Exhibit 99.1
[LETTERHEAD OF MARATHON FUND, L.P.]
September 18, 2000
Dear Board of Directors:
We are fiduciary for shareholders controlling 468,233 shares of Lancer
Corporation, representing approximately 5.13% of the total of outstanding
shares. Four months have passed since we expressed our concerns regarding
the organizational disarray at Lancer during the annual meeting in San
Antonio. You will recall that, with some reservations, these concerns were
validated by the comments of other shareholders, employees, and directors
during the annual meeting. Furthermore, an SEC schedule 13D filed by another
large shareholder in August of 1999 raised many of the same issues.
Unfortunately, there has been little action taken during the ensuing months
to address the issues raised in either of these venues. As a result,
Lancer's financial performance continues to stagnate, as reflected in seven
consecutive quarters over prior year quarter results.
As we see it, Lancer's four great attributes are a respected brand name, a
"franchise" position as one of a handful of players in an industry with high
barriers to entry, industry leading technology and product development.
However, it also is apparent that the market for Lancer's products has
evolved to the point that it will become increasingly difficult for Lancer to
compete with multi-line companies with far greater resources and the ability
to spread marketing costs across multiple product lines.
Therefore, it has become apparent to us that a combination with a larger
industry player is in the best interest of Lancer shareholder's (including
management shareholder), employees, and customers. Moreover, we believe that
this is the best, and only, strategy for preserving Lancer's position as the
premier manufacturer in its product segment.
The time for inaction has passed and it is time for Lancer's employees,
shareholders and other stakeholders to unite to seize control of our destiny
by selling to someone who is committed to make this Company what it should
be: the undisputed leader in the beverage equipment business. We intend to
make every conceivable effort to bring this result to fruition.
Sincerely,
/s/ Don Woodard, Jr. /s/ David A. Corbin
