Audiovox Announces Definitive Agreement to Acquire Klipsch

HAUPPAUGE, N.Y., Feb. 3, 2011 /PRNewswire/ — Audiovox Corporation (Nasdaq:
VOXX), announced today that it has entered into a definitive agreement to
acquire Klipsch Group Inc. and its worldwide subsidiaries (“Klipsch”) for total
consideration of $166 million, subject to certain contingencies and adjustments,
plus related transaction fees and expenses. Klipsch, headquartered in
Indianapolis, is a global leader in providing high-performance audio solutions
serving the residential, professional and personal listening markets. Klipsch
Group products are sold through premier retail, online, and distribution
channels around the world.

The acquisition is expected to be financed by a combination of existing Audiovox
cash and a new asset-based revolving credit facility from Wells Fargo Capital
Finance, LLC that will also be used for operating capital. The combined assets
of Audiovox and Klipsch will secure the borrowings under the financing
commitments and the Company expects the transaction to close within 30 days.
Subsequent to the close of the transaction, Audiovox expects to have excess
availability under the credit facility for general corporate purposes. However,
there is no assurance at this time that this transaction will be completed.

This transaction is expected to be accretive to cash flow and earnings per
diluted share (“EPS”) in fiscal 2012 inclusive of all costs for financing. The
Company noted that on a pro-forma basis, for the latest twelve months ended
November 30, 2010, revenue for the combined companies approximates $742.2
million compared to $573.1 million for Audiovox as a stand-alone company.

Patrick Lavelle, President and CEO of Audiovox Corporation stated, “This
transaction will add the world renowned Klipsch Group brands- Klipsch, Jamo,
Energy and Mirage- and its world class management team- to the growing Audiovox
family of companies. This highly respected company has for over 60 years been
synonymous with premium high-end audio solutions, and today enjoys the
well-deserved reputation as ‘The’ preeminent audio brand for residential,
professional and personal listening use. They have a strong and stable base of
retail, e-commerce, commercial distribution, and professional installation
business partners in North America, Europe and around the world. Klipsch Group
provides an outstanding new distribution channel for our company to reach the
home and commercial installation markets.”

Klipsch will become a wholly-owned subsidiary of Audiovox and will be run as a
stand-alone operation in Indianapolis, and will continue under the leadership of
the current management team. We are highly confident that this acquisition will
result in both near and long term value growth for our shareholders and enhance
our position in the premium audio category for years to come.

Fred Klipsch, Chairman and CEO of Klipsch Group, Inc. stated, “Our team looks
forward to partnering with Audiovox and with the additional resources Audiovox
has to offer accelerating our domestic and global growth. Klipsch remains
focused on providing our customers with the best speaker solutions in the
industry, maintaining our deep customer and supplier relationships and
leveraging our world class employee base. Klipsch Group will continue to be
‘The’ innovative premium speaker provider our partners expect and trust.”

Lavelle added, “While Klipsch will operate as a stand-alone company, we see many
opportunities to leverage distribution, global brand development, and brand
expansion in areas such as OEM automotive and professional audio.”

Wells Fargo Securities, LLC acted as exclusive financial advisor to the Company
and Wells Fargo Capital Finance, LLC provided the committed debt financing.
Houlihan Lokey Howard & Zukin acted as financial advisors to the Klipsch Group
and Vantage Point Venture Partners. Barnes & Thornburg LLP served as legal
counsel for Klipsch Group. Duane Morris LLP assisted as legal counsel for
Audiovox Corp.

About Audiovox

Audiovox (Nasdaq: VOXX) is a recognized leader in the marketing of mobile and
consumer electronics products and accessories. The company has a substantial
International operation selling products through offices in Europe, Asia,
Venezuela and Mexico. In addition, the company is a supplier of Original
Equipment (OE) both domestically and internationally to a significant number of
the major vehicle manufacturers in the world.

Among the lines marketed by Audiovox are its mobile entertainment products
including rear seat entertainment systems, mobile multimedia systems and
satellite radio. Vehicle security, remote start and collision avoidance products
round out our mobile electronic lines. Our consumer electronics products include
digital camcorders, DVRs and Internet radios. We also supply high end TV remote
controls, wireless speakers, headphones, the leading line of HD indoor/outdoor
antennas, connectivity products, and personal sound amplifiers.

You can find Audiovox products in virtually every distribution channel from the
world’s largest retailers to car dealers to small independents. The company owns
over twenty global brands and markets its products domestically primarily under
Audiovox, RCA, Jensen, Acoustic Research, and Advent. Key European brands
include Magnat, Mac Audio, Heco, Schweiger and Oehlbach. For additional
information, visit our Web site at www.audiovox.com.

About Klipsch Group, Inc.

Founded in 1946 by Paul W. Klipsch, one of America’s most celebrated audio
pioneers, and then acquired by Fred and Judy Klipsch in 1989, Klipsch has long
been a high-end name in speaker design. Today, the brand continues its success
as a leading global manufacturer of premium sound solutions for home, personal
and commercial use. From massive professional cinema speakers to tiny
headphones, Klipsch remains committed to delivering the most powerful, detailed
and emotional sound experiences. The products sold by Klipsch include home
theater systems, floorstanding speakers, bookshelf speakers, center speakers,
surround speakers and sound systems, subwoofers, headphones, flat panel
speakers, architectural speakers, outdoor speakers, iPod/Computer speakers,
cinema speakers, business music systems, accessory products and more. For more
information, visit www.klipsch.com.

Safe Harbor Statement

Except for historical information contained herein, statements made in this
release that would constitute forward-looking statements may involve certain
risks and uncertainties. All forward-looking statements made in this release are
based on currently available information and the Company assumes no
responsibility to update any such forward-looking statement. The following
factors, among others, may cause actual results to differ materially from the
results suggested in the forward-looking statements. The factors include, but
are not limited to risks that may result from changes in the Company’s business
operations; our ability to keep pace with technological advances; significant
competition in the mobile and consumer electronics businesses as well as the
accessories business; our relationships with key suppliers and customers;
quality and consumer acceptance of newly introduced products; market volatility;
non-availability of product; excess inventory; price and product competition;
new product introductions; the possibility that the review of our prior filings
by the SEC may result in changes to our financial statements; and the
possibility that stockholders or regulatory authorities may initiate proceedings
against Audiovox and/or our officers and directors as a result of any
restatements. Risk factors associated with our business, including some of the
facts set forth herein, are detailed in the Company’s Form 10-K for the fiscal
year ended February 28, 2010.