Klipsch to Build New 46,000 Sq. Ft. Distribution Center and Renovate Manufacturing Plant in Hope, Ark.; 80 New Jobs Created

HOPE, Ark. (October 24, 2001) - Reaffirming his company's commitment to the state of Arkansas and the city of Hope, Chairman and Owner Fred Klipsch today announced that Klipsch Audio Technologies will break ground next month on a new 46,000-square-foot distribution center. The new building will be located approximately one mile west of the main Klipsch manufacturing facility on Highway 32.

According to Fred Klipsch, construction of the new distribution center is a multi-million dollar capital investment that includes significant renovation of the manufacturing facility as well, and will create up to 80 new jobs for the city of Hope and Hempstead County.

"As a Hope native and Arkansas' governor, this announcement is doubly exciting for me," said Gov. Mike Huckabee. "Klipsch is an established industry leader and continues to see its business grow rapidly. Its history of success and plans for expansion are good indicators of even more prosperous times ahead. I'm proud the company calls Hope home, and I'm pleased it has chosen to expand operations here. It's great news for Hope and all of Arkansas."

According to Fred Klipsch, the 55-year-old "Legend in Sound" company has doubled its sales in the last three years through stellar performance of its core business of home audio, along with major contributions from other business units including professional cinema, international operations and multimedia audio. The new distribution center and manufacturing plant renovation will allow Klipsch to keep up with the increased demand and set the stage for holding onto its position as the number one specialty audio loudspeaker brand in the United States.

"The people of Hope and south Arkansas should be congratulated. It is a credit to the local workforce and local leadership that a quality company like Klipsch would choose to continue to grow its operations here," said Jim Pickens, director of the Arkansas Department of Economic Development. "We are pleased that Klipsch has found over the years what other businesses are discovering - that the business environment in Arkansas is one that can lead to long-term success and prosperity. We certainly welcome this expansion with great enthusiasm."

"I certainly do want to recognize the organized and diligent team of the state of Arkansas, city of Hope, Southwest Arkansas Planning and Development District, Hope Water and Light Commission, Hempstead County and particularly the Hempstead County Economic Development Corporation for their efforts in making this expansion and renovation possible," Fred Klipsch said.

According to Mike Klipsch, executive vice president and COO for the Klipsch Worldwide Manufacturing and Supply Management Group, Klipsch will relocate its finished goods and warranty parts stocks as well as its shipping operations to the new distribution center. He said the manufacturing facility renovation will focus on process improvements that increase product quality while reducing production lead times and manufacturing costs.

Mike Klipsch also explained that the renovation will include the creation of a dedicated manufacturing area for the Klipsch Systems Integration Division, which supplies premium professional grade loudspeakers to world-renowned entertainment facilities such as Hard Rock Cafes, Planet Hollywood restaurants, Regal Cinemas, NCAA Hall of Champions, museums, churches, sporting complexes and conference centers worldwide.