ZAGG Interview

Ahead of expectations, ZAGG demonstrated profitability in 2Q08 which we believed, comparatively, to be a sluggish quarter. The Company maintained its revenue drift, accomplishing 240% year-over-year revenue growth in the second quarter and we expect firm growth going forward as the third and fourth quarters are usually fundamentally strong. ZAGG is aggressively pursuing alliances with big box retailers, and we believe these alliances will be catalysts to the Company’s successful penetration in the market. Although ZAGG has competition, its first-mover advantage and reliable business association both at the back and front ends will give it an edge over the next two to three years. We believe ZAGG’s evolution as an exclusive distributor of protective electronic coverings has been very impressive, and it offers a conservative investment opportunity in a specialty retail segment. We maintain our “Speculative Buy” rating and have revised upwards our 12-month target price to $2.25 to encapsulate the recent revenue and business gains amidst a difficult economic environment. 5BB1797B-528C-1833-051D-45B902DE288E 1.02.05

Blip | October 2, 2008

Tags:. .catalysts. .upwards. .sluggish. .penetration. .specialty