Conn-Selmer Creates Local Dealer Sales Out of Mars Music's Mess

Business Wire, Nov 27, 2002

Business Editors

ELKHART, Ind.--(BUSINESS WIRE)--Nov. 27, 2002

Conn-Selmer, Inc., a subsidiary of Steinway Musical Instruments, Inc. (NYSE: LVB) today announced it has purchased instrument rental contracts from the bankruptcy proceedings of Mars Music. This move, which is intended to support local school music dealers, involves nearly 25,000 contracts in over 40 markets throughout the U.S.

"Our key objective in making this acquisition was to assist our dealer organization," said Tabor Stamper, vice president of sales for Conn-Selmer. "We recognize that these rental contracts compete with our local dealers, yet the bankruptcy proceedings would not allow individual dealers to purchase just those contracts affecting their local markets. With Conn-Selmer purchasing all of the contracts, local dealers no longer have to worry about a 'Mars II' setting up shop in their markets using these contracts as a foothold."

"Neither Selmer nor UMI ever sold instruments to Mars," noted Stamper. "These rental contracts are for instruments that other major manufacturers sold to Mars in direct competition with our local dealers. Our intent is to protect our authorized dealers by minimizing any damage in the market caused by this failed business plan."

Stamper continued, "Conn-Selmer is not in the instrument rental business. We do not operate retail stores. Given that, we have engaged a financial services company to assist us in the servicing of these rental contracts. As instruments are returned, we expect to remove the majority of them from the rental market, creating a vacuum of student instruments that the local dealer can fill. Of course, we are hopeful that our dealers will support our actions by increasing orders of Conn-Selmer products to fill the void."

Part of this strategy is the recognition that this rental inventory has a rental return rate of at least 50%. The Company estimates that, if the rental inventory associated with these contracts continued to be available, it could adversely affect the market for the next three to five years.

Dana Messina, CEO of Steinway Musical Instruments, explained, "With the increasingly competitive landscape, it has become all the more important for us to work in a close partnership with our band instrument dealers. We consider this purchase to be a vital service to the local dealer network and an example of the Company's commitment to the success of its dealer base."

About Steinway Musical Instruments

Steinway Musical Instruments, Inc., through its Steinway and Conn-Selmer subsidiaries, is one of the world's leading manufacturers of musical instruments. Its notable products include Selmer Paris saxophones, Bach Stradivarius trumpets, C.G. Conn French horns, King trombones, Ludwig snare drums and Steinway & Sons pianos. Additional information can be obtained by visiting the Company's web site: www.steinwaymusical.com

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995

This release contains "forward-looking statements" which represent the Company's present expectations or beliefs concerning future events. The Company cautions that such statements are necessarily based on certain assumptions which are subject to risks and uncertainties which could cause actual results to differ materially from those indicated herein. These risk factors include the following: changes in general economic conditions; increased competition; work stoppages and slowdowns; exchange rate fluctuations; variations in the mix of products sold; fluctuations in effective tax rates resulting from shifts in sources of income; and the ability to successfully integrate and operate acquired businesses. Further information on these risk factors is included in the Company's filings with the Securities and Exchange Commission.