The lubricant market has seen considerable pricing volatility in the past several months, and like all other manufacturers, AMSOIL has been affected. Rising costs on base oils and additives have forced all companies to raise prices on finished lubricants. And while I had not intended on spending a lot of time discussing this, we have heard some mild grumbling from the field recently and I want to address the issue directly.

The very last thing AMSOIL INC. wants to do is raise prices. We consistently hold off doing so for as long as we possibly can. Those who follow the market closely can tell you that virtually all other lubricant manufacturers have raised their prices three to four times since early February and are now set to do it again. Valvoline, for example, has announced a six percent increase to its distributors, effective September 19. Shell will boost its prices another five percent, also effective September 19. Chevron, ExxonMobil, ConocoPhillips, Citgo and BP Castrol will impose similar increases in September.

Meanwhile, AMSOIL is doing its best to hold the line. We have limited our increases to just three times during this period and each percentage increase has been held to approximately one-half of what consumers are seeing from the others. And while I cannot predict the future, I can tell you emphatically that we have no plans for additional increases now.

That’s not to say it wouldn’t be justified. We are seeing the same cost increases in raw materials that other companies are seeing. But we approach things differently. Rather than bumping up our prices we are working diligently to offset our increasing costs by finding ways to control our administrative and operational costs. We are looking at all areas of the company and taking every measure we possibly can to limit our expenditures and improve our efficiencies at all levels. Keep in mind also that the base oils and additives we use to build our products are top of the line. It costs us more to formulate our lubricants than other companies are willing to spend. Yet, while others may find ways to cut costs through formulation downgrades, we do not. It is just the opposite. We continue researching new technologies to make our products even better.

It is important for our Dealers and Preferred Customers to understand that while all companies must make a profit, AMSOIL has never, and will never, let profit become our main driver. My philosophy has always been, a half a loaf of bread is better than none. We manage this company properly and do not overprice our products.

In fact, an AMSOIL Dealer makes more money on the sale of a quart of motor oil than the company makes. And that’s the way I want it. Our goal has always been to help our Dealers become as competitive in the marketplace as they can possibly be. By holding our costs down now while others are raising theirs, we will find ourselves in an even better competitive position. Once the price increases imposed by other companies work their way down through their distributors and out to their customers, our pricing will be more competitive than ever.

And beyond price, of course, is value. Our extended drain lubricants, particularly our Signature Series line, provide value that other lubricants simply cannot match. You can assure your customers that the company you represent is taking every possible measure, in the face of rising costs, to do what is right for them.

Although the AMSOIL business opportunity has been the subject of this column many times, I am going to address it once again for the benefits of our Preferred Customers. I realize, of course, that not all Preferred Customers may be interested in owning an AMSOIL Dealership at this time, and that’s just fine. Believe me, I appreciate your business, and you can read this simply as food for thought. For those who have entertained the idea of becoming an AMSOIL Dealer, consider the many benefits the opportunity offers.

As the owner of an AMSOIL business you have freedom. You have no quotas, inventory requirements or set hours. You have no one telling you when to work, where to work or how hard to work. The only obligations you have are those you impose on yourself. Many Dealers work their businesses strictly part-time. Others work part-time for several years before becoming full-time Dealers. Still others, like Preferred Customers, are drawn to AMSOIL simply to use the products, and once they experience the quality, they commit to their AMSOIL businesses. The point is, you are your own boss. You call the shots.

An AMSOIL Dealership also offers diversity. We provide products for virtually every lubricant market, and you select those that most interest you. Most Dealers gain expertise in a variety of markets, while others find success with a more narrow focus. Dealers with a passion for motorcycles, for example, are naturally drawn to that market. They talk the talk, and armed with an understanding of the quality of our products, are totally comfortable working that environment. The same applies to the marine market, trucking market, construction market and all the other markets our Dealers bring value to.

And then there is income. I was approached recently by an elderly woman who apparently knew me as the president of AMSOIL INC. She told me she grew up in the house I currently live in. I knew she was mistaken. When she described the house and gave me the location I realized the cause of her confusion. It’s a very large, stately house located not far from our corporate headquarters. It belongs to Direct Jobbers Bill and Donna Durand. I explained that to her.

“Oh,” she said, “I thought for sure it belonged to you.”

“No,” I said, “I can’t afford a house like that.”

You get the point. The Durands receive a hefty AMSOIL commission check each month, and they enjoy those things their AMSOIL business has allowed them to afford. And why not? They have earned it. They’ve worked hard for many years, just like countless other AMSOIL Dealers who earn large monthly checks. With an AMSOIL business, like all legitimate businesses, you cannot get rich quick. But with enough determination, you can get rich.

Perhaps most importantly, an AMSOIL business provides security. You may recall a letter we published in the May issue of this column from Dealer Robert Schultz. Robert’s story mirrors the many stories I’ve heard from Dealers throughout the years. Robert wrote, in part: As you know, I have been in the hospital for just over three weeks now… What I really want to tell you is thanks to my AMSOIL business I still have an income… I wish I could personally thank Al for creating a company that not only changed the face of lubrication forever, but gives everyone the opportunity to make a great living selling great products from a great company. If not for AMSOIL I’d be dead in the water right now with no income.

When issues arise that threaten life’s stability and, more specifically, financial security, a strong AMSOIL business can keep things right. There is no better insurance policy or retirement plan than an AMSOIL business. With an AMSOIL business, you make no insurance payments. Just the opposite. You earn money each month while the value of your business grows. An AMSOIL business can also be sold or passed on to loved ones when that time comes. and one final thought. For all those who commit to building an AMSOIL Dealership I can guarantee that this company will be here for you. We are strong, we are growing and our future could not be brighter.

From the President's Desk

I received a phone call recently from a local man who has a few ties to AMSOIL. His name is Dave Esse. Dave is a high school hockey coach from a small community in the region and has had tremendous influence on many young men throughout the years. As a coach he is quite successful. Several of his players have gone on to have productive careers in the National Hockey League. Dave is also a local stock car driver. His success in that arena is not quite as noteworthy, but even with the small budget he has to work with he does manage to find the winner’s circle from time to time.

Dave’s mission was to meet me and express his appreciation for the support the company provides locally in a couple of areas. That local support is minimal compared to our large investment in national advertising, but it is significant nonetheless. When we met for lunch, Dave thanked me for securing the naming rights to the new AMSOIL Arena in Duluth, Minnesota and AMSOIL Speedway in Superior, Wisconsin. Both venues have considerable impact on the region’s social and economic well-being, and as a hockey coach and stock car driver Dave made it clear how important he thought our involvement was.

The conversation eventually turned to AMSOIL products. Dave first became aware of them many years ago. His friend’s father had been an extremely successful stock car driver and team owner in the Midwest, and Dave and his friend spent many hours at the track. They would wander the pits, observing the mechanics and picking up tips where they could. Dave recalled the issues all the teams had with gears running hot. The mechanics would have to wear gloves or use old towels or rags just to touch the overheated gearboxes. That was not the case in his friend’s father’s pit. There was no need for protection. The gearbox was not hot to the touch. AMSOIL gear lube was the difference, his friend’s father explained, and Dave gained an education on synthetic oil.

Dave went on to describe a more recent experience. He attended a NASCAR race, and through his hockey connections was invited as a guest to the pit area. There, he had the opportunity to meet with the crew of a successful NASCAR team. Dave asked about the lubricants NASCAR teams used, and the crew admitted that “brown-bagging” tactics were not uncommon. Despite commitments to use particular products, teams would conceal their oils of choice in nondescript packaging and add the fluids to the race vehicles behind closed doors. Regardless of what it said on the container, the crew explained, it was not uncommon to find AMSOIL in the container.

Neither of these stories is new to me. Three-time Indy 500 winner and racing legend Bobby Unser had the exact same experiences over 35 years ago. Bobby first discovered AMSOIL products when he contacted me with a problem. The rear end in his Pike’s Peak car was giving out after every run. It was an old unit and parts were impossible to find. Bobby’s crew was forced to fabricate parts continuously. Ultimately, I sent him some AMSOIL gear lube, and the rear end quit breaking. He could now run the entire season with absolutely no need for repairs. From that point on Bobby always spoke about how his crew could touch a gearbox fresh off the track because the gears ran so much cooler with AMSOIL.

And Bobby, too, was guilty of brown-bagging. He tells the story of a race-day preparation when he was approached by a corporate big-shot. The guy was irate because he had seen Bobby’s crew putting AMSOIL in the vehicle. Under contract, Bobby was committed to another product. When the big-shot was done blowing off steam, Bobby looked him straight in the eye. “Look,” he said, “I get paid to win races, so stay out of my business. This is how I win races.” The central theme to all of this is product quality. From the start, those who know lubrication have turned to AMSOIL. We have earned our reputation through performance, not slick advertising or evasive marketing campaigns. AMSOIL lubricants truly can make a difference. Bobby Unser and countless others discovered that many years ago.

From the President's Desk

It wasn’t all that long ago that the business of selling AMSOIL motor oil involved much more than just selling oil. Plenty of legwork had to be done before any transactions were completed. Hurdles had to be cleared, and mindsets had to be altered. Synthetic oil was still new on the scene, and customers required education. “What makes the oil so special,” they asked, “and why should I pay more for it?”

Despite the obstacles, our Dealers made tremendous inroads. The savvy segment of the motor oil market recognized the benefits of our oil. The performance made a difference. Then, as other synthetic oils began to appear, the demand for our products continued to climb. Others now shared in the education process and added support to the movement we started.

That movement has even more support today. In a market where once the automakers, oil manufacturers and industry organizations essentially closed us out, synthetic lubricants are now chewing up shares. As you will read on pages 10 and 11 in this issue of your Magazine, all of the forces that drive the motor oil market are pushing greater demand for synthetics.

In 2005 synthetic motor oil claimed five percent of the market. Today it claims seven to nine percent, and by 2019 it is projected to claim twelve and a half percent. That is tremendous growth in a very large market, but I think even that is conservative.

We can look back to just 1992 when General Motors broke ground by requiring that every Corvette rolling off its assembly lines be factory filled with synthetic oil. Eight Corvette engines had seized at the General Motors assembly plant in Bowling Green, Kentucky. Cold weather had moved in, and the thick, hard-to-pump oil did not reach the front camshaft bearings which were destroyed by lack of lubrication. At 30 degrees, incidentally, it wasn’t all that cold. It doesn’t speak well for conventional oil.

The move of General Motors to synthetics, of course, was just the first of many. Advancements in engine design are now demanding more from lubrication. Take a look at the list on page 11 in this issue of the vehicles now factory filled with synthetic motor oil. That list will continue to grow.

The organizations responsible for setting lubricant performance specifications are driving the demand for synthetics too. Oils are now required to be much more robust. Specifications calling for better wear protection, greater engine cleanliness, improved fuel economy and reduced emissions are making it more difficult for conventional oils to make the grade. And the growing demand for extended oil drain intervals continues the push for synthetics.

AMSOIL has led the way for close to forty years and has helped drive the course of lubrication. We have earned our reputation through the quality of our products, and the diversity of our product line meets the demands of all customers. As more people look to synthetic oil they will look to AMSOIL.

It all points to opportunity, and the introduction of our new OE 15W- 40 Synthetic Diesel Oil expands that opportunity even further. At a lower cost than our extended drain diesel oils, OE Diesel reaches those motorists who appreciate the performance of synthetic oil but aren’t yet ready to move up to extended drains. It’s the ideal oil for those diesel applications affected by the fuel dilution issues that prohibit extended drains. Owners of 2007 and newer Ford, Dodge and GM diesel pick-ups will appreciate the value of our new OE Diesel. With OE, they get AMSOIL quality at a price comparable to standard-drain diesel oils.

As a final note, I want to thank the Dealers who attended our AMSOIL University. I enjoyed seeing all of you and congratulate you for taking a major step toward even greater success in your AMSOIL Dealership. I encourage all Dealers to join us next year. And to all of our Preferred Customers, I can assure you that at any time you feel that an AMSOIL Dealership is right for you, we will do all we can to help in your success too.

A.J. “Al” Amatuzio
President and CEO, AMSOIL INC.

As a company, we have been extremely successful in selecting promotional venues and associations that have advanced AMSOIL brand recognition and delivered high levels of return-on-investment. Our approach has always been conservative. We don’t throw money at opportunities simply because they are glamorous or trendy. We analyze the opportunities carefully and select only those options we believe our Dealers can best capitalize on.

The motorcycle market is a perfect example. Beginning with our long-time sponsorship of the Geico/AMSOIL/Honda Supercross Team, we have strategically expanded our promotional effort in this market to include extensive motorcycle magazine advertising and a broad range of series and event sponsorships.

Most recently, we elevated our involvement with Daytona Bike Week from “official oil” to “presenting sponsor.” This ties in with our official oil partnerships with the Sturgis Motorcycle Rally, Laconia Bike Week and the Monster Energy AMA Supercross Series.

Another of our recent partnerships in the motorcycle market has generated more immediate response than any we have ever done. Beginning with 2011 models, AMSOIL motorcycle oil will be the factory ?? ll for all EBR motorcycles. AMSOIL will also sponsor EBR’s racing efforts in the AMA Superbike Series. EBR, for those who don’t know, is short for Erik Buell Racing. Erik Buell is a legendary motorcycle designer who has built some of the most innovative road bikes in the world.

His long-time association with Harley- Davidson put him at the forefront of the motorcycle world and gained him legions of loyal followers. AMSOIL was literally inundated with responses to our new association with him. Here are a few:

Just wanted to let you know that I am an owner of two Buells, am crazy about Erik Buell Racing, and will be switching from Redline synthetics to AMSOIL. Thanks!

Sincerely,
Jody Leavell

Just a note to let you guys know I will be buying and using AMSOIL in the future for my Buell motorcycle. The reason is directly related to AMSOIL’s decision to sponsor Erik Buell Racing. If your oil meets Buell’s approval, it gets mine … and you guys get my money.

Thanks for the support…and thanks in advance for providing a high quality product.

Harry Loveless

As a long time Dealer and Buell owner I just wanted to thank you and AMSOIL for sponsoring EBR. I know you will not be disappointed in their results and determination to win.

The results EBR was able to accomplish last year on a shoestring budget were amazing. I can only imagine what they will be able to accomplish with AMSOIL’s support.

I will redouble my efforts to get all the Buell owners I know to use AMSOIL products in all of their vehicles.

Sincerely,
Paul Ellis

I just wanted to say thank you for supporting EBR! I’m a loyal Buell rider as well as a fan of the new race team and company. Just wanted to let you know I will be switching from another brand to AMSOIL at the next oil change.

Thanks again,
Thomas Sartwell

I am a long time fan of Buell motorcycles and I have owned three of them, two of which I have used your products in. I, as well as many others, was deeply saddened by the Buell shut down in Oct.

2009. However, as you guys know, Erik Buell has worked his way back into the motorcycle business and released the new 1190RS. I just wanted to thank you guys for backing him and becoming the sponsor of his race team, as well as lubricating his new bike.

Doing this motivated me to become a Dealer for you guys. In fact, I just submitted my application yesterday and I am very excited to be able to see that #99 EBR/ AMSOIL bike racing this coming season.

Very respectfully,
Donald J. Wyman

I just wanted to say thanks for supporting Erik Buell Racing. I’ve got a Buell and have used AMSOIL since I’ve owned it. I’m glad that Erik is getting back on his feet and I wish you the best for the upcoming race seasons!

Sincerely,
Thomas Smith

I wanted to write to express my appreciation for your 3-year sponsorship of the Erik Buell Racing Superbike Team. I, like many other Buell riders and supporters, will be switching to AMSOIL at my next oil change.

Thanks!
Hugh Odom

Although EBR is just gearing up, projections are to produce thousands of bikes in 2012. As the factory ?? ll oil, that’s thousands of more users our brand will reach directly and thousands of more supporters spreading the word about AMSOIL. It is all about gaining more market for our Dealers, and piece by piece we are claiming our share.

A.J. “Al” Amatuzio
President and CEO, AMSOIL INC.

I was interviewed recently by a young reporter from a local television station. She was well aware that AMSOIL INC. was a major employer in the area and that our sales reach extended well beyond the local community, but, as I expected, she knew very little about motor oil. Her answer to my standard question, “What brand of oil do you use?” was typical of most. “Whatever kind they put in,” she said. The reprimand I gave her was not severe.

She asked first about my childhood, and then, knowing I had been a jet fighter pilot, asked about my passion for flying. I explained that as a young boy I would sit on the shore of St. Louis Bay and watch the mail plane land on the water. I imagined myself flying that plane and dreamed that I would one day become a pilot. We talked briefly about my flying career.

She then asked how the idea for synthetic oil originated. I explained that as a pilot I was aware that every jet engine in the world used only synthetic oil, and I reasoned that cars, trucks and other internal combustion engines could benefit greatly from the same type of technology. When I began formulating oil in the early-1960s, my critics thought I was crazy. They claimed I had been at altitude too long without oxygen. But I persisted.

I further explained that making synthetic oil for internal combustion engines was much more complicated than making oil for jet engines, and the chemistries available at the time were much less sophisticated than they are today. Base stock options were limited and the obstacles were many. Eventually, I had my oil tested at Southwest Research in San Antonio, Texas. It exceeded all test limits and proved conclusively that it could go well beyond the traditional drain interval recommendations. AMSOIL coined the phrase “extended drain interval,” and our 25,000-mile recommendation flew squarely in the face of conventional thought. We had taken lubrication to an entirely new level.

It would be a few years later, I told her, before another synthetic oil was introduced. Mobil 1 hit the market in 1974 and, coincidentally, carried a 25,000- mile drain interval recommendation. Although many AMSOIL Dealers feared that with another synthetic oil now in the game our sales would plummet, I knew otherwise. The money Mobil would lay out in advertising would only serve to support our effort. That proved to be the case. Mobil, by the way, was pressured, I suspect, and backed off on its 25,000-mile drain interval recommendation.

Our reporter friend left the interview impressed with the impact AMSOIL has had.

And speaking of impact, it is interesting that Mobil’s recent repositioning of its motor oil lineup closely mirrors the positioning of our oils. I am not suggesting, necessarily, that Mobil modeled their approach after us, but it is worth noting. Mobil Clean oils have been discontinued and replaced with a new family called Mobil Super. This line has been added to Mobil’s flagship Mobil 1 products. The Mobil Super line includes Mobil Super Synthetic, a lower cost synthetic oil recommended for 7,500 miles or six months. This oil is positioned to attract those consumers who are interested in moving up to a synthetic but are not yet ready to invest in a more expensive, longer lasting oil. According to Hesham Omar, Americas automotive marketing manager for ExxonMobil Lubricants and Petroleum Specialties, as quoted in Lube Report, the company “…anticipated that the Mobil Super Synthetic consumers will be trading up from conventional and synthetic blends. The Mobil 1 buyer is seeking a superior product, and less likely to be interested in the Mobil Super proposition.” Sound familiar? That was exactly our strategy with the introduction of AMSOIL OE.

The Mobil Super Synthetic product falls in behind Mobil 1, which is recommended for 10,000-mile drain intervals, similar to our XL oils. At the top end, Mobil 1 Extended Performance, with its 15,000-mile or one year oil drain recommendation, is positioned to attract those consumers who want the best that Mobil has to offer. Those are the same consumers who are drawn to our top-tier, 25,000-mile oils. Separate tiers of motor oils differentiated by drain interval and price, each aimed at satisfying the needs of distinct levels of consumers. Sounds familiar.

Again, I am not suggesting that Mobil intentionally “borrowed” our strategy, but it is curious. Our impact has been seen before.

A.J. “Al” Amatuzio
President and CEO, AMSOIL INC.

I have to begin this month’s column by sending out a big congratulations to Team AMSOIL snowmobile racer P. J. Wanderscheid. As you will read in this issue of your Magazine, P. J. became the first racer ever to capture four AMSOIL World Championship Snowmobile Derby titles. That’s no small feat. And while it may be true that snowmobile racing is not front page news in the southern portion of this country, it does grab attention in the northern states and Canada. Millions of people took notice of P. J.’s win and that’s fantastic brand exposure for AMSOIL, no matter how you slice it.

P. J.’s accomplishment has propelled him to legendary status in the world of snowmobile racing. The Derby championship is universally recognized as perhaps the most coveted title in the sport. The event’s forty-eight year history is a timeline of snowmobile racing’s most memorable moments. It draws the world’s most accomplished oval ice racers, as well as legends from across the motorsports world. Indy 500 winners Bobby and Al Unser have made regular appearances at the track.

Although AMSOIL has had connections for years, the company became the title sponsor of the World Championship Snowmobile Derby in 2007. This sponsorship, along with our sponsorship of the AMSOIL Championship Snocross Series, has solidified us as a dominant force in the snowmobile market. Television for these events reaches over two million people and, along with significant on-site exposure, every magazine and major news outlet dedicated to the snowmobile industry is there to cover them. With approximately three million registered snowmobiles in North America, and that’s just the tip of the iceberg, we are reaching a prime market for AMSOIL Dealers.

Equally important, snowmobile owners are primarily do-it-yourself types. Similar to motorcycle owners, they are passionate about their machines and appreciate the value of superior lubrication. Plus, they own additional equipment. Whether it’s for trucks, cars, trailers, boats or any other type of lubrication demand, AMSOIL products have earned their trust.

Beyond the exposure these sponsorships provide is the role they serve in the development and testing of AMSOIL products. All of our race teams are testing grounds. The AMSOIL products they use in the demanding conditions in which they operate are the same products we offer to the public. Unlike many other companies, we don’t make special, high-performance products for our race teams, and then use that as testimonial to sell the products we make available commercially. P. J. Wanderscheid wins snowmobile races with AMSOIL Dominator Synthetic 2-Cycle Racing Oil. Kevin Windham wins supercross races with AMSOIL 10W-40 Synthetic Motorcycle Oil. Scott Douglas wins off-road truck races with AMSOIL Dominator 15W-50 Synthetic Racing Oil. You get the point.

Our product testing, of course, goes way beyond our race teams. We constantly test our products in laboratory and stationary engine type settings, and fleet and field testing never ends for us. Our mission is to ensure that our products, without fail, measure up to AMSOIL standards. We know where the competition stands, and we will never fall behind the curve.

This issue of your Magazine features a field study that was conducted with a refuse hauling company. In short, we tested our Premium API CJ-4 Synthetic 5W-40 Diesel Oil against four other diesel oils. The conditions were extremely demanding, and the objective was to determine which oils could best maintain their viscosity and total base number (TBN) levels. Each of these features is essential in an oil’s ability to extend drain intervals and maintain wear protection. The application was a 7.6L Navistar DT 466 engine, which is notorious for shearing oils out of grade.

All four of the competing oils sheared out of grade within 168 hours of operation. AMSOIL Synthetic 5W-40, on the other hand, maintained its designated viscosity after 371 hours. The AMSOIL product also maintained the highest TBN retention rate of the five oils tested. The results indicated that AMSOIL Synthetic 5W-40 Diesel Oil was the most balanced formula in the group and more capable than the others in protecting engines throughout extended oil drain intervals. You can read the details.

On a final note related to our products, we have resurrected a program that was initially introduced in August 2008. Beginning in March and running through May we will offer a money-back guarantee tied to the fuel economy benefits of our P. i. Performance Improver. We are totally confident in the performance of this product, and with fuel prices rising, the time is right to capitalize on this opportunity. You can read about that, too, in this issue.

Bottom line, consumers can trust the AMSOIL brand to deliver the same outstanding performance we have been delivering since 1972. It is the AMSOIL reputation, and we stand behind it.

We received a letter recently from the owner of the AMSOIL snocross team, Steve Scheuring, that I am going to share with you. Steve and Team AMSOIL racer Robbie Malinoski received it from a fan who attended the AMSOIL Championship Snocross Series race in Fargo, North Dakota. It illustrates the value the team brings to the table. It has nothing to do with winning or losing or performance on the track; it has everything to do with representing AMSOIL at the highest possible level. The letter:

My son and I were at the Fargo race today. It was very cold, and I thought it would help to warm up to walk the pits for a bit. It had been a few years since we had been at a race, and I had forgotten the thrills of the sights, sounds and smells of the speed and excitement. When I was young, my dad took us to an oval or cross-country race every weekend. I have tried to continue this with my son, but his basketball has hindered our travel.

Even though more races and travels may lead to a more costly winter for Dad’s wallet, it is worth every penny. His 2003 REV will even have a number 4 (Malinoski’s number) on it. I know how busy your time is when at the track, but your kindness and caring today will never be forgotten. Thank you very much, and I wish the best of luck for you and the team for the rest of the year. After this year you may see a certain young man at the race track much more often with his dad.

What Robbie Malinoski and the AMSOIL crew did went unnoticed by the thousands of fans that day. It will not show up in the points standings and will do nothing to improve the team’s performance. But it did mean a great deal to a father and son, and it did reflect positively on AMSOIL. It enhances the image and reputation that we have worked so hard to establish.

It is not uncommon for a race team we sponsor to go the extra mile for us. We approach our sponsorships differently than many other companies do. Our goal is to build relationships that last beyond the terms of typical contracts. While other sponsors may come and go, we do not jump from one sponsorship to another. We have been with Steve Scheuring, for example, for fourteen years. We have sponsored the same supercross/motocross team for thirteen years. Our power boat racers, Terry Rinker and Bob Teague, have been with us for eight and five years, respectively. And off-road racer Scott Douglas will begin his sixth year driving for AMSOIL next season. Our teams appreciate our loyalty and go over that loyalty to us. Even my good friend Bobby Unser, who we no longer sponsor, of course, continues to promote AMSOIL at every opportunity he gets. We built a relationship, established the loyalty and it is still paying dividends for us. To our racers, an AMSOIL sponsorship means much more than just the dollars it represents.

So I thank Steve Scheuring, his team and all of the other racers who proudly wear the AMSOIL colors. They represent us well.

It’s interesting how things work out. I have been thinking about the subject of my next message to our Dealers these past few days. I wanted to tell you all how great business has been and congratulate you on how well so many of you are doing in this business.

Then, I got a call from my good friend, Jack Arotta, and I have an all new message not quite as upbeat.

Jack was the first person to use my experimental synthetic motor oil back when I was flying jet fighters and starting an oil company was only a dream for me.

He put my experimental oil in his brand new 1966 Ford. ( I eventually told him he had better drain it until I did more testing.) In later years, I kidded him about putting untested oil in his new car. He said he had to do it. After all, I was his commander.

Anyway, Jack is totally sold on AMSOIL products. He owned a business in Duluth, Minnesota, where he operated a number of vehicles, including delivery vans. He would literally run those vehicles until the bodies fell off the frames, but the engines and drive trains were still going strong on AMSOIL lubricants.

Jack called me from the west coast of Florida, where he was visiting his sister and her husband, Ray. Ray had just purchased a 19-foot runabout with a 350 Chevrolet engine. Jack told him he should switch the boat over to AMSOIL lubricants. Jack has owned and operated a number of boats on Lake Superior over the years and they were all lubricated with AMSOIL products.

Jack set out to find an AMSOIL Dealer. He looked under lubricants in the yellow pages, but there were none listed. He called a number of marine supply stores, but to no avail. He finally stopped at a marine supply store near Ray’s home and asked why they didn’t stock AMSOIL Lubricants. The owner said he had received a number of requests for AMSOIL but he had never been approached about marketing the products.

Now this is where I knew my message was going to change. I’m sure most of you are just like me. There’s nothing you dislike more than to hear that a potential customer can’t find you or your products. It’s hard for me to believe that there is a single phone book in this country that doesn’t have an AMSOIL Dealer listed, but I guess there are.

If your business has been growing and you haven’t advertised in the one place that most people look when they want to find a product, just imagine how much better you could be doing if you did advertise in the yellow pages. And if your business is not doing as well as you would like and you haven’t advertised in the yellow pages yet, for goodness sakes, do it now!

Also consider how many businesses are out there right now who know about your products, have had requests for your products, yet have never been given the opportunity to become a retail outlet for your products. These are business people who would welcome a visit from an AMSOIL Dealer to explain how they could profit from selling AMSOIL products, as so many other retail businesses have been doing in recent years. They may have seen our magazine ads, or our logo on racing machines on TV, or had customers requesting AMSOIL products, but they have never once been approached about selling them. To my way of thinking, there is something wrong with that picture.

Yes, these are good times for AMSOIL and AMSOIL Dealers, and my original message was to celebrate this fact. But considering Jack’s story, business is obviously not as good as it could be. I remember many years ago, the common complaint from people who were interested in using AMSOIL products was they couldn’t find a Dealer. There is really no excuse to hear that complaint today, and it is very disappointing when I do.

My friend Jack finally broke down and bought some Mobil 1. He was very apologetic, but he figured at least it was a synthetic oil. He said he put in some 5W-30 and asked what I thought of that. I had a hard time being too critical, but I certainly wasn’t enthusiastic. I said, “It’s better than nothing, I guess.”

As the economy slows down, consumers have become even more demanding. They want maximum value for their money. That is good news for AMSOIL Dealers, because our products are not luxury products.

They are solid investments that help keep high priced vehicles and equipment operating properly and lasting longer. They deliver full value and then some.

But we can’t expect people to beat a path to our door. We need to make it as easy as possible for them to buy from us. That means yellow pages advertising. That means signing up Retail Accounts. If you are not doing either of these, it’s certainly time to begin!

Another year begins. From all indications, it should be another good year for AMSOIL and AMSOIL Dealers. Last year, sales were up, new commercial and retail accounts grew significantly, our preferred customer program was very successful, and sponsoring in general was outstanding.

In addition to this, internet sales exceeded everyone’s expectations and the number of inquiries and responses we had from our advertising numbered over 25,000 for the year. We respond to each and every inquiry with sales literature and assign the leads to T-1 Certified Dealers for follow-up.

Our co-op programs with T-1 Certified Dealers have been growing, as well. The co-op race program grew over 50% last year, and the co-op trade show program was up over 20% for the year. These are programs where AMSOIL shares part of the expense with Dealers in the promotion of our products. The fact that the co-op programs are growing every year not only reflects our growing Dealer base but demonstrates the commitment our Dealers have in promoting their businesses.

We’ve been very fortunate. Our growth is not typical of what’s been happening around us. Considering the sluggish economy during the entire year and the terrible events of 9-11-01, many companies experienced a very disappointing year in ’01, with prospects for the first quarter of ’02 not much better. Unemployment has been rising and is expected to top 6% soon. Many companies have had major layoffs and more are expected.

Did you know that AMSOIL has never had a layoff in the history of the company? We’ve been in business for nearly thirty years through good times and bad, and we have never, in all those years, had to resort to layoffs. That doesn’t mean there were no lean times, because there were. We all weathered the storms and came out stronger than ever.

In the early years our growth was almost unmanageable. We had a revolutionary new product line unlike anything people had seen before and everybody wanted in on the ground floor. In recent years, our growth has been more steady and solid and we are on track for continued success. The market for our products is huge, and an AMSOIL business is still a ground floor opportunity today!

What’s in store for us in ’02? I predict more of the same. Steady growth. Growing name recognition for AMSOIL products. A continued trend towards longer drain intervals among all the vehicle manufacturers. Improved Dealer income opportunities. More new products. In short, a very exciting and rewarding year ahead for all of us!

In addition, we have some exciting events that will soon be taking place here at the AMSOIL home office that are going to have a positive affect not only on us as a corporation, but on all our Dealers and customers, as well.

On pages 8-9 in this issue of Action News is a story about a major investment we have made in both your and our behalf. It is a new computer system and software program so advanced, it will change the way we do just about everything. Its implementation lays the groundwork for properly managing the next twenty years of growth, providing information and services to us and our Dealers beyond anything we’ve experienced before.

But, like anything new, it’s going to take some trial and error to learn how to use it and iron out all the bugs. For over a year, we have had a team of consultants working with each department here at AMSOIL instructing and working with our people in order to make the transition to this new business management system as smooth as possible. Effective February 1, 2002, our pre-flight training will be over and we’re going to actually start flying on our own.

We ask for your patience during this period. Short term, it may be a little disruptive, but long term, every Dealer and customer will benefit from its implementation. We’re totally confident of that!

So 2002 will be another exciting year for us, that’s a certainty. Despite what’s going on around us, I expect our business and yours to continue growing. Today more than ever, there is a need and demand for our products. Tomorrow, the need will be even greater. I wish every other business well in 2002, but regardless of how the times affect them, I believe we will come out of the new year stronger than ever!