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Letter from the President:

The Economy, Arnco, and You.

Oil closes in record territory, consumer confidence drops and construction slows.

It’s time to brace for the perfect storm as we encounter higher prices and weak demand. Once again we continue to be shocked by the outrageous prices for a barrel of crude oil. Add to this the drop in consumer spending and the weak construction market and we’re in for a challenging period ahead.

As business people, we no longer apologize or try to justify price increases because this is way beyond anything that we can control. The best we can hope for is that our customers will continue to recognize the value provided by our goods and services. It is clear that demand will drop, but to respond by cutting prices with hopes of gaining more market share will only lead to lower margins and less profit in the end. We have spent years building relationships with customers – and have earned their confidence by providing quality products and honest advice. Now is the time to continue along that path.

As a trusted advisor and supplier, Arnco wants you to know that we value your business and will continue to supply the value added products and services that we are known for. We will not compromise our quality or let you down. In the meantime, if there is anything that we can do to help you strengthen your business with training from Arnco University or any of the other programs that we offer please let us know. Thanks for your business and loyalty to Arnco.

Sincerely,

Larry Carapellotti

For further information, call 800-821-4147, or visit the newly designed Arnco website at www.arnconet.com