WOOD PELLETS PREMIUM PINE BLEND PELLETS White Pine Forest Pride *Current Possible Product *Current Pricing Subject To Change PREMIUM HARDWOOD PELLETS Nation’s Choice Trae Heat Lignetics -Blend of white pine and hardwood for more heat and less than ¼% ash -10% more BTUs per pound than hardwood pellets -Minimum cleaning -Less than ½% ash -Hardwood pellet -Burns clean and strong -All natural and efficient $6.99 Each $299.50 Per Ton ($5.99 Each) $5.99 Each $269.50 Per Ton ($5.39 Each) Dear Wood Pellet Customers, December 17, 2014 This year has been a very unusually year in the wood pellet supply business. In the 15 years we have been selling wood pellets in large quantities, we have never seen a winter season where demand is so much higher than the supply so early. We have already sold twice as many bags this year than last year. That is an increase from 34,000 bags to over 70,000 bags (or 32 more truckloads). It is our hope that supply will catch up with demand now that winter has started and many homeowners have purchased their pellets already. We increased our summer purchase from our primary supplier, LIGNETICS by 16 trailer trailer loads over last summer. Even with that huge increase in early supply, we keep our normal winter orders in place with the manufacturer, but they have not been able to keep up production and fill our orders. While we get one or two loads each month from Lignetics, we sell out of Lignetics pellets within several days each time we get a delivery. Last year we started stocking a very high premium wood pellet from American Wood Product, made from white pine lumber. While it costs a bit more, the heat provided is 10% more per pound and the ash generated is almost zero. This is probably the best wood pellet we have ever seen on the market. The only negative to this pellet is it is more expensive than regular premium hardwood pellets and the vendor is raising the price again in January. Sales of white pine pellets have also increased by about 10 times over last year. This pellet we are managing to keep in stock most of the time. New in December 2014, Lignetics version of this premium pellet with the same performance is the Forest Pride brand As we are not able to get enough Lignetics brand wood pellets to meet our customers’ needs, we are purchasing another premium hardwood pellet from International Wood Products. That pellet comes in either a Nations Choice bag or a Trae Heat branded bag. We have been able to buy 10 truckloads of these pellets. This pellet is a premium hardwood pellets that is a good substitution for our Lignetics Brand pellet. Our biggest struggle as a company is to have pellets in stock that we can keep the price reasonable for our customers. Wood pellet suppliers that have inventory to sell us this winter have raised their prices substantially. Our costs have increased almost to a point we cannot afford to stock them. We had to make a choice to either wait until spring for enough supply at regular prices, or purchase them now at much higher prices. We intentionally chose to purchase them regardless of cost and price them just above our costs so that we can have wood pellets in stock if you need them. We recognize the prices of wood pellets are high right now but we promise to keep our prices as low as financially possible during this temporary shortage. Our profit margins on wood pellets are very minimal and we intentional cut our markup to keep the price as low as possible. Our costs increased an average of almost $50 per ton and we increased our ton price only $30 per ton. Our price per bag (for less than full ton purchases), we did not increase. We want to thank you for choosing us as your supplier for wood pellets over the past years. promise to work diligently to keep the products you need in stock at fair prices. Sincerely, Edward Shenk President Weavers Hardware Company [email protected] We appreciate your business and we