The Klipsch Group Establishes Wholly Owned Distribution Management Companies to Support Global Expansion

INDIANAPOLIS (January 5, 2006) - The Klipsch Group, Inc. announced today that effective immediately, its portfolio of brands - Jamo and Klipsch - will now be sold through three corporately owned distribution management companies. The Europe and Asia Pacific regions will be served by Klipsch Group Europe and Klipsch Group Asia Pacific, respectively, with industry veteran Niels Jespersen in place as newly appointed managing director. In addition, longtime Klipsch sales executive Dave Kelley has been promoted to president of Klipsch Group Americas, which will oversee distribution of the two brands in North, South and Central America. The two Distribution presidents will work directly with The Klipsch Group president Paul Jacobs to develop the channel, brand and category strategies worldwide.

"These changes to our structure will not effect the customer-facing portion of our business," said David Kelley, president, Klipsch Group Americas. "Business partners will continue to work with the same brand-specific sales reps and independent distributors that they always have. This is a strategic and structural change to allow for centralized distribution decision-making for all the current Klipsch Group brands and any additional brands that we may acquire."

Klipsch Group President, Paul Jacobs, states that the company's strategy is to accelerate global growth with multiple brands: "This new structure is the foundation we need to reach our very aggressive growth objectives. We now have in place a distribution operation that can support any acquisition activity we choose to pursue, helmed by two of our most experienced and knowledgeable executives."

In addition to overseeing and optimizing the distribution relationships and practices, Kelley and Jespersen also manage the sales teams and distributor networks in their respective geographies. Kelley and Jespersen report to Paul Jacobs, president of Klipsch Group, Inc. which is the parent company for the distribution companies. Klipsch Group Americas will be located at Klipsch Group global headquarters in Indianapolis, IN, and Klipsch Group Europe and Klipsch Group Asia Pacific will be headquartered in Copenhagen, Denmark with a subsidiary being opened in Asia.

This anticipated growth must be managed in a coordinated and orderly fashion within each market," said Managing Director Jespersen. "Markets where one brand makes sense, another may not, and this new organization gives us the ability to place the right products with the right retailers and contractors. The singular corporate structure will help avoid market conflicts and maximize established supplier/reseller relationships."

Since joining Klipsch in 1992, Kelley has held several leadership positions including key account manager, regional manager, director of sales, national sales manager, international sales manager, vice president of sales and senior vice president of worldwide sales. With over 20 years in the industry, Kelley began his career at Highland Superstores where he started as a sales associate and later held a variety of management positions. At the time, he was the youngest manager in the company's history.

Jespersen joined Klipsch in March 2005 as director of global distribution strategy. He brings to Klipsch more than 30 years of international consumer electronics sales and distribution experience. He served as president of the International Division of Harman Consumer Group and director of European activities for JBL and Harman Kardon. Jespersen most recently established distribution activities in Denmark for Marantz electronics and Audio Pro speakers.