Monday, March 01, 2004

Performance Trailers, Inc.
6430 47th Street North
Pinellas, FL  33781

To Our Valued Customers:

In recent months, the price of steel has been skyrocketing due to supply and demand issues in the international market. Currently, steel pricing is highly volatile, and the short-term forecast is for pricing to continue to escalate. Steel represents a significant portion of cost in the manufacture of trailers and is included in every major component such as frames, axels, wheels, fasteners, springs and brackets. All steel consumers have been affected by these price increases, and Performance Trailers is no exception. Aluminum pricing has also increased, but not as dramatically. In recent months, Performance Trailers has been absorbing these cost increases. Although we are capable of absorbing a portion of these price increases, we cannot absorb all of them. In order for us to continue to provide you with the same level of service and product quality, we are implementing a surcharge on all trailers as shown in the table below.

Trailer Type Percentage Surcharge
Aluminum Trailers 5%
Galvanized Trailers 8%
Utility Trailers 10%

* Effective Monday 3/1/2004

A surcharge will allow us to react faster to ever changing market conditions. It is our belief that the cost of materials will stabilize in the long-term. We will continue our efforts to cut costs without jeopardizing the quality of our product and to improve productivity to better absorb these costs. When pricing does stabilize, and eventually it will, we will be able to issue a new price list reflective of then existing market conditions.

We truly appreciate having the opportunity to be your supplier. Thank you for your continued support and patience as we work together during these challenging times.

Mark Sullivan

Chief Operating Officer
Performance Trailers, Inc.