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 Press Release
August 13, 2009 - 11:00 AM Eastern
Second Quarter Earnings Conference Call
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ZAGG Reports Second Quarter 2009 Earnings


SALT LAKE CITY--ZAGG Inc. (OTCBB: ZAGG - News), a leading producer of mobile electronics accessories including the popular invisibleSHIELD™ and ZAGGaudio™ brands, announces successful results for the second quarter of Fiscal Year 2009, ended June 30, 2009. ZAGG highlighted a 236% increase in revenues when compared to second quarter 2008 and also reported positive fully diluted earnings per share of $0.05 for the second quarter 2009. For the six months ended June 30, 2009, ZAGG had a 210% increase in revenues when compared to the six months ended June 30, 2008 and also reported positive fully diluted earnings per share of $0.10 for the same period.

“We are thrilled with these results, as the second quarter is historically our slowest, so to execute another record-breaking quarter is very exciting,” said Robert G. Pedersen II, President and CEO of ZAGG. “We continue to see dramatic growth in domestic and international markets. We are currently expanding our SKU count with Best Buy and the launch of another big box retailer to be announced on the conference call. Our mall kiosks are experiencing record growth in inquiries from potential owners, and from new cart openings; we currently have 67 operating locations across the country, and 78 signed agreements. ZAGG will be introducing a new product line on this call, as well as a switch in paradigm in offering new product categories over the coming months. I am confident that the invisibleSHIELD and new product launches throughout the rest of this year will keep our company on a high growth trajectory for years to come.”

The Company will host an investor conference call Thursday, August 13, 2009 at 11:00 AM EDT to answer questions regarding the results from their Form 10-Q for the three and six months ended June 30, 2009. To participate in the call please dial (877) 407-0782. Interested parties may also listen via the Internet at the event website and on the Company website at: www.ZAGG.com. The call will be available for replay for 30 days by dialing (877) 660-6853 and entering account number 286 and call ID number 329368.

Financial Results

Net sales for the quarter ended June 30, 2009 were $9,214,971, an increase of 236% compared to net sales of $2,739,176 for the quarter ended June 30, 2008. Net sales for the six months ended June 30, 2009 were $17,290,146, an increase of 210% compared to net sales of $5,584,597 for the six months ended June 30, 2008.

Gross profit for the quarter ended June 30, 2009 was $5,515,454, or 60% of sales, compared to $2,026,962, or 74% of sales, in the quarter ended June 30, 2008. Gross profit for the six months ended June 30, 2009 was $10,708,398, or 62% of sales, compared to $4,094,591, or 73% of sales for the six months ended June 30, 2008. We reported net income of $1,194,264 or $0.05 per share for the quarter ended June 30, 2009, compared to net income of $174,703 or $0.01 per share for the quarter ended June 30, 2008. We reported net income of $2,222,504 or $0.10 per share for the six months ended June 30, 2009, compared to net income of $60,532 or $0.00 per share for the six months ended June 30, 2008.

For more information about ZAGG, please visit the investor relations page on www.ZAGG.com. This calendar of events may be subject to change without notice.

About ZAGG Inc.:

ZAGG Inc. designs, manufactures, and distributes protective clear coverings and accessories for consumer electronic and hand-held devices, worldwide under the brand names invisibleSHIELD™ and ZAGGaudio™. ZAGG has also introduced beta testing of AppSpace.com, an online destination for the fast-growing mobile app market, combined with the networking power of social media. The invisibleSHIELD is a protective, high-tech patented 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 of clear protective film covering a device is the first scratch protection solution of its kind on the market, and has sold millions of units. Currently, ZAGG offers over 3,000 precision pre-cut designs with a lifetime replacement warranty through online channels, big box retailers like Best Buy, resellers, college bookstores, Mac stores and mall kiosks. The company continues to increase its product lines to offer additional electronic accessories and services to its tech-savvy customer base. For more product or investor 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 of 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,
2009 2008
ASSETS
Current assets
Cash $ 3,334,158 $ 1,065,652
Accounts receivable, net 5,088,329 3,593,887
Inventories 4,179,258 1,913,297
Prepaid expenses and other current assets 1,270,241 676,077
Notes receivable 513,000 513,000
Deferred income tax assets - 81,663
Total current assets 14,384,986 7,843,576
Property and equipment, net 689,069 549,370
Deferred income tax assets - 4,937
Deposits and other assets 9,688 9,688
Intangible assets, net 78,017 47,344
Total assets $ 15,161,760 $ 8,454,915
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable $ 10,199 $ 20,223
Accounts payable 2,317,626 1,626,390
Accrued liabilities 137,396 212,754
Accrued wages and wage related expenses 129,784 121,112
Deferred revenue 214,052 366,590
Deferred income tax liability 1,243,165 -
Sales returns liability 544,563 291,119
Total current liabilities 4,596,785 2,638,188
Total liabilities 4,596,785 2,638,188
Stockholders' equity

Common stock, $0.001 par value; 50,000,000 shares authorized; 21,141,112 and 19,163,995 shares issued and outstanding, respectively

21,142 19,165
Warrants to purchase common stock 425,666 739,338
Additional paid-in capital 6,743,220 3,808,280
Cumulative translation adjustment (203,781 ) (106,630 )
Retained earnings 3,578,728 1,356,574
Total stockholders' equity 10,564,975 5,816,727
Total liabilities and stockholders' equity $ 15,161,760 $ 8,454,915
ZAGG INCORPORATED AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Three Months Ended Six Months Ended Six Months Ended
June 30, 2009 June 30, 2008 June 30, 2009 June 30, 2008
Net sales $ 9,214,971 $ 2,739,176 $ 17,290,146 $ 5,584,597
Cost of sales 3,699,517 712,214 6,581,748 1,490,006
Gross profit 5,515,454 2,026,962 10,708,398 4,094,591
Operating expenses:
Advertising and marketing 1,393,194 484,728 2,846,248 1,274,792
Selling, general and administrative 2,259,150 1,343,778 4,395,148 2,849,199
Total operating expenses 3,652,344 1,828,506 7,241,396 4,123,991
Income (loss) from operations 1,863,110 198,456 3,467,002 (29,400 )
Other income (expense):
Interest expense (178 ) (972 ) (2,620 ) (2,674 )
Interest and other income 50,226 81,149 92,274 129,536
Total other income 50,048 80,177 89,654 126,862
Income before provision for income taxes 1,913,158 278,633 3,556,656 97,462
Income tax provision (718,894 ) (103,930 ) (1,334,152 ) (36,930 )
Net income $ 1,194,264 $ 174,703 $ 2,222,504 $ 60,532
Basic net income per common share $ 0.06 $ 0.01 $ 0.11 $ 0.00
Diluted net income per common share $ 0.05 $ 0.01 $ 0.10 $ 0.00
Weighted average number of shares outstanding - basic 20,062,839 18,884,105 20,391,870 18,884,050
Weighted average number of shares outstanding - diluted 22,614,394 18,936,055 22,383,552 18,976,547



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