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Today's news...3/23/05

MARCH 23, 2005 -- Hackers Attack Throwback Websites

The FBI arrested two men on March 18 in connection with a massive DDOS (Distributed Denial of Service) attacks against several websites selling throwback sports apparel, one of which was Atlanta-based Distant Replays. Its website (www.distantreplays.com) was targeted because it is a nationally known industry leader in the throwback field.

The attacker believed that by disabling his competitor's sites that he could boost traffic and sales to his own site. DDOS attacks utilize "bots" that effectively take over computers that have been infected with viruses and then launch thousands of simultaneous hits to a website, flooding the host servers to the point that they cannot process the traffic. DDOS attacks usually cripple the target site and in some cases other sites that are hosted

The attacks were allegedly ordered by an 18-year-old Michigan man, Jason Salah Arobo. He operated two websites (www.customleader.com and www.jerseydomain.com) selling similar throwback sports jerseys, as well as sneakers and watches. Through conversations using instant messaging, Arobo was allegedly able to hire a juvenile in New Jersey to carry out the attacks that flooded competitor websites as well as their respective web hosting companies. In some instances, the attacks affected unrelated businesses (including those in the banking, data storage and pharmaceutical industries) whose websites were hosted by the same companies. The first attacks began in July 2004 and continued until November, 2004.

Following the initial attack, Distant Replays immediately contacted the FBI in Atlanta and began working with other attacked competitor sites to provide as much data and information as possible. As a result, agents in Atlanta and New Jersey were able to trace parts of the attacks to several infected computers at a college campus in New Jersey.

Upon investigating those machines, agents were able to locate the juvenile in New Jersey who eventually lead authorities to Arobo. These attacks were massive in scale, causing an estimated $1.2 to $2.5 million in damage to computers and loss of business. Arobo has been released on $50,000 bond and faces up to five years in prison and a fine of up to 2X the victims'losses.

Distant Replays, based in Atlanta, GA, is a nationally known destination store and website specializing in reproduction, retro sports apparel from players and teams of the past. It was named to the Inc. 500 list of Fastest Growing Companies in 2004.

Gander Mountain Moves To St. Paul

On Monday, Gander Mountain's "Base Camp" officially relocated from Bloomington to Saint Paul. A rather large contingent of workers hiked the 18 miles from their old home to their new one.

"There's no better way to show the Twin Cities that 'We Live Outdoors' than by hiking to our new Base Camp," said CEO Mark Baker, referring to the company's motto. "Gander Mountain is about embracing the outdoors, and our employees want to show everyone just how committed to that idea we all are."

The city of St. Paul last fall offered an economic incentive to entice the retailer to the city. It is paying Gander $3,000 per job up to 400 jobs over the next five years. The monies would come in the form of a "forgivable
loan," under which the loan would not have to be repaid if the company commits to stay a certain length of time.

Friedman Billings downgraded Gander to market perform from outperform. Piper Jaffray is maintaining its market perform rating on Gander.

Johnson Outdoors Will Remain Public Company

Johnson Outdoors said that while its proposed merger with JO Acquisition Corp. received enormous support from Johnson Outdoors' longstanding shareholders, it did not receive the support of some institutions that more recently became shareholders. Consequently, the company did not receive the supermajority vote of shareholders as required under Wisconsin law for approval at the special meeting.

Helen Johnson-Leipold, COB/CEO, said, "While the outcome of today's vote isn't what we had hoped for, I want to thank all of our shareholders who supported this merger and reaffirm my strong commitment to Johnson Outdoors and its future."

US Sporting Goods Exports Rose 5.6% In 2004

According to SGMA, the dollar value of sporting goods and athletic footwear exported from the US increased by 5.6% in 2004. Exports increased by 9.7% in 2003, and have risen four of the past five years. This analysis is based on the US Commerce Department's statistical data on exports of athletic footwear and 16 sports equipment categories. SGMA reports that the total declared value of sporting goods exports for 2004 was $2.107 billion compared to $1.996 billion for 2003.

Comparing 2004 to 2003, total sporting goods equipment exports increased by 7.1%, and athletic footwear fell by 17.7%. The total dollar value of the sixteen sports equipment categories was $2.002 billion compared to $1.869 billion in 2003. Total athletic footwear import dollar value totaled $104.5 million compared to $127 million in 2003.

Among the major equipment categories, gym/exercise (+25.1%), fishing tackle (+18.4%), and other bowling equipment (+12.5%) topped the list of growth items. Exports of roller skates and parts (-55.6%), golf club parts (-14.4%), and other golf equipment (-11.9%) had the largest declines in dollar value.

The National Shooting Sports Foundation has again allocated $500,000 to assist state conservation agencies in their efforts to recruit and retain hunters. This is the third consecutive year for the special granting program dubbed "Hunting Heritage Partnership," administered jointly with the Congressional Sportsmen's Foundation. To date, nearly $1 million has been used by 25 states to develop and enhance hunting opportunities and participation.

A 29-year-old loss-prevention officer at a Sportsman's Warehouse in Riverton, WY, has been accused of stealing more than 30 items and selling the items on e-Bay. Police estimated the value of the items missing at $15,000-$20,000.

Caris & Co. downgraded Quiksilver to average from above average… Caris & Co. downgraded Quiksilver to average from above average…Analysts at Hilliard Lyons Research maintained their neutral rating on Nike, while raising their estimates. The current valuation of Nike's share is modestly attractive, Hilliard Lyons said. The diluted EPS estimates for FY05 and FY06 have been raised from $4.40 to $4.45 and from $4.90 to $5.05, respectively.

Dansko footwear announces that Kristin Carpenter Public Relations will be handling the public relations relations efforts for the brand effective immediately. KCPR will promote the launch of two new fashion-forward collections from Dansko, including the Beacon Hill collection for women and the South Street line for men.

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Sporting goods industry
Mergers & acquisitions

Distant Replays
Johnson Outdoors Inc.
Gander Mountain Inc.
Fastest Growing Companies
Caris & Co.

athletic footwear
dollar value
equipment categories
sports equipment categories

Jason Salah
CEOMark Baker
Friedman Billings
Helen Johnson-Leipold

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