Hills, Changyuan Team Up To Build Extrusion Equipment

Hills Inc. – a West Melbourne, Fla.-based developer of multicomponent fiber extrusion technology
– and Changyuan Elastan Machine Manufacturing Co. Ltd. – a China-based manufacturer of elastic
filament equipment – have entered into a joint development agreement to design, develop and produce
melt-spun spandex fiber extrusion machinery for the man-made fiber industry. Hills will sell the
machinery outside China under the Hills/CY brand name. A machine will be available for
demonstration at Changyuan later this year.

March 2005