Tweeter Drops Monster Cable Brand

BRISBANE, CA - Sept. 26, 2005 - Monster Cable Products announced today that Tweeter Home Entertainment Group will be dropping the sale of all Monster products, ending a mutually profitable 20 year relationship.

In recent months Monster had become increasingly concerned over Tweeter's financial condition, and the exposure of its four million dollar credit line. After doing an in-depth study of Tweeter financials, talks with other Tweeter vendors, gathering the opinion of financial analysts and other industry advisors, Monster's credit committee became increasingly concerned about continued losses in the future and high risk of loss.

Monster then announced a roll back of Tweeter's credit line to commensurate levels and recommended a shortening of terms that would still allow Tweeter's Monster business to continue. In an unexpected action, Tweeter immediately moved to drop all of Monster's business and replaced it with four other vendors, which was announced last week.

This is contrary to Tweeter's previous announcement release that implies that Monster was replaced by new vendors because it did not measure up in a comparison of quality, value, profitability, margin, and customer satisfaction.

"We believe that this separation is a huge loss between the two companies as Tweeter is one of most successful retailers under Monster's M4 program, and Monster is one of the most profitable vendors for Tweeter," says Noel Lee, founder of Monster Cable.

"The main reason that Monster and Tweeter have parted ways is over the companies' inability to reach financial and credit terms," states Tom Silvia, Monster's Manager of Credit and Finance.

"We made some suggestions of credit line approaches that would help to maintain the cash flow to Tweeter and would enable them to continue their current level of successful business with Monster, but they were not accepted," cites Irene Baran, COO of Monster Cable.

Noel Lee, CEO (Head Monster) of Monster Cable, who originally implemented the M4 program with Tweeter, says, "This is a sad end to a long relationship. Tweeter was the very first retailer to benefit under our M4 program implementation over 10 years ago. It was a true partnership between our two companies. The M4 program is firing on all cylinders at Tweeter with profit increases of the past two years that has earned Tweeter the prestigious category award of the Most Monsterous AV Specialty Chain Award of 2004 at the CES show in January. The abrupt end to the partnership and the reluctance to work things out before dropping Monster came to us as a complete shock."

Monster has always focused on the success of its retail partners with their M4 program, providing the tools, measurement processes, and training needed to bring solutions to consumers and profitability to retailers. In fact, Monster's award to Tweeter was not the only recognition between the two companies. In 2004, Tweeter awarded Monster Cable "Best Category and Development Award" amongst all their vendors.

Having trained Tweeter management himself this year, Noel Lee states, "With years of Monster training, the sales staff at Tweeter is excited about the brand and are extremely comfortable selling it. This has made Monster one of Tweeter's most profitable categories. I have to believe that the change was very emotional, especially considering the time of year. I only wish that we could have met to work things out."

We regret the loss of their business and hope to be a Tweeter vendor again sometime in the future in better times, under better conditions.

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