Dear Excalibur Association Member:

      We have just completed the highest production year for the Excalibur since the company was formed in 1964. During the year of 1976, 198 Excaliburs were built. It is Interesting to note that of this total amount, the Phaetons comprised 95% and the Roadsters only 5%.

      The Excaliburs are now distributed through five domestic dealers as well as a distributor in Canada and one for Europe and the Middle East.

      It is anticipated that production for 1977 will be between 225 and 250 vehicles, which Is the maximum. To do the additional production, we are going through another expansion program of adding an additional 8,000 feet to the factory's existing 35,000 feet. This will be used for an additional machine shop area and bulk storage of incoming materials. We have also finally reached the "computer age" in that our entire inventory system and purchasing control is being put on to a computer. These two changes will allow us to produce the maximum number of vehicles.

      The year 1976 has been a good year for us as it is the year we have finally turned the corner. We continue to look forward to servicing your needs for parts and any other help or information you require.

                                                                            Very truly yours,

                                                                            EXCALIBUR AUTOMOBILE CORPORATION

                                                                            David B. Stevens

                                                                            President

                                                                            William C. Stevens

                                                                            Vice President