CO-OPERATIONS ACQUIRES FULFILLMENT SPECIALTIES, INC.

Acquisition vaults Co-Operations to prominence in Pacific Northwest

Portland, OR – March 31, 2003 – CO-OPERATIONS, INC., announced today that it has acquired its leading competitor, Fulfillment Specialties, Inc. Both companies operate in Portland and provide third-party warehousing, fulfillment and related outsourcing solutions to their customers. The acquisition closed late last week.

Founded in 1984, Fulfillment Specialties listed Intel, the Oregon Tourism Commission, Weyerhaeuser, PacifiCorp and Freightliner among its leading customers. Most of the customers are expected to transfer their accounts to CO-OPERATIONS. CO-OPERATIONS has been in business since 1993. CO-OPERATIONS’ noteworthy customers include ESI, Clarity Visual Systems, Extensis, Jacuzzi, PacifiCare of Oregon and Washington, Radisys, Tripwire and Xerox.

“We’re pleased to welcome the new customers to CO-OPERATIONS,” said Patricia Granum, CO-OPERATIONS’ president and chief executive officer. “I’m also very happy that so many of FSI’s key employees are joining us. With their talents and CO-OPERATIONS’ technological edge, our longtime customers – as well as the new ones - are sure to benefit from this transition.”

“CO-OPERATIONS is eager to meet the needs of their clients,” observed Todd Davidson, Executive Director for the Oregon Tourism Commission. “We are pleased to have such a technology savvy company take on our account.”

Despite the downturn in the economy, CO-OPERATIONS has experienced steady growth over the last four years. Since 1999, when The Business Journal recognized it as one of “Oregon’s 100 Fastest Growing Private Companies,” CO-OPERATIONS has continued to grow each year while achieving greater profitability. Granum commented, “In recent years, we have invested in technology and built state-of-the-art systems to serve our customers. That investment is paying off as our customers see we can do more for less.”

With nearly one acre of warehousing and production facilities under one roof, CO-OPERATIONS is consolidating its newly acquired accounts at its facilities in southwest Portland. At least four of FSI’s warehouse and production staff and all but one of FSI’s account managers have also agreed to join CO-OPERATIONS. With the new employees, CO-OPERATIONS’ employee base will now total 21 full-time personnel. This total nearly doubles CO-OPERATIONS’ headcount from two years ago.

Anticipating that its existing customer base would lower their marketing and operational budgets, the company’s management has actively promoted outsourcing as a quantifiable cost-saving measure. CO-OPERATIONS strategically targeted regional and national accounts to expand its market share in the sluggish economy. These efforts have not only strengthened its relationship with fast-growing local ventures like Extensis, Tripwire and Clarity Visual Systems, but in recent months has attracted national accounts, such as Jacuzzi and World Savings Bank, to CO-OPERATIONS. This success, complemented by the additional accounts achieved by the FSI acquisition, places CO-OPERATIONS as one of the Pacific Northwest’s leading full service warehousing and fulfillment companies.

“You have to expect that a company like CO-OPERATIONS will continue to grow,” commented Scott Rogers, Extensis’ Operations Manager. “We have relied on CO-OPERATIONS for more than 8 years. It’s a great team over there. And the more they have grown - the better their service has become.”

CO-OPERATIONS, INC., a woman-owned, privately held Oregon corporation, is a full-service outsourcing provider for companies that assemble, ship and distribute literature or products to end-users worldwide. Co-Operations provides outsourcing solutions for CD replication, product procurement, hand assembly, warehousing, inventory management, call center services, as well as literature, product and project fulfillment. The company was a finalist for the Oregon 2002 Tech Awards "Technology Service Company of the Year."

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