-0512 – RTN - 864-938-0512 (Reached Fax/Modem Tone) (Usage= $4.41)

866-938-1086 – RTN - 864-938-0512 (Reached Fax/Modem Tone) (Usage= $0)

866-938-1087 – RTN - 864-938-0555 (Reached Susie) (Usage= $0)

866-938-1001 – RTN - 864-938-1001 (Reached Susie) (Usage= $1.38),[object Object]

54 Local Services- Continued 125 Notables Items on Local Service Continued- ,[object Object],Geostar Rec R18: Remove/seek credit ,[object Object]

859-375-2424 = $41.25per month

828-645-6885 = $49.99per month

276-328-2697 & 5645 = $83.52*This equals a combined total of $174.76per month on busied lines* Geostar Rec R19: Remove **We were unable to acquire the local invoices for the site in Marshall, TX as well as the site in Sudbury, ON. Multiple voicemail messages were left, as well as reaching out to Austin Powders billing team. ** ** Geostar Consulting was provided a list of all Austin Powder locations. When scouring through the billing, it was determined that there are two local invoices for two separate sites in Massachusetts that Austin pays for monthly. They are as follows: Account #: 978-744-6666 (145 007 7) in Salem, MA at $27.92 Account #: 978-448-3721 (860 007 6) in Shirley, MA at $23.12

55 Local Services- Continued 126 Notables Items on Local Service Continued- ,[object Object],Geostar Rec R20: Change/Renew

56 Local Services- Continued 126 Notables Items on Local Service Continued- Total possible monthly savings under this Local section could be as high as $5,377.54

Long Distance Services- 57 127 DCT Communications is the main Long Distance Provider for Austin Powder Company. It does so over 2 Long Distance T1’s at Corporate Headquarters in Cleveland Ohio. Currently there is a MAC (Minimum Annual Commitment) associated with this LD account in the amount of $72,000.00. There is also some old AT&T Long Distance and WATTs service from what appears to be old carry over, prior to the LD switch to DCT Communications. In addition, there are also stray Long Distance bills included here from multiple carriers. This can occur when new lines are added and not properly PIC’d to the corporate LD carrier, or this can also happen when switching to a new carrier when some lines are inadvertently omitted during the mass conversion.

Long Distance Services Continued- 58 127

Long Distance Services- Continued 59 127-128 The Minimum Annual Commitment is of great concern, as it is far too high given the current usage. In addition, Geostar projects that usage will actually decrease due to changes in information transfer and technologies. Geostar bid this sector to Qwest, Fidelity, and AireSpring as they are each low cost providers of quality long distance services. The table on the following slide breaks down their associated costs for comparison:

Long Distance Services- Continued 60 128

Long Distance Services- Continued 61 128 Notables Items on Long Distance Service Continued- Here, the monthly savings provided by AireSpring is not only 15%, but it also is quite flexible and competitive when considering there are no minimums required. The DCT approach is outdated and when Geostar posed the question to have it lowered to zero, DCT declined to entertain such a request. Additionally, Airespring's switched traffic rate is $.0421 for outbound intrastate and .0578 inbound intrastate. This would save Austin and additional $768.00 per month if transferred. Geostar Rec R21: Move services to Airespring to lower costs and have no liability

Long Distance Services- Continued 62 128-129 Notables Items on Long Distance Service Continued- ,[object Object],Austin has 3 lines that have been tagged to this service for years, originally set up for outbound calling only. These lines are: ,[object Object]

740-286-2105Geostar Rec R22: This service is in the process of being removed per Austin in a previous recommendation – These three lines appear under the Red Diamond Plant location on as a separate bill (Account: 614 100-0016 670) for this product. During Geostar’s research, AT&T was asked to provide usage statistics on these 3 lines under the watts product. AT&T found no such usage for the last 1 year period and noted that not many in the organization even know that this still existed and how it works. It is merely a legacy billing that should have ceased years ago. Austin is billed a monthly charge of $2,901.84 for these unused services. Geostar requested a credit for these services since AT&T reported no shown usage for over 1 year. However, even though there has been no usage, AT&T denied the credit request stating that they cannot know what Austin has been using them for and there was no previous formal request to cease operations.

Long Distance Services- Continued 63 129 Notables Items on Long Distance Service Continued- ,[object Object]

DCT only charges a flat rate of $5 per month for unlimited toll free’s on the account.

Additionally, Geostar have found three separate and consistent LD bills with the below referenced carriers:(AT&T Account: 030 040 1659 001) ,[object Object],Geostar Rec R23: Move traffic to the proper carrier, either DCT or newly selected, to achieve savings and eliminate unnecessary billing

Long Distance Services- Continued 64 129 Notables Items on Long Distance Service Continued- Geostar Rec R23: Move traffic to the proper carrier, either DCT or newly selected, to achieve savings and eliminate unnecessary billing ,[object Object], This consistently bills $54.70and is for LD only on five lines at the Northampton, PA location Geostar Rec R23: Move traffic to the proper carrier, either DCT or newly selected, to achieve savings and eliminate unnecessary billing ,[object Object], This consistently bills$25.29and is for LD fees on one line (740-596-3914) at the Red Diamond facility. *During test call phase of report, this line is one of the Business Lines reflecting a RNA condition. These three types of standalone LD bills were usually created as an add-on in the old AT&T days when someone from the organization would call and say; “we need long distance on x lines” etc. Typically a whole new bill would be created versus assigning it to the often lower rated master account. Then, when Austin converted to DCT over the years, this stray bill would go unnoticed in the line conversion and simply run on at a retail plus rate since there is no master agreement to stop the rates from increasing.

Long Distance Services- Continued 65 130 Notables Items on Long Distance Service Continued- ,[object Object]

(AT&T Account: 131 011 8341 692) for 800-458-6144, which rings to (740-596-5286) at the Red Diamond facility in McArthur, OH. Monthly cost during sample month was $38.55Geostar Rec R24: Eliminate and move to proper carrier ,[object Object],[object Object]

Long Distance Services- Continued 67 130 Notables Items on Long Distance Service Continued- ,[object Object],Geostar Rec R26: Move to proper carrier ,[object Object]

Domestic Local Invoices contained $642.73 on 2,332 minutesin residual LD.

Domestic Local Invoices contained $197.76 in fees

Eliminate fees and reduce rates below .05 on proper carrier to save approximately $723.89 monthly.Geostar Rec R27: Move to proper carrier at reduced rates Total possible monthly savings under this section could be as high as $6,171.70 (Additional Tax Reductions projected to be approximately $500-$750.00 monthly)

68 Cellular / Wireless Services – 131 Austin Powder Company utilizes a combined total of seven wireless/cell providers in the USA and Canada. In the United States, Austin houses the lion’s share of wireless services with Verizon Wireless. It also uses AT&T Wireless, and Alaska Wireless. (There was also a Sprint Wireless bill disclosed at the beginning of this audit. However, attempts at receiving a bill copy were denied by Jeff Britcher, as he stated there were only a few lines present and they would be “going away”.) In Canada, Austin uses four providers for this service. They are TELUS Mobility, Bell Mobility, Info-Sat, and SaskTel. Below is a listing of these services by provider:

69 Cellular / Wireless Services – 131

70 Cellular / Wireless Services – 131-132

137 Cellular / Wireless Services – 165 *Totals in red highlights are lines that billed over $100 during sample month / orange billed over $200

138 Cellular / Wireless Services Continued– 165 Notable Cellular/Wireless Items ,[object Object], ,[object Object]

Lines available to be upgraded at the end of this year – 317

That leaves only 120 lines that roll into 2012 while under contract

When 3yr Term expires - 566 of 686 lines will be "upgrade eligible"

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