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Stewart & Stevenson Partners With Mercury

Maritime Activity Reports, Inc.

February 2, 2001

Stewart & Stevenson, a leading manufacturer, distributor and provider of service for industrial and energy related equipment, and a manufacturer of medium tactical vehicles for the U.S. Army, announced that it has signed agreements with Mercury MerCruiser to create regional power centers. Under the agreements, MerCruiser Diesel Power Centers (DPCs) will serve customers in 26 states within the Pacific Northwest, Southeast and South Central United States and MerCruiser Engine Power Centers (EPCs), which deal with gasoline products, will service 19 states within the South Central United States and the Pacific Northwest. The Stewart & Stevenson MerCruiser DPCs will primarily serve the diesel repower market as well as boat builders, focusing on sales, service, inventory of parts and accessories and application engineering of diesel engines. Additionally, the line of engine products will be expanded to provide a complete line of inboard and stern drive engines with 100 - 500 horsepower. The DPCs will also provide after-market support for diesel products sold by MerCruiser directly to key original equipment manufacturers (OEMs) and large customers. The Stewart & Stevenson MerCruiser EPCs will service the gas repower markets selling engines and drives to retail marine dealers, marinas and boat dealers. The centers will also service the OEM markets targeting select boat builders.

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