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Tuesday, March 18, 2014

GDSI Responds to Remington Outdoor Company's CEO

Last week an interoffice memo was leaked from George Kollitides that stated the Unsolicited Offer to Purchase Remington Outdoor Company, Inc. (Formally Freedom Group) was merely a publicity stunt. Apparently this was done to calm any rumblings among employees that may have been apprehensive about changes within the company. Now the CEO of GDSI is firing back with his own response to set the record straight in stating their offer was no sham.

The CEO of GDSI, Richard Sullivan points out the financial viability in reference to his prior success and that the key goal is to give the company freedom in its operations by offering liquidity free from the potential problems of hot button issues inherent in the firearms industry, e.g. selling off a company below value due to an isolated incident. GDSI has a history of mergers in acquisitions under various company names. The names and ticker symbols have changed over time, so its difficult to see a full picture of the financial standing of GDSI given its current company profile. We can see some merit to Mr. Sullivan's claims, but money talks. Cerberus has not responded to the unsolicited offer to buy their company nor have they publicly released much information about their plans to divest themselves of Remington Outdoor Company, Inc. However, a lot has changed over the past year, so it makes sense that they would keep their cards close to the vest.

March 17, 2014
Mr. George K. Kollitides, Chairman & CEO
Remington Outdoor Company, Inc.
870 Remington Drive
Madison, NC 27025-1776
RE: GDSI’s Unsolicited Offer to Buy Remington Outdoor Company (“ROC”)
Dear Mr. Kollitides:
It has come to my attention that GDSI's filing of a Form 8-K and companion press release last Tuesday, March 11th, has been misconstrued and mischaracterized in certain media accounts. I wish to dispel these misguided notions and set the record straight. And I am happy to speak with you directly by phone or in person to resolve any misunderstandings.
First, GDSI is serious and qualified in its commitment to acquire ROC. In the last company (Applied Digital Solutions, Inc. - NASDAQ:ADSX) which I built from a $60K investment, revenues grew to over $350MM from $1MM through 42 acquisitions, and shareholder value increased to $2.5B over a five-year period. I have led manufacturing companies and created shareholder wealth of significance over the past half century.
Second, I am prepared to work with you and ROC senior management to ensure a smooth, seamless and successful transition. GDSI's plan is not to run and operate ROC. That is the role of ROC management. GDSI's value and contribution to shareholder's equity stem from our proven record of success (same management from ADSX) in helping to integrate transformative technologies; fortify brand leadership strategy through partnerships and alliances; and provide stable, long-term capital through a global shareholder base devoid of divestiture mandates and/or other regulatory limitations.
Third, it is precisely because the ROC sale process last year was inconclusive that the GDSI offer merits fair, complete review and consideration. Our view is that ROC is a valuable and iconic global brand leader that deserves a better alignment between shareholder base and the business/industry which ROC serves. I am confident that an open and earnest discussion between us will yield a mutually acceptable understanding that GDSI represents an extremely attractive liquidity partner for ROC.
Yours truly,
Richard J. Sullivan
Chairman & CEO