Open Letter to Our Advertisers April 30, 2009

April 23, 2009

The last 18-months have been an economic roller-coaster from which many businesses have suffered.  We, at the Pennysaver, have remained upbeat and positive in the long-term vision that this too shall pass.   Along the way, we have held ourselves accountable for managing our own costs and infrastructures in response to softer advertising revenues.  We have aggressively made changes to our organization, including very difficult decisions about people and our products.  And frankly, this has not been about profits.

We could see and feel the world changing back in 2007.  Housing was declining, the mortgage business was in trouble, the auto industry was beginning to suffer, and fuel prices were escalating.  In October 2007 we instituted promotional pricing platforms for specific types of businesses to address these issues.  Then as the world continued to decline in 2008 we responded with two new distribution products and in 2009 we added new color enhancements.  We have upgraded the look of our newsprint, and in effect branded all these changes as our own economic advertising stimulus package.

This advertising stimulus package is designed to be a very aggressive rate structure.   Classified and display advertisers customers are offered more homes for their advertising message to reach at a reduced rate.  In essence, we rolled back prices to levels not seen in almost 10 years.  These offers allowed you to buy more for less so you could build customers and traffic, even in a slow economy.  And we are grateful for those who took advantage of these opportunities and used us to help their dreams come true as business owners and entrepreneurs.

While we will continue aggressive pricing promotions, we need to be very sensitive to changes in the costs of running our operation.  In May of this year, the Post Office- our partner and delivery arm, will raise our rates.  They too need to keep their business going and providing the level of service we all expect.  This increase in our delivery costs and our need to manage our business, will lead to the Pennysaver making a slight adjustment to our stimulus package rate structure.  These new rates will increase slightly from where they are today and will still be less than rates years ago. This small change will help us to provide more opportunity for business owners and entrepreneurs to succeed even in this economy.  Our people can provide you the specifics at your convenience.

The road to recovery will be long for all of us, with bumps along the way.  Today the news seems a bit brighter.  Some companies are showing signs of “bottoming out” and not declining further.  Other companies have found ways to thrive combining print and the internet.  We see indicators that while the economy is still tremendously down, little patches are stabilizing and in some instances, showing a slight improvement.  We hope your world is showing signs of recovery as well.

Respectfully,

Orestes Baez, Chief Executive Officer and President

Pennysaver Group, Inc., Hanover, Maryland