TO: ALL OMAHA STANDARD DISTRIBUTORS

RE: Steel Surcharge, 4/19/04

As you are undoubtedly aware the steel market has been extremely volatile over the past 90 days. Despite contracts with our steel suppliers covering pricing and quantities, we are facing possible shortages and have already been hit with several surcharges, in some cases amounting to increases of over 50%. We are being told that more surcharges are on the way. In effect, our steel suppliers have reneged on the contracts and we are forced to pay the higher prices or not get steel. Obviously, if we don’t have steel—our primary raw material—we can’t produce products.

While we have a price increase of 4% going into effect March 15, this will not cover the steel price increases we are already paying. On the other hand, we have commitments to you which we want to do everything in our power to honor and do our best to protect orders already in house. Accordingly, even though we are absorbing most of the surcharges, we will maintain the 3/15/04 pricing for all shipments up to April 19. We will be adding a surcharge of 4% to the prices of our products loaded/shipped on that date and thereafter. This delay in passing on the surcharges will give you time to work with your customers to minimize the impact of the higher prices.

We appreciate your understanding in this very difficult situation. We will keep you timely informed as to any future changes regarding steel pricing and availability.

Thank you for your business. We hope that we continue to deserve it in the future.