ZAGG Inc. Announces Nearly 250% Increase in Year-to-Date Sales

"These results come from successful execution of an aggressive business plan, and the new level of sales and growth should be very encouraging to our investors," said Robert G. Pedersen II, President and CEO of ZAGG. "To have such an outstanding jump in sales is bound to create challenges, of course, but I am very pleased with how we have responded and continue to respond to these new opportunities."

"Our website sales have never been stronger, and our distribution partnerships are really helping to move the invisibleSHIELD brand forward," said Pedersen. "Even as we are announcing an almost 250% increase in revenue, we are confident that there is nowhere to go but up."

These events will be discussed in further detail during the investor conference call scheduled for Friday, August 15, 2008 at 1:00 PM ET. Executives will be available to answer questions, and information will be presented regarding the results as reported in Form 10-Q for the three and six months ended June 30, 2008. To participate in the call please dial 877-407-9210 (201-689-8049 for international callers). Interested parties may also listen via the Internet at: www.investorcalendar.com and on the Company website at: www.ZAGG.com. The call will be available for replay for 30 days by dialing 877-660-6853 (201-612-7415 for international callers) and entering account number 286 and call ID number 293716.

Financial Results

Net sales for the second quarter of 2008 were $2,739,176, an increase of 240.5% compared to net sales of $804,458 for the second quarter of 2007. Net sales for the six months ended June 30, 2008 were $5,584,597, an increase of 249.6% compared to net sales of $1,597,306 for the six months ended June 30, 2007.

Gross profit for the second quarter of 2008 was $2,026,962, or 74% of sales, compared to $203,672, or 74.7% of sales, in the second quarter of 2007. Gross profit for the six months ended June 30, 2008 was $4,094,591, or 73.3% of sales, compared to $1,206,475, or 75.5% of sales. We reported net income of $174,703 or $0.01 per share in the second quarter of 2008 compared to a net less of ($48,293) or ($0.00) per share in the second quarter of 2007. We reported net income of $60,532 or $0.00 for the six months ended June 30, 2008 compared to a net loss of ($318,865) or ($0.02) for the six months ended June 30, 2007.

About ZAGG Inc.

ZAGG Inc. designs, manufactures, and distributes protective clear coverings and accessories for consumer electronic and hand-held devices, worldwide. ZAGG's flagship brand, the invisibleSHIELD, is a protective, high-tech 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 is the first scratch protection solution of its kind on the market, and has sold over one million units. Currently, ZAGG offers over 2,500 precision pre-cut designs with a lifetime replacement warranty through online channels, 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 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 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.

ZAGG INCORPORATED AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, December 31, 2008 2007 ---------------------------------------------------------------------- ASSETS Current assets Cash $ 475,940 $2,129,215 Accounts receivable, net 821,161 402,446 Inventories 680,509 447,044 Prepaid advertising 244,482 204,976 Prepaid expenses and other current assets 892,121 122,107 Deferred income tax assets 12,829 12,829 ---------------------------------------------------------------------- Total current assets 3,127,042 3,318,617 Property and equipment, net 447,253 328,077 Deferred income tax assets 407,188 444,118 Deposits and other assets 30,537 30,547 Intangible assets, net 46,535 46,894 ---------------------------------------------------------------------- Total assets $4,058,555 $4,168,253 ---------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Notes payable $ 29,655 $ 42,090 Accounts payable 236,693 505,575 Accrued liabilities 41,997 35,814 Accrued wages and wage related expenses 101,283 95,537 Deferred licensing revenue 71,703 100,911 Sales returns liability 66,658 23,861 ---------------------------------------------------------------------- Total current liabilities 547,989 803,788 ---------------------------------------------------------------------- Total liabilities 547,989 803,788 ---------------------------------------------------------------------- Stockholders' equity Common stock, $0.001 par value; 50,000,000 shares authorized; 18,893,995 and 18,853,995 shares issued and outstanding, respectively 18,895 18,855 Warrants to purchase common stock 750,476 750,476 Additional paid-in capital 3,422,169 3,341,388 Cumulative translation adjustment 882 (3,866) Accumulated deficit (681,856) (742,388) ---------------------------------------------------------------------- Total stockholders' equity 3,510,566 3,364,465 ---------------------------------------------------------------------- Total liabilities and stockholders' equity $4,058,555 $4,168,253 ----------------------------------------------------------------------

ZAGG INCORPORATED AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Three Months Six Months Six Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 ---------------------------------------------------------------------- Net sales $ 2,739,176 $ 804,458 $ 5,584,597 $ 1,597,306 Cost of sales 712,214 203,672 1,490,006 390,831 ---------------------------------------------------------------------- Gross profit 2,026,962 600,786 4,094,591 1,206,475 ---------------------------------------------------------------------- Operating expenses: Advertising and marketing 484,728 79,188 1,274,792 254,231 Selling, general and administrative 1,343,778 554,037 2,849,199 1,246,785 ---------------------------------------------------------------------- Total operating expenses 1,828,506 633,225 4,123,991 1,501,016 ---------------------------------------------------------------------- Income (loss) from operations 198,456 (32,439) (29,400) (294,541) Other income (expense): Interest expense (972) (20,231) (2,674) (26,099) Interest and other income 81,149 3,969 129,536 4,085 ---------------------------------------------------------------------- Total other income (expense) 80,177 (16,262) 126,862 (22,014) ---------------------------------------------------------------------- Income (loss) before benefit (provision) for income taxes 278,633 (48,701) 97,462 (316,555) Income tax benefit (provision) (103,930) 408 (36,930) (2,310) ---------------------------------------------------------------------- Net income (loss) $ 174,703 $ (48,293) $ 60,532 $ (318,865) ---------------------------------------------------------------------- Basic net income (loss) per common share $ 0.01 $ (0.00) $ 0.00 $ (0.02) ---------------------------------------------------------------------- Diluted net income (loss) per common share $ 0.01 $ (0.00) $ 0.00 $ (0.02) ---------------------------------------------------------------------- Weighted average number of shares outstanding - basic 18,884,105 15,168,995 18,884,050 14,596,739 ---------------------------------------------------------------------- Weighted average number of shares outstanding - diluted 18,936,055 15,168,995 18,976,547 14,596,739 ----------------------------------------------------------------------

SOURCE: ZAGG Inc.

ZAGG Inc. Robert Pedersen II, President and CEO 801-263-0699 ext. 110 (Media) robert@zagg.com or Alpaytac Inc. Caroline Rubenstein 312-245-9805 ext. 110 (Media) caroline@alpaytac.com or ZAGG Inc. Brandon O'Brien, CFO 801-263-0699 ext. 122 (Investor Relations) brandon@zagg.com