Leveling the Playing Field In the seventeen years since our company was founded, Horizon has strived to provide you with the best service we possibly can. We've tried to deliver friendly, competent Sales Reps and responsive leadership for you to discuss issues that can't be immediately resolved with our staff. We are constantly striving to ensure that you find doing business with us is easier and more enjoyable than with any other company in the industry. Over the years we've developed many programs including JR Rewards, Co-op, Fast Forward, QuickShip and QuickShip Direct, FastServe, FastServe RMS, and many others. I'll be the first to admit that we're not perfect, but our goal is to help you to improve your competitiveness and profitability in as many ways as possible. For these reasons, I'm excited to announce a new program for our loyal customers: HobbyShopNow, or HSN. In a nutshell what we're doing is opening up our horizonhobby.com e-commerce Web site for use by our dealers. We're doing this for a couple of reasons. First, we're sincere in our desire to help you in any way possible: the more successful you are, the more successful we are. Second, we understand the frustration felt by many dealers who believe they're not playing on a level playing field when it comes to the web, as it takes resources beyond the reach of most retailers to really be successful in e-commerce. And third, while we've always been straightforward about our objectives with our own Web site (that is, to promote our proprietary brands), we recognize that there are lingering doubts about where we're headed with it. So we thought we'd put that to rest once and for all, and give you the opportunity to compete on the Web if you desire, and increase your sales from the growing number of consumers who choose to shop online. Here's how it works. You get a copy of our Web site and shopping cart with all references to Horizon Hobby eliminated. We can help you customize it with your own logo, graphics, text, pictures, colors, etc. You get access to the same 60,000+ items that horizonhobby.com sells, and you get to set your own prices if you like (within MAP guidelines where applicable, of course). You needn't worry about credit card authorizations, because HSN guarantees that. And order fulfillment is done for you as well - HSN picks the order from our stock, packs it, and ships it, with your shipping label. In fact, HSN and Horizon are completely transparent to your customer. Your part is bringing customers to your Web site, maintaining relationships with them, and handling post-sale servicing. And our fee structure is very reasonable. In our opinion, a retailer that has both "bricks" and "clicks" can have an especially strong, defensible position in the marketplace. Customers like choices. For instance, some customers like to research products on the web, and then place their orders in person. And the idea of being able to buy online, but return in person is really appealing to a lot of other consumers. HSN makes sense for us because driving revenue for ourselves from our website was never our primary objective. It may make sense for you because it allows you to concentrate on customer relationships, marketing, and selling, while we take care of all the behind the scenes logistics. If you're interested in finding more out about the HSN program, feel free to call us at 1-866-293-9707 (toll-free). Regardless of whether or not you're interested in HSN, thanks for continuing to do business with us! Mike Gillette President Horizon Hobby