by Monte Washburn
President and CEO

We are rapidly approaching 4 years as a company. I must say that I expected being a business owner would be exciting and challenging, but the last 4 years have exceeded my expectations.

Uncertainty is a normal part of life. All of us that do forecasting recognize the significance of uncertainty. I thought that once we pasted January 1st, 2000 and realized it was not the end of the world, we would be well on our way into a future that was fairly predictable. I missed that prediction by a country mile.

When we started the company we were riding the wave. We watched the Dow Jones index rise well over 1000 points in the previous year, and this was just another one of those great years on the stock market - the norm. The Dow Jones was over 10,000 when we started as a company. The NASDAQ composite grew over 800 points over the previous year. The NASDAQ was over 2500 when we started as a company and within 7 months it topped 5000.

2000, 2001, and 2002 the stock markets ended lower than when they started. 2003 has had a tough start. The Dow Jones is about 700 points lower (close to 7700) and the NASDAQ is already 100 points lower (close to 1300) than the start of the year.

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I’m not sure that any one thing contributed to the decline of the stock market and our economy. The rush to reach 2000 and all of the expenditures to get there certainly had an impact. The tech market took a dive almost immediately after the new millennium began. The rest of the markets were in a slow decline (maybe being dragged by the tech stocks) for over 18 months. Whatever it was, it brought uncertainty and was the beginning of a nationwide economic slow down.

911 (September 11, 2001) spawned prolific uncertainty. America had been asleep for so many years and ignoring those trying to get our attention until they actually succeeded inflicting the horrific damage and caused the high number of deaths we all know about. The aftermath brought targeted attacks through the delivery of letters through the post office.

One thing is certain, the 911 event was the nail in the coffin of the airlines industry overall. The impact on this segment of the economy will be studied for years, and the impact this in turn had on the rest of the economy we be key.

The impending war with Iraq, the constant threat of another terrorist attack, the situation in North Korea, and our inability (thus far) to see the beginning of economic recovery impacts all agencies of the government, all businesses, and each individual.

I believe we have a bright future, not just our company, but also the country. I believe economic recovery starts in the businesses. There is a lot to do, but with hard work and a lot of heart, I believe we can shorten the cycle.

During a downturn businesses must cut expenses (often have to release employees, cut salaries, as well as cut purchases and normal expenditures) because they have hit a point of no profits (or worse, losses). This is the beginning of the downward spiral and higher unemployment, lower consumer confidence and lower consumer spending.

As soon as the company begins to show a profit again, then the companies are able to spend more money (hire employees, give raises, buy things it wants). More money and a feeling of security equates to higher consumer spending.

We see a significant number of our customers going through this cycle. This of course has had an impact on us. Although its been tough leaving the great years and struggling to survive the hard years I believe that it has gone a long way to build character for Heartland ITS and its employees. I do believe in the old adage “What does not kill you will make you stronger.” I have watched our employees with courage and conviction as they face the uncertainty. I believe we are a better company as a result of this experience.

I also believe that the historic solution is for businesses to wake up and maximize their scarce resources through these times (so they begin to make a profit). It is not just the businesses that woke up, but the employees too. They realized that they were in fact contributing to the recovery of the economy.

Heartland ITS is proud of its employees and the extra efforts that are made make us a great company, one that will survive through these times only through the hard work of its employees.

Heartland ITS is also proud to be part of communities that have a heart, that struggle with us, and work to help make our world a better place.

Lastly, Heartland ITS is proud to be assisting our customers find solutions to make them or save them money now and prepare them for the economic recovery. We recognize that their success is our success. We want to do all that we can to work with them and help insure a long-term successful relationship.

Thanks to all of you for making Heartland ITS a vital part of the community.

---Monte---