New FreshWater Salt System · message behind the ACE® Salt Water Sanitizing System. The ACE system extends water life and removes maintenance hassles, two significant barriers to

New FreshWater® Salt SystemFrom the start, creating referral business through advocacy has been a driving message behind the ACE® Salt Water Sanitizing System. The ACE system extends water life and removes maintenance hassles, two significant barriers to purchase, and subsequently usage, making a Hot Spring® spa with the ACE system the best choice for many consumers.

By all accounts, the ACE system has been a major success for dealers participating in the program. It’s been a huge benefit for many owners who have enjoyed improved wellness with their spa that is “always hot and ready to use.” You’ve heard us say it many times: “Frequent users become happier customers, and happier customers result in referrals and repeat business.” And Watkins has made a lot of customers and dealers happy with the ACE system since its launch in 2010!

Yet two limitations of the ACE system keep the brand from creating even more advocates: purchase price and predictable cell life.

• Consumers want to know how long the system will last, and the nature of the product often prevents you from giving a single answer.

• As to purchase price, in the 2018 SpaRetailer TradeCertified™ survey, dealers rated the ACE system first in water quality but last in value among participating products, confirming what one high-volume ACE system dealer aptly stated,

“Everyone wants salt, they just want to pay less for it!”

Once the facts are known, everyone wants an affordable, predictable and simple salt water sanitizing system. You want more sales and fewer technician calls. Consumers want more joy and less effort. With this new water care system, Watkins Wellness® delivers.

1

Introducing the FreshWater® Salt System by Watkins Wellness, an affordable, simple water care system that eliminates the worry of

keeping spa water clean, clear and sanitized without requiring

a drain and refill for 12 months.*

There is nothing else on the market that’s as easy to use as the FreshWater Salt System. It consistently and reliably generates chlorine as a sanitizer while keeping water feeling soft and natural. The unparalleled patent-pending design makes water care so simple for spa owners

to use and enjoy, it is destined to be a breakthrough innovation—one that will position you for greater success.

This system provides solutions to the top reasons why shoppers don’t purchase hot tubs – maintenance and cost. With this system, we have an opportunity to drive industry growth by changing the way people view hot tubs and converting more shoppers to owners. We believe this is the very best solution available, therefore, we are making it available to consumers of both Hot Spring and Caldera brands.

The Answer is Simply the Best Choice in Water Care

The Answer is Simply Long-lasting WaterWater conservation is at the forefront of the FreshWater Salt System innovation story. We all know our water supply is finite—when it’s gone, it’s gone for good. In some regions of the globe the availability of water is so limited that supplies are tightly governed. In fact, Watkins Wellness believes water will be heavily regulated in the future. The trend toward conservation is here to stay. To remain a viable industry in the face of more regulation, we must do more to remove the stigma of hot tubs as water-wasters. The FreshWater Salt System answers the call by preserving spa water for a full year before draining and refilling are required.* And by making salt water more affordable, more

spa owners can take advantage of this opportunity to conserve.

*Many factors impact the life of hot tub water, such as bather load and water chemistry. When these factors are accounted for and the spa is properly maintained, the FreshWater Salt System will keep water clean and clear for a full year.

2

The FreshWater Salt System delivers on the Hot Spring spas brand promise of Every day made better® through better water that is simply easier for all.

Like ACE, the FreshWater Salt System means:

Less time needed and no maintenance headaches – just spa water that’s always hot and ready-to-use.

Fewer chemicals and no itchy, dry skin or eyes – just clean, soft-feeling and odor-free water that looks and feels great!

Less water wasted from frequent drain and refills – preserves spa water for a full year*

Compared to ACE, FreshWater offers:

A unique patent-pending design that requires no field calls to replace or service the system – owners can easily change the cartridge in seconds!

An affordable chlorine-generating salt system that removes cost barriers – it’s the best value available.

Consistent aftermarket sales – no upset customers due to short cell life. The cartridge lasts four months guaranteed.* And they’re more affordable and easier to replace so it’s easy to keep customers coming back.

*Cartridge life and water life is dependent on the water being properly balanced and maintained.

The Answer is Simply the FreshWater Salt System

A Clear Reason to Move Shoppers Up the LineThe low-cost, integrated and in-line design benefits of the FreshWater Salt System make salt water spa ownership more appealing and accessible than ever. With its affordability, easy maintenance and water saving solutions, spa shoppers will have a clear reason to choose a Hot Spring spa and step up to the Limelight® Collection or Highlife® Collection.

Especially when combined with water care exclusives such as 100% no-bypass filtration and Tri-X® filters, the FreshWater Salt System makes the Hot Spring brand a clear choice.

3

Simply put, the system overcomes one of the primary concerns about owning a spa—water care. The FreshWater Salt System employs a unique, patent-pend-ing technology in an industry-first, in-line and disposable design, accessible from the top of the spa. The key advantages of the salt system include:

Patent-pending Technology – Two features, the in-line design and user-serviceability, make the system unlike anything on the market today. They’re what make the system easy to own in delivering spa water that’s always hot and ready-to-use.

Maintenance-free Cartridge – Like ACE, but at a lower cost, the titanium cartridge generates sanitizer from salt without the harsh chlorine feel or odor, keeping the water clean, clear and feeling softer. In normal conditions, the cartridge requires no maintenance or cleaning. If operated outside of hardness parameters, the cell may scale but can be easily cleaned.

Easy Cartridge Replacement – After four months of use, or when the chlorine-generating titanium cartridge stops producing sanitizer, the owner can change the cartridge in seconds from the bar top—no need to drain the spa, disconnect any wires or call the dealer. Convenient and Disposable – Cartridges are sold in an attractive three-

pack carton, giving the customer an affordable one-year supply of water care. Replacement cartridges will drive repeat aftermarket sales.

A Fully-integrated In-line Design – The system is integrated with the spa control panel and plumbing for convenient and reliable operation. No unsightly added components on the spa! The instructions on the spa’s control panel indicate when the salt system needs attention and what steps to take, eliminating guesswork.

Water Lasts One Year – With fewer additives needed, the water stays cleaner longer. The spa water lasts 12 months before it needs to be drained and refilled.* This saves on maintenance time, conserves water and reduces costs.

With so many advantages, the FreshWater Salt System is the perfect solution for ensuring more happy hot tub owners enjoy the wellness benefits of regular hot tub use. From relieving pain, to improving sleep habits, to nurturing relationships through quality time with family and friends—using a hot tub often can help create a shift in the way people feel, live and connect.

*Cartridge life and water life is dependent on the water being properly balanced and maintained.

Why the FreshWater Salt System is the Best Choice in Water Care

Follow instructions on control panel to replace cartridge.

Remove cap.

Press button to remove cartridge.

Insert new cartridge. Press button and push into place.

Secure cap. Follow instructions on control panel.

Easy Cartridge Replacement

1.

2.

3.

4.

5.

4

The low-cost titanium cartridge works with salt to generate chlorine to keep water crystal clear, looking great and feeling softer with no harsh odors. The disposable titanium cartridge lasts four months, is accessible from the bar top, does not require any maintenance and can be replaced by the owner in seconds. The dealer just installs the components from the start-up kit, ordered separately. After that, the spa owner tests water and adjusts output settings every 10 days as prompted by the spa display, replaces the cartridge every four months, and performs an annual drain, refill and rebalance. It’s that simple.

The FreshWater Salt System ComponentsThe system is comprised of three components: a cartridge housing with screw cap, a titanium cartridge, and a system controller. All 2019 Highlife Collection and Limelight Collection spas will ship from the factory with the following components installed:

1. Cartridge housing and screw cap on the bar top 2. Cartridge housing plug

The cartridge housing plug creates a seal in the housing and must not be removed unless the owner replaces it with the titanium cartridge available in the start-up kit.

The FreshWater Salt System Start-up Kit ComponentsThe FreshWater Salt System requires the following components from the start-up kit that is available separately and is necessary for the dealer to install the salt system:

1. Controller 2. Titanium cartridge 3. 4.5 kg (10-lb) bag of salt 4. Vanishing Act® calcium hardness reducer 5. Salt Test Strips 6. 5-way Test Strips 7. Owner’s Manual 8. Start-up Guide

Along with the start-up kit, replacement cartridges packaged in convenient three-pack cartons are also available. This yearlong supply of titanium cartridges comes in packaging designed for optimal showroom merchandising and draws attention to the system with its attractive, new FreshWater branding. The FreshWater Salt System is our first step in moving to an umbrella brand for water care, a consolidation move that will result in a stronger program benefitting dealers and consumers.

How it Works and What’s Included

FreshWater Salt System Start-up Kit

5

Combine with Silver - The combination of chlorine and silver is the most powerful cleaning option for hot tubs. While optional, we suggest pairing the FreshWater Salt System with FreshWater Ag+® Silver for the ultimate water care solution (available in the U.S. only). With the chlorine-generating cartridge now being located in its own housing, space within the filter is open to install the silver cartridge. It’s easier than ever to get customers using silver and keep them coming back for more.

Reduce Calcium Hardness – Hard water prevents the system from working effectively. Use Vanishing Act treatment or theOn The Go® pre-filter at start-up to keep calcium hardness levels at or below 50 ppm. This will help maximize cartridge life.

Remove Metals – Any metals in the water must be removed before starting up the FreshWater Salt System. Use theClean Screen® pre-filter and FreshWater Stain and Scale Control to ensure metals are removed.

Use Liquid Chlorine or Bleach at Start-up – Liquid chlorine (or bleach, a diluted version

of liquid chlorine) contains fewer fillers and additives than granular chlorine. When used at start-up, less chemical is introduced into the water, which will help prolong the life of the water and eliminate the possibility of cyanuric acid build-up. Your Regional Sales Manager can provide more details.

Get a Chlorine Residual – The system cleans the water before it produces a chlorine residual. If there is no measurable chlorine in the spa water after 24 hours, this indicates that the salt system is still cleaning the water. If there are contaminants in the water, or the spa has heavy initial use, it may take the system a few days to clean the spa water and keep up with the chlorine demand. Add liquid chlorine or bleach for quicker residual generation.

Tested and Endorsed – A host of dealer and consumer beta users declare the FreshWater Salt System our best water care system. Get ready to grow your spa sales and create more happy customers, our advocates for a healthy referral business.

Essentials for Success

Included Start-up Guide

6

Key Takeaways

• The FreshWater Salt System is our best choice in water care. It features patent-pending technology and provides predictable cartridge life, user- serviceability and lower cost.

• One, three-pack of cartridges provides 12 months of water care.

• Cartridges require no maintenance or cleaning under normal operation.

• Cartridges are owner serviceable and can be replaced in seconds from the bar top.

• The water lasts a full year when properly maintained.

• The FreshWater Salt System is less expensive than ACE making it easier to keep your customers coming back for repeat sales.

• Like ACE, the system saves water, saves maintenance time and keeps the water sparkling clean so owners will spend more time using their spa and less time maintaining it.

• The new 2019 Highlife Collection NXT models are will start production the week of November 12 with the FreshWater Salt System, including the 2019 models with Teak cabinets until the color is discontinued at the end of 2018.

• 2019 Limelight Collection models will start production the week of November 12 with the FreshWater Salt System – no other changes are planned for these models.

7

©2018 Watkins Wellness® 1280 Park Center Drive, Vista CA 92081 USA • CONFIDENTIAL

Availability The FreshWater Salt System, will replace ACE as our top choice for the best spa water possible, and for Hot Spring spas, will be available on 2019 Highlife Collection and Limelight Collection spas. ACE replacement cells will continue to be available to sup-port customers who are currently on the ACE system. Please note, the new FreshWater Salt System is not backward compatible and cannot be used on hot tubs made prior to 2019 models.

Hot Spring will continue to offer the FreshWater III CD Ozone generator with the EverFresh® System and FreshWater bottled products as other water care options. Because ozone competes with salt systems and the chlorine generation process, the ozone generator will no longer be installed as a standard feature from the factory in 2019 models - it will be a dealer-installed option.

The FreshWater Salt System Kit (PN 80001), Freshwater Spa Salt 4.5 kg (10-lb) bag (2/case) (PN 80000) and 3-Pack Replacement Cartridges (PN 80004) are also available to order now. You can place your order via WatkinsDirect® online ordering service, or by contacting your Dealer Support Representative. An updated Necessories® price list has been posted on the Extranet.

Marketing and Training Materials Training materials, including a PowerPoint presentation, recorded webinars, FAQs and videos, as well as a single-page sell sheet are available to you now on the Watkins Marketing Library in the FreshWater Salt System portal. Consumer marketing materials will be available to coincide with the launch of the new Highlife Collection in mid-January. This includes website updates for HotSpring.com as well as availability of assets on the Watkins Marketing Library. International Hot Spring websites and dealer sites managed by our Local Digital Program, will be available no earlier than March to coincide with the consumer launch.

If you have any questions or need assistance with details of this announcement, please contact your Regional Sales Manager; Nancy Hoobergs - European Sales Manager; Deana Jacobsen-Abarca - Senior International Sales Manager or Leo Hamacher - Vice President of International Sales & Marketing.

8