From: Noel Lee
Sent: Tuesday, September 30, 2008 11:54 AM
To: News
Subject: State of the Economy and Monster; Part one

With all of the financial news that is affecting our economic world, a message on Monsterłs outlook would be appropriate. I am writing this to you prior to the approval of the Federal help that is coming for financial institutions so it will be part one.

The Good News:

Our sales so far this year have been right on track, and unlike other companies in our space, and our competitors, we have made a profit every month this year. This outpaces our performance last year, so we are in good shape. A lot of this comes from opening new retailers, international sales, and what we hope will come, the sales of new products like Beats and Digital Life.

The Not So Good News;

Our reps and our retailers are feeling it a lot harder than we are. Especially the past days and months, the availability of working capital and growth capital is almost non existent, and consumer confidence is low, meaning lower sales. Lower sales for them doesnłt necessarily mean lower sales for us if we can outpace the growth in attachment rate of our products to the customers that they now have. With current attach rates being at 35 to 45%, we have at least 50% growth potential if we just get to more customers.

The Better News:

Our retailers need us more than ever. We need to work harder to reach our numbers, but the opportunities are there. We hope to take advantage of our opportunities to help our retailers with aggressive trainings, and sell in of new products like Digital Life. For example, Tom Land is launching a full M5 program with our new 600 store chain in Europe, Eldorado. I am on my way to a Best Buy territory training that focuses on Monster more than they ever have before.

Consumer spending is down, but itłs not zero. We need to take advantage of customers that are still going into the stores and raise ASP and Attach rates. Execution at a high level on everything that we do will keep us ahead of the game. But thatłs a tall order because we are not there yet on a lot of levels. We need to do the best we can in all of the things that we have control of, and not worry on all of the things that we donłt have control of.

Standby for part 2.

-

Monsterous Thanks,

Noel
The Head Monster
Mobile Phone: [phone]
Office: 415 840-2000

Achiever-Futuristic-Individualization
Self Assurance -Strategic

Contact
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Jessica Shea
[e-mail]
415 430-7729

Monster Web Site
Http://www.monstercable.com