Klipsch Announces Global Expansion

INDIANAPOLIS (February 15, 2005) - Klipsch Audio, Inc. today announced plans for major international expansion in collaboration with VantagePoint Venture Partners, one of the world's leading venture capital firms. Through its relationship with VantagePoint, Klipsch will expand its reach and capabilities with its immediate entry into new markets with multiple brands, through the acquisition of the brand name and key assets of Jamo A/S, a privately held Danish audio company highly regarded for its innovative design and technology. [See also press release, "Klipsch acquires Jamo," Feb.15.] Jamo is recognized among the premier speaker brands in Europe and has significant distribution in Asia including 135 company-operated retail stores in China. The Klipsch family retains majority control of Klipsch Audio, Inc.

As part of the relationship with VantagePoint, Klipsch named two new senior executives to the management team from VantagePoint portfolio company Aurora, Inc. John Carter, former chief engineer of Bose Corporation, has been named chief technology officer of Klipsch. The former CEO of Harman Consumer Group, Tom Jacoby, joined Klipsch as chief development officer and vice chairman.

In 2004, Klipsch Audio Technologies reported double-digit annual sales growth for the seventh consecutive year. The Company is ranked as the number one speaker brand in all U.S. distribution channels maintaining a 13 percent market share, according to NPD Techworld, a point-of-sale market-tracking firm. During the last five years, approximately 50 percent of new and retrofitted movie theatres around the world have installed Klipsch loudspeakers.

"The partnership with VantagePoint is exciting because we are working together to execute a global strategy that will extend our market impact well beyond the 75 countries and 5,000 storefronts we're in today," said Fred Klipsch, chairman of the board of directors and CEO of Klipsch. "VantagePoint brings the resources and knowledge to help us build a high-growth global company."

"As the market leader, Klipsch has a premier management team, reputable brand and well established distribution, providing the right platform for growth," said Cynthia Ringo, managing director, VantagePoint Venture Partners. "The company is also well positioned to tap into exciting changes in audio technology, readily meeting new demands for high-quality speakers across multiple categories."

Management Team Expansion

The executive management team at Klipsch, which was formed in the early 1990s, has expanded with the addition of John Carter and Tom Jacoby, two accomplished senior level executives with extensive backgrounds in consumer electronics and global organizations. John Carter has been named to the newly created position of chief technology officer and Tom Jacoby joined as chief development officer and vice chairman, also a new position.

Carter brings 29 years of technology and product development expertise to Klipsch. As Chief Engineer of Bose Corporation, he managed the development of technologies such as the Acoustic Wave® Music System, Lifestyle® Home Theatre, QuietComfort® Acoustic Noise Canceling® Headset and others. Carter was instrumental in Bose's entry into the automobile OEM business and led the product and business development of Bose's patented noise reduction technology.

Jacoby brings 25 years of high-level consumer electronics industry management experience to Klipsch. He served as president of JBL Consumer Products, Inc.; president and CEO of the Harman Consumer Group, a market-leader in consumer electronics; and executive vice president and chief marketing officer of Harman International Industries, Inc. He has an extensive background in corporate operations, global management and strategic consulting.

"We have built a strong executive management team over the last ten years and we welcome Tom and John as new members," said Chairman Fred Klipsch. "They bring invaluable experience to Klipsch, particularly in the areas of technology and global operations."

About VantagePoint Venture Partners

VantagePoint Venture Partners is one of the world's most active venture capital firms with more than $2.8 billion in committed capital. As a multi-stage investor, the firm funding and resources for all stages of a company's lifecycle from seed round through late stage and privately negotiated investments in public companies. Founded in 1996, VantagePoint is based on a full-service 'Partner-Team' approach that provides entrepreneurs with a blend of technology, marketing, legal, operations, and corporate-finance expertise. The firm is organized around five technology practice groups including CleanTech, Communications, Healthcare, Semiconductor & Components, and Software and Internet sectors.