Exhibit 99

SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes to those statements,
appearing elsewhere in this memorandum.

Except as otherwise indicated, in this memorandum "we", "our" and "us"
refer to The Sportsman's Guide, Inc.

OUR BUSINESS

We are a leading marketer of value priced outdoor gear and general
merchandise, with a special emphasis on outdoor clothing, equipment and
footwear. We market and sell our merchandise through two primary channels:

- main and specialty catalogs; and

- a network of e-commerce Web sites.

Our main and specialty catalogs offer high quality products at low
prices and are advertised as The "Fun-to-Read" Catalog(R). Over the past 22
years, we have developed a substantial catalog business which has an extensive
customer database that includes over 4.4 million names, of which 1.1 million
have made purchases in the past 12 months. Our sales exceeded $160 million and
we distributed approximately 80 million catalogs in 1999. We purchase our
merchandise from more than 1,000 vendors and currently offer in excess of 30,000
SKUs. Our operations are based in two sophisticated warehouse/distribution and
office facilities totaling approximately 535,000 square feet. We are able to
fulfill and ship in excess of 25,000 packages per day and we provide same day
shipping for online orders. Our in-house and outside call centers have the
combined capacity to handle over 30,000 calls per day. We also maintain a
separate customer service department staffed with full-time representatives. Our
large and sophisticated catalog business is uniquely positioned to exploit our
Internet initiatives.

In April 1998, we launched www.sportsmansguide.com as an e-commerce
site. We began posting our catalogs and full product offerings on the site in
February 1999. Our online retail store offers extensive product selection,
detailed product information and a personalized shopping experience. The site
averaged approximately 14,000 user sessions per day with an average user session
length of 16 minutes in the fourth quarter of 1999. Our customer database
includes 260,000 opt-in proprietary e-mail addresses collected through the site.
In November 1999, we launched an additional e-commerce site
www.bargainoutfitters.com, which will function as a liquidation outlet,
initially offering clothing and footwear products that are deeply discounted,
discontinued or overstocked. Our online sales exceeded $12.0 million in 1999 and
accounted for over 10% of our revenues in the fourth quarter.

In the first quarter of 2000, we plan to launch www.guideoutdoors.com,
our community/destination portal for the outdoor enthusiast offering e-commerce
and content features. The site will feature full-line and expanded merchandise
offerings at discount prices. The content for the community will provide a broad
and deep selection of information updated daily covering all aspects of the
outdoor experience. Personalized Web pages will include articles on hunting,
fishing and camping experiences, Department of Natural Resources (DNR)
information, local and national weather forecasts, tips and hints on planning an
upcoming outdoor event, photo galleries, chat rooms, message boards, maps, free
personalized e-mail and outdoor, sports and other news. The destination site
will include links to our online retail store and liquidation outlet sites. The
site will initially target the Sportsman's Guide customer, but we expect it will
expand to appeal to a broader outdoor enthusiast market.

Our strengths in the catalog business as well as our ability to develop
a network of e-commerce Web sites uniquely positions us to expand our Internet
initiatives as well as provide e-commerce and fulfillment solutions to other
businesses. In November 1999, we entered into an agreement to develop, build,
maintain and support e-commerce storefronts on Web sites operated by North
American Outdoor Group. NAOG, the world's largest affinity membership
organization with over 3.6 million members, operates a number of special
interest clubs. We are responsible for providing e-commerce solutions for NAOG's
fishing and hunting club sites, including merchandising, warehousing,
distribution and fulfillment. Orders on these sites will be our sales with NAOG
receiving a commission.

OUR PRODUCTS

We offer a large selection of high value products at low prices. These
products include clothing, footwear, hunting and shooting accessories, camping
and outdoor recreation equipment, optics, collectibles, gift items and a diverse
range of additional offerings. In the last five years, we have aggressively
pursued a strategy to provide manufacturers' close-outs of name brand shoes,
boots, apparel and general merchandise, as well as government surplus from
around the world. Over time, our product offerings and marketing efforts have
broadened to include those interested in pursuing and living the outdoor
lifestyle in general and the value-oriented outdoorsman in particular. The table
below indicates our percentage of sales by product category for 1999.

PRODUCT CATEGORY % OF SALES PRODUCT CATEGORY % OF SALES
- -------------------------------------------------------- ------------------------------------------------

Clothing and Accessories 21.6% Domestics 5.4%
Footwear 21.5% Electronics 5.2%
Hunting and Shooting Accessories 14.5% Novelty and Collectibles 3.1%
Camping and Outdoor Recreation 9.8% Personal Accessories 3.0%
Optics 5.4% Other 10.5%

THE MARKET

Statistics from the National Sporting Goods Association and USDA Forest
Survey estimate the 1998 outdoors market at $6.5 billion. In terms of sports,
camping is the leading individual category at $1.8 billion, followed by hiking
and hunting at $1 billion each, biking at

$900 million and fishing at $800 million. In terms of participation, fishing is
the leader appealing to 29.1% of Americans 16 years of age and older, biking
draws 28.6% of this population, and camping and hiking draw 26.8% and 23.8%,
respectively. In addition, 17% of men age 16 and older hunt.

The Internet has emerged as a global medium, enabling millions of
people to share information, communicate and conduct business electronically.
International Data Corporation estimates that the number of Internet users will
grow to approximately 320 million by the end of 2002. It is also estimated that
business-to-consumer online transactions were $8.0 billion in 1998 and are
expected to reach $60.2 billion by 2003. The demographics for both the outdoor
enthusiast and the Internet user are identical at 38 years of age and a
household income of $56,000.

OUR STRATEGY

Our objective is to leverage our existing systems, expertise and
infrastructure to become the leading marketer of value priced outdoor gear and
general merchandise for outdoor enthusiasts and build the most
heavily-trafficked outdoor destination Web site. The key elements of our
strategy include:

- develop Internet customer acquisition program through brand
awareness;

- expand depth and breadth of product offerings;

- create an online outdoor community; and

- provide e-commerce and fulfillment solutions to other businesses.

RISK FACTORS

Our business is subject to risks which are described under "Risk
Factors." The following are among the risks which may adversely affect our
future performance:

- risks associated with catalog and online retailing;

- fluctuations in operating results and seasonality;

- dependence on third party service providers; and

- competition from catalog, retail and Internet-based businesses.

COMPANY INFORMATION

Our principal offices are located at 411 Farwell Avenue, South St.
Paul, Minnesota 55075. Our telephone number is (651) 451-3030.

We intend to establish a wholly-owned subsidiary, GuideOutdoors.com
Inc., to conduct our Internet operations. We plan to contribute to
GuideOutdoors.com Inc. certain assets and liabilities associated with our
present Internet and e-commerce business, including the guideoutdoors.com
community/destination portal.

SUMMARY FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, (1) SEPTEMBER 30,
- ----------------------------------------------------------------------------------------------- --------------------

1994 1995 1996 1997 1998 1998 1999
------ ------ ------ ------- ------- ------- ------

STATEMENT OF OPERATIONS DATA:
Sales................................... $96,398 $101,832 $112,270 $128,113 $142,876 $ 90,393 $105,726
Earnings (loss) from operations 3,732 (1,229) 4,056 5,049 3,075 2,100 (222)
Net earnings (loss)..................... 2,722 (1,744) 2,327 2,475 1,416 947 (585)
Net earnings (loss) per share (2):
Basic............................... $ 1.17 $ (.75) $ 1.00 $ 1.06 $ .32 $ .22 $ (.12)
Diluted............................. 1.06 (.75) .96 .85 .31 .21 (.12)
Weighted average shares outstanding (2):
Basic............................... 2,333 2,334 2,334 2,336 4,434 4,330 4,748
Diluted............................. 2,576 2,334 2,431 2,919 4,616 4,554 4,748

SELECTED OPERATING DATA:
Catalog sales........................... $96,398 $101,832 $112,270 $128,113 $141,792 $ 90,131 $ 99,136
Internet sales (3)...................... -- -- -- -- 1,084 262 6,590
Gross profit as a percentage of
sales.................................. 33.2% 34.1% 35.7% 40.5% 41.3% 42.3% 39.7%
Total catalogs mailed................... 39,312 54,436 42,908 60,593 75,041 50,521 54,970
Total active customers (4) ............. 1,021 1,034 1,017 1,094 1,133 1,136 1,087

SEPTEMBER 30, 1999
----------------------------------
ACTUAL AS ADJUSTED(5)
------ --------------

BALANCE SHEET DATA:
Working capital.................................................................... $ 10,899 $
Total assets....................................................................... 64,435
Long-term debt (less current maturities)........................................... 40
Shareholders' equity............................................................... 16,417

----------------

(1) Our fiscal year ends on the Sunday nearest December 31, but for
clarity of presentation, we describe all periods as if the year end is
December 31. Fiscal years 1994, 1995, 1996 and 1997 consisted of 52
weeks and 1998 consisted of 53 weeks.
(2) See Note A-11 in the notes to financial statements.
(3) "Internet sales" are defined as sales derived from our
sportsmansguide.com Web site, catalog orders processed online and
online offers placed by telephone.
(4) An "active customer" is defined as a customer who has purchased
merchandise from us within 12 months preceding the end of the period
indicated.
(5) Adjusted to give effect to the sale of common stock offered hereby and
the application of the estimated net proceeds from the sale.

RISK FACTORS

You should carefully consider the risk factors described below as well
as the other information in this document before making an investment in our
common stock.

RISKS RELATED TO OUR BUSINESS

WE ARE SUBJECT TO RISKS ASSOCIATED WITH CATALOG AND ONLINE RETAILING.

Our success depends on the success of our catalog-based business as
well as our e-commerce business. We believe this success is achieved through the
following:

- efficient targeting of our customers;

- appropriate shifts in our merchandising mix;

- our ability to achieve adequate response rates to our catalog
mailings and online offerings; and

- our ability to accurately forecast economic conditions and
consumer demand.

Catalog mailings involve substantial postage, paper and printing costs.
Merchandise acquisition costs are incurred prior to mailing each catalog and
making each online offering. If we were to experience a significant shortfall in
anticipated sales from a particular catalog mailing or online offering and not
recover costs associated with that offer, our results of operations could be
adversely affected.

Response rates and sales generated by each catalog mailing and online
offering can be affected by factors such as consumer preferences, economic
conditions, timing of our catalog mailings and online offerings as well as our
competitors', and our mix of merchandise. Our inability to accurately target the
appropriate customers or to achieve adequate response rates could result in
lower sales and profits.

OUR OPERATING RESULTS ARE SUBJECT TO SIGNIFICANT FLUCTUATIONS AND SEASONALITY.

Our sales and results of operations have fluctuated and can be expected
to continue to fluctuate as a result of a number of factors, including:

- the timing of new merchandise, catalog and online offerings;

- recognition of costs or sales contributed by new merchandise,
catalog and online offerings;

- fluctuations in response rates and success of advertising
campaigns;

- fluctuations in postage, paper and printing costs;

- fluctuations in merchandise returns;

- adverse weather conditions that affect response, distribution or
shipping;

- shifts in the timing of holidays;

- changes in our product mix;

- seasonal fluctuations in consumer purchasing patterns and
advertising spending;

- changes in the growth rate of Internet usage and online user
traffic levels;

- actions of our competitors; and

- general economic and market conditions.

The majority of our sales historically occur during the third and
fourth quarters. The seasonal nature of our business is due to our focus on
outdoor merchandise and related accessories for the fall, as well as winter
apparel and gifts for the holiday season. We expect this seasonality will
continue in the future. In anticipation of increased sales activity during the
third and fourth quarters, we incur significant additional expenses for hiring
additional employees and building inventory levels. Our annual financial results
would be adversely impacted if sales were to fall substantially below what we
normally expect during the third and fourth quarters.

WE DEPEND ON THIRD PARTY SERVICE PROVIDERS TO OPERATE OUR BUSINESS.

We depend on a number of third parties to provide services to operate
our business. For example, we depend on:

- outside printers and pre-press providers to print and mail our
catalogs and to convert the catalogs to digital format for Web
site posting;

- shipping companies and the U.S. Postal Service for timely
delivery of our catalogs and shipment of merchandise to our
customers;

- telephone companies to provide telephone service to our in-house
and outside call centers;

- outside call centers to handle inbound customer telephone orders;

- communications providers to provide our Internet users with
access to our Web sites; and

- vendors or suppliers for timely fulfillment of merchandise
orders.

Any disruption in these services could have a negative impact on our
business. Strikes or other service interruptions affecting our shippers would
impair our ability to deliver merchandise on a timely basis. Shipper strikes can
suppress our sales because customers may perceive that their orders cannot be
delivered or will be significantly delayed.

Our Web sites could experience disruptions or interruptions in service
due to failures by communications providers. Our users depend on Internet
service providers and Web site operators for access to our Web sites. Our users
may experience significant outages, delays or other difficulties due to system
failures unrelated to our systems. These types of occurrences

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could cause users to perceive our Web sites as not functioning properly and
therefore cause them to stop using our services.

A third party hosts and manages our two e-commerce sites and will host and
manage our community/destination portal. System failures by this third party
could lead to disruption in service on our sites. These system disruptions could
have a material adverse effect on our business.

WE FACE SIGNIFICANT COMPETITION FROM CATALOG, RETAIL AND INTERNET-BASED
BUSINESSES.

The direct marketing industry is highly competitive and fragmented. We have
significant competitors within each merchandise category and may face
competition from new entrants or existing competitors who shift focus to markets
we serve. Our competitors include:

- other outdoor/hunting mail order catalogs, including Bass Pro Shops
Inc. and Cabela's Inc.;

- discount retailers such as Wal-Mart Stores, Inc. or Kmart Corporation;

- Web sites maintained by online retailers of footwear, clothing and
outdoor gear;

- Internet portals and online service providers that feature shopping
services, such as America Online, Inc., Yahoo! Inc., Excite Inc. and
Lycos, Inc.; and

- Internet content-based providers that target the outdoor enthusiast
such as GORP.com, Inc. and All Outdoors, Inc.

Some of our competitors are larger and have substantially greater
financial, marketing and other resources than us. Our competitors may be able to
secure products from vendors on more favorable terms, fulfill customer orders
more efficiently and adopt more aggressive pricing or inventory availability
policies than we can. Our competitors may develop products or services that are
equal or superior to our solutions or achieve greater market acceptance than
ours. Traditional store-based retailers also enable customers to see and feel
products in a manner that is not possible in catalogs or over the Internet.

INCREASES IN POSTAGE AND PAPER COSTS AND PAPER SHORTAGES CAN ADVERSELY IMPACT
OUR CATALOG BUSINESS.

Increases in postal rates and paper costs have a significant impact on the
cost of production and mailing of our catalogs and the shipment of customer
orders. Postage prices increase periodically, and we have no control over
increases that may occur in the future. Paper prices historically have been
cyclical and we have experienced significant increases in the past. Significant
increases in postal rates or paper costs could negatively impact our operating
results, particularly to the extent we are unable to pass on increases directly
to our customers or offset the increases by reducing other costs.

In addition, we are dependent upon the availability of paper to print our
catalogs. Paper shortages have occurred in the past and may occur in the future.
Any paper shortage

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may increase our paper costs and cause us to reduce our catalog circulation,
change to a different weight or grade of paper or reduce the number of pages per
catalog. These increased costs or responsive actions could negatively impact our
sales and operating results.

WE MUST DEVELOP AND MAINTAIN OUR MAILING LIST TO GROW OUR CATALOG BUSINESS.

We mail catalogs to individuals whose names are in our proprietary customer
database and to potential customers whose names we obtain from rented or
exchanged mailing lists. Names derived from rented or exchanged lists generate
lower response rates while requiring the same or greater advertising expenses
than names in our in-house database. Consequently, overall response rates could
decline while expenses increase if we were to increase our use of rented or
exchanged lists relative to the use of names in our customer database.

Attrition reduces the number and quality of names in our mailing list. We
must constantly develop and maintain our mailing list by identifying new
prospective customers and tracking purchases by existing customers. We use
internally developed customer selection models to identify prospective and
existing customers to whom a catalog will be mailed. Incorrect modeling
assumptions or our failure to update our mailing list could negatively impact
our sales and operating results.

OUR INTERNET OPERATIONS ARE EXPECTED TO INCUR SUBSTANTIAL NET LOSSES FOR THE
FORESEEABLE FUTURE.

We expect our Internet operations to record substantial net losses for the
foreseeable future. We believe that the continued growth of our Internet
business will depend in large part on our ability to:

- increase awareness of our Web site brand names, build traffic on our
Web sites and convert site users to single and multi-buyers;

- develop a fully operational and integrated portal providing both
e-commerce and community services to outdoor enthusiasts;

- provide our customers with superior Internet community and e-commerce
experience; and

- continue to enhance our systems and technology to support increased
traffic to our Web sites.

We intend to significantly increase our level of Internet marketing and
promotional expenditures. We also expect to make investments to further develop
our Web sites, technology and operating systems. Slower revenue growth than we
anticipate or operating expenses that exceed our expectations would harm our
Internet business.

WE MAY NEED ADDITIONAL CAPITAL TO CONTINUE TO EXPAND OUR INTERNET BUSINESS.

We will require substantial working capital to fund expansion of our
Internet business and may need more in the future. The net proceeds from this
offering, together with our

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available funds, should be sufficient to meet our working capital and capital
expenditures needs for the next 12 months. If we accelerate our Internet
initiatives from current plans, we may need to raise additional funds through
the issuance of equity, equity-related or debt securities. In that event, your
rights may be subordinate to other investors and your stock ownership percentage
may be diluted. We cannot be certain that additional financing will be available
to us.

WE DEPEND ON OUR SENIOR MANAGEMENT FOR OUR SUCCESS.

Our success is dependent to a significant extent on the efforts of our
executive officers and key management employees. The loss of any member of our
senior management could hurt our business.

OUR MANAGEMENT'S EXPERIENCE IN THE INTERNET INDUSTRY IS LIMITED AND WE MAY FAIL
TO HIRE, RETAIN AND INTEGRATE KEY EMPLOYEES.

Our senior management has limited experience operating and managing Web
sites engaged in the sale of outdoor gear and providing Internet community
services. We depend on their ability to quickly develop an expertise in the
e-commerce and community aspects of our Internet business.

We anticipate hiring additional persons to serve on our Internet management
team. Our success depends on our ability to continue to attract, retain and
motivate skilled employees who can effectively manage a fully integrated
Internet portal business. Competition to hire qualified e-commerce and Internet
community employees is intense. We may be unable to retain our present key
employees in the future. We may experience difficulty in hiring and retaining
skilled employees with appropriate qualifications. Our business will be harmed
if we fail to attract and retain key employees.

In addition, because of the current low unemployment rate in the
Minneapolis/St. Paul metropolitan area, we face a shrinking pool of available
labor and we could experience labor shortages and higher labor costs in the
future.

WE MAY NEED TO EXPAND OUR COMPUTER SYSTEMS TO SUPPORT INCREASED SALES VOLUME AND
INCREASED TRAFFIC ON OUR WEB SITES.

Growth in our sales volume, in the number of users of our Web sites or in
the e-commerce solutions we provide to other businesses may strain or exceed the
capacity of our computer systems and lead to declines in performance or systems
failure. We believe that we will need to continually improve and enhance the
functionality and performance of our e-commerce, customer tracking and other
technical systems. We intend to upgrade our existing systems and implement new
systems as we anticipate new demand. Failure to implement these systems
effectively or within a reasonable period of time would cause decreased levels
of customer service and satisfaction.

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DISRUPTION IN OUR FULFILLMENT OPERATIONS WOULD HARM OUR BUSINESS.

Our ability to receive, process and fulfill customer orders depends on the
effective operation of our telephone lines, operational and management
information systems, and warehouse and distribution facilities. Any material
disruption in our order receipt, processing or fulfillment systems resulting
from internal or external telephone system failure, electrical problems, failure
of our information systems or other technical problems could cause significant
delays in our ability to receive and fill orders and may cause orders to be
lost, shipped or delivered late or cancelled by the customer.

Our primary facility is our headquarters in South St. Paul, Minnesota. If
this facility were destroyed or significantly damaged by fire or other disaster,
we would need to obtain alternative facilities and replenish our inventory,
either of which would result in significantly increased operating costs and
delays in fulfilling customer orders.

WE DEPEND ON FINDING AND MAINTAINING SOURCES FOR OUR MERCHANDISE.

We offer a changing mix of products. This changing mix of products presents
certain unique challenges in finding merchandise for our catalogs and e-commerce
offerings. Our buyers must develop and maintain relationships with vendors to
locate sources for high quality, low price, name brand merchandise they believe
will interest our customers. We cannot assure you that we will be able to locate
sources for or maintain ongoing access to manufacturers' close-outs, military
surplus and other items featured by us or that such merchandise will be
available to us at the times or prices or in the quantities desired.

EXCESSIVE MERCHANDISE RETURNS COULD ADVERSELY IMPACT OUR BUSINESS.

We maintain a policy of making refunds or exchanges for all merchandise
returned by customers for any reason, and we place no time limit on this return
policy. As our merchandise mix of footwear and apparel has increased so have
merchandise returns. While we make allowances in our financial statements for
anticipated merchandise returns based on historical return rates, actual
merchandise returns could exceed our reserves. We may experience increased
returns of Y2K-related merchandise, such as gas or solar powered generators,
after January 2000. Any significant increase in merchandise returns or
merchandise returns that exceed our reserves could negatively impact our
operating results.

HIGHER BACKORDER LEVELS CAN NEGATIVELY IMPACT OUR OPERATING RESULTS.

The average order is approximately three items. Backorders frequently
result in our shipping the customer two packages, but we charge the customer
shipping only for the first package. Consequently, higher backorder levels
increase our shipping costs and negatively impact our operating results.
Effectively managing our level of backorders depends both on our ability to
accurately forecast customer demand and product availability from our vendors.

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GOVERNMENT REGULATION AFFECTS OUR BUSINESS.

We are subject to federal, state and local laws and regulations which
affect our business. Federal Trade Commission regulations govern the manner in
which orders may be solicited and prescribe other obligations in fulfilling
orders and consummating sales. Other laws and regulations prohibit or limit the
sale, in certain states and localities, of certain items we offer such as black
powder firearms, ammunition, bows, knives and similar products. Government
regulation of firearms can affect sales of these ancillary firearm products, and
any increase in such regulation could adversely impact our sales of those
products.

State and local government regulation of hunting can result in changes to
hunting seasons, bans or limitations on hunting or other similar restrictions.
Because a significant amount of our sales are attributable to hunting, such
changes or restrictions could decrease the demand for some of our products.

We import products for sale. Consequently, we are subject to U.S. customs
laws and regulations pertaining to proper item classification, quotas, payment
of duties and tariffs, and maintenance of documentation and internal control
programs.

We do not collect sales or similar taxes on sales of merchandise shipped to
residents of states other than Minnesota. Various states have sought to impose
on direct marketers the burden of collecting state sales and use taxes on the
sale of merchandise shipped to residents of that state. If we become subject to
collection or payment of additional sales, use or other taxes, our customer
response rates could be adversely affected.

WE FACE PRODUCT LIABILITY RISKS ON THE PRODUCTS WE SELL.

Our products include black powder firearms, ammunition, air guns, paintball
guns, blank firing firearms, bows, slingshots, knives, stun guns, blowguns,
crossbows, certain non-lethal and chemical spray devices and other potentially
dangerous products. Although we are not a manufacturer of any of these products,
the sale of these products involves a risk of being named as a party defendant
in product liability litigation. We cannot assure you that our insurance will
cover all potential claims arising from the sale of these products or that the
amount of the coverage will be adequate, nor can we assure you that adequate
insurance coverage can be obtained in the future at an acceptable cost or at
all. Any uninsured or inadequately insured claim or liability could have a
material adverse effect on our business and operating results.

WE FACE YEAR 2000 RISKS.

Many existing computer programs and systems use only two digits to identify
a year in the date field. These programs and systems were designed and developed
without considering the impact of the upcoming turn of the century. If not
corrected, these computer applications could fail or create erroneous results in
the Year 2000.

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The failure of any of our software or systems to be Year 2000 compliant
could inhibit users from accessing our Web sites and prevent us from being able
to process or fulfill orders from our customers. Our financial and management
controls and reporting systems may also be damaged. Any failure, if not quickly
remedied, would hurt our business, financial condition and results of
operations.

Our operations also depend on the performance of software and systems of
our third party service providers. These include providers of
telecommunications, parcel and mail delivery services. We cannot assure you that
our service providers have, or will have, operating software and systems that
are year 2000 compliant. We have limited or no control over the actions of our
service providers. Since a majority of our catalog purchases and all purchases
through our Web sites are made with a credit card, our business may be damaged
if our customers cannot use their credit cards due to Year 2000 issues.

RISKS RELATED TO THE INDUSTRY

WE DEPEND ON CONTINUED GROWTH IN USE OF THE INTERNET.

A decrease in the growth of Web usage would hurt our business. The
following factors may inhibit growth in Web usage:

- inadequate Internet infrastructure;

- security and privacy concerns;

- inconsistent quality of service; and

- unavailability of cost-effective and high-speed service.

The performance and reliability of the Internet may decline as the number
of users increases or the bandwidth requirements of users increase. If outages
or delays frequently occur in the future, Web usage, including usage of our Web
sites, could grow slowly or decline. Even if the necessary infrastructure or
technologies are developed, we may have to spend considerable amounts to adapt
our solutions accordingly.

WE DEPEND ON CONTINUED GROWTH OF E-COMMERCE.

Our future revenue and profits depend upon the widespread acceptance and
use of the Internet as an effective medium of commerce. Failure of the Internet
and online services to become a viable commercial marketplace would hurt our
business. Rapid growth in the use of the Internet and commercial online services
is a recent phenomenon. We cannot assure you that a large base of consumers will
adopt and continue to use the Internet for commerce. Demand for recently
introduced services and products over the Internet and online services is
subject to a high level of uncertainty. The successful development of the
Internet and online services is subject to a number of factors, including:

- continued growth in the number of users of such services;

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- concerns about transaction security;

- continued development of the necessary technological infrastructure;
and

- the development of complementary services and products.

WE DEPEND ON AN UNPROVEN INTERNET BUSINESS MODEL.

The profit potential for an Internet business model is unproven. We intend
to make significant expenditures to advertise our Web sites in traditional
broadcast and print media as well as online. It remains to be proven whether
this advertising can raise awareness and increase usage of specific Internet
sites. Even if we are successful in generating increased user traffic to our Web
sites, we cannot be sure these users will purchase products or be repeat
customers.

WE MAY BE VULNERABLE TO BREACHES OF ONLINE SECURITY.

Our servers may be vulnerable to computer viruses, physical or electronic
break-ins and similar disruptions. We may need to expend significant additional
capital and other resources to protect against a security breach or to alleviate
problems caused by security breaches. Our business may be harmed if security
measures do not prevent security breaches. We cannot assure protection against
all security breaches.

RISKS RELATED TO THIS OFFERING

OUR PRINCIPAL SHAREHOLDER AND MANAGEMENT OWN A SIGNIFICANT PORTION OF OUR COMMON
STOCK AND WILL BE ABLE TO EXERCISE SIGNIFICANT INFLUENCE OVER OUR AFFAIRS.

Vincent W. Shiel, a director of the Company, and members of his family as
well as trusts for the benefit of children and grandchildren, together with our
other directors and executive officers, beneficially own approximately 33.5% of
the outstanding shares of our common stock. These persons also beneficially own
options to purchase 534,343 shares which if fully exercised would result in them
beneficially owning 40.2% of our outstanding common stock.

As a result of this share ownership, our management, and in particular Dr.
Shiel, will be able to exert significant influence on corporate action requiring
shareholder approval, including the election of directors. This share ownership
could delay or prevent a change in control. It could also prevent our
shareholders from realizing a premium over the market price for their common
stock or effecting a change in management. In addition, our Restated Articles of
Incorporation provide that shareholders may cumulate their votes for the
election of directors, which may allow shareholders owning less than a majority
of our outstanding common stock to elect one or more directors.

THE SUBSTANTIAL NUMBER OF SHARES THAT ARE ELIGIBLE FOR PUBLIC SALE MAY ADVERSELY
AFFECT OUR STOCK PRICE.

There are 4,747,810 shares of our common stock outstanding. Of these
outstanding shares, 3,733,622 shares are freely tradable without restriction or
registration under the Securities Act and 1,014,188 shares are eligible for
public sale under Rule 144 of the Securities Act. Following the closing of this
offering, we will file a registration statement with the SEC under the
Securities Act to permit the resale of the common stock offered hereby. These
shares will become eligible for resale when the SEC declares the registration
statement effective.

As of December 31, 1999, 617,069 shares of common stock were issuable
pursuant to options granted under our stock option plans. Of these option
shares, 370,482 shares are currently exercisable. We may issue options to
purchase up to an additional 616,062 shares under our stock option plans. All
shares issuable under our stock option plans have been registered under the
Securities Act. We also have outstanding warrants to purchase 100,000 shares.

Sales of substantial amounts of common stock in the public market, or the
perception that such sales could occur, could adversely impact the market price
of our common stock.

OUR STOCK PRICE MAY FLUCTUATE SIGNIFICANTLY.

The trading price of our common stock has been volatile and is likely to
continue to be volatile. Our stock price could be subject to wide fluctuations
in response to a variety of factors. The stock market has experienced
significant price and volume fluctuations that have often been unrelated or
disproportionate to the operating performance of particular companies. Broad
market factors may have a material adverse effect on our stock price, regardless
of our actual performance. You may not be able to resell your common stock at or
above the offering price due to the possible volatility of our common stock
after this offering.

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BUSINESS

- main and specialty catalogs; and

- a network of e-commerce Web sites.

Our main and specialty catalogs offer high quality products at low prices
and are advertised as The "Fun-to-Read" Catalog(R). Our network of Web sites
includes www.sportsmansguide.com, our online retail store modeled on our print
catalogs, www.bargainoutfitters.com, our new online liquidation outlet, and
www.guideoutdoors.com, our soon to be launched community/destination portal for
the outdoor enthusiast.

INDUSTRY OVERVIEW

THE OUTDOOR SPORTS INDUSTRY. Statistics from the National Sporting Goods
Association and USDA Forest Survey estimate the 1998 outdoors market at $6.5
billion. In terms of sports, camping is the leading individual category at $1.8
billion, followed by hiking and hunting at $1 billion each, biking at $900
million and fishing at $800 million. In terms of participation, fishing is the
leader appealing to 29.1% of Americans 16 years of age and older, biking draws
28.6% of this population, and camping and hiking draw 26.8% and 23.8%,
respectively. In addition, 17% of men age 16 and older hunt.

THE CATALOG INDUSTRY. The catalog shopping industry has experienced
substantial growth over the past several years. The U.S. consumer catalog
industry is expected to reach sales of approximately $119 billion by 2003.
Between 1993 and 1998, U.S. consumer catalog sales growth outpaced that of the
retail industry. An industry source estimates the size of the adult catalog
shopper market will reach 158 million by 2001, up 44% from 1996. The majority of
our sales fall within two large product segments of the U.S. catalog market:
apparel and sporting goods. Together, the apparel and sporting goods segments
represent approximately 27% of the total dollar volume of catalog sales in the
United States. Since most direct mail catalogs are targeted to women, we believe
the male catalog customer is an underserved segment of the market that
represents a significant opportunity. We believe that our niche marketing focus
on the value-oriented outdoor enthusiast, together with our product offerings
and growing sales of general merchandise, have positioned us to continue to take
advantage of opportunities within this large and expanding market.

GROWTH OF THE INTERNET AND E-COMMERCE. The Internet has emerged as a global
medium, enabling millions of people to share information, communicate and
conduct business electronically. International Data Corporation estimates that
the number of worldwide Web users will grow from approximately 159 million
worldwide in 1998 to approximately 410 million worldwide by the end of 2002.
This rapid growth represents a significant opportunity for businesses to
advertise and sell products online to both consumers and businesses.
Business-to-consumer online transactions were approximately $8.0 billion in 1998
and it is

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anticipated that online consumer transactions will increase to approximately
$60.2 billion by 2003.

OUR STRATEGY

DEVELOP INTERNET CUSTOMER ACQUISITION PROGRAM THROUGH BRAND AWARENESS. We
believe that building brand recognition for our Web sites is critical to our
Internet customer acquisition program. We seek to build brand recognition and
attract new and retain existing customers through several methods, including:

- PROMOTION IN OUR CATALOGS. Since our inception on the Internet, we
have marketed our online retail store in our catalogs. We intend to
continue to advertise in our catalogs, which have a planned
circulation of approximately 60 million in 2000. To date, this
marketing channel has been the principal marketing mechanism to reach
our target audience.

- TRADITIONAL AND INTERNET ADVERTISING. We intend to use traditional
broadcast and print media to promote our Web sites and our catalog
business. We also intend to use Internet advertising to promote our
brand name and specific merchandising opportunities.

- DIRECT MARKETING. We currently have a database of 4.4 million names,
including 260,000 opt-in proprietary e-mail addresses. We plan to
aggressively market to our existing database, including sending
broadcast e-mails to our users promoting special product offerings. We
are also planning sweepstakes to convert our catalog customers to
online purchasers and to increase the overall number of our e-mail
addresses.

- STRATEGIC ALLIANCES. We believe we can enhance our brand names and
increase our customer base through alliances with other Internet sites
and online service providers. Our online store currently has anchor
tenancy positions in the shopping areas on AOL.com, Lycos.com,
Amazon.com zShops and the Yahoo! Store. We intend to expand our use of
these kinds of relationships to build traffic and attract customers.

EXPAND DEPTH AND BREADTH OF PRODUCT OFFERINGS. Our guideoutdoors.com site
will carry deeper and more diverse product lines and merchandise categories than
we have traditionally offered. The site will feature full-line and expanded
product offerings at discount prices including merchandise for the active
sportswoman and for those who enjoy extreme sports, biking, marine, fishing,
hiking and archery.

CREATE AN ONLINE OUTDOOR COMMUNITY. In the first quarter of 2000, we plan
to launch guideoutdoors.com, an online community for the outdoor enthusiast
offering both e-commerce

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and community features. We believe our target audience places value on
opportunities to interact with other outdoor enthusiasts through interactive
services that we will offer, including free personalized e-mail, photo
galleries, chat rooms and message boards. The content portion of the site will
provide outdoor-related information updated daily, including articles on
hunting, fishing and camping experiences, DNR information, local and national
weather forecasts, tips and hints on planning an upcoming outdoor event, maps
and outdoor, sports and other news.

PROVIDE E-COMMERCE AND FULFILLMENT SOLUTIONS TO OTHER BUSINESSES. Our
strengths in the catalog business as well as our ability to develop a network of
e-commerce Web sites uniquely positions us to expand our Internet initiatives as
well as provide e-commerce and fulfillment solutions to other businesses. In
November 1999, we entered into an agreement to develop, build, maintain and
support e-commerce storefronts on Web sites operated by North American Outdoor
Group. NAOG, the world's largest affinity membership organization with over 3.6
million members, operates a number of special interest clubs. We are responsible
for providing e-commerce solutions for NAOG's fishing and hunting club sites,
including merchandising, warehousing, distribution and fulfillment. Orders on
these sites will be our sales with NAOG receiving a commission.

OUR WEB SITES

Our network of Web sites, The GuideOutdoors NetworkTM, includes those that
offer online shopping as well as a soon to be launched online destination site
with content-rich resources and information for the outdoor enthusiast. The
GuideOutdoors NetworkTM will initially include the following three sites:

- SPORTSMANSGUIDE.COM, our online retail store;

- BARGAINOUTFITTERS.COM, our online liquidation outlet; and

- GUIDEOUTDOORS.COM, our community/destination portal for the outdoor
enthusist.

SPORTSMANSGUIDE.COM. Our sportsmansguide.com site is our online retail
store. The site was launched in April 1998 as an e-commerce site. We began
posting our catalogs and full product offerings on the site in February 1999.
Our online retail store generated over $12.0 million in sales in 1999 compared
to $1.1 million in 1998. Product sales on the site accounted for over 10% of our
sales in the fourth quarter of 1999 compared to less than 1% for all of 1998.
The site averaged approximately 14,000 user sessions per day with an average
user session length of 16 minutes in the fourth quarter of 1999.

Our sportsmansguide.com site is modeled on our print catalogs. The site
translates the distinctive look and editorial voice of our print catalog onto
the Internet, adding interactive functionality to make shopping an entertaining
experience. The site is designed to be fun-to-read and easy to use, enabling the
ordering process to be completed with a minimum of customer effort. The site is
advertised as The "Fun-to-Browse" Website(R). The site allows customers to order
merchandise from print media, view current catalogs and request mailed catalog
copies. E-mail addresses are collected through an optional program. E-mail
broadcast

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messages, which include a variety of specialized product offerings, are
delivered to 260,000 participating customers on a weekly basis.

Through our relationship with Banta Digital Group, we have automated the
re-purposing of our printed catalog pages for publication on our Web site. The
digital pre-press of our catalog pages automatically flows to the Web site,
enabling us to post entire catalogs on the site and giving the site the look and
feel of our catalogs.

BARGAINOUTFITTERS.COM. Our bargainoutfitters.com site is our online
liquidation outlet launched in November 1999. The site is initially dedicated to
offering clothing and footwear products that are deeply discounted, discontinued
or overstocked.

GUIDEOUTDOORS.COM. Our guideoutdoors.com site is our community/destination
portal offering e-commerce and content for the online outdoor enthusiast. The
site is scheduled to be launched in the first quarter of 2000. We believe the
site will be unique in its combination of name brand quality, discount pricing
and breadth of product offerings, all within a community environment. The site
will offer full-line selections of camping, fishing, footwear, clothing,
hunting, archery, marine, extreme sports, biking and hiking products at discount
prices. The community content will provide a broad and deep selection of
resources and information updated daily covering all aspects of the outdoor
experience. Personalized Web pages will include articles on hunting, fishing and
camping experiences, DNR information, local and national weather forecasts, tips
and hints on planning an upcoming outdoor event, photo galleries, chat rooms,
message boards, maps, free personalized e-mail and outdoor, sports and other
news. The site will include links to our online retail store and liquidation
outlet sites.

OUR CATALOGS

We publish main and specialty editions of The Sportsman's Guide catalog. We
mailed approximately 80 million catalogs to existing and prospective customers
in 1999.

FORMAT. Our catalogs are designed to be fun and entertaining. Every
merchandise offering uses a highly promotional format that features various
items at sale prices. Unique to us is our product description, or copy. The
catalogs make creative and expansive use of art and copy to extensively describe
products with humorous text, call-outs, photos, photo captions and caricatures.
Copy is written in the first person from Gary Olen to the reader. The catalogs
are perceived by customers as having entertainment value and are advertised as
The "Fun-to-Read" Catalog(R). Excerpts from the catalogs have been featured in
Jay Leno's "Headlines" segment on The Tonight Show. The copy has also been
singled out for its excellence by various publications within the direct mail
industry.

TYPES AND PURPOSES. Main catalog editions are mailed monthly and offer
selections of our best selling products in a variety of product categories. We
also use our main catalog as our primary prospecting catalog to test new names
and new products. Response data from main catalog mailings is used to create
specialty catalogs. New customers continue to receive monthly main catalogs in
addition to specialty catalogs featuring the product categories in which they
have shown an interest through past purchases.

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Specialty catalogs contain wide selections of products from a single
product category. We identify the product categories for our specialty catalogs
based on demand generated for certain categories in our main catalogs. During
1999, we published 39 specialty catalogs targeting buyers of footwear and
apparel, deer hunting equipment, ammunition and shooting supplies, military
surplus, camping equipment and holiday gifts.

The specialty titles allow us to utilize a customized marketing plan for
individual consumer groups thereby maximizing response rates and minimizing
advertising costs as a percentage of sales. We believe that our specialty
catalog titles have been an important component in our sales growth and have
allowed us to expand our sales to existing customers and to broaden sales to new
customers beyond our historical customer profile.

CREATIVE. All catalogs are created and designed in-house by our creative
services department which produces the advertising copy and layouts for each
catalog. Substantially all of the photographs used in the catalogs are taken at
our in-house photo studio. Artwork and copy for the catalog are transmitted in
digital format from our desktop publishing systems to a pre-press vendor and
then to the printer, which prints and mails the catalogs. These capabilities
allow us to preserve the catalog's distinctive character and allow us greater
control of the catalog production schedule, which reduces the lead time
necessary to produce catalogs. We are able to prepare and mail a catalog in
approximately 75 days. This allows us to offer new merchandise quickly to our
customers, thereby maximizing pricing opportunities while minimizing inventory
carrying costs. Because we use a value-oriented sales approach, we are able to
use a lower weight and grade of paper than our competitors to reduce our catalog
production costs.

MERCHANDISING

Our products originally were limited to a small selection of merchandise
targeted to the deer hunter. Our product offerings have gradually evolved to a
broader range of merchandise intended to appeal to the value-oriented
outdoorsman. We offer a changing mix of products.

PRODUCTS. We offer a large selection of high value products at low prices.
These products include clothing, footwear, hunting and shooting accessories,
camping and outdoor recreation equipment, optics, collectibles, gift items and a
diverse range of additional offerings. In the last five years, we have
aggressively pursued a strategy to provide manufacturers' close-outs of name
brand shoes, boots, apparel and general merchandise, as well as government
surplus from around the world. Over time, our product offerings and marketing
efforts have broadened to include those interested in pursuing and living the
outdoor lifestyle in general and the value-oriented outdoorsman in particular.
The table below indicates our percentage of sales by product category for 1999.

PRODUCT CATEGORY % OF SALES PRODUCT CATEGORY % OF SALES
- ----------------------------------------- -------------- --------------------------------- --------------

MERCHANDISE MIX. We historically offered a changing mix of in-line
products. In-line products are those products regularly available from
manufacturers. As a complement to our value pricing approach, in 1996 we began
aggressively pursuing manufacturers' close-outs of name brand shoes, boots,
clothing, watches and other merchandise, which we offer to our customers at
savings of 25% to 60% from original retail prices. We also offer military
surplus from around the world, providing customers a low-cost alternative for
items such as wool coats and pants, shirts, gloves, underwear, blankets, boots,
sleeping bags, jackets, backpacks, skis and snowshoes.

Our merchandising strategy has been to shift our merchandise mix to a
larger percentage of manufacturers' close-outs, military surplus and other
higher margin product categories including apparel and footwear, and to reduce
the number of lower price point items, while maintaining a broad selection of
products. This strategy has added to our customer base value-oriented customers
who may not otherwise be identified as pure outdoorsmen. This strategy has also
contributed to significant increases in our overall gross profit margins.

SOURCING. Our buyers actively seek sources for products they believe will
interest our targeted customers. We seek to maintain existing and develop new
relationships with vendors to provide ongoing access to manufacturers'
close-outs, military surplus, direct imports and other items. Buyers regularly
attend trade shows, meet with vendors and make mass mailings and cold calls to
locate high quality, low price, name brand merchandise as well as unusual or
unique products. We frequently purchase large quantities of close-outs and other
individual items on an opportunistic or when-available basis. The capability to
purchase large quantities in a short time period makes us a unique and desirable
outlet for manufacturers looking to sell overstocked or discontinued products.

We purchase our merchandise from more than 1,000 suppliers and generally
purchase all of our product needs for a particular item from one vendor. No
single supplier accounted for more than 10% of our purchases during 1999, and we
believe there are numerous sources for products in our merchandise categories.

SELECTION. Our buyers and merchandising staff collectively select the
merchandise to be offered to customers by evaluating product availability,
pricing, historical demand, emerging merchandise trends and expected product
profitability. Each product is hand-picked, and most are field tested by our
buyers to ensure quality, functionality and proper sizing in order to maximize
appeal to customers.

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INVENTORY MANAGEMENT. Once merchandise has been selected, our rebuyers are
responsible for ordering all merchandise, determining the quantity and arrival
date, managing inventory levels, assessing customer demand, adjusting estimates,
canceling orders for slow-moving merchandise and reordering merchandise.
Utilizing our information systems, buyers and rebuyers meet seven days following
each catalog mailing to monitor product sales and take responsive action.
Slow-moving merchandise is actively promoted through telemarketing, clearance
sales, package stuffers or, when possible, is returned to the vendor.

As part of our merchandise liquidation strategy, we maintain a retail
outlet store at our primary warehouse and distribution facility in South St.
Paul from which we sell discontinued, overstocked, returned and regular catalog
merchandise. We opened a second retail store in Moundsview, Minnesota in 1997.
The retail stores along with our recently launched bargainoutfitters.com Web
site provide a liquidation outlet and serve to minimize inventory mark-downs.

CATALOG CONTENT. The merchandise offered in our catalogs is determined
based on product availability and the catalog in-home delivery date.
Manufacturers' close-outs are offered when available. Close-outs and military
surplus merchandise purchased in large quantities are normally placed in our
main catalogs. If a supply of merchandise is limited, it is usually offered in a
specialty catalog or is included in a multiple page insert in the main catalog
mailed to a targeted customer segment. Numerous products are shown on each page
giving the catalog a dense look and adding to our value-oriented image. Product
sales are analyzed item by item to identify trends and help plan future
merchandise offerings.

MARKETING

Our marketing programs are based on gathering, analyzing and organizing
information on our customers. We believe that because we offer such a broad mix
of merchandise, it is particularly important for us to fully understand our
customers.

CUSTOMER DATABASE. We maintain a proprietary customer database in which we
store detailed information on each customer in our customer list, including
demographic data and purchasing history. Our customer database contains over 4.4
million names, including over 1.1 million customers who have made purchases
within the last 12 months and 260,000 opt-in e-mail addresses provided by
customers. The customer database is updated regularly with information as new
purchases are recorded.

CUSTOMER SELECTION. We have developed our own customer selection models to
segment our customer list according to many variables, allowing our marketing
department to analyze each segment's buying patterns. We statistically validate
the results of each of our catalog mailings. The data is used to further update
the customer database to refine the frequency and selectivity of our catalog
mailings in an effort to maximize response rates and profitability.

LIST DEVELOPMENT. Our new customer acquisition program is designed to
cost-effectively identify and capture new customers that fit our customer
profile. New customers

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are acquired principally through the use of targeted mailings to individuals
identified through mailing lists rented or exchanged from other catalog
companies, retail subscription lists, and lists of names compiled from
businesses whose customers have interests similar to those of our customers. We
are generally entitled to make one mailing to each name obtained through a
rented or exchanged mailing list. If the prospect responds, the name is added to
our database and may be freely used by us in the future. We are also pursuing
new sources of prospective customers, such as those who request catalogs through
advertising, through our Web site or from customer referrals. New customers
accounted for approximately 15% of our sales during 1999.

Once new customers are acquired, our objective is to maximize the long-term
profit potential from these customers. With ongoing refinements in our approach
to merchandising and marketing, we have increased the frequency and quantity of
mailings to the most profitable segments of our existing customer list.
Demographic and regression analyses of historical purchasing patterns of
existing customers, including recency, frequency and monetary modeling, are
preformed to assist in merchandising and customer targeting and to increase
sales to existing customers. Existing customers accounted for approximately 85%
of our sales during 1999.

MARKETING PROGRAMS AND PROMOTIONAL FORMATS. We strive to develop
promotional formats that will stimulate customer purchases. Successful
promotional formats include catalog cover designs, different catalog covers or
wraps, free gifts, and promotional tag lines such as "last chance" offers.

We employ a disciplined approach to our marketing activities. We test a
sample of new names before mailing to a new customer group, test price and
shipping charge changes, test new list sources and test marketing programs and
promotional formats before full-scale implementation to ensure customer
acceptance and cost-effectiveness. Two significant, successful marketing
programs implemented by us are a buyer's club and an installment payment plan.

- BUYER'S CLUB. Our buyer's club offers its members exclusive
merchandise not offered to other customers as well as a merchandise
discount of 10% on regularly priced items and 5% on sale items and
special buys. Customers can purchase a one-year membership in our
buyer's club for a $29.99 fee, or a two or three year membership for a
fee of $53.99 and $80.99. We currently have more than 120,000 members
in our buyer's club.

- INSTALLMENT PAYMENT PLAN. Our installment payment plan, known as the
"G.O. Painless 4-Pay Plan," is available to credit card customers with
orders of $50 or more. Payments under the plan consist of 25% of the
merchandise charges, plus 100% of any shipping charges and buyer's
club fees, if applicable, at the time of shipment with three equal
installments in 30 day increments, which are automatically charged to
the customer's credit card. No interest or additional fees are charged
to customers who elect the 4-Pay Plan.

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CUSTOMER SERVICE. A key element of our marketing strategy is our commitment
to customer service. We have a toll-free customer service telephone line
separate from our inbound ordering lines. We maintain a separate customer
service department staffed with full-time customer service representatives who
answer customer inquiries, reply to complaints and assist customers in returning
merchandise. The customer service department personally responds to all customer
correspondence. Our commitment to customer service is supported by our
unconditional guarantee which allows customers to return merchandise for any
reason and at any time for refund or exchange if they are not satisfied with the
merchandise.

OPERATIONS AND FULFILLMENT

INBOUND CALLS. We maintain an in-house call center. Approximately 72% of
customer orders are placed through our toll-free telephone lines which are
staffed 24 hours per day, seven days a week, while 20% of orders are received by
mail or facsimile and 8% are received at our Web site. Our telephone system
consists of an expandable AT&T GR3 digital switch which currently has twelve T-1
lines. Computer telephony integration software identifies the caller and, if
known, accesses the customer's records simultaneously with answering the call.
When fully staffed, we have the capacity of handling up to 2,750 calls per hour
on average.

We also contract with outside call centers to handle calls on an as-needed
basis. If calls become backlogged or in the event of telephone system failure,
back-up systems and rerouting capabilities allow the outside call centers to
handle inbound telephone orders. The outside call centers have access to
inventory availability and allow us to maintain our call standards.

OUTBOUND TELEMARKETING. We maintain a small outbound telemarketing
department as part of our telephone sales operations. Telemarketers contact
existing customers who have previously purchased collectibles and supply items
such as ammunition to offer them similar products. Outbound telephone sales
accounted for approximately 1% of our sales during 1999.

ORDER ENTRY. Our telemarketing department is staffed with individuals who
are familiar with the products offered in the catalogs and can offer assistance
to customers on availability, color, size, and other information. Telemarketers
use a catalog sales system with pre-written merchandise descriptions and sales
offers and are provided monetary incentives to sell additional merchandise to
customers who order by phone. During 1999, add-on sales averaging $10 per order
were made to approximately 31% of all inbound phone orders taken by our in-house
call center.

Processing of customer orders is coordinated and handled by our on-line
order entry system. Telephone orders are entered directly into the system. Mail
orders are batched and, after payment is verified, are then entered into the
system. The system is also used in connection with all other order entry and
fulfillment tasks including credit authorization, order picking, packing and
shipment. During 1999, our on-line order processing system handled in excess of
2.2 million orders.

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CREDIT AND PAYMENT TERMS. Customers can pay for orders by check or major
credit card. Orders are shipped after credit card charges are approved or checks
are received. Charges are not billed to customer credit cards until the orders
are ready for shipment.

PICKING AND PACKING. Through our fulfillment and delivery methods, we
strive to be a low cost operator in the direct mail industry. We use an
integrated computer-driven picking, packing and shipping system. The system
edits orders and generates warehouse pick tickets and packing slips. Packers are
provided monetary incentives to ensure accuracy of orders, which has contributed
to our distribution accuracy rate in excess of 99% during 1999. We are able to
fulfill and ship in excess of 25,000 packages per day. We believe we have
sufficient additional capacity available for the foreseeable future which can be
utilized by adding more shifts and weekends.

SHIPPING. We promise next business day shipping on orders received by 7
p.m. for in-stock merchandise and same day shipping for online orders. Virtually
all of our merchandise is stocked at, and shipped from, our two warehouse and
distribution facilities in South St. Paul and Mendota Heights, Minnesota,
although a small percentage of merchandise is drop-shipped directly to the
customer by specific vendors. We primarily utilize the U.S. Postal Service and,
to a lesser extent, United Parcel Service for shipment of merchandise to
customers. Ammunition is shipped exclusively via UPS. We utilize a consolidating
shipper for delivery of merchandise to the U.S. Postal Service. A shipping fee
is charged on each customer order based on the total dollar amount ordered. We
will expedite shipping for an additional fee.

INVENTORY CONTROL. Our merchandise mix results in our maintaining a broad
selection of products as well as large quantities of individual products.
Consequently, inventory management is an important component of our operations.
We employ a cycle count, or perpetual inventory, procedure which eliminates
wall-to-wall physical counts and resulted in 99.8% inventory accuracy during
1999.

RETURNS. We maintain an unconditional return policy which permits customers
to return merchandise for any reason at any time for refund or exchange.
Returned merchandise is restocked, sold in the retail outlets, returned to the
supplier or scrapped. Returns processors are provided monetary incentives to
ensure accuracy of returns processing.

SEASONAL STAFFING. We adjust the number of employees to meet variable
demand levels, particularly during the peak selling season, which includes the
months of November and December. To meet increased order volume during our peak
selling season, we hire a significant number of temporary employees.

INFORMATION SYSTEMS AND TECHNOLOGY

We have developed an integrated management information system which is
fully redundant. In addition to on-line order entry and processing, the
information system also provides support for merchandising, inventory
management, marketing, and financial and management reporting. The on-line
access to information allows management to monitor daily trends and the
performance of merchandise and planning functions.

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Our main hardware platform is the IBM RISC 6000 series of computers. We use
a Unidata database operating system. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Year 2000" for a discussion
of the Year 2000 computer issue.

COMPETITION

The direct marketing industry includes a wide variety of specialty and
general merchandise retailers in a highly competitive and fragmented business
environment. We sell our products to customers in all 50 states and compete in
the purchase and sale of merchandise with all retailers. Our competitors
include:

- other outdoor/hunting mail order catalogs, including Bass Pro Shops
Inc. and Cabela's Inc.;

- discount retailers such as Wal-Mart Stores, Inc. or Kmart Corporation;

- Web sites maintained by online retailers of footwear, clothing and
outdoor gear;

- Internet portals and online service providers that feature shopping
services, such as America Online, Inc., Yahoo! Inc., Excite Inc. and
Lycos, Inc.; and

- Internet content-based providers that target the outdoor enthusiast
such as GORP.com, Inc. and All Outdoors, Inc.

Some of our competitors are larger and have substantially greater
financial, marketing and other resources than us.

REGULATION

We are subject to federal, state and local laws and regulations which
affect our catalog mail order operations. Federal Trade Commission regulations,
in general, govern the solicitation of orders, the information provided to
prospective customers, and the timeliness of shipments and refunds. In addition,
the Federal Trade Commission has established guidelines for advertising and
labeling many of the products we sell.

We are also subject to a variety of state laws and regulations relating to,
among other things, advertising, pricing, charging and collecting state sales or
use tax and product safety/restrictions. Some of these laws prohibit or limit
the sale, in certain states and locations, of certain items we offer such as
black powder firearms, ammunition, bows, knives and similar products. State and
local government regulation of hunting can also affect our business.

Because we import products for sale, we are subject to U.S. customs laws
and regulations pertaining to proper item classification, quotas, payment of
duties and tariffs, and maintenance of documentation and internal control
programs.

There are few laws and regulations directed specifically at electronic
commerce on the Internet. However, given the increased use of the Internet for
both mass communications and

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commerce, new laws and regulations may be adopted covering a variety of areas
such as collection and use of data from Web site visitors and related privacy
issues, pricing, content, copyrights, distribution and quality of goods and
services.

SERVICE MARKS

Our service marks "The Sportsman's Guide," "The 'Fun-to-Read' Catalog" and
"The 'Fun-to Browse' Website" have been registered with the United States Patent
and Trademark Office. "The Sportsman's Guide" mark has also been registered in
Canada. Applications to register "GuideOutdoors" and "Bargain Outfitters" in the
U.S. are pending. A service mark is a word or symbol used to identify,
distinguish and indicate the source of services.

EMPLOYEES

As of December 31, 1999, we employed 875 associates, including full-time
and part-time staff. During 1999, our seasonal employment ranged from a high of
approximately 900 employees, plus additional contracted temporary workers, in
November to a low of approximately 700 employees in the summer. None of our
employees are currently covered by a collective bargaining agreement. We
consider our employee relations to be good.