ZAGG Incorporated (ZAGG)

[MikeDDKing]

Letter from ZAGGs CEO Indicates Record-Breaking Year in 2008, Continuing in 2009
ZAGG Describes Highlights of Past Year and Forecasts Continuing Success
Monday January 26, 2009, 6:00 am EST

SALT LAKE CITY--(BUSINESS WIRE)--ZAGG Inc. (OTCBB: ZAGG - News), the market leader of protective coverings and accessories for consumer electronics, today issued the following letter:

Dear Shareholders and Friends of ZAGG,

With 2008 now drawn to a close, I wanted to take a moment to reflect on the past 12 outstanding, successful months. From our first days -- just a few years ago -- ZAGG was founded on principles of working hard for our customers and shareholders; and we are privileged that our company and our industry remain strong in spite of wider economic concerns.

For a company that began with a bang, hit the ground running, and has always been on the forefront of a very competitive consumer electronics industry, we have become accustomed to stunning growth and record sales. This year was no exception; please consider with me the following highlights:

- Our goal at the beginning of the year was to continue ZAGG’s three-year trend of doubling our annual sales. However, in 2008, we exceeded our own expectations by more than tripling our numbers and showing strong profitability. We feel we will continue this growth trend of at least doubling our numbers in 2009.
- In mid-2008 we created an exceptional partnership with Best Buy, the largest specialty retailer of consumer electronics in the United States. We started in July with 3 SKUs in 300 stores, and we currently have 10 SKUs in all 1,000+ Best Buy locations across the United States. In 2009 we plan to further increase our SKUs count as well as be integrated into new Best Buy locations. This will allow ZAGG to expand both horizontally and vertically.
- We opened ZAGG Europe in early 2008, which quickly brought the invisibleSHIELD into Carphone Warehouse. We currently have 12 SKUs in over 900 stores throughout the UK, and are looking to expand into the rest of Europe in 2009.
- The invisibleSHIELD also became available on Walmart.com where it continues to have excellent sell-through. We plan to further expand this relationship with Wal-Mart in 2009.
- International distributors were one of ZAGG’s fastest growing segments in 2008. Along with our established strongholds throughout Europe and Asia, we saw steady growth into Canada, Mexico, Hong Kong, Australia, and South Korea.
- We had over 4 million unique visitors to ZAGG.com in 2008 – up from just over 1 million in 2007.
- We now have a network of almost 500 independent resellers across the country, up from 300 in 2007, with everything from “Mom and Pop” electronic shops to college bookstores, independent Apple resellers, and mobile phone retailers.
- We introduced an improved invisibleSHIELD film with our logo prominently on the back, so our customers know they are getting the original, best quality electronics protection.
- We doubled our mall kiosk locations in 2008, which led to our cart sales tripling. In 2009 we expect to again double our mall kiosk locations from current levels.
- In December we won the coveted CES Innovations Award for our new Z.buds in-ear headphones.

These are just some of the biggest and brightest highlights, but many, many other remarkable things happened at ZAGG this year. Of course, the past is just the beginning, and the best is yet to come:

- We kicked off the year with a major presence at both Macworld Expo and International CES, two of the most important industry trade shows. The response we received was incredible as many new business partnerships were fostered.
- We plan to further our relationship with current and potential big box partners.
- Our innovative ZAGGaudio line will continue to win awards and generate great buzz among reviewers and audiophiles. We also anticipate these products opening new distribution channels for ZAGG and the invisibleSHIELD.
- New product releases from the biggest names in the industry -- Apple, LG, BlackBerry, and the new Palm Pre among them -- will provide great opportunities for ZAGG and the invisibleSHIELD product line.
- We are excited about upcoming products and services that will be introduced throughout 2009.

We appreciate your support in 2008, and I feel comfortable declaring that 2009 will be our best year ever. In 2008 we turned the corner to profitability, and 2009 will be the year we take ZAGG to the masses with new big box additions and new product additions. Our growth continues to amaze the market and our hard work and execution of our unique business plan will continue to pay off as we move forward. Thank you for helping to make ZAGG one of the most exciting and dynamic companies in the electronics industry.

Go ZAGG!

Robert G. Pedersen II
President and CEO
ZAGG Inc.


About ZAGG Inc.:

ZAGG Inc. designs, manufactures, and distributes protective clear coverings and accessories for consumer electronic and hand-held devices, worldwide under the brand names invisibleSHIELD™ and ZAGGaudio™. The invisibleSHIELD is a protective, high-tech patented film covering, designed for iPods, laptops, cell phones, digital cameras, PDAs, watch faces, GPS systems, gaming devices, and other items. The patent-pending invisibleSHIELD application of clear protective film covering a device is the first scratch protection solution of its kind on the market, and has sold millions of units. Currently, ZAGG offers over 2,500 precision pre-cut designs with a lifetime replacement warranty through online channels, big box retailers like Best Buy, resellers, college bookstores, Mac stores and mall kiosks. The company continues to increase its product lines to offer additional electronic accessories to its tech-savvy customer base, as well as an expanded array of invisibleSHIELD products for other industries. For more product or investor information please visit the company’s web site at www.ZAGG.com.

Safe Harbor Statement

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may," "future," "plan" or "planned," "will" or "should," "expected," "anticipates," "draft," "eventually" or "projected." You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in filings made by the company with the Securities and Exchange Commission.


Contact:
Media:
ZAGG Inc.
Robert Pedersen II, president and CEO
801-263-0699, ext. 110
[e-mail]
or
Alpaytac Inc.
Caroline Rubenstein
312-245-9805, ext. 110
[e-mail]
or
Investor Relations:
ZAGG Inc.
Brandon O’Brien, CFO
801-263-0699, ext. 122
[e-mail]
or
RedChip Companies, Inc.
Jon Cunningham
407-644-4256, ext. 107
[e-mail]