IMPORTANT DEALER ANNOUNCEMENT

October 6, 2003

Dear Dealer,

It is always difficult to come to the end of an "era", but Hobie Cat Company has had to face the fact that it is no longer economically feasible to continue to build our Hobie 17 Special Editions and Hobie 17 Sports, as well as our Hobie 18 Special Editions and Hobie 18 SX’s. Both boats enjoyed life cycles that would make any manufacturer proud. More importantly, we are proud of the introduction to sailing and enjoyment they provided to so many people for so many years. For us, it is like saying goodbye to old friends.

We had an unexpected order come in from offshore that depleted our Hobie 17 finished goods inventory completely, and the volume in which we would have to reorder certain inventory items to continue production of the boats is just not warranted by the sales volume. We have set aside parts to support the boats that are in the field for the foreseeable future.

The Hobie 18s have also declined in volume to the point that we cannot justify future production. We do, however, have a few boats left in stock that can be dedicated either as Special Editions or as SX’s. When these boats are gone, we will not resume production, but again will maintain a very reasonable parts inventory to support the boats in the field.

The bright side to this announcement is that we have introduced some boats in recent years that have, slowly but surely, rendered the H17s and H18s virtually obsolete. The Hobie Getaway, in particular, has fulfilled, and to some extent surpassed, many of the features of both boats for the recreational user, and for less money. The Hobie Tiger and, to a lesser extent, the Hobie FX-1 in this size range have raised the bar a bit on the racing side of things, and have re-invigorated the racing scene in many parts of the country. Our Hobie 16 numbers remain constant, which in itself is unusual for a boat of it’s vintage, and thus remains a very healthy and important part of our product lineup.

We hope that this announcement in some ways makes your lives a bit easier and gives you a clearer focus on which boats to stock for your inventory. We appreciate your support of both products through the years, and value your continued business now that we have streamlined your choices.

I also want to announce that I will be out of the country from the afternoon of Thursday, October 9th through the rest of the month. If you would like to discuss this issue, or anything else with me, please catch me before Thursday afternoon. I miss you guys already! Have a great October!

RUTH TRIGLIA