SmartMail’s 2003 Business Strategy Results in Significant Growth

Explore this investment 02.04.04

Atlanta – February 4, 2004 – SmartMail Services┬« is pleased to announce the success of its aggressive growth strategy during the 2003 calendar year. SmartMail acquired two companies, expanded its processing facilities to 17 SmartCenters and broadened its suite of delivery service offerings to include Flats, Catalogs, Bound Printed Matter, Media Mail and Parcels.

“The SmartMail team had an outstanding year and accomplished several milestones,” says Matt Vettel, chairman of SmartMail and partner at Great Hill Partners. “By expanding our service offerings and continuing our network build out, we met our overall strategic objective of strengthening our value proposition for our customers.”

SmartMail’s 2003 growth strategy was two-fold focusing on both growth and customer retention. The company added 189 new customers during the calendar year, and launched retention initiatives that increased its service offering giving mailers a variety of delivery service options. Increasing customer access to information, SmartMail also enhanced its reporting and monitoring tools such as web-based tracking, delivery performance reporting and electronic invoicing.

“Our ability to maintain consistent growth year after year stems from our focus on new customer acquisition while retaining our current customer base,” says Don Berry, executive vice president of Sales and Marketing for SmartMail.

In April SmartMail acquired Clearwater-based Global Logistics, a parcel delivery company, and three months later Drop Ship Express, a Minneapolis-based mailing and shipping company. Within months of merging the organizations, all corporate functions were centralized to headquarters in Atlanta including Finance and Information Technology.

Efficiently integrating the businesses, SmartMail optimized air and truck lanes, consolidated duplicate courier routes, and integrated operational and financial systems. Consolidation of processing facilities within close proximity of one another resulted in 17 SmartCenters located nationwide with new facilities located in Philadelphia, Minneapolis, Memphis and New York.

“The synergies realized from merging all three organizations increased the mail density processed in our facilities to 3 million pieces a week, which translated to improved delivery times for all services,” says Berry.

To manage peak volumes SmartMail expanded the footprint of three facilities and added additional sortation equipment in high volume processing centers, which have the ability to process several thousands of mail pieces an hour.

With addition of a ground delivery network, SmartMail broadened its suite of delivery services to include products ranging in weight from two ounces to 70 pounds. The company also rolled out a new service offering of warehousing products, which provides a delivery solution for catalogers. The ability to warehouse products allows catalog companies to take advantage of SmartMail’s unique value proposition and consistent delivery times by positioning product closer to the final destination.

Reflecting the success of SmartMail’s aggressive growth strategy, the calendar year ending December 31, 2003 resulted in a 57.6 percent increase in GAAP accounting.

SmartMail ended the year by appointing an eighth board member, Ed Cook, to its Board of Directors. Cook, a private investor since May 2001, will serve as an independent director and chairman of the audit committee.

About SmartMail Services

SmartMail Services offers high-volume mailers and shippers budget ground and expedited delivery services for Flats, Catalogs, Media Mail, Bound Printed Matter and Parcel packages. With an expansive domestic footprint of 17 processing facilities nationwide, SmartMail meets delivery commitments, while yielding reductions in both operational costs and postage fees for its customers. Value-added services include address verification, ZIP code correction, online tracking and reporting, and selective routing. For more information, please visitwww.smartmail.com.